Bitcoin is none of the things it was supposed to be | Hacker News Reader

Bitcoin is none of the things it was supposed to be

theoutline.com

137 pointsokket118 comments

The high transaction fees are forcing Bitcoin in this direction. If buying a hamburger cost you $30 in fees on top of the $6 burger, you'd stop using dollars for everyday purchases, too.

Seems we're stuck in this situation so long as the block size remains where it is. That artificially reduces the supply of transactions, forcing the price up. No matter how many miners there are competing for those transaction fees, there can never be more transactions. The transaction market is really one half of a market, or a market with a "supply ceiling".

It's ironic that Bitcoin's transaction count is essentially limited _by fiat_---by fiat of the Bitcoin code that implements the block limit.

But given the relative failure of forks that increase that block limit, it seems Bitcoin is what it is and other coins will have to pick up that slack.

No one who owns BTC wants it used for transactions. They want it to be an investment and go up forever, so they'll never go with a fork that allows it. It's like home owners in a neighborhood locking out new construction so their own homes raise in value.

That's a pretty broad generalization. Many of us work very hard to make Bitcoin usable for day-to-day transactions.

Sometimes a broad generalization is generally applicable even if not always specifically applicable.

You know, that's quite insightful. HOAs (Home Owners' Associations) are also responsible for some pretty egregious local/municipal legislative blockage as well.

Seems like the miners have a strong incentive to keep the "supply" of transactions artificially limited too, since it results in sky-high transaction fees for them.

Those who want an appreciable asset own it, those who want transactions use it.

Of course Bitcoin is the digital crypto analogy for SF Bay Area NIMBYism :)

Christ, that's some deep snark!

But that was the original goal of Bitcoin — the paper states specifically transaxtions. I personally found it interesting when I bought shoes over Overstock via BTC earlier this year; only problem was my phone didn’t have a default QR scanner.

The original goal was to have transaction fees cover network processing costs, but anyone who does the math can quickly see that the number of transactions allowed by the current block size is an issue, and prevents bitcoin from scaling to visa/mastercard levels of usage.

The reason why this flaw was accepted back then was because "space is cheap", and "we can always make the blocks bigger later".

Basically, it was a known issue all along, and the plan all along was to evolve as needed. It was never intended to be a perfect solution from the get-go.

The problem now, is that people are actively preventing bitcoin from evolving.

> The problem now, is that people are actively preventing bitcoin from evolving.

So an 'evolving' BTC market is not a stable market. Doing something that increases the transaction speed is good, but doing something that changes the fundamental rules is not.

If your income is based upon artificial scarcity, then you're going to be invested in keeping it that way.

I own bitcoin (and have for nearly five years) and I want it to be spendable as a currency again.

It realy seems the libertarian utopia story the way non libertarians envision it.

The main joke is satosi's people skills. A coin needs a community to launch it. It wil forever be asociated with it. Ponzi coin wil stay ponzi coin, porn coin wil stay porn coin etc

>they'll never go with a fork that allows it

Actually, I think that people would race to buy BTC before any fork, in order to get free money. (that explains why BCH has that volume/market)

The Lightning Network is meant to address this: https://lightning.network/

Lightning ultimately has to come into contact with Bitcoin at some point, unfortunately. Even if you just have one Bitcoin transaction a month, I'm paying $20/month at the current tx prices just to be able to use Bitcoin. $240/year. Does that sound anywhere near reasonable to you?

The goal is that there will be fewer BTC transactions once LN becomes widespread, especially if people or institutions open long-lived channels between each other (active for months, years, or even indefinitely). Then you'd only have to hit the BTC blockchain a few times a year, at most, and that's a level of transactions which the BTC blockchain can easily handle, even if the whole world population uses it for everyday trading.

However I also expect that fees will go down once this craze is over (in a few days hopefully). They have tripled in the past three days (see https://fork.lol/tx/fee).

Let's say "a few times a year" is once every two and a half months. Everyone who wanted to use Bitcoin would then have to pay about $100 a year to use it at today's rates. That's still ridiculous. And fees have increased mostly because the price increased. If people actually started using Bitcoin, the price would skyrocket and fees would rise even higher.

The fees have increased because there's not enough space in the blocks. The price increase would be irrelevant if there was enough space in blocks.

The fees have also increased because of the large number of unconfirmed transactions (we currently have over 160k transactions in the mempool). Once that decreases to more reasonable levels the tx cost will decrease, too.

Some premium credit cards come with annual fees and benefits. $100 a year for the ability to use a censorship resistant, semi-anonymous payment system doesn't sound like a bad deal.

Recent updates with video demos (looks great):

https://medium.com/@lightning_network/lightning-protocol-1-0...

Why bother attempting to patch on layers on top of BTC when it's already centralized with ASIC farms?

Start fresh.

Early adopters of BTC are trying to con new users into buying coins produced for minimal capital/computational work. The flaw in BTC is inherent to the malicious minting algorithm designed to harm new users.

There's other cryptocurrencies who are far out pacing the BTC core team.

Which currencies do you see as addressing these problems in a technically proven way?

Vertcoin is the probably the most Bitcoin-like one that addresses the mining centralization issue.

Ethereum (which definitely has its own fair share of issues) recently hit its all time high in daily transactions, which incidentally is more transactions than all other existing decentralized blockchains put together--a set containing Bitcoin.

Ha because then that would devalue bitcoin and everyone's dream of selling to a greater fool would collapse!

I agree: we need a faster settlement layer independent of how much the currency itself is worth; but let’s say we have have that network? How do taxes work? Everytime you transfer or pay for anything? That’s not going to work.

Lightning network is the biggest pile of vaporware in be whole mess. It’s been “just around the corner” for years now.

In theory segwit and offchain settlement layers (namely Lightning) can/will speed things up/reduce fees without raising the block limit. FWIW I think that they should have done both.

> If buying a hamburger cost you $30 in fees on top of the $6 burger, you'd stop using dollars for everyday purchases, too.

Or maybe you'd buy a few month's worth of burgers.

But then they'd spoil!

I meant as subscriptions.

What an awful limitation. I may not want a burger next week.

OK, Bitcoin-backed debit cards.

Who cares about what they're backed with? If it's not bitcoin, then you don't get the benefits of bitcoin.

The only difference between a normal debit card and a bitcoin-backed debit card is that the bitcoin backing layer is more expensive than the usual one.

You get at least one benefit. You can keep your large-scale financial life as private as you like. Not as well as with the newer privacy-focused cryptocurrencies, of course.

And that was arguably a key goal for Bitcoin. It came up in the shadow of ecash and e-gold. Although it's not as decentralized as many expected, it's also far less vulnerable to government takedown than ecash and e-gold were. But sadly, it's no less vulnerable to speculation than any other small currency has been.

> But given the relative failure of forks that increase that block limit, it seems Bitcoin is what it is and other coins will have to pick up that slack.

So here's a question. Should a miner move to a fork that decreases the block limit? Would it be more beneficial or less beneficial for a miner?

This is all fixed with Bitcoin Cash.

Responding to problems with this article as they appear:

1. Coinbase buckling is a failure of a web application grappling with unprecedented load. Not with bitcoin.

2. The dark web mostly uses Monero, which would not exist without Bitcoin coming along first. Also the notion of a $65 fee on a $250 tx is ridiculous, not to mention a 24 hour wait time.

3. The existence of exchanges and dark web websites that allow you to convert fiat to bitcoin and facilitate trades (middlemen as the authors calls them) is a failure of Bitcoin? Building a centralized exchange/facilitator will ALWAYS come before a decentralized alternative because decentralized apps are hard.

4. Applications that provide immeasurable convenience at the cost of a little privacy and security are an inevitable step in the road towards a better system. This is the equivalent of RMS bemoaning the existence of Ubuntu because it uses a few propriety programs, when whatever free distro he recommends is straight out of 1992

5. "retains none of the exciting features"? Rapidly increasing prices does not remove the most innovative features (smart contracts, off-chain transactions, etc) of the crypto world. It accelerates them if anything by providing the capital to finance their development

Feel free to attack Bitcoin for its shortcomings, but don't act like things could have easily gone differently. Bitcoin still has tremendous potential for privacy, security, and everyday use --- if you get past the clickbait headlines.

What is your source for #2? Only a single market on the darknet currently accepts Monero (libertas). Monero currently lacks any multi-sig capabilities so it is useless for the newer distributed DNM systems such as openbazaar. At most Monero is used to obscure the trail of bitcoin as someone will buy some Monero with bitcoins puchased from a site like Coinbase and then sell those Monero back for bitcoin to avoid Coinbase banning their account for transferring to a known DNM Bitcoin address. Bitcoin is still used for the vast majority of DNM transactions.

The author seems to expect that the changes created by cryptocurrency should be visible immediately. It is a lack of patience, and lack of understanding that changing deeply rooted systems and behaviors takes time.

People have never managed software where if you lost your "password", your money was gone forever. They never had to keep a 12-24 word recovery phrase. They've never sent money to addresses that look like hash strings. Their money value was never this volatile (in some countries anyway) and never this complicated to use (understanding and waiting for block confirmations, looking up transactions in the blockchain explorer).

That's why Coinbase exists, to obfuscate these complexities, to sell security as a service. The cryptography behind cryptocurrencies allows you to basically be your own bank vault; this is not intuitive to people.

The fundamentals for Satoshi's vision have been laid out, the rest of the implementation details will come in time.

What, then, exactly is the difference between your scenario and Coinbase being the bank?

That is a good analogy, if you choose to you can use a bank (or Coinbase) but you also have the option of doing everything in cash or managing your own Bitcoin wallet. Prior to cryptocurrency if you wanted to quickly send money around the world without going through a bank or other financial institutions you were out of luck.

Coinbase can't print money.

Technically they can try, by selling users coin in a fractional reserve model. This is probably already being done by some exchanges.

But that's a problem regarding legal regulation.

Banks can't print money either, and this isn't some "ackshually it's the Mint" thing: banks have the power to create debt. But this isn't special, because you and I also have the power to create debt. What makes a bank special is that debt is its business (so most of its operation concerns the management of debt), and much of its debt can be called on demand, and so we call banks' debts to us demand deposits.

Fractional reserve is just a particular kind of regulation placed on banks' creation of debt, and it usually isn't the most important one. The practical limit of banks is that they have to be able to extinguish their debts (which we call withdrawal), including being able to transfer them to other banks in exchange for cash (which we call clearing), at the whim of the creditors (you and me).

The problems with banks are the problems with debt generally, but that's much trickier than some glib remarks about monetary policy.

You can't really create debt with money that you don't have, as the banks do.

You can't make 1000$ appear on my bank account and say " you now have a debt of 1000$ to me". You need to give me physical money. But bank can create this money they don't have.

The bank isn't creating that money. When you deposit $1000 in a bank account, you lose that $1000 and gain 1000 FunnyMonies instead. The bank can then turn around and give that $1000 to someone else. At the end of the day, there's only $1000 running around.

What makes it look different is that we treat 1000 FunnyMonies as if it were $1000. So instead of saying "there's $1000 and 1000 FunnyMonies" we say "there's $2000, oh look, the bank created money." But it hasn't, and when the difference really matters, and the bank doesn't have the ability to give you back $1000 for your 1000 FunnyMonies, that's when bad things happen.

Absolutely not. The bank can lend those 1000$ to several people.

I think it can lend it up to 10 times the money it has in its vault (not sure about the exact amount)

You are correct, it's called "fractional reserve banking". It's not a standard 'x10' though, since it's based on rules from federal banks etc.

Let's be careful about what scenario we're talking about.

> You can't make 1000$ appear on my bank account and say " you now have a debt of 1000$ to me". You need to give me physical money. But bank can create this money they don't have.

This scenario doesn't involve real money at all. It's just two IOUs in opposite directions. You and I could make such an agreement trivially.

> I think it can lend it up to 10 times the money it has in its vault (not sure about the exact amount)

So this involves real money. But it's not a special bank power. You can loan a friend some cash, which they give to you for safekeeping. Then you can loan another friend the same physical dollars, which they also give to you for safekeeping. Then another, and another...

Now you have $10k in cash deposits even though there's only $1k in physical cash.

The only reason you can't do it in practice is that nobody wants to give you their money for safekeeping. You don't lack the ability to multiply money. You lack anyone handing over money to do it on.

Bitfinex can, though.

MtGox printed money. Lots of exchanges probably do but since they are unregulated and completely opaque you’ll never know for sure.

> People have never managed software where if you lost your "password", your money was gone forever. They never had to keep a 12-24 word recovery phrase. They've never sent money to addresses that look like hash strings. Their money value was never this volatile (in some countries anyway) and never this complicated to use (understanding and waiting for block confirmations, looking up transactions in the blockchain explorer).

Well yeah, nobody in his sane mind would have designed such an unpractical system. It took a bunch of out of touch, fresh out of school computer scientists to reach such nonsense.

I doubt that blockchain was invented by a fresh out of school computer science graduate. The breadth and depth of technical complexity (even if just the white paper) that blockchain covers requires time and experience to accumulate.

more likely an out of touch phd professor (or team of them)

The article repeatedly quotes statements to the effect “this was supposed to show what a truly free market looks like. Instead, it’s a shitshow.”

The word “instead” doesn’t belong there. Really.

Maybe we should call it anarcho-markets?

Wasn’t that the exact point of the tweet that was mentioned in the article?

As we learn more about cryptocurrencies, more evolved altcoins will emerge, with much more sophisticated economics.

As it is, none of the developers of cryptocurrencies really understand economics and the majority of them believe in heterodox economic ideas that are probably wrong.

But currently people are just trying to get rich. At this point in time I'm more bullish about GNU Taler. It is not a cryptocurrency but it shares some of the objectives.

Hey Lumberjack - I’m curious to learn more about the economics most folks in the space are ignoring.

Are there any particular economic theories or resources you would recommend as a starting point for someone interested in studying up?

Email in bio if you feel so inclined. Appreciate it!

The best criticism I've seen on Bitcoin is, by far, Paul Krugman's "Bitcoin is Evil" [1]. In essence: Bitcoin doesn't have "monetary policy" to regulate it's supply. That's why it is prone to speculative bubbles and very dangerous as money.

[1] https://krugman.blogs.nytimes.com/2013/12/28/bitcoin-is-evil...

Painful to read. Paul Krugman is a laughing stock in the crypto-world, which he has been wrong about so confidently, so many times.

As an aside, the US had active monetary policy for about a century, and it has enjoyed plenty of bubbles and crashes. Some of those were worsened by monetary policy (e.g. easy money in the early 1920's swapped to deflationary monetary policy in 1929 as soon as the easy money bubble popped, low interest rates fueling real estate speculation in the early 2000's, etc.)

Can you give an overview of or pointers to critiques? My prior is that Krugman is more likely to by correct than the average crypto person, even after adjusting for interest in and attention to crypto.

For a celebrated economist, Krugman has a poor grasp of certain facets of economics. It's probably a subconscious way of rectifying his political views, which many of us are guilty of.

In this case, he does not understand how Bitcoin can be a store of value, because it is not backed by a government. How come gold or any other commodity has value? Value it what the market decides, not the government. He obviously did not understand the intrinsic value the technology provides, which previous media of exchange do not provide, such as immutability and full control of funds. He is happy to pass judgment without understanding the technology.

How are immutability and “full control of funds” intrinsically valuable?

That's like asking why laws firms & and security agencies exist.

Intrinsic value has a well-understood meaning in economics. Bitcoin, like any currency, has no intrinsic value, regardless of these neat features.

> Intrinsic value has a well-understood meaning in economics. Bitcoin, like any currency, has no intrinsic value, regardless of these neat features.

I don't think you understand the definition of intrinsic value -- it has nothing to do with being physical:

https://www.investopedia.com/terms/i/intrinsicvalue.asp

Key quote: "The intrinsic value is the actual value of a company or an asset based on an underlying perception of its true value including all aspects of the business, in terms of both tangible and intangible factors.

Where did I imply intrinsic value requires physical presence? Businesses produce cash flow, and therefore ownership stakes (stocks) have intrinsic value. Gold is used in manufacturing and has an intrinsic value (lower than its traded value). Bitcoin has 0 intrinsic value. This is not a slight against Bitcoin, it's just a property of most currencies. Bitcoin is no exception.

A good thought experiment for whether something has intrinsic value is: would <thing> still be useful if nobody else on the planet wanted it? A share in a business would continue paying out dividends, and would absolutely be useful. A dollar bill would be useless (especially if it's an electronic dollar). A bitcoin would also be absolutely useless.

> Bitcoin doesn't have "monetary policy" to regulate it's supply

Actually it has the best monetary policy: it's supply is inherently regulated and prescribed: https://en.bitcoin.it/wiki/Controlled_supply. Intellectual-yet-idiot Krugman is a Kardashian of the economic's world. Popular because he is popular, nothing more.

"Economists" should take a note from the medical profession: First do no harm. AKA unless there is a extraordinarily compelling motivation, the best course of action is no action. We have spent the last 100 years in a system where the very base layer of our economy, the currency, was cooped for social engineering. "Wouldn't we all be better off if we made the cost of lending almost 0?" -> Housing bubble. If Wizard's of Oz are constantly mutating the value of money and lending the only people who can prosper are the Wizards (politicians) and the Bankers. The last 50 years of economic prosperity make that evident.

"Intellectual-yet-idiot" is remarkably like the phrase "educated stupid" from Time Cube fame.

You can't just meme your way through a conversation. This just reads you're spouting other people's words here without actually understanding them.

You gotta love that the 2 responders to Krugman is to call him an idiot who's been wrong many times, and a Kardashian. But I'll just reply to your post because I don't feel like engaging with the brainwashed.

The fact that the majority of people only trade/hold bitcoin to exchange for centralized currency i.e. USD tells you something, no?

Yes: that it's not universally accepted (yet?) and highly volatile.

Do you mean universally accepted as payment for goods?

The fact that it takes an hour+ for one transaction to be confirmed (i.e. behind ~6 blocks) seems like a huge UX problem for buyers/sellers. If I'm going to use bitcoin to buy a TV, I'm not going to wait around an hour for the merchant to say I'm good to go. And transaction fees are so high now that it makes no sense to use bitcoin for small transactions.

Other issues include refunds/disputes. If you receive something in the mail from a seller that is not as described, then no equivalent of a dispute/chargeback process to get your bitcoin back.

The problem is this perspective mixes levels of certainty that are not comparable. A trader can accept a transaction as soon as it shows up, even with zero confirmations. Doing so creates the risk of not actually receiving the payment, The circumstances under which this can happen are probably much rarer than the possibility of a credit-card transaction being reversed.

You want the high certainty on large sums, For small payments you could easily just take the hit on the tiny (if any, in-reality given the minimal reward for effort of fraud) transactions that don't go through.

The issue of transaction charges is a growth pain. When Bitcoin came on the scene, It was expected that the future incarnations of the protocol would handle vastly larger numbers of transactions, that view hasn't really changed. The only issue has been on the time-frame of the expansion. If anything that can be considered as being too successful. It's a little system that might be a big system one day, but people anticipating the future state of the big system is causing strain.

It will be interesting to see where things stand 30 years from now.

> Doing so creates the risk of not actually receiving the payment, The circumstances under which this can happen are probably much rarer than the possibility of a credit-card transaction being reversed.

When everyone and their mother is using bitcoin as currency, I'd agree with this statement. For now, and for a reasonable short term timeline (~1-5 yrs?), I'd argue that the probability of an immediately accepted bitcoin transaction being a fraudulent one are much higher, simply because there are more opportunists as a percentage of total 'users' of bitcoin than there are in a more established market.

Of course most of the new money that's come into the bitcoin market (from the say ~$2k/BTC - $16k/BTC time period) isn't using it as a currency, they're speculating on it growing in value even more.

> It will be interesting to see where things stand 30 years from now.

It most certainly will. Personally, I don't think bitcoin is going to be the go-to cryptocurrency of 30 years from now, but who knows.

I missed my chance at being a bitcoin billionaire already(could have stashed away a few 1000s of bitcoin back when it was well under $1), so I'm not playing the speculation game anymore (I sold what I had at under $10k/BTC) - I hope everyone on here who is holding onto loads of BTC cashes out before it crashes, or that it doesn't crash and actually becomes useful currency! I'm just going to keep putting money into my 401k.

The dollar remains the easiest rosetta stone for figuring out what you've got, i.e., what your bitcoins and other assets are worth. It will continue to be easier to use a more stable currency for that purpose, unless something goes wrong with it.

You're missing the point. Everyone just holds the currency because they treat it as an investment. In other words, they are speculating.

People invested, in both the financial and emotional sense, tell others to hold because that drives the price up more. The subculture's vernacular even includes "HODL", a joking way to tell someone to keep doing their part to drive prices up.

It's painfully obvious what people are doing.

>Bitcoin was designed so that users had to take care of their private cryptographic keys for every address they used, and Nakamoto advised making a new address for every transaction. This proved too confusing and burdensome, so along came wallet services, which stored users’ Bitcoins like a bank account and substituted a password for the private key

wut? if you used a online wallet, you still had to manage addresses. the only advantage comes in the form of not having to wait hours/days for the client to sync up (back then there weren't any thin clients), and not having to back up a wallet file.

>Whether it was out of incompetence or an attempt to save itself from selling at an inflated price (at one point, the price of Bitcoin was $3,000 higher on Coinbase than on other exchanges),

that's not how exchanges work. the counterparty is another buyer, not the exchange. coinbase is getting x% fee regardless if the price was $1000 or $10000.

>this was exactly the kind of thing Bitcoin was supposed to prevent.

sounds like a strawman. i don't think anyone realistically thought if bitcoin came along, all the AML/KYC laws around handling fiat will magically evaporate

"i don't think anyone realistically thought if bitcoin came along, all the AML/KYC laws around handling fiat will magically evaporate"

I disagree - I've seen and debated far too many people claiming essentially that viewpoint; IMHO it's a naive and unrealistic expectation, but a lot of people did think that.

Is anyone else getting the same sense with Bitcoin as with Trump leading up to the election? Everywhere I go everyone has negative things to say, everyone is going on about how it's going to crash. They all seem like sensible arguments.

But here we are, Bitcoin keeps following an exponential curve and Trump is president. The one thing I know for sure is there's an awfully noisy signal out there.

Correlation is not causation.

People also predicted that Iraq and Afghanistan would be quagmires. Those predictions came true.

I voted for Trump and I bought some Bitcoins... hopefully I am right again.

Remember how Coinbase, the San Francisco-based startup which raised more than $200 million in venture capital, put a freeze on my money? Whether it was out of incompetence or an attempt to save itself from selling at an inflated price (at one point, the price of Bitcoin was $3,000 higher on Coinbase than on other exchanges), this was exactly the kind of thing Bitcoin was supposed to prevent.

Um no, I don't think so.

Coinbase.com is not the Bitcoin experience, just like Facebook is not the internet experience. Nothing in the Bitcoin whitepaper mentions Bitcoin solving problems inherent with a central currency Exchange or hosted, custodial wallets.

Use localbitcoins.com and a non-custodial wallet if you want to experience Bitcoin per it's original specification.

Exchanges != Bitcoin.

That is the point of the article though. If most of transactions are going through exchanges, Bitcoin is not being used as it's supposed to.

Coinbase, and similar sites, may as well be Bitcoin for the average ("retail") investor. It's far too complicated, not to mention resource intensive, for the average Joe to set up and run his own node.

My uncle wants to "invest" in Bitcoin. He wants to trade it like a stock. You seriously think he's going to mess around with private keys and wallet pass phrases? Many technical people can barely handle that.

And, yes, for a lot of today's youth, Facebook is the internet experience. The Internet experience, for me, was telnet, gopher, and Usenet news. We're along way from those days.

Bitcoin seems like just another medium of exchange. Almost all the properties of bitcoin - decentralization, anonymity, worldwide acceptance - apply equally well to gold bullion. The one additional property bitcoin had was convenience. But as transaction costs increase this is becoming less true.

Given the above, why would anyone expect bitcoin to behave differently than physical gold in the real world? The world of gold is chock full of middlemen, dubious financial instruments, and companies taking advantage of those that don't know better. Bitcoin is just following the same well-tread path.

You can't send $50M of gold halfway around the world for $3.

Right now, you probably can't send $50M of Bitcoin around for the world for $3 either.

You can't send $50 million of bitcoin with only $3 in transaction fees either

Why not? The cost you pay is proportional with your transaction size in bytes, not the amount of bitcoins you're sending. So it depends on how many inputs and outputs you're using, not the quantity you're moving.

The cost you pay isn't just dependent on how many bytes you want to send. Each block maxes out at 1MB and there's only 144 blocks a day. If you want your transaction to be confirmed, you have to outbid everyone else who wants their transaction to happen (as long as there's more than 7 transactions / sec). I don't think it is doable to try to do a transaction with a $3 fee, you need something like $20 worth of BTC to get it done within the next block or two, and maybe $10 if you're willing to wait a while[1]

[1] assuming https://estimatefee.com/ is correct. Based on the transactions of some of my friends it seems pretty accureate though

It only started skyrocketing this week. Last week average tx fee was about $6-7. You can see the historical averages at

https://bitinfocharts.com/comparison/bitcoin-transactionfees...

I don't get how there's much anonymity with gold. I mean, you need to ship it.

The person shipping it doesn't need to know who the sending or receiving parties are, just where the pickup and drop-off are.

So you would ship $10 million gold with such a scheme?

Bitcoin is trying to move transactions off the blockchain to fix this issue... bitcoin cash is what bitcoin was supposed to be (increased block size)...

It's not Wall Street's fault or whatever boogie man's fault that the Bitcoin tech doesn't actually work as some idealistic libertarian creator imagined it would; the fault is in Bitcoin's design itself. Even if the price wasn't fluctuating like crazy it simply doesn't work well as a currency due to technical limitations (eg, the time and cost it takes to process a transaction in the real world has always been impractical), but it shows promise as something that holds value (like gold).

The Outline creates articles with pureed facts written in a carefully standardized "no-nonsense", language-as-spoken-today linguistic style for mass consumption that are often deceptive, political or just technically wrong. Don't trust it.

I feel like it's a parable about lofty libertarian ideals -- everything's peachy until there's large sums of money involved. Bitcoin is fixable but now there's a financial incentive for never fixing it.

You're probably right about Bitcoin not being fixable as a currency, and I say probably because I almost never speak in absolute terms. There are alternative cryptocurrencies that stand a chance of working out; the idea is mainstream now.

To me, it's a parable about the danger of following a pseudo-philosopher with no academic credibility and whose relevant oeuvre is fictional literature and not reading what Adam "Greed Is Good" Smith actually wrote about free markets AKA unregulated capitalism, which was that an economical system of people acting in their self-interest ends up promoting a greater economical and moral good for everyone but only as long as there are significant safeguards against abuse, but that's just my opinion.

I should google it but I'll just wonder out loud, how would libertarians use money anyway? Doesn't money need something to back it up, i.e. a central bank?

Libertarians still believe in government, I believe the normal solution to this they propose is to move the money back to the gold standard with the gold held by the government issuing the money.

Something this volatile is considered a good value store? The reason gold is a good value store is not only because of it's general acceptance and obvious physical properties but also because it's a non-volatile element physically and monetarily. Gold doesn't experience 1000% gains in like a week followed by equivalent losses.

Right now, no. It's in a bubble. But in the long-term there are people in Wall Street who look at it that way -- which is part of the reason why Bitcoin Futures are coming.

Being able to short Bitcoin should keep the value more in line with reality -- even if people eager to short might lose money as bubbles sometimes go for longer than they reasonably should.

I am by no means an expert in any of these things - but philosophically was bitcoin written w/ the expectation that an individual is inherently good, and running smack into the reality that individuals are inherently focused on their own self interest?

Bitcoin was actually built under the assumption that you couldn't trust anyone else. You store your own money with your own private key.

I wonder what percentage of the individuals who are opining here know about Monero.

Allow me to make a farfetched analogy: Bitcoin is like Obamacare. Obamacare wasn't made perfect the first time; this is normal. The way you fix issues with complex legislation, is you have it passed by significant members of both parties, so that you can revisit it the next year and fix things. But, with no trust between parties, the Dems had to get everything right in one go, when they had both houses and the White House, and guess what, there were problems. Which we can't fix.

Bitcoin wasn't made perfect the first time. No problem, all software that becomes popular does, and all new financial arrangements (money, credit, credit cards, etc.) had unforeseen problems that had to get worked out. But, with no government involved, there is no mechanism for working things out. It's not surprising that everything wasn't perfect, or that things need fixing later; the issue is that no one has the mandate to do it.

The problem I see with that analogy is that Obamacare has been actively undermined at every step by the Tepublican party.

Nothing like that is happening to Bitcoin.

I think this was all inevitable. How could you make a new currency and not expect all the people who take advantage of monetary systems to move in? I’m not sure it’s preventable.

I think the undermining of Bitcoin's original promise by speculators is just as inevitable as Obamacare's undermining by conservatives. Both are driven by hype. Both are primarily driven by greed ("temporarily embarrassed millionaire" greed, in many cases). Both are aspirational. Both run counter to the cynical "humans will always subvert" narratives of their times.

That's not a judgement on either one. Just an observation of similarities. They're very different in many ways, too.

What I meant about undermining is that I don’t think the speculators are out to sabotage bitcoin, it’s a side effect of what they’re doing. When it comes to Obamacare it’s very clear that the sabotage is intentional.

The more I think about it the more I wonder if bitcoin could have ever worked. The way my name works pretty much guarantees a individual or small group would end up with the majority of the hash power if bitcoin was ever actually valuable. And that immediately undermines the peer-to-peer decentralized no one in charge of it aspect.

Without something that disincentiveses people with significantly more cpu power people are just going to run away with it. That kind of seems like a flaw in all of these crypto currencies, even if it’s not CPU power that you use.

I think I read this too much from people saying bitcoin will work... "sure it sucks now, but it will have all the features you want in the future!", and hah, as you say, but no one is actually working on those features, and indeed 100 people probably have 100 different wishes and if they're a bitcoin-belieber they think bitcoin will get all those wishes.

Just like how Trump will make America great again, with "great" being defined differently in around 63 million heads.

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