Bitcoin falls below $5,000
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I was immediately turned off when a different, exchange website asked me to upload a photo of myself holding my driver's license in one hand and a paper with the name of the website and date in the other.
Just my experience. To me, it seemed like a joke.
Expect it moving forward.
Coinbase and the like failed to do it initially, and had to play catch-up during the peak of the activity towards the end of last year / early this year. I guess it was a sort of tech debt with regards to their customer support and experience dealing with KYC problems?
I recall being asked by a keen young thing if his (completely legal) online business should take bitcoin only. I suggested that since he wanted people to give him their money, he needed to make it easier for people to give him their money; not harder. The website of which you speak, I can only imagine, didn't really want your business.
At least on EBay, the seller has some protections. On a random website you won’t.
Some countries have reliable postal systems that take forever and others have a high rate of fraudsters or thieving postal workers.
Sometimes some regions of the country are fine and others aren’t, but how can I know that?
If you're buying a comic book from a store the next city over and they only take bitcoin, they don't want your custom and accepting the extra cost and hassle of indulging their political leanings isn't worth it.
But if you’re in a developing country, even if your postal system is reliable, it’s hard to get sellers over any perception that you live in a mud hut and must be defrauding them.
Bank wires can be recalled, and take a while. My bank even charges $25 or so to receive one. Maybe Western Union would be an option. Bank drafts and cash can be counterfeit, let alone hard to get in my local currency (Canadian dollars).
As a seller, I would directly accept a handful of country’s payments directly, and leave the rest in crypto-only via a payment processor that pays me in $. That maximizes my revenue and minimizes my hassle.
Putting aside everything else, I will say that your bank, like many banks in the US, is frequently found to be taking the piss. For a first world, developed nation, the retail banking sector in the US is in serious need of a bloody nose.
Unless you’re doing a SEPA transfer, the UK bank I looked at still charges for receiving and sending wires. And you always get dinged if there’s a currency exchange.
Being in the middle I see 99% of bullshit blockchain stuff, but I’m really hyped by some cryptocurrencies and some of their tech. It is a really interesting field if you ignore the market, but there is also a lot to win/lose if you can predict where the tech will go.
Bankers and blockchain people are both the worst people to ask for an opinion. So I might be in the right position to make a guess.
There is value. This market might become as strong as the stock market is nowadays. As long as there is hype, there will continue to be a market. If it’s a scam/pyramid sheme/mlm, then it’s an international one and it’s probably not going to stop.
Cryptocurrencies are an AML nightmare. Ironically, this is a social–not technological–problem. Even on HN, you'll regularly see "I don't have to pay taxes on cryptocurrencies because the authorities can't catch me" comments. This creates regulatory risks. Regulatory risks are regulatory costs.
Add to that the credit card fraud (buy cryptocurrencies with a card, charge back; profit) and theft risks, and a cryptocurrency-affiliated customer is more likely to cost a bank rather than make them money. Layer on top of that the time it takes to develop expertise and a blanket ban on everything around cryptocurrencies becomes understandable (versus training employees to comb through them).
I don't like this outcome. But I see why a big bank would decide this. Community banks, on the other hand, might be willing to invest the time into understanding why you don't pose a fraud or my-assets-got-stolen-now-I'm-broke risk.
The original argument for bitcoin was that it's a great replacement of physical money.
Does the stuff you are referring to have a market price? Like with Bitcoin, we can say that its market price is around $5,000 USD per BTC.
Does this other stuff, which you say is so great, have a unit price at which it can be bought and sold? If yes, is that market anywhere as large as Bitcoin?
If it doesn’t have a Traded price, then what is it?
I’m not selling you anything, just pointing out that a lot of people (on both side) are clueless and I think you proved my point.
One is of course the network effect. I can't pay with (whatever)coin unless other people use it too. So unless I'm just really excited about crypto and want to pay with it, it's not very useful to me until more people start using it. And considering most of the crypt-hype has worn off, there's less and less people that are just dying to use it.
And the other is that people (and businesses) are not going to try things over and over until someone gets it right. Bitcoin is terrible as a currency. I tried paying a friend of mine for a sandwich once, just for fun, and it cost me $10 to send him $10, plus it took almost an hour. Of course it's less bad now, but it's still not great. Valve started accepting bitcion and later stopped. Lots of retailers did too. No one is going to jump on Bitcoin Cash or Monero or whatever, even if they're better, because they were burned pretty hard with Bitcoin.
Someone is going to have to genuinely nail it with a currency that is instant, costs almost nothing per transaction, is very easy to use, and they're going to have to make sure everyone knows it. And even then I think it's going to be uphill.
I think they will, if it is better.
> going to have to genuinely nail it with a currency that is instant, costs almost nothing per transaction, is very easy to use,
There are such cryptos. stellar, nano and i m sure also others. And i think monero's anonymity promise is a big selling point too
I think there are ways to make them less volatile. For one, don't list them in any crypto-to-crypto exchanges, instead allow only dollar cash-ins/outs, or limit the amount that can be exchanged to some fixed value like $100 / hour. Speculation and greed is limiting the prospects of most coins.
Stellar is trying to achieve a completely different goal than exchanging stellars coins.
Almost no one of those crypto could achieve even half of the current daily transaction processed by CC, and the proof they are using is in no way as safe as proof of work, even if more efficient. Why would people adopt them? There's no advantages, fees would be similar probably
It just need to be stable enough for the length of the transaction. As long as you keep the bitcoins moving, the gain/loss will distribute itself over everyone and it won't be different than any bank fees.
Let say I want to buy something from you for 20$ USD, I'm in Canada, so I buy 27$ CAD of Bitcoin on a local exchange (so I buy it from someone that essentially just sold something), I transfer the resulting Bitcoin to you, you then sold it as soon as you can. Even if the Bitcoin price is losing 25% today, if you can do all that in 2 hours, you will only lose about 3%, which is similar to Visa fees. Ideally you wouldn't hold them for more than 5 minutes and it would all be automated behind the scene without your knowledge, probably through your bank if they move quick enough, but that could be through a third party too (which is the beauty of it all, you depends on no one).
That's an ideal world though and I feel like that's an utopia but that's how I see we can ignore the stability issue.
The transaction needs to occur before an ice-cream cone would melt, and it needs to cost less.
Bitcoin can be valued based on... ???
All we knew was that a lot of people were very excited about it for pretty irrational reasons. That's a lot like how a lot of people are very excited about cryptocurrency for pretty irrational reasons.
I understood most of those words individually, but the combination was a complete bafflement.
And that, in a nutshell, is a big problem for Bitcoin. I understand cash - it has value because the government says it has value and it's directly exchangeable for something that I can relate to that value (say, a huge bag of bubblegum). But how do you explain an ICO and it's value to someone, without an actual, physical object being present?
On the surface, it sounds like something virtual being exchanged for something else virtual which may or may not lead to some other virtual thing, but at no time is anything physical, representing concrete value, present.
In re the bubblegum example - when I was young, my grandfather handed my cousin and I a dollar to buy some gum, expecting we buy a piece or two and hand him the change. You can figure out the rest, I think. He was kinda pissed off.
Aside from that, a point nobody seems to bring up is just how unproven most cryptocurrency technology is from a monetary safety standpoint.
It's not just about a 51% blockchain attack. In multiple cases of some of the most popular cryptocurrencies, we've seen danger [0] (these are not the only examples). Nobody talks about this though, so while you're worried about centralized banking, consider for a moment the threat of bad actors to the core of your system.
[0] https://techcrunch.com/2018/08/09/cryptocurrency-insecurity-...
Of course many fanatics (some of the same people who still treat John McAfee seriously) will blindly "hodl" by the logic that it's gone up after the post-2013 crash, it must surely skyrocket again. Some people can justify their belief, but many are just playing follow the leader.
Volatility induced by technical failures in the cryptocurrency market should be just as concerning, particularly when people expect / expected the price to stabilize following the surge in price in 2017.
From a speculator's perspective, it'd probably be a riskier but more rewarding bet to make in the cryptocurrency space.
Could someone explain why did Bitcoin Cash split again, were there technical reasons that couldn't be resolved by creating a new cryptocurrency?
edit: clarification
The changes were mostly around blocksize (the camp that disagreed wanted larger block sizes), how transactions are ordered in a block, and adding/removing certain functions.
I think a lot of this is just stemming from Craig's ongoing desire to fraudulently control Bitcoin by claiming to be it's creator (the fork is called "Satoshi's Vision").
I'd stay far away from anything he touches.
Comparing him to Trump only speaks to the fact that Trump also has issues, not that Craig does not.
Moreover, the style of writing/behavior is polar opposite of Satoshi.
Question: was the Bitcoin breaks $20000 post ripped off the front page last year?
I've thought it was overvalued for a while but I still kept expecting the whole ecosystem to create something I or someone else might find useful in the real world. I've waited and waited and waited but no. Teams of brilliant people, tons of money, and nothing!
It started as a sort of crypto-libertarian critique of financial capitalism, but then it seems to have evolved rapidly into a "reductio ad absurdium" parody of financial capitalism.
Among other things I think this experiment proves that the excesses and absurdities of financial capitalism are not a technical problem. They are a social and political problem. The instant cryptocurrency got legs it became yet another speculative casino just like the rest of the financial system.
Edit: so prove me wrong. Does anyone actually use a cryptocurrency based system for anything other than cryptocurrency itself, speculation, or gambling?
The thing that's shocked me the most is the amount of money raised by ICO-type projects during the boom and the fact that not one of them appears to have delivered anything. I'd expect some to be scams, but every single one of them? Not a single reputable functional team raised money with an ICO and shipped something?
I'm excluding ICOs that shipped things of use only to other ICOs, cryptocurrency, gambling, and speculation. That's self-referential: crypto to make crypto for more crypto. I'm talking about things of use in the real world. That's why I called it a parody of financial capitalism. The point of money is to facilitate useful things, not to just chase itself around in circles. The latter is the essence of financial capitalism vs. real productive capitalism.
Ethereum's ICO was in 2014, and most ICOs were on Ethereum and are less than 1-2 years old. One of the older "smart contract" projects has been in development since 2013 and it is still a massive work in progress.
You have a shit ton of people who want to reap the benefits of what-to-come, in fact that is what ICOs made easier. What it lacks are extremely competent people willing to dedicate anywhere between 3-10 years of their life to make it happen. It is hard to say you can buy that with strictly money.
Edit: What just got to my mind is that we will never gain more bitcoins then those 21 million, but we surely will lose them (people lose they keys, die, whatever). Will the price go up to "infinity" or will it suddenly drop to 0?
This introduces a very unstable system. If the price of bitcoin doesn't (double + increase with inflation), as the block reward shrinks, the rewards will become useless.
1: https://bitcoin.stackexchange.com/questions/10486/when-will-...
I happened to be paying attention that day, and there was a brief period where the network was small because everyone's miners couldn't participate until they were updated. My little single-GPU miner was suddenly rather effective because I had it back up immediately while the difficulty was very low. These days I don't bother turning it on, but when the scheduled forks occur there's probably still some opportunity for the little guys.
However, I recently listened to a Reply-All episode [1] where a young girl casually received $100 in bitcoin from an anonymous individual mid-episode, a sort of restitution for having her account stolen, while corresponding with the thief on discord.
It took practically no time, and gave me some pause to consider how this might be a glimpse of the future. The exchange could have been done through PayPal or something else with less anonymity, but it wasn't, they used bitcoin. Perhaps it was staged, perhaps she was primed to have a coinbase account already by the show hosts knowing this would happen, I don't know. If it was an authentically candid situation, it would be somewhat remarkable that she was already prepared to accept the payment with zero friction other than asking "It's super long, right?" when asked for her bitcoin address.
So clearly there's already utility/convenience for some people today, and the fact that this group includes youngsters could mean it's just be a matter of their becoming mature adults continuing to use cryptocurrency before it takes over in a big way.
Here's the excerpt from the transcript for the curious and lazy:
----8<----8<----8<----8<-----
ALEX: And then (clears throat) he was like, “Look, do you have a bitcoin account?” And she was like, “Yeah.”
KEVIN: I sold the Snapchat for 100 so I’ll just send that directly back to you. So um, you can do whatever you want with that since it is rightfully yours.
ALEX: Lizzie, do you have your Bitcoin account number handy?
LIZZIE: Yeah.
ALEX: Do you want to drop it into–
KEVIN: Yeah, let me–
LIZZIE: It’s super long, right?
KEVIN: Yeah, yeah, yeah no. Post it. Yeah, yeah. It starts, uh, it’s usually with a three. You have coinbase, right?
LIZZIE: Yeah.
KEVIN: Yeah, let me boot up my ledger. Okay. [typing] Alright I sent it.
LIZZIE: Yup.
KEVIN: Got it?
LIZZIE: Yeah, thank you.
KEVIN: Cool. Yeah, of course. Yeah you can do whatever you want with that. If you wanted to donate it, go for it. And if you want to keep it and buy groceries go for it.
LIZZIE: Awesome.
----8<----8<----8<----8<-----
[1] https://www.gimletmedia.com/reply-all/130-lizard
[1.mp3] https://traffic.megaphone.fm/GLT8967905844.mp3?updated=15416...
(ambiguity intended)
In order to maximize "exchange of value", there needs to be a way to exchange tiny amounts of money easily. Right now there isn't such a way and crypto might solve it.
Bold statement.
> Right now there isn't such a way and crypto might solve it.
weak support.
Why do people need to exchange tiny amounts of money?
EDIT for clarity: Why do people need Crypto to exchange tiny amounts of money?
My vision is you would stock a wallet with, say $50, and then authorize a few of your regular sites in your client. Every time you loaded a new story, it might deduct $.01 for example.
Perhaps not with this tech, but one similar with fast transactions and tiny fees. See Iota for example.
Shifting from an ad driven to paid publisher/subscriber model has many advantages. Ideally you'd have a tech to support it which was a) not centralized, b) anonymous customer but visible vendor, and c) low transaction fees. This rules out credit cards and bitcoin but there are others.
I dislike that fact, but I don't think most people care. So micro payments are just a way to make less money than advertising-based models.
Of the 3rd-party produced works, I assume netflix pays them some fraction of my $x.xx/month based on my viewing time.
Citation needed. The impression I get is that other than a get rich quick/MLM scheme, there isn't really anything there of interest to the general population. And I say that as someone who has spent a lot of time thinking about Bitcoin and crypto in general.
Demand has crashed because speculation is much more difficult now, and it's much easier to get into a position where your only choices are (a) sell at a huge loss; or, (b) hold and hope it goes up and you can get out even. A few years ago when it was much more volatile unless you were very unlucky with your timing you didn't have to wait more than a month or two to be able to sell with substantial gains, and wait for another drop to buy back in (or buy in pieces on the way down).
DataWallet[0], for example, is building blockchain-based data hub for users to manage their data, in such a way that they (the users) retain control over it, and companies wanting access have to pay. Simplest use case: enter your contact info in 1 place only, not on every website you sign up for. More generally, I think something like this would be well-received by the public, given recent outcries around privacy, scandals in large tech companies, and the emergence of GDPR (specifically: regular people learning - perhaps for the first time - that they have a right to control the access permissions of the data they create, even on someone else's platform).
Another development of interest is Basic Attention Token[1], wherein users are essentially paid to watch ads. This project is pretty well-known so I won't say much about it other than that it does have consumer appeal.
Granted, the majority of blockchain projects don't (directly) address major problems that consumers have; rather, most address the problems that developers and/or businesses face. The hope is that some of these new technologies will enable said devs & businesses to build better products for their respective users.
[0] https://datawallet.com [1] https://basicattentiontoken.org/
Cash is already the perfect medium for exchanging small amounts of money.
Yes in person, but not over the internet. Crypto currencies definitely have potential for exchanging small amount of money there!
"At its peak, in November 2017, it briefly hit $19,783 - which means the price has fallen by about 75%."
If this were a real stock market and those were real $$$s, isn't that the kind of crash that causes great depressions or investors jumping out of windows (movie trope, but not really)
How can something so volatile possibly be worth pursuing or investing in, other then get rich quick schemes.
That's actually exactly the argument I've seen from many Bitcoin proponents, ironically enough.
On the other hand, I would say a country's economy weren't viable if their cash had crashed.
Sure, if the S&P/Dow/Nasdaq fell 75% people would be jumping out the window, but it's also never risen 300% in a few months like crypto did.
Crypto needs to be evaluated against other speculative investments and not against a long term vehicle like a major index.
Try 2000%, not 300%.
High volatility makes people rich -- that's the attraction. It also makes people poor.
Investors in GM & Chrysler (considered blue-chip value stocks at the time) saw their investments go to zero when the companies declared bankruptcy in the 2009 Financial Crisis. The S&P 500 dropped 50% in the same period. PG&E stock dropped by 53% in one day last week when it was revealed that they may be responsible for the California wildfires.
Pretty much everything worth investing in is that volatile. You just either need to be greedy when other people are fearful and vice versa, or have long enough time horizons for it not to matter.
Normally when there's a demonstrated demand for something, its price doesn't go down by 75% year over year. Well, outside of government price controlling
You could be right, but it doesn't appear that the thing will be bitcoin, at least not unless it's a different thing sharing the same name.
The promise of bitcoin was a currency. But so far, it's not being used as a currency, people are treating it more like gold than cash. Until people are actually using it in day to day transactions, it's just a collectible.
Now I have been payed in Etherium by a client a couple times, but it's such a hassle. That money's just sitting around because I don't even want to deal with the exchanges.
What's your definition of there? Being able to do micro-transactions? quick transactions?
Would transaction fees matter?
Now Bitcoin has much more value for me, as a tool to store money and transfer big payments. There's no easy way to transfer few thousand bucks between countries without dealing with state agencies, there's huge risk of frozen account, there's huge risk of being robbed, etc. Storing money is the same: your house could be robbed, your bank could default. Bitcoin solving those problems perfectly, aside from its fluctuating price, of course, but that couldn't be solved with algorithms anyway.
My feelings towards bitcoin(cryptocurrencies in general): A tool to misbehave in a society that is completely regulated and monitored. Its price is going to match the market for misbehaviour. The size of the market for misbehaviour is going to be based on how much the society deviates from moderate: that is, in total anarchy bitcoin can replace the total global money supply and reach millions of dollars equivalent per bitcoin and in totalitarian governments in multipole world order it can be the currency to trade between camps and illegals when the governments tells you not to.
Edit: Hey, it would be nice if you also write why you disagree.
I agree with this part. However, many of us are just negative because of the tendency to try and make blockchain a solution when it's not needed. Especially when it's used somewhere where you already have to trust a 3rd party. In those cases, a traditional ledger is fine.
Cash is a better tool for misbehaving. Bitcoin is a good tool for misbehaving remotely at a small scale, though even there something like Monero has it beat. The market for small-scale remote misbehaviour is small. Extant, but small—much smaller than the present cryptocurrency markets.
I think the reasons a lot of HN people are negative on bitcoin and blockchain are:
- For most use cases, blockchains seem like a really inefficient database. While blockchains are are neat data structure and might have some great uses in the future, most of the proposed use cases seem better served by a normal DB. Would love to be proven wrong.
- The "power used vs. utility provided" ratio of BTC seems insanely bad. A fairly small financial network (at the global scale) is sucking up a noticeable fraction of energy production.
- Crypto brought a wave of very non-technical get-rich hucksters into the tech scene doing pump and dump ICOs and the like.
- It seems like a lot of non-sophisticated, non-technical investors are getting duped out of their money. I hear all the time about working class people "getting into crypto" because they think it's a magic money machine and don't really understand the risk.
- And the biggest for me: Almost every crypto investor/fan I ask in person has NEVER used crypto to buy anything other than more crypto or to make small purchases. Crypto fans make huge claims like crypto is transforming commerce but it doesn't seem to jive with real life experience.
It used to be the other way around, that is, Silicon Valley is early in something that gets big from nothing and the rest of the world makes it's own version after it's proven to be worthwhile.
Other than that I agree that there's lot's of BS going on but on the early days of the Web, there was also a lot of BS happening too.
As a corollary to this, a lot of blockchain "solutions" don't seem to even understand the problems they're purporting to solve. They're shoehorning blockchain into issues where it's absolutely inappropriate and claiming victory. Elections come to mind.
Not long ago every app idea was getting funded only to decay in irrelevance.