A Bitcoin Battle Is Brewing
techcrunch.com
techcrunch.com
The article:
* people are beginning to take bitcoin more seriously.
* there are multiple cryptocurrencies
* bitcoin is the biggest
* namedropping for blockstream
* namedropping for stellar
* ¯\_(ツ)_/¯
* maybe the real competition between cryptocurrencies is still to come
I'm not sure of the message or the point here. My guess would be to namedrop blockstream, but the whole thing is unfocussed and confusing to me.
In a world with fiat, bitcoin is king due to liquidity. In a world without fiat, it's much easier to consider alternatives. Personally I'd like to see a wallet that holds many currencies, and can do all the conversion automatically.
"priced in ___coin? okay"
"You want to pay with ____coin? sure!"
"You only accept ___coin? no probs!"
And apps like http://shapeshift.io can help with background conversions.
Thus, the long-tail of crypto becomes more relevant.
For me, it's not a battle of bitcoin, rather it's a battle of "either/or" (now) vs "both/and" (future.)
I also think the future is coming faster than we think. People will want bitcoin alternatives, especially people that want to make money and think there are better coins that can do that (and will give them a try.)
add:
to give an example of this war, I placed a link to http://snapcard.io in reddit-bitcoin for a shop owner in France wanting to accept digital currencies. Result: -1 downvotes, 4 hours ago. Why? I presume because they are a multi-crypto POS startup.
Bitcoin is full of the same people that were trashing it when it first came out. Now they are trashing any alternatives. I don't want to be part of that. They're neither cool, nor smart.
No, it has been settled for almost a hundred years that AC, for long distance transmission, is the best. Too bad he included something like this. It diminishes his credibility and colors the entire article.
Edit: So I seem to be quite wrong. Well, at least now I know. I stand corrected.
Historically, AC was much more feasible to do this with because you can change the voltage with transformers, which are basically paired coils of copper wire. These days we have the capability to convert between AC and high voltage DC, but it's still requires comparatively complicated equipment and isn't as reliable.
AC transmission is nice for a few reasons, but the biggest reason for its use historically historically has been that you can step down from high to low voltage with a passive element (a transformer).
(Why step up and down? You want to transmit at the highest voltage you can to reduce conduction losses (higher V -> lower I for the same P, and thus lower I^2 * R losses).)
But long distance AC transmission is ugly in a bunch of ways. For one, over very long distances a power line becomes a reasonably efficient 60 Hz antenna, which means radiated losses in addition to conduction losses. For another, AC generators want to produce 3-phase power; transmitting this directly means more wire, balancing phases, et cetera. Further, AC transmission suffers additional conduction losses when reactively loaded because of circulating currents (this is why people care about "power factor"). In practice, the complexity of managing the reactive loading of HVAC transmision wires is substantial: transformer nonidealities turn a resistive load on the secondary into a slightly reactive load seen at the primary, which introduces circulating losses. And let's not forget that an AC grid requires that all the generators feeding the grid are precisely synchronized, while a DC grid has no such synchronization issues, which simplifies the task of bringing power plants up and down.
By comparison, DC transmission requires complexity at the sender and receiver: generation is for the most part a fundamentally AC process (i.e., electrical generators), and of course homes are built for AC power, so the receiver must switch DC back to AC. But as power devices become better and cheaper, and the power grid's load increases (without commensurate increase in copper to handle higher currents), long distance DC transmission is becoming more commonplace. (And since modern AC transmission requires some power factor management anyway, the choice really isn't between "dumb transformer" and "massive inverter" anyhow.)
For example, when I lived in Boston it received a substantial amount of its power as HVDC from somewhere in Canada. Three big (like, BIG) inverting stations around town were responsible for turning this DC into AC for local transmission. This setup ostensibly saved substantially on conducted and radiated transmission losses, according to the folks who gave us a tour of one of the inversion stations.
Wikipedia has more on this topic. http://en.wikipedia.org/wiki/High-voltage_direct_current
I liked the VoIP analogy, although other examples abound where an initial network effect was supplanted by competing implementations (e.g. search engines, social networking).
Network Effect does.
The key advantages are decentralization and anonymity and to the average person who just wants a simple secure payment solution a credit card has all the advantages.
For the average person, I can list a few reasons: - near immediate transfer of money across international borders - close to zero fees or greatly reduced fees when transferring money internationally - safe and secure store of value (for the unbanked)
Then there are the future killer apps that will be created - tipping on the internet (changeTip / Coinbase) - programatic money - smart contracts - pure play digital banking - ??
It's hard to see how bitcoin could apply to the general public sitting at your computer in a first world country. But keep in mind there are nearly 5 billion unbanked or unserved people in the world where bitcoin (or similar) will change their life.
No one's telling you to switch to Bitcoin, but it's clear that lots of people are going to use it.
Block rewards have no effect on whether people will use Bitcoin, especially since there are other digital currencies that don't have that issue. Inasmuch as it's a problem, it's fixable.
Hundreds of thousands of people involved in making the current system work. Legislation and so on.
If I send $100 worth of bitcoin to someone, they receive $100 worth of bitcoin and I pay 4 cents worth of bitcoin to send it to them. There is no $10-20 transaction cost on either end of the exchange.
The value you're referring to is created by the block reward. It's additional value that did not previously exist, not value taken from someone else.
There is no such cost for a given transaction, and it's simply incorrect to state that there is.
You're talking about something completely different and stating that it's the same. It is not.
1. Due to Bitcoin's cash-esque nature, you don't hand over your account keys when you make a transaction. Every time I hand my credit card to a 16-year-old waiter I'm trusting that he's not going to take a quick picture of it with his cell phone to go shopping with online later. Since a Bitcoin transaction encodes a specific transfer of a specific amount from one address to another, I don't have to worry that that transaction is going to get leaked down the road (/stolen at an ATM/gas station/POS terminal) and end up putting my entire financial stability at risk.
2. Credit card processing fees inhibit a lot of services that could be microtransaction-based from becoming reality, because they aren't financially viable to run once you consider transaction fees. Bitcoin opens opportunities for a huge range of services that are only viable with minimal transaction fees to become reality.
With transaction costs currently between 10 and 20 dollars per transaction and with a record of close to 100 dollars it does not really look like a good way to implement micro transactions.
Who ever needed TCP/IP besides the governments? Well as it turns out the whole world did and not in any way it was originally intended.
The difference between short term hype and long term implications are always hard but I think when it comes to bitcoin I think its fair to say that we haven't even begun to see the implications.