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Comment by oskarth | Hacker News Reader

I think you are mischaracterizing many of the comments. The abstract value concept is not new to people. What is confusing however, is what the uses are.

In the case of Bitcoin this is easily explained: Silk Road, "laundering" (for good or bad) and speculation. Since this is the first time many people have heard of this currency a natural question is: who is using this and why?

In the case of this specific currency, it seems like it's mainly used on social networks like Reddit for small transactions (tip), and due to its origins as a cheap joke currency it managed to get early traction. With this explanation in hand, the concrete uses becomes more clear.

Abstract values don't exist in a vacuum. There's always a concrete use of it, even if it's just speculation (Tulips) or gestures of goodwill (~ tip).

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Dogecoin's cheap/jokey nature means that what I call the barrier to experimentation is practically non-existent.

Let's say you're interested in cryptocurrencies. The hassle and expense you have to go through to get your hands on some Bitcoin is significant enough to put most people off.

By contrast, to get your hands on some Dogecoin, just post to /r/dogecoinbeg and you've got a pretty good chance of being tipped some.

> In the case of Bitcoin this is easily explained: Silk Road, "laundering" (for good or bad) and speculation.

Or, for people who like Bitcoin: decentralized transaction log, low/no transaction fees, and fraud protection.

Fraud protection? LOL. Fraud enablement is more to the point.

I like Bitcoin. It's odd that I even have to say that to be read correctly.

None of the things you mention are uses, they are features. Great features, sure, but it's not something that you actually do with a currency. It's like saying dollars are used by paper, or for central bank. Bitcoin - right now - is not used much for commerce, aside from black market type stuff.

> "It's odd that I even have to say that to be read correctly."

This is IMO a sign that a discussion has jumped the shark and is no longer worth participating in. Once you get to the "you're either with us or against us" point people have picked their sides and you're arguing against brick walls.

You are absolutely right. In hindsight I shouldn't have replied. The comment thread would've been shorter and more readable then, too ;)

You were talking specifically about possible explanations for people placing subjective value in Bitcoin. The fact that some of these explanations are "uses" and some are "features" isn't relevant.

Fraud protection ? Are you joking ?

Credit card companies almost unconditionally insure their customers against fraudulent transactions. Bitcoin does not. Banks will actively monitor accounts for suspicious transactions and lock the account if necessary. Bitcoin does not. Banks provide a friendly, easy to use and traceable list of your previous transactions. Bitcoin does not. Banks provide a mechanism to reverse transactions. Bitcoin does not.

I think he meant fraud protection for sellers. "Bitcoins up front." and you are 100% protected from fraud as a seller.

Perhaps baddox meant Fraud protection for the vendor - chargebacks are impossible with Bitcoin, so once the vendor has the money/bitcoin, it's theirs.

As a consumer though, I much prefer the fraud protection that the credit card companies provide. And as a vendor, the 1% or less of chargebacks is probably outweighed by the number of customers who do buy because they feel safer using their credit card online.

Erm all bitcoin transactions are public

ALL

If you know someones address then you can go back and check all the transactions.

As for refunds, merchants selling using bitcoin still have to follow law of the land, in most civilised countries there is a "Supply of Goods and Services Act" or equivalent legislation where a customer is entitled to a repair, replacement or refund if the good/service is bad. Buying with bitcoin is no different to buying in cash

You obviously do not understand bitcoin or are confused about some aspects of it.

If you and I trust each other a great deal, we can do a transaction by exchanging a private key.

Groups of people that trust a third party can also do bitcoin denominated private transactions (the only visible transactions would be with the trusted third party). You see this at most bitcoin exchanges.

Fraud protection in the sense that, if you protect your private key no one can steal your bitcoins. With credit cards you are constantly giving away your secret to third parties when you transact with them.

Bitcoin/cash shifts protection from third parties, like stores, to the user. This dramatically changes the nature of security in both good and bad ways.

> Fraud protection in the sense that, if you protect your private key no one can steal your bitcoins.

To swap out a word or two: "Fraud protection in the sense that, if you protect your wallet, no one can steal your cash."

I don't think that matches the commonly understood meaning of "fraud protection".

Right, except it isn't a physical object like cash is, it can't be stolen from your person like cash can, and most people keep nearly all of their 'cash' in electronic accounts anyway.

The snarky parent was probably trying to say that „theft protection” might be a better term.

I agree with your interpretation, but bitcoin eliminates that kind of fraud, while requiring you to protect against theft.

It's not just theft protection though. Bitcoin provides protection from forms of fraud which specifically use mechanisms in a currency or transaction system, like chargebacks on PayPal (a ubiquitous form of fraud), or fake Western Union payments.

Chargebacks may be a mechanism of fraud by purchasers against sellers, but they are also a tool for addressing fraud by sellers against purchasers.

I prefer a user-securable account (like Bitcoin) over a laughably insecure account (like credit cards, where your "authentication" details are just a handful of numbers that you have to share with everyone you transact with) with a dispute resolution team.

Credit card companies need to spend vast resources on fraud protection because their underlying protocol offers virtually none. Credit cards, after all, don't even have a basic "password." It's like the difference between an online bank account with no password but with a team of "fraud protectors," and a bank account with good two factor authentication. You can argue that both are forms of "fraud protection," but I vastly prefer the latter.

Actually, that's precisely the opposite of my point. To have value, an abstraction need not have "uses" in a pragmatic sense. It's easy to list some more common things of ascribed value that have no clear use: hobby collectables, keepsakes, Steam badges and other virtual commodities in video games, Xbox experience points, Ph.D. diplomas, etc. One simply needs to nucleate a community with some irrational desire for an abstraction of value to manifest extant value.

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