1. Avoiding Venezuelan hyper-inflation - it is a use-case, but doesn't really apply to the United States for example.
2. Store of value - volatility is way too high and there are much better alternatives (Treasury bonds)
3. Evading capital controls - it is a use-case, but not really applicable to most citizens in the US, and is unlikely to be applicable in the future.
4. Settlement layer for banks - banks already have a settlement layer that works for them.
The downsides of a decentralized system vs. a centralized system are an increased cost (in energy, computation, time, money, etc.) of transaction. So what justifies the cost?
To me, it's trustless money. I don't need to trust the US gov, I don't care about who they will elect or which wars they are gonna start or which banks they are gonna bailout.
You can verify everything through code and math. If that's not valuable to you, maybe there's some other use case you're interested. If you've done your research and there's really no use case that excites you, then you can just ignore it.
Bitcoin itself is inherently trustless, that's the whole point of it. You can trust that there will never be more than 21M Bitcoins, you can trust that there will never be a double-spend, you can trust that it will run 24/7, etc.
Whether it will gain worldwide acceptance is another matter (btw, adoption is increasing at very fast pace now), as long as there's a subset of the world that accepts it, that's good enough for me.
No it isn't. If the Bitcoin devs and miners agree on a change (for instance, to increase the cap), it'll happen, so you have to trust them.
And even if that change were to go through, there will still be people running the old chain (Ethereum Classic is still alive). So those parameters would only change if they improve the network for most stakeholders, otherwise, most people would stay on the old chain.
Sure, but the devs do have the "Bitcoin" name, which would leave them well-positioned to market their changes. Bitcoin Classic may stick around, but like Etherium Classic, it may not be very healthy: https://www.coindesk.com/ethereum-classic-blockchain-subject...
People in the Bitcoin ecosystem.
For example, when the Bitcoin/Bitcoin Cash split happened, you had people dumping one for the other to manipulate the price in their favor, you had miners that decided which one they wanted to mine, exchanges that decided which one they wanted to put under BTC ticker and some people that just stayed on the sidelines waiting to see which chain would prevail.
For a brief moment, Bitcoin Cash was actually close (in price, adoption, etc), but then eventually people chose the original chain as Bitcoin and we know the rest.
Just goes to show it’s not necessarily clear cut what’s considered “original” at every point in time.
Canonically, Bitcoin considers the longest chain in terms of accumulative difficulty (roughly translatable to hash power) the “real one
AFAIK adopting segwit is a soft-fork (existing clients will continue to work, only miners need to update), but raising the block limit is a hard-fork (all clients need to update).
Governments of course. Anything is better than trusting governments.
If there is nothing to spend your Bitcoin it's worthless. If there is no US economy that is begging to exchange "worthless" dollars to Bitcoin then your Bitcoin will not amount to much. Really, when people are betting on Bitcoin or gold they assume that in the future there will be a bigger pie and thanks to their ownership stake in Bitcoin or gold they receive the same percetage portion of the bigger pie. If the pie shrinks because of a war then guess what? Your Bitcoin will be just as worthless as the dollar.
Money is ultimately a reflection of power, and decentralization is merely a tool for when those power structures limit the market.
Because I expect that it will continue to significantly appreciate (it has gone up 10X or more in the last year!), I couldn't care less about its volatility. I expect that as its exponential rise slows down (like all exponential growth, it must come to an end, perhaps after a few more halving cycles), the volatility will decrease accordingly.
You're right that there are other systems to store value, but it doesn't follow that Bitcoin doesn't have value as one. It does for me, today. I've used it (together with some other systems to store value) in a very real sense to store portions of my salary and, months later, consume it, acquiring tangible assets. I couldn't care less about having to convert it to Euros first, that doesn't make it any less useful to me.
Then you don't use it as a store of value; you use it as a speculative investment.
But sure, you're free call it whatever you want and continue to push your world view, and miss the point that, for me, today, it is very useful.
In a similar way, BTC will evolve. It arguable already has. All the money flowing into cryptocurrencies and the crypto tech stack drives more and more competition (and yes - also corruption and bad behaviour) and some of it will be meaningful. Just like some tech startups were/are scams, some are kind of useless but harmless and a few changed the world. I personally don't know what problem(s) crypto will solve, but I can see that the technology summons a lot of creative energy. Creative energy that gets empowered through capital and channeled through competition will eventually produce breakthroughs somewhere. Let mankind's creativity run wild and let yourself surprise by the unexpected outcomes!
LN also requires a constant observation of the LN network or malicious actors can just take more from a channel than allowed. This eventually leads to entities specialized in monitoring the chain for the average Joe. You could call those payment providers.
Not true. Cite a source.
Lightning Network Whitepaper, section 3.3.4 states very clearly:
"For this reason, one should periodically monitor the blockchain to see if one’s counterparty has broadcast an invalidated Commitment Transaction, or delegate a third party to do so. A third party can be delegated by only giving the Breach Remedy transaction to this third party. They can be incentivized to watch the blockchain broadcast such a transaction in the event of counterparty maliciousness by giving these third parties some fee in the output. Since the third party is only able to take action when the counterparty is acting maliciously, this third party does not have any power to force close of the channel."
Channel factories solve this issue by being able to create and close many channels at once.
> LN also requires a constant observation of the LN network or malicious actors can just take more from a channel than allowed.
These are called watchtowers, they never have control of your funds, they are simply watching the blockchain for counterparty actions, which if they tried to steal your money, they would end up losing all theirs, so just knowing that you might be using a watchtower is a very strong deterrent to not cheat you.
Watchtowers are what I meant with payment processors. You need to pay them to watch the chain in case the other party tries to literally steal from you. You can call them whatever you want, it's a third-party, just like Visa.
I love how all these cryptocurrency concepts have "traditional" counterparts, btw. Or it's rather the other way around.
It can be a third-party or you could also run one yourself, there's nothing stopping you.
I wouldn't be surprised to see counterparts, just like email is "mail on the internet", but there are also fairly novel concepts like flash loans which are just not possible in current financial system.
Problem solved without Bitcoin. You won't get rich from just holding it, though, and we all know that this is really the only goal of cryptocurrency proponents.
With cash, not only you won't get rich holding, the FED is determined to make sure it's value goes to 0. It seems like you've already made up your mind anyways.
How do you send cash over the internet though? That part is hard.
Get rich
Destroy trust
https://www.coindesk.com/the-defi-flash-loan-attack-that-cha...
That's an ... amazingly blanket ... statement, for the countless thousands of words people here have said on the topic.
It's somewhat pointless to argue with random strangers on the Internet who may or may not appreciate your effort at reasonable discussion. If you believe in your own arguments, put your money where your mouth is and be proven right economically and be the one who quietly owns the last laugh.
That's an opinion, not a fact.
BTC genuinely uses a stupid amount of energy and there isn’t a terribly good reason for it since we don’t need a completely trustless financial system outside of some libertarian ideal. It would be necessary if establishing trust was impossible but it isn’t.
BTC transaction fees and throughput are still an issue. Off-chain transactions that use the main network as a settlement layer is a non-solution that undermines the whole point of BTC. Might as well just use banks as a settlement later for the lighting network for all it matters at that point.
Volatility and the fact that BTC is more of an investment vehicle than anything else matters if you want to actually use it to buy stuff.
The fact that there is no form of monetary policy means that the available currency doesn’t expand and contract with growth in economic output which makes prices unstable and naturally deflationary.
BTC is fine as a nerdy digital cash and commodity market based on its value as such but a general purpose currency it isn’t.
Who's "we" ? I certainly do need it.
Why do I need a fully trustless system that is worse in every other category? Slow, more expensive, less consumer protection, etc.
At the very least its not obvious and the market has not spoken. Even people speculating use off chain exchanges, not the chain itself.
Have you ever had your entire bank account confiscated by the government? That's what happened in my country in the 90s:
https://en.m.wikipedia.org/wiki/Hyperinflation_in_Brazil#Col...
Inflation was out of control and the president decided to freeze everything in some kind of desperate attempt to control it. They took away everyone's money.
People who say they don't need cryptocurrencies are way too comfortable with their banks and governments holding all the power. I don't really care how much energy it uses, I still want it to continue existing just in case my government starts getting funny ideas again.
Before you say that drug dealers ceasing to use Bitcoin is a good thing..., it really says more about the ability to regulate Bitcoin and the ability to trace people than it says anything about the users of Bitcoin suddenly deciding they are law abiding. Secondly, drug dealers are forced, absolutely forced, to use your cryptocurrency, they are the few users that absolutely cannot do without cryptocurrency, at least not over the internet. Cash is still king, but only on the street. If the most "diehard" users of the cryptocurrency move on that is a signal that it will absolutely fail for all the "softcore" users who don't really need your cryptocurrency.
Bitcoin "people" hail second layer scaling solutions like lightning which is basically paypal but decentralized. So why on earth would you not expect the people/companies who would participate in lightning to not just build their own scaling layer? What we are seeing is just that Visa and other competitors build a central scaling solution outside Bitcoin. Thus Bitcoin failed to decentralize anything if the vast majority of people using Bitcoin don't even interact with the block chain.
The fees are incredibly high, so high that any Venezuelan that is using Bitcoin is already rich and just wants to flee the country with their wealth.
It's not private, anyone who knows your address can track your balance, your transactions and can even send tainted Bitcoin to you, to ruin the untainted Bitcoin in your wallet.
>lack of backing have all been responded to, to a sufficiently satisfactory degree.
They haven't. The only thing I see is that people consider Bitcoin as the perfect Cryptocurrency as it is and nothing has to be changed to make it better, yet they expect the market cap to grow forever without doing anything for it, but still assume that the changes they refuse to implement will be the driving force of that value.