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Comment by alexasmyths | Hacker News Reader

"The promise of great riches if you can survive long enough"

Except that there is no net new value being created - and it's a zero sum game. So any 'riches' you make are from some suckers pocket.

No thanks.

The Valley and tech works because we are doing a lot of non-zero sum game stuff. Whenever anyone invents/creates something new - we can grow the whole pie.

Yes - I see how it could be considered fun ...

But most of the 'riches' from the 'Wild West' went to those who were just willing to be the most brutal.

So in reality ... no thanks.

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Value is created by destroying friction: if financial transactions become decentralized, cheap and fast, you already have created some value.

Even more: having the masses controlling the capital would allow for novel allocation of financial resources: nobody would have killed the electric car 40 years ago if research capital had been more distributed (just an example, not trying to bring up any specific conspiration theory).

More applications, taken from git: before git took the development world by storm, everybody was pretty much used to cumbersome and slow merges when doing team development. Once a fast vcs tool appeared, the possibilities multiplied, and whole new industries emerged. A couple of simple features (speed, low cost, easy setup) where enough to create a miriad of new applications.

Money being at the base of everything, from economics to politicis to science, the blockchain is poised to revolutionize society as no other technology has achieved before.

" if financial transactions become decentralized, cheap and fast, you already have created some value."

+ There is no evidence of value from a 'decentralized' system - in fact, there's considerable value from a managed currency which we know will expand as the economy needs it - not an some arbitrary and ridiculous parameter such as the availability of computing power.

+ Most monetary transactions are already cheap and efficient.

"having the masses controlling the capital would allow for novel allocation of financial resources:"

A) BTC in no way enables 'the masses to control the capital' - it's probably more concentrated in terms of ownership than other currencies fyi - moreover - it's just a currency. It's not capital, per sey. B) There's no indication that the masses are better investors than the very large category of investment managers. C) "nobody would have killed the electric car 40 years ago " this is patently false. People have been working on electric cars basically forever and it's been ongoing.

As for GIT ... 'faster merges crated new industries'? If that's what you meant to say then I don't really buy the argument at all. And this has nothing to do with BTC nor is it even analogous.

"Money being at the base of everything, from economics to politicis to science, the blockchain is poised to revolutionize society as no other technology has achieved before."

From your comments I might argue that you might not know what 'money' is.

BTC is not 'money' - it can kind of be used as that, but is not, and is used less and less as such.

BTC has many structural elements which make it not very useful as a currency.

Having a 'Central Bank' is not a drawback in the opinion of most people - this 'decentralization' stuff is technology/libertarian ideology, nothing more. A well managed Central Bank is preferable to a fairly strict currency with arbitrary control mechanisms. An economy that loses the ability to have monetary policy ... well ... loses a lot.

There is a huge ugly factor with VISA/AMEX taking 2% of so many transactions ... but that's another story.

Aside from that transaction fee - our monetary system works pretty well - far better than BTC. The 'problems' that BTC is trying to solve are not real problems. Many of the opportunities it creates are simply the result of bypassing regulations which are there for the most part to protect us.

> Most monetary transactions are already cheap and efficient

Say that to peple sending wires with Western Union at 40% commission, and waiting one week for them.

> BTC is not 'money' - it can kind of be used as that, but is not, and is used less and less as such

Revolutions take some time (this one is going pretty fast). Would I work for bitcoin now? No. Do I consider working for bitcoin in the short future? Yes. Is it important for me to have government approval to work for bitcoin? Haven't decided yet.

> People have been working on electric cars basically forever and it's been ongoing

As said, my comment was not specifically about electric cars, that was just an example. Any other example would do. It would be naive to think that powerful interests have never succeeded in halting progress.

> Having a 'Central Bank' is not a drawback in the opinion of most people - this 'decentralization' stuff is technology/libertarian ideology, nothing more.

Most people do not know or care about this. Whether that is good or bad for them is debatable.

> A well managed Central Bank is preferable to a fairly strict currency with arbitrary control mechanisms. An economy that loses the ability to have monetary policy ... well ... loses a lot.

Sure, amongst other things:

- the ability to debase savings of people and force them into brainless consumption, ensuring everybody is playing the rat race.

- the ability to privatise profits and socialize losses (see financial crisis)

And other niceties.

> The 'problems' that BTC is trying to solve are not real problems.

You are just not seeing the problems, as nobody could see clearcase's problems pre-git. And, more importantly, you are not seeing the possibilities.

I've sent and received money with Western Union... where does it take 40% commission or one week?

It takes about 10% commission at most and it's same-day.

Definitely can be improved upon but you're exaggerating.

Plus, bitcoin has huge friction for people unfamiliar with it - Western Union's network is great.

It is clearly not zero-sum. Take for example a scenario where bitcoin price keeps going up (not saying it will), explain how that is zero sum?

An option or future is zero sum. One goes to zero, the other gets paid on expiration, a winner and loser.

You're completely wrong about crypto being a zero sum game. Wealth is created in crypto the same way it's created in the stock market, with changing perceptions and opinions on value driving the underlying asset's value.

I'm afraid you don't understand the difference between a stock and a crypto currency, nor where the bulk of value is created.

A) The bulk of value in capitalism is not created via the exchange of shares - it's created when people 'do stuff, make stuff and invent stuff' - yes - there is some value creation by financial activity, but it's not the bulk.

Crypto currencies - if they were actually used as currencies - would provide some value. But i) they are not being used as currencies - and ii) they are certainly not being used to the point wherein they should be having a $50B valuation/cap.

It's wrong to suggest that BTC has created $50B in value for civilization.

B) Your point about valuation is wrong.

Stocks can be valued in a number of ways, but ultimately they are worth the present value of all the assets the company has - and will have. Why? Because stocks are ownership. The companies bank account is de-facto owned by shareholders.

Crypto currencies cannot be valued - they don't have anything underlying them - they do not imply ownership of anything - and especially since they are not used as currencies - their valuation is a total fantasy.

BTC is worth whatever the next guy thinks it is worth - and what he thinks it is worth is pure speculative fiction. Just a function of emotional dynamics and fad.

A stock in 'Bank of America' - well you can calculate how much assets they have, and estimate how much you might think they will earn in the future. There will be disagreement over that hence fluctuating value of prices ... (and BTW it's good that we have a lot of people trying to figure out how much BofA is worth - that provides value).

At least as of today - all crypto currencies are a fiction. They are invented numbers that others are duped into paying money for. They are generally not used as currencies, and so ... 'there is no 'there' there'. Even thought it's really interesting from an academic perspective, and something may yet come out of it.

For most stocks, you are correct.

However, there are a whole class of stocks where the stock price is based on nothing more than perception of value. There is almost zero actual, intrinsic value. You see this often with penny stocks (and even larger companies, back in the dot-com days.)

The value of the bitcoin network lies in being a censorship[1]- and capital-control-resistant store of value. That is a social net positive, like investment in the equity of productive ventures (except for different reasons). As more people use bitcoin, it becomes a more effective store of value and thus represents a further social good (modulo the increase in legitimately criminal stuff it facilitates!). Perhaps not exactly $50 billion worth, but value nonetheless.

>Crypto currencies cannot be valued - they don't have anything underlying them - they do not imply ownership of anything - and especially since they are not used as currencies - their valuation is a total fantasy.

>BTC is worth whatever the next guy thinks it is worth - and what he thinks it is worth is pure speculative fiction. Just a function of emotional dynamics and fad.

Isn't that equally true of any currency? It doesn't pay dividends and doesn't guarantee ownership of anything, and rises and falls based on the whims of the market. At most you can say that legit currencies are "ownership" of "the cancellation of X units of tax debt", but that's somewhat circular: there's no guarantee that "X units of tax debt" will be a large burden in the first place, and will itself fluctuate in value with the market.

[1] It's true that bitcoin has many failings at achieving anonymity but it certainly competes with international bank transfers for many use cases.

Necessary disclaimer: I'm long bitcoin and and author of understandingbitcoin.us.

How can something as inimical to privacy as Bitcoin be resistent to control? Direct and technical, maybe not, but China for example seems to work around that.

Right, it's an open question how good it will actually be at achieving the goals people want, like privacy. I don't have a firm reason to believe China will be successful or not. My point was just that there are legitimate reasons to believe Bitcoin will be valuable for non-bubble reasons and will not substantively differ from legit currencies in supporting a valuation.

Ok, that’s certainly a reasonably cautious stance, although st this point I wonder if that can be Bitcoin.

There is some intrinsic value to BTC, and that is the value of using it for transactions (e.g. because of untraceability, to pay for black market goods). That value is small compared to the overall price of BTC - which is mostly speculative - but it's non-zero.

And many stocks are similarly overvalued by orders of magnitude compared to the actual assets the company holds, to the point that saying that it's "how much they will earn in the future" is meaningless. People buy those stocks because they hope to sell them at a greater price to other people and cash in on the difference, just as they do with BTC.

""how much they will earn in the future" is meaningless."

When companies grow faster than the 'cost of capital' for the person buying the stock - then the value goes to infinity - so this is a problem.

But it's still based on something.

Telsa stock will not go to $20K each.

Bitcoin doesn't have untraceability though. The transactions are public.

If you want untraceability you should pick up Monero.

Transactions aren't tied to your known identity, unless you do it yourself.

Empirically, BTC is used a lot for this kind of stuff - ransomware payouts, Silk Road type marketplaces etc.

That's pseudonymous not untraceable or anonymous.

I'm aware it's used for this kind of stuff but that doesn't really change facts.

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