Out of the loop question - I've read that transaction costs have risen drastically and it's now around $10 per transaction.
Doesn't this mean it's essentially failing in its goal to work as a currency? Why do people still buy it / believe in it?
Doesn't this mean it's essentially failing in its goal to work as a currency? Why do people still buy it / believe in it?
It’s 2020 an ACH transfer costs in bulk about 1/10th of a cent and has no practical cap.
Also, why. It makes no difference.
Back in 2014 I was consistently selling BTC to friends in Brazil at a rate that made perfect sense for them and even above the BRL-USD rate.
This year I paid for all of my domain renewals using BTC on namecheap. Hundreds of dollars.
You can go to a service I provide right now and you can purchase the services with ethereum and ERC20 tokens. I also accept Raiden, which can make the transaction cost virtually zero.
I will reiterate what I asked in first comment: instead of just arguing with the amygdala, is there any chance you can establish a set of parameters and values that will make crypto (not necessarily Bitcoin, not necessarily Ethereum) something you consider worthy of a experiment, or are you forever going to believe that the status quo is the best we can do?
> Also, why. It makes no difference.
You playing the cynical permabear who sees no point in building on blockchain tech is no different from a corporate drone who does not understand why people work on Free software without any immediate financial reward.
Even if Bitcoin fails, it has already paved the way for something that won't. You may not care about your freedom and self-reliance, but it ABSOLUTELY makes a difference.
Well played, I upvoted you in no small part because of your wordplay there :)
I see no point in building anything backed by proof of waste, it’s simply not a reasonable value proposition. It’s like trying to build coal fired cars. Yes you’ll build a car, but it’ll be wildly less efficient and strictly worse than all alternatives. That eliminates a good 90% of crypto currencies by market cap. Setting aside for a second that the market cap of a currency is a nonsensical metric, currencies are what you measure market cap in not of.
Permissionless and irreversible are not things humans want or benefit from. Permissionless is what has allowed North Korea to fund its nuclear program with billions of dollars of cryptocurrency. It’s what allows ransomware authors to get paid and shut down schools and hospitals. It’s what allows laundering the proceeds of crime. It’s what allows rampant market manipulation.
Decentralized prevents the currency from responding to externalities like births, and deaths, and pandemics.
And that really knocks out the rest.
The reality is trust is a huge optimization.
Beyond that most solutions are cheaper, faster, simpler and map better onto human fallibility if implemented as a MySQL table in RDS. Then you can secure it with a Merkel tree and call it a day.
No, I’m not bullish on crypto because it has yet to, in 12 years, do anything better than what’s out there today except separate suckers from their money. It’s great at that. And this is in spite of some of the smartest minds in the world working day and night to do so. If a single crypto product shows even a 1% improvement over a classical implementation along any axis I’ll eat my ... er, hat (yes, that’s a John McAffee reference) and buy your bitcoins at what I’m confident will be a dramatically higher price.
> You may not care about your freedom and self-reliance, but it ABSOLUTELY makes a difference.
There’s no such thing, we live in a society.
So, I guess, I respectfully disagree but always appreciate hearing the other side.
> backed by proof of waste
Already claiming that PoW is the only possible approach. Off to a good start.
> Yes you’ll build a car, but it’ll be wildly less efficient and strictly worse than all alternatives.
The first electric light bulb was certainly less efficient than candles or oil lamps. The first airplanes could barely carry the pilot. Should we give up work on new technology simply because the current iteration is not better than the status quo? What a lame attitude.
> That eliminates a good 90% of crypto currencies by market cap.
You said it yourself. Market cap is a bullshit metric from the perspective of the technology. Irrelevant to the argument.
What is relevant is that a good number of these different currencies are trying different approaches to solve different problems, or trying to implement different financial models, different levels of centralizations/trust, and so on. For every aspect of Bitcoin that you criticized, there has been a different project that tries to overcome that. Yet, you completely ignore it just because it is easier to look at what is wrong in the present instead of working to fix things for the future.
> Permissionless and irreversible are not things humans want or benefit from
Contradicted by the amount of people putting their time, energy and money on. YOU don't want it, fine. YOU don't speak for everyone.
> North Korea, ransomware, money laundering.
FUD and bullshit. Do you blame the use of petrol for enabling Al-Qaeda or left-wing dictatorships in Venezuela? You are very well aware that money laundering already existed before crypto. Have you renounced your use of banking systems because of all the drug and weapon traffickers that used HSBC to launder money for so long?
Criminal activity and the need for spending resources in security is never going to go away.
> Decentralized prevents the currency from responding to externalities like births, and deaths, and pandemics.
Okay, that's the third statement based on the current implementation. Hat-trick!
> The reality is trust is a huge optimization.
Definitely! No serious person would challenge that. No serious person would also challenge that systems that are too optimized are more likely to fail in unpredictable ways and collapse after Black Swans.
This is why decentralization is important. It's not about efficiency, it's about hedging bets to improve our chance of surviving catastrophes.
> has yet to, in 12 years, do anything better than what’s out there today
That's FOUR! This kid is on fire...
> There’s no such thing, we live in a society.
Societies. Plural. To be honest, I am more concerned about people that want to establish an "universal" society than I fear all of the scammers that try to exploit people in crypto.
I didn't, I tackled the most prominent first.
> Contradicted by the amount of people putting their time, energy and money on. YOU don't want it, fine. YOU don't speak for everyone.
I think you misunderstand. Many people put their time and energy into it because it's overwhelmingly a get-rich-quick scheme. If the price went down to $1/BTC you can bet your behind nobody would care at all anymore.
> FUD and bullshit. Do you blame the use of petrol for enabling Al-Qaeda or left-wing dictatorships in Venezuela? You are very well aware that money laundering already existed before crypto. Have you renounced your use of banking systems because of all the drug and weapon traffickers that used HSBC to launder money for so long? Criminal activity and the need for spending resources in security is never going to go away.
I do, which is why I believe in technology that can make the problem better instead of technology which surrenders to the criminals and walks away.
> Okay, that's the third statement based on the current implementation. Hat-trick!
Sure, if you pretend there's some platonic ideal cryptocurrency that doesn't have any problems, and is perfectly efficient, why not? I'll be waiting for OP to deliver.
> FUD and bullshit.
Not if you decided to look for information. $2 billion dollars and counting as documented by a pro-crypto news source. [1]
That's the definition of permissionless. Many pro-crypto folks hold this up as an example of crypto working properly! "Why should we allow America decide who can and can't spend money! Iranians and North Koreans should be able to conduct commerce internationally too!"
> Societies. Plural. To be honest, I am more concerned about people that want to establish an "universal" society than I fear all of the scammers that try to exploit people in crypto.
You misinterpreted. That expression implies we each live in our respective societies but that nobody is self-sufficient.
[1] https://cointelegraph.com/magazine/2020/10/09/north-korean-c...
You may have a lot of people on the hodl camp, but a lot of people are like me - less worried about lambos and more focused on ensuring that we can create feasible alternatives to the status quo.
Yes, there will be a vast majority of people that are in it for the short-term gain. It doesn't matter. Every market needs to have speculators. I will still be focused on the long term.
I am not betting my life savings on it and I am not recommending anyone to do so. What I am telling people though is that crypto will be a fundamental part of how groups of people coordinate themselves and allocate their resources, and that the sooner they start getting acquainted to it the easier it will be when it is more mature for wider adoption.
> North Korea... $2 billion dollars and counting as documented by a pro-crypto news source.
I am aware of the story, this is not what I am calling FUD. What I am saying is that you are using crypto as a scapegoat. State-sponsored terrorists can cause damage regardless of them being financed by crypto, gold, oil or greenbacks.
Black markets were not invented with crypto. Money laundering is estimated to be between 800 billion to 2 trillion dollars. Those were the number before crypto, yet you make it sound like BTC, ETH, ZEC and Monero are the Four Horsemen of Apocalypse. THAT is what I am calling FUD and BS.
> platonic ideal currency
I know it will never be perfect. No implementation of any system ever is. But the only way to have something better than the existing flawed solutions is to iterate, use it, test it in the real world and keep improving.
To make an analogy with Free Software: I know that is never going to be perfect or satisfy every use case, but its flaws are on the implementation side, not the principle. The more I use and the more I contribute to it, the less people get to be dependent on proprietary crap.
What you are saying is that people should not bother working on making a better Free Software Desktop because the current systems are not as "usable" as Apple and likely will never be. That is, quite frankly, a horrible way to live.
Ah, now I understand the name "Lightning Network". Cheers!
US interchange is about 1.8% and that’s largely returned to buyers in the form of reward programs. The remainder is split between profit and the cost to originate and service loans. This isn’t a bad deal, at all, as studies show merchants enjoy 20% larger ticket sizes and don’t have to fear theft of cash or scammers taking their crypto - while customers enjoy protections and rewards.
In Europe interchange is capped at 0.3% for credit and 0.2% for debit, so of course they Don’t have reward programs.
A Bitcoin transaction costs $10 in fees and $80 in electricity so you’d need an average ticket size of $30000 in Europe ($5000 in the US net of reward) to make BTC more efficient.
In what context? I've read some of the posts that you've made in this thread and at this point i'm almost certain that you either work for a bank or for a credit card provider. You are glowing.
It’s not bad in the sense that merchants get larger average ticket sizes and avoid a lot of risks, customers get insurances and protections including chargebacks, the ability to defer and consolidate their cash flow via 1 month no interest loan.
A bitcoin transaction does not cost $10 (https://mempool.space/graphs#1w). If you are going to add in your (completely made up?) estimate of mining costs to a bitcoin transaction you would need to include the costs of the entire fiat payments and settlement infrastructure to the costs of credit card transactions. From gold mined and stored by central banks all the way through to the energy used by the back offices of commercial banks all over the world.
At the time I posted this, the average fee was hovering between $8 and $14 per transaction, and so I picked a fairly generous, low average.
> If you are going to add in your (completely made up?) estimate of mining costs to a bitcoin transaction...
It's not made up, it's available for you to review and criticize here [1], with all the linked studies available to you. I specifically did not include the 700 kWh at a global average $0.14/kWh ($98) so as to avoid inviting this criticism.
> ...you would need to include the costs of the entire fiat payments and settlement infrastructure to the costs of credit card transactions. From gold mined and stored by central banks all the way through to the energy used by the back offices of commercial banks all over the world.
Without going through the process of estimating what it is, I can tell you what it isn't -- even close to the same order of magnitude as BTC. I know that because if I scaled up linearly the energy consumption and e-waste generation of BTC vs. just Visa it would require several times more energy than the entire world generates today, and would generate more e-waste than the entire world generates today.
It's wasteful, and it's shameful for people to defend it like this. Its energy usage is not comparable, at all, no matter what externalities you tried to bundle in. Now there might be a case to be made that the energy usage is worth it, but deflecting the energy usage criticism with hand-waving about including the calories exerted by gold miners swinging pick-axes under the earth is at best disingenuous.
However, 10 years later, Bitcoin has proved to be a new kind of financial instrument, with extremely useful properties unmatched by any other kind of asset.
At this point, of all the things Bitcoin can do that other financial assets can't (pseudo-anonymous, extremely hard to confiscate, can be moved quasi instantaneously across borders, demonstrably finite supply, can be use as a settlement layer for large players, etc ...) the one aspect that I believe attracts people is "store of value".
Many people contest that last property citing high volatility, and they're correct if your window is less than 4 years. But for folks who play the long game, supply and demand tells a verycompelling story for Bitcoin.
Calling Bitcoin a "currency" at this point is essentially incorrect and just creates confusion.
Currencies are tangible, generally recognizable and agreed-upon value containers to be traded for goods and services.
Calling it anything else at this point, I'd contend, would likely be essentially incorrect of its own merits, and I do think trying to separate it out would create confusion as it really does no good at all.
It is certainly a special kind of currency, but no different than some of the other universal currencies that we've had in the past, really, at all.