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Comment by endisukaj | Hacker News Reader

He fails to understand the fact that it's not necessarily Bitcoin _per-se_ that will bring change to world economy and the banking structure; it's the underlying technology that has value and perhaps even for Bitcoin itself it's where the store of value lies.

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Bitcoin does not exist outside of modern technology. It’s very existence relies on the internet. But the internet isn’t some nebulous thing that exists in a void outside of human economy. So there’s a fundamental cost in a currency other than bitcoin that must be paid in that other currency before the bitcoin transaction may take place. In the language of Econ, Bitcoins transaction costs include interacting with another (more broad) currency. The value of bitcoin then will, must always be dependent upon another currency. Hardly seems the Libertatian panacea that it’s made out to be.

As for Krugman and predictions, one never makes a prediction without a hearty dose of humility. Predictions are the playthings of fools. Believe me, he knows that. But predictions still produce clicks and views.

Edit-

One might liken bitcoins value through Greshams law (https://en.m.wikipedia.org/wiki/Gresham%27s_law ).

I got into btc in 2013 because I could plug a box into a wall and in generated value that I could then use to make purchases. There are people that exist entirely in the crypto economy and did not put cash in or out. BTC is a drop in the bucket compared to other securities in the world, but your premise of that it has to exist on other currencies isn't true in my view.

And what exactly is the value proposition of the underlying technology?

Getting closer to frictionless payments.

Getting access to a number of services that we currently use banks for - without using banks.

Note: my reply is about blockchains, not about bitcoin.

I've more or less given up on bitcoin and think other crypto tokens have a far better chance in the long run.

> Getting closer to frictionless payments.

Pardon my ignorance. I see this mentioned a lot. What do you mean by frictionless payments?

> Getting access to a number of services that we currently use banks for - without using banks

What services in particular? And what's preferable about using blockchain technology for these services?

> What do you mean by frictionless payments?

I mean in the same way as email is frictionless compared to mail: you can send all day, it arrives halfway around the globe in seconds, fees are significantly lower.

> What services in particular?

For most people? Money transfer.

> And what's preferable about using blockchain technology for these services?

AFAIK because it is a way to make this happen without having to trust a number of institutions that are rich because of the current setup and might have a huge conflict of interest.

Again: IMO this is about the technology, not about Bitcoin.

The short answer; decentralized, trustless consensus. But I don't think Bitcoin's blockchain will be the winning platform in the future.

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