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Comment by wpietri | Hacker News Reader

I would probably object to Bitcoin counting.

Its original notion was "peer-to-peer electronic cash". As best I can tell, there's almost no significant legal use beyond speculation. [1] Even prominent Bitcoin advocates have admitted it isn't a good currency. [2] Illegal use is self-limiting; if Bitcoin becomes mainly known as the crime currency, it'll be truly screwed, as governments everywhere will further crack down on conversion and use, driving off investors, developers, business partners, etc.

I think it's especially obvious how much it's failed as e-cash when you compare it with M-Pesa, an African e-money system. [3] It started just a year before Bitcoin, but does something like 100x the transaction volume and is wildly popular in a number of countries.

[1] E.g., https://www.nytimes.com/2018/04/16/nyregion/new-york-today-l...

[2] E.g., https://avc.com/2017/08/store-of-value-vs-payment-system/

[3] https://en.wikipedia.org/wiki/M-Pesa

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Bitcoin is the most transparent form of money invented and in circulation. That's why a number of studies you can find online place criminal activity quite low. Who wants a trackable currency vs dollars?

It's a very interesting thing to call it "money". It's ... not. Not unless you want to call every scarce good money. This has bene rehearsed many a time over the years. It's too volatile but be usable as a unit of account, it's not backed by a nation state and it can't be used to create credit. These are all important functions of money and Bitcoin has none of it.

And no, it's not a Ponzi scheme either, it's a new kind of scam: https://prestonbyrne.com/2017/12/08/bitcoin_ponzi/

not being controlled by any government and not being able to create it out of thin air for credit is a feature not a bug. but if you are calling bitcoin scam in 2019 I don't think we can have a rational argument.

It's a feature for a very small number of people with a quasi-religious aversion to government-backed money. It's also a feature for criminals. But both historically and currently, the great majority of people seem to quite like currencies backed by well-run governments.

for criminals see the root of the comment you are commenting on. fact: it's not popular among them.

Not being controlled by a government is a feature for all criminals. Bitcoin has other issues that make it less popular for criminals, though.

I don't get the sequence of your thought. Not being controlled by a government is a feature of a global currency such as the IMF currency. Or Gold. Do you think a global currency not controlled by one entity is good for criminals? Why? How?

https://www.imf.org/en/About/Factsheets/Sheets/2016/08/01/14...

> The SDR serves as the unit of account of the IMF and some other international organizations.

> The SDR is neither a currency

And gold is not a currency either. It's a scarce good, nothing less nothing more.

It was an example.

> not being able to create it out of thin air for credit is a feature not a bug.

Credit predates capitalism by thousands of years and noone has shown any sort of working economy running without credit.

that's why it's an experiment of course

it's a scam nothing more, come now. https://prestonbyrne.com/2017/12/08/bitcoin_ponzi/

it's an opinion that needs hours to debunk. All I need to say is that he includes a quote from Naval. Lol. Naval is a big proponent of bitcoin and blockchain. Talk about getting facts wrong.

WaPo already in 2015 summarized it thusly:

> So the Bitcoin faithful have tried to not only convert people, but also convince them to martyr themselves, financially-speaking, for the crypto cause. It goes something like this. - Hey, do you want to hear about the future? It's a digital currency called Bitcoin that lets you spend or move your money online without paying any fees. - Sounds great. How does it do that? - Well, Bitcoin saves you money by making transactions irreversible. - So ... if I get scammed, I got scammed? There's nothing I can do about it? - Yes. - Okay, but is it at least easy to use? - The thing is, I don't actually use it. I just hoard it. I'm waiting for some greater fools to push up the price by using theirs. - Oh. - Yeah. So you should buy some Bitcoins and use yours. - I'll get back to you on that.

If you subscribe to the hodl mantra and advocate for Bitcoin, this is exactly what you do...

If you bought bitcoin in 2015 and hodled you would have 2000% profit now. Don't even go there.If you give dollars IRL to a scammer you don't get it back. There are so many false and useless claims with these narratives. Just make an opinion on your own or if you want to only listen to "important" people listen to the people that invested in Facebook and built all the Silicon Valley (Winklevoss, Draper, Andressen Horowitz, Wozniak, Jack dorsey, YC etc etc etc). Their opinion matters.

You'd have 2000% profit today; you had a lot more in 2017 and within a year or two you will lose it all.

it's always like that with any breaking the status quo technology. either make it big or break. it doesn't matter if you think this particular technology will fail. it doesn't make it a scam. your government even and your congress (I suppose you are american) believes it's not a scam since you can pay taxes in it. Hey, is something that you can pay taxes with a currency? No? Why?

> not being controlled by any government

That's not the same as "not being backed by". Uncle Sam seems to be doing a pretty good job of asserting his control over it[0], while the Fed isn't guaranteeing it. Worst of both worlds, isn't it?

[0] https://www.coindesk.com/goodbye-fungibility-ofacs-bitcoin-b...

The amount of transactions is much higher, but the amount of money being moved is much lower. The highest number I could find for yearly transaction amount in mPesa was 3.7 Trillion Kenyan shilling, which is about 36 billion$. Compared to that, bitcoin moved value for over 400 billion$ in 2018.

I agree with you that the mPesa transactions are much more likely to be transactions for goods and services, but I don't think Bitcoin can be counted as an abject failure just yet.

Your valuation number for Bitcoin is driven by a speculative bubble, so it's not a fair comparison. And, "electronic cash" should have a lot of small transactions. That Bitcoin is mainly large transactions is a sign it's a bad cash replacement.

I agree that Bitcoin won't be counted as a failure yet, but I think that's part of the problem. As a hypothesis, Bitcoin apparently isn't falsifiable. Consider the Fred Wilson article linked above, where a Bitcoin advocate admitted that it wasn't a good payment system. But he immediately declares it a store of value. Now that we've had it crash by 80%, it's pretty clear that it's bad for that too. If there isn't a new consensus answer to the question, "what is Bitcoin good for," then its advocates just shift to the possible shining future based on hope and potential. And note how its distributed, peer-to-peer promise has quietly drained away.

Bitcoin can apparently never fail. And I think that's part of what guarantees its failure. Nobody expects an early product to be perfect. But good products evolve and expand to better serve users. As it became clear Bitcoin was not very good for its stated purpose, it could have changed and grown. But speculation was too profitable, so it got stuck in a very deep rut. If some blockchain currency becomes actually useful, I suspect it would be one of the hundreds of competitors. But given that none of them seem to be delivering real-world economic value either, I'm not optimistic.

> there's almost no significant legal use beyond speculation

Citing an article about a guy trying to use it exclusively is a bit odd as a source for "almost no use".

The big payment processors process up to over a billion dollars of completely normal white market payments per year. That's likely mostly enthusiasts, but still a decent chunk to make a profitable business or two from, and very far from "almost no use".

"Cash" has a very specific meaning from those interested in private currencies, which has nothing to do with how well adopted it is. It means something that is a transfer of value (and not an IOU), that is fungible, with private transactions between parties. Bitcoin is questionable on the latter but pretty good on the former. The white paper must be understood in this context.

The fact that Bitcoin has value at all is an astounding success, compared to what most other casuals observers (myself included) thought about it.

> The big payment processors process up to over a billion dollars of completely normal white market payments per year.

I would love to see your data for that.

But "big payment processors" are definitely the opposite of "peer-to-peer electronic cash". We already had big payment processors. Those are much more efficient.

> fact that Bitcoin has value at all is an astounding success

It strikes me as a pretty uninteresting kind of success. Tulip bulbs and Beanie Babies both had very high valuation for a while. But in the long term, prices generally fall back to what's sustained by use.

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