Of course Dropbox is dumb when rsync exists. Of course og Twitter was dumb when group sms existed. Of course Bitcoin is dumb because...(waves hands in all encompassing disbelief). Wrong every time.
It doesn't pay to be the 'smartest guy in the room', as a figure of speech. It pays to be able to figure out how the everyman will act, no matter how much it pains you. And maybe those people who do are the real 'smartest people in the room.'
But with Bitcoin, even with the benefit of hindsight, I still don't get it.
Socially:
Some people don't trust governments to handle one of the most powerful collaboration technologies ever invented (money). All financial systems before Bitcoin were government controlled. Some have behaved in a trustworthy way, many have not. And over the longer term they all tend to mess it up eventually.
So these people set out to build an alternative that they believed governments couldn't control.
Technically:
The interesting key advance that made Bitcoin interesting and successful was coming up with an algorithm that solved the problem of getting parties that don't trust each other at all, to collaborate on maintaining a global ledger to everyone's benefits, without them having to even know about each other.
This is already a feature of money (I don't need to know about you to have indirect financial ties to you) but was not true of the financial system itself until Bitcoin.
Company scrip, community currency, hawala have all existed for centuries.
Also Bitcoin is also government controlled. It lacks the anonymity required to protect participants making it trivial for nation states to influence. And it does nothing to prevent the centralisation of capital that causes so much manipulation in traditional currency systems.
> And over the longer term they all tend to mess it up eventually.
Over the long term the probability of failure of all systems is 1.
All of these have the problem of centralized and permissioned issuance, where one entity can arbitrarily inflate the supply without the knowledge or consent of others.
> Also Bitcoin is also government controlled
In what way?
> It lacks the anonymity required to protect participants
This is false and does not make it government controlled. I’ll concede that there are many ways for one to lose privacy when using Bitcoin though.
> And it does nothing to prevent the centralisation of capital
The ‘centralization of capital’ isn’t an issue Bitcoin aims to solve. One of the big problems Bitcoin solves is the unjust accumulation of capital via arbitrary issuance (IORB, RRP, loans via newly created bank deposits, etc.)
It’s considered a security; a representation of value for sure. Move it around all you want until you’re blue in the face.
But money still has to come out of an exchange and through some sort of bank. So it’s all a shell game that’s decidedly not anonymous or protected at all.
That’s why so many have concluded that crypto is a scam; we might as well be smuggling Egyptian grave goods.
Which is great when applied to rural areas of underdeveloped countries. But realistically it's more about financial infrastructure for criminals, outcasts, scammers and rich people in counties with strict financial controls
Bitcoin is completely useless as a currency since its value does not decline with time, thereby making it an investment vehicle instead of a currency. An asset can't be good at being both a medium of exchange and an investment. Only criminals use bitcoin as currency, and they do it because the alternative for them is moving cash around in suitcases.
It's neither over-logical nor "smartest guy in the room" to equate Dropbox with rysnc. Instead, it's a category error.
Consider that rsync syntax is basically : rsync <src> <dst>
Before that command is run, that "<dst>" has to exist somewhere that's reachable by all client devices that want to see the same files. That means creating that "dst" target such as arranging a $5/month VPS at Hetzner, or a self-hosted NAS at home with Tailscale/CloudflareTunnels VPN, etc.
Dropbox takes care of the "<dst>". rsync does not. That makes a profound difference in usability for non-techies.
(One could use rsync only as a peer-to-peer sync between client computers with no "server" but that doesn't work well for a 1-to-many file sharing setup to facilitate a "Single Source Of Truth".)
Interesting cases, thanks for sharing. I didn't know what real-life inspiration the movie "Rain Man" came from. However, the two people seem to be worlds apart socially. While Peek seems to be extremely "stunted" in his social development, Flansburg appears to be coping well with his position as a speaker, which I always thought to be rather unusual for people with autism spectrum disorder.
One of them is in the class of "if enough people believe it, it's true", the other one is actually subject to logic.
Twitter/Dropbox offer more convenience to people: Bitcoin offers _less_. That's why people are using Bitcoin for two things: crime and speculation. People aren't buying houses with Bitcoin, they don't use it as a store of value (because it has extreme deflation), and they aren't doing their books using BTC as the currency.
What features/improvements does Bitcoin offer over the financial system? So far, the differences to me seem to be
- It's easy (or at least possible) to get a bank transaction reversed by going to court.
- If you forget your password, your bank can reset it and you don't lose all your money.
- When you transfer money using your bank, it arrives immediately in the recipient's account. When you transfer money using Bitcoin, it takes hours. The bank checks that the name matches the bank account number beforehand.
- If you get hacked, and the hacker tries to steal all your money, your bank's fraud detection system will kick in and stop this.
- Banks are regulated, and the currency is stable. This means that you can quote a price in USD, and do your accounting in USD, whereas very few people do their accounting in BTC.
- People have faith in fiat currencies because they have state backing, which means that the central bank will intervene to maintain price stability.
It is also a dump speculative asset. I'd even claim Tesla stock is better as speculative asset, at least it may be a positive-sum game.
Caveat: I am one of those people OP mentioned.
{{currency}} is a negative-sum game. You can only get out what others put in and {{entities}} continuously have to {{maintain infrastructure}}.
An actual argument could be derived from the last point by asking whether the cost of maintaining the infrastructure is worth it. This is something the market decides.
It's common knowledge that one shouldn't pay back a low-interest loan faster than is expected, because it's better to have liquidity or to invest.
But it's real easy to look at the past and say "oh I could've invested in that". It's also very easy to look at success stories and forget that poverty is widespread and the poor don't talk about their misfortune.
Video games are interesting because you can count how many times your character dies before you actually manage to finish the game.
Others who were very early (source: I was there and interacted with them) were extremely wealthy investment bankers with a track history of being able to make money, some kinds of cryptographers (Hal, Adam, etc) and others who were ultra-competent, often inventors of new technique in their own right.
It's a well-studied but unfortunately not particularly well-known result that the people most interested in Bitcoin are at the two ends of the expertise spectrum—highly highly financially competent, and financially incompetent people.
You will never hear from most of the highly-competent people because they also recognize that being noisy about owning Bitcoin draws a giant target on their backs. E.g. try and find ArtForz now.
I would offer that the late and very great James Randi's often-repeated comments on ultra high-skilled people being some of the easiest to trick are probably illustrative, and my personal opinion at the moment is that many of these people have been tricked long ago into thinking that Bitcoin is something bad.
We may not get rich, but we may miss out on becoming poor, too.
But it is important that you keep thinking that you are the smartest man in the room.
Why would cynics be poor? The OP mentioned "techies", many of whom have jobs paying 6 figures a year.
Sceptical people will be grounded by what we know to be true. They will explore new ideas but will not be swept up by them. We need people like that or we'll waste our time on flights of fancy. But we need the irrational optimists to explore new ideas too. It's a classic exploration vs exploitation trade-off.
The Cynic has enough if he has his cloak and found some food in the garbage can. He feels like he has enough. You might feel like that's not enough.
Conversely I might think the richest man in the world (by net worth) has enough. He feels like he needs more.
But it could be this too in some cases.
Some people do things unless they find a reason not to but so a skeptical person will only do things if they find a reason.
People who really feel they have enough might not see any reason to spend their time or effort placing bets, even on things they think are probable. But I don't think many people think that way.
Quite the opposite: it takes a lot of strong will and risk to talk against a hype. A kind of risk-affinity that unluckily rarely makes you rich. :-(
Same for friends living in high inflation LatAm countries - crypto stablecoins are a way to escape rampant inflation
They want cryptocurrency because it helps them avoid taxes and trading fees.
In a lot of these places, things like Paypal don’t work. So you have to send wires. You get an awful exchange rate + fees for sending it. And they get an even worse exchange rate when receiving it
You easily lose 5-10% spread for every payment
And the “avoid taxes” part is, again, heavily western biased where for all their ills, the governments actually work for the people. I say as someone from a third world country - taxes are largely siphoned off by politicians and bureaucrats. Everything from public schools and hospitals and roads are unusable. Avoiding taxes is perfectly morally correct if all it does is feed an oppressive machine
Even the volatility of BTC really doesn't seem like a dealbreaker when you've seen your country's own currency lose 50% of its value in a year.
My best idea, that probably gives governments too much credit, is that it's pretty useful to have a transparent record of illicit money flows, and that you can be OK with a bit of crime to get it.
Governments are huge and consists of many different institutions. I guess many would like to see Bitcoin stopped, but how to do that without fondling with the basic human rights, such as the right to free communication? So far the governments have been regulating it, trying to reduce the illicit use, which doesn't really stop it but actually makes it more legitimate.
Most bitcoin users aren't storing illicit assets. They're hedging against the state doing something absurd.
[edited to correct a couple of typos]
I don’t remember the powhatan or Lenape (Virginia-MD-PA tribes that were exterminated in order to build the core of the US trade and political networks) being consulted on any of this.
So, the answer is more or less "all of them," from dollar parity day to the latest all time highs.