Bitcoin Forum

The original Bitcoin protocol is very innovative. However, there are several reasons for why today's cryptocurrencies will fail:

1. Too slow transaction times for general use.
2. Too bloated block chain for mainstream adoption.
3. Having to store coins "under the mattress" is a step backwards.
4. Proof of work will lead to too large transaction fees.
5. Proof of stake leads to the rich getting richer.
6. Lack of government support prevents mainstream use.
7. Trading against ordinary fiat currencies causes volatility.

Your're assuming that All of today's cryptocurrencies are made for one purpose, to infiltrate the mainstream population which is not true. There are many niches that Needs to be filled in the cryptocurrency secter.

For ex: One niche would be a store of value coin, another would be a privacy/anonymous coin, etc.

Clearly you forgot #8 :

8: The propagation of information is limited to the speed of light. Therefore in the year 3973 people on Earth won't be able to keep the same blockchain as the people across the galaxy. Just won't scale. Transactions could take millenia! Clearly doomed!

Actually, there are supposed things faster than the speed of light.

http://gizmodo.com/5908206/did-scientists-really-just-break-the-speed-of-light

But bitcoin uses the internet! :D

Tomorrow's internet may run on Higg's Boson ;)

If that was true, we would have seen a success story by now. Bitcoin is a success for investment and currency trading, but could be a limited one. We will see. I stick with my prediction that the bitcoin price will not go much higher than $5,000 because of lack of mainstream adoption.

If u were in 90s, u would have said the internet will fail too. Some people simply cant see the future...

http://ultra-coin.com/images/Coins/World_Wide_Web_timeline.jpg

Though Bitcoin's success is not in its FIAT valuation, here is an interesting stat that u may like...

A statistical explanation why 1BTC may equal 1M USD in future...

Value of 1BTC (around figure)

2009 => 10^-2 USD
2010 => 10^-1 USD
2011 => 10⁰ USD
2012 => 10¹ USD
2013 => 10² USD
2014 => 10³ USD
2015 => 10⁴ USD
2016 => 10⁵ USD
2017 => 10⁶ USD

--- Early Adoption Ends Here and The Price Stabilizes ---

9.  While largely heralded as the antithesis for inflation - deflation (block halving down to nothing) results in early adoption getting wealthy by the magnitude of adoption.  At the expense of the wealth being represented by more coins / inflation. This directly discourages future adopters as the wealth goes towards the early people rather than spreading to more units.

Don't feel up for a debate right now, but would like to point out that item 6 is an anathema to the basic principles of crypto in general.

What does this mean about "under the mattress"?

I wrote today's cryptocurrencies. I actually believe some new cryptocurrency will become a huge success. And one issued by an official authority. With fast transaction times, zero transaction fees, a user ID system and stable price.

The biggest problem today is cold storage. That's worse than money in the Dark Ages. And trusting some third party like MtGox is also horrible.

That's the biggest problem! Cold storage. An absolute nightmare to have manage oneself even for a crypto-savvy person. Some people may enjoy storing private keys on paper etc, but those are the fanatics. For ordinary people the mess with having to secure the coins oneself is a major step backwards, into the Dark Ages.

4 years between halvings is actually a lot of time, so I think it is fair. Much larger impact is the number of people mining, but you can not have both - high adoption and everyone mining full Bitcoins...

There is already one for you. It is called FB credit.

By the way, do u understand the basic concept of decentralization ?

The official cryptocurrency will be decentralized and peer-to-peer. FB credit? Sounds like Linden Dollars. 90s technology.

There is nothing official in the world of cryptos. Please come out from old school thoughts. Official means centralized and we already have a lot of centralized currencies.

Hmm, I'm not sure I agree.  I guess I'm a "fanatic" because I printed out a paper copy of some keys to be safe from a computer crash but I don't know why that's so crazy.  What do you do to secure anything else on a computer that's important to you?  I'll let you know what I do, I make backups and store them somewhere cool and dry.  Here's the LOCKSS rule: lots of copies keeps stuff safe (a librarian told me that).  As far as security, again, isn't this already an issue that's bigger than cryptocoins?  Here's some rules of thumb: don't run windows, don't install programs you don't inspect, encrypt sensitive material.

I don't see how these issues of backing up and securing data are relevant to crytpocoins specifically. They seem to me like general issues related to keeping sensitive/important information on a networked computer.

Cryptos are very, very far from being doomed. Yes, mainstream adoption has been disappointing.
High-street Western peoples are unenthusiastic as there are no advantages over their debit cards or credit cards.
However, there is still plenty of scope for massive growth in many areas, including amongst the unbanked peoples of the 3rd world, and in any country experiencing a major banking crash.

Wrong !!! Unbanked people from 3rd world wont be able to use Crypto. Because...

i. They dont have internet

ii. They are mostly illiterate

Crypto will first conquer the remittance industry.

Could happen. My guess is that the lack of mainstream adoption will put a limit to the bitcoin price already within a year or two, and not much above $5,000. In a way bitcoin is already a huge success and I'm still a great fan of the general idea of cryptocurrencies. It's just that some puzzle pieces are missing.

True, and furthermore I personally like the comparison to adoption of the internet.  Obviously in the first few years there were only a few people excited about it because many of the supporting software (easy to use web browsers, javascript!, https) wasn't around and there was a technical hurdle for the common "high street westerner" to overcome.  However, as the infrastructure filled out the next step was a big boom-n-bust when all sorts of fly-by-night ventures popped up and thus the dotcom boom then bust.  Finally, in the third stage, internet adoption and online services continue to grow at a steady rate until world domination.

Realize:

ia. Internet access through smartphones is increasingly available even in the poorest countries.
iia. Illiterate ≠ stupid.  People will use technology as it becomes helpful to them, you don't need to know how to interpret Derrida in order to use a phone to pay a bill.

I'm looking at it in a long-term perspective. As a comparison, to have to keep one's computer safe oneself is also incredibly old tech from that perspective. The usability of information technology will become much better. Even having to install apps on a smartphone is very old and cumbersome tech.

Signs of the problematic nature of today's cryptocurrencies are all the messy ad hoc additions to the technology, such as 0-confirmation transactions, micropayment channels, deterministic address generation, random address generation and so on.

All the altcoins existing today are a good thing! Not that I believe any particular altcoin today will become a huge success, but the combined innovative force behind them can lead to some really useful applications. Probably in some unexpected ways. I believe that all the services that you have to pay to use will fail. It will more likely be open source projects which are free to use that will become successful and where companies can make money on providing services around the open source. The altcoin projects today are way too greedy and often socially lopsided constructs with the intent of making the wealthy become more wealthy and/or early investors become super rich.

Someone said that proof of stake only gives those who have lots of coins more voting power and is not a means of making the super wealthy profusely rewarded while those who have few coins hardly rewarded at all. Yeah, right. Like there would be no conspiracies between the stakeholders and the miners.

Derrida couldn't interpret Derrida, a most confused character.

A good analysis, and nice to see a focus on crypto being far from "fair".

It isn't fair, and those that claim it is are most probably the people that benefit from it.

Like you imply, it has been a great experiment, and I can see small-scale altcoins that service specific groups or niche markets being successful at some point.

At the moment, crypto is a state of nature, quite nasty and brutal with greed the motivating factor.

I guess you're a kind of a prophet, or there's something in your version of the future that hasn't made it into mine.  I keep my own computer safe because no one else has a vested interest in keeping my computer safe like I do.  When I buy a smartphone the first thing I do is erase everything in memory and install cyanogenmod---why? because I've inspected the source code and I can control what I put on or take off.  Oftentimes, I download the cm source code and modify it to my needs before I put it on my phone.  Who else is going to do that for me?  I don't really know what you mean about "old and cumbersome tech".  For me, it really sounds like you're saying something along these lines:

Having to choose what you are going to eat for dinner is very old and cumbersome tech.  In a happy future, you can just allow a company or institution to choose your dinner according to a correctly balanced nutritional profile.

However, in my world, choosing what apps to install, what pictures to back up, what plants to put in my garden, what to eat for dinner isn't "old and cumbersome", it's what makes me me!  I don't want to agree that choosing things for yourself is an old and cumbersome way to live.

Ever heard of quantum entanglement? When particles become entangled, a change in one particle will produce an immediate change in the other particle immediately, and regardless of distance. The quantum world is a very strange place, and our mastery of it will produce innovations that would seem like magic today.

Well if you see always the negative side of the thing nothing will be successful.. at least now we have those more reasoned arguments.. back in 2013 and 2012 people were saying bitcoin is a ponzi.

How many people store money under the mattress today? Sure, storing money in the bank is also old-fashioned compared to the future. The trustless part of cryptocurrencies is a major step forward. But trusting oneself isn't trustlessness. That's why I consider having to manage security oneself will sooner or later become outdated.

There will be innovations! Thomas Edison failed lots of times before he came up with a functioning light bulb. However, from a conspiracy theory perspective :D Bitcoin is an invention made by a big power group, and they are one step ahead and will introduce a new cryptocurrency and Bitcoin is "only" their pilot project. So the innovations in this case are then already done. I still think the bitcoin price may reach $5,000 though.

At least in my country, storing money in a bank is mainly trustworthy because of the Federal Deposit Insurance Corporation under which deposits to accredited banks are ensured by the USGovt even if the bank fails.  Before the FDIC, putting money under a mattress was a reasonable solution.  Longer term people would buy precious metal or whatever.  I just cant get on board with you that in the future, taking responsibility for yourself will be outdated.

Not 1, not 2, not 3...(/lebron sarcasm off)  but 7  :o reasons about why today's cc are doomed!
Thanks Anders. This community has been looking for those reasons for 5 years.  :-*

PS. My personal favorite: No.3  ::)

But don't you want the whole money chain to be trustless? That's what I think we will have in the future. Instead of banks or mattresses the money will be stored on a distributed block chain. And instead of managing private keys, there will be a global user ID system that will keep the money safe and connected to individuals anonymously.

I could be wrong. Such user ID system is easier said than done. Biometrics can be shaky and counterfeit. ID cards can be stolen. Tricky problem.

We will see. Maybe you are right! That there will always be necessary to manage the security of private property oneself or having to trust a third party.

I think I finally understand where you are coming from on this.  However, I thing that the kind of "trustlessness" that you're talking about isn't really trustless, it's just trusting in a community.  Indeed, I think this is a powerful idea.  And you might be right about some eventual implementation, I'm not convinced though.  Anyway, I'm glad I finally understand what kind of thing you're referring to.

One potential danger is that a global ID system (or even local ID systems) will lead to Orwellian control over people. Scary. In the long run we will have artificial intelligence taking care of all of that, but that's technological singularity stuff and hopefully without a Skynet, lol.

Totally agree that current generation cryptos are all doomed, but the problems can be fixed if we see some real innovation in alts. There is the possibility of making our own decentralised global identity system.

But this possibility seems pretty scary to me.  I'm supposed to put my global idenity into some sort of decentralized information network.  I worry about things like: what if this network is overthrown, who is organizing it?  More importantly, what if the information in this network is used against me?  Ie, people with X, Y, or Z characteristics are deemed unworth to A, B or C.

I'm not saying such a thing won't come to  pass, I just don't see it in our lifetimes.  Who knows, maybe in some future generations though.

Hmm... Interesting idea. There is a project called bitID or something like that. I haven't checked it out yet.

Nice where did you come from? anyhow we like some argument here:

lets go though your list, i intend to show you why innovation can matter and "Gen 2.0" crypto already exists.


- Quark has an effective 30 second block time, and its in its "EQ period" (see down the list) - both of these things provide some robustness and security. ( also dynamic checkpoints which can be taken off any time)


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- certainly a potential problem but not a deal breaker when you see how Quark has solved the other "issues" Like many other decentralized system Cryptocurrency is similar to say for example "Torrents" - if users are running full nodes they are serving the network, should/could there be some incentive to do this in the future , sure why not. that's the "if we do nothing to the core" scenario, there are of course many other options.



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i'm going to be honest i've not idea what you are talking about? but you could be referring to a theory I proposed which i've called the "use/collapse" paradox , where because mining monopoly in Bitcoin creates price manipulation if the manipulators "use" the entity (Bitcoin) this will cause the market to "price collapse" (Bitcoin) so this causes it to be in effect "kept under the mattress "

lets explain:

Quark is fully distributed except for the EQ reward, this gives benefits (many) and causes some perceived problems  the benefits far outweigh the issues as Quark is priced by the market and moving forward will be used and utilized by the market.



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this ones my favorite but really i don't judge you for being ignorant of it - because when monopoly takes over any system, ignorance and humor grow usually.

The Quark EQ reward  -

EQ)uilibrium R)eward   is just a simple trickle amount of "inflation" 0.4% declining - that allows fees to be replaced, so its is the reward for mining not the generated fees.

To all intents and purposes Quark is fee free, (except for the protections on the "spam transactions"
It can be Fee free because of the this small amount of "inflation" ( which also effectively protects the network from monopoly)

Summary :
The EQ reward is a revolution in Crypto currency.
Quark is "fee free"



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True , generally, not sold on this one totally yet. it gets more complex.
(Quark is not PoS it has the EQ reward.)



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what's a "Government" oh you mean the guys that work directly for the people that issue the currency in to Debt?
the people that issue the currency into Debt are by default the leaders (in most cases) of the government.

next question:

Why would entities that issue debt money ever support ANY debt free system that means they lose all control over the "ongoing mechanics of debt issuance" ?

the answer is they won't and you are living in fantasy land if you think they will (just because.)

if they look like they are supporting it, its because they are either 1. actively destroying it. or 2. working towards that.



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nope that's a Meme and a Myth as well - Quark solved it  ( we believe )

have a look at the charts here:

http://kolinevans.wordpress.com/2014/07/14/an-interesting-thing-happened-on-the-way-to-proving-that-decentralized-free-market-distribution-can-find-price-stability/
https://kolinevans.files.wordpress.com/2014/07/quark180day.png

full distribution + free market pricing.

volatility is caused because all (most) crypto are price manipulated - once Real economists (Shiller etc)  understand "mining difficulty" they are going to 1. Slap themselves 2. laugh at you guys (just so you know)

Too many coins chasing too few dollars. For one coin to succeed, other coins must die.

This is a great thread. Well, it *was* much better before digitalindustry inserted his senseless propaganda into it.....  :'(


Anywho, I tend to agree with those that see a form of GlobalID coming into existence; something that automatically identifies your place on the blockchain, no matter where you are. However, such a concept is extremely frightening, as it would have serious, serious implications if abused or utilized by nefarious actors, especially actors of the corporate and governmental persuasions.

You (of course ) are a :

1. A Sock puppet

2. Talking about a "Global ID"

So your "credibility rating" is currently T*


* Turd.

If you don't want a discussion fuck off back to your WOW game?

As a use case, how will grandma store her QarkCoins? Does she have to print private keys on paper, on a computer disconnected from the Internet, and with several separate copies that later must be put together? That's worse than even money under the mattress! Or does she need a hardware wallet, that needs to be backed up in case of hardware failure? In which case, we are back to square one again with private keys on paper or stored on a hard drive disconnected from the Internet. Extremely cumbersome management.

There is some wallet that uses a 12 word pass phrase or something like that, and then generates private keys with a deterministic algorithm. But would grandma try to remember the whole pass phrase or write it down on paper?

You would probably trust having your money stored in a bank account. Would you trust having your cryptocurrencies stored in a MtGox?

The EU for example could issue a regulated cryptocurrency:

* Low incentive for hoarding (high currency flow)
* Low volatility (stable value short-term)
* Stable in terms of inflation and deflation
* Decentralized
* Peer-to-peer
* Block chain with encrypted user IDs/wallet addresses (so that the coins don't have to be cold stored)
* Zero transaction fees (low friction)
* Miners that are run by the EU member states as a public service
* Fast and reliable transaction times
* VC Protocol regulated by EU authority
* User ID system regulated by EU authority

For people who are computer savvy and interested in cryptocurrencies, the problems may not be a big deal. That's however only a tiny percentage of all potential users. For the average person the problems with today's cryptocurrencies are obstacles enough to prevent a mainstream adoption.

Grandma has a Hardware wallet - with multi sigs

but she won't call it that, she will call it my.

"Money widget thing" and she will know that if she presses this or that button she can spend money.

- as for long term storage, "Banks" revert back to the original "Coin storage" facilities they were in ancient times, literally they could be just protecting a crypto "Paper bond"  with he ability to "make liquid" that bond and add to your "Money widget thing"

so in summary:

Hardware wallets,  multi-signatures, and storage facilities.

want to hear something terrifying?

just as the "Internet" equalized  information flow , Crypto will "equalized" capital flows, if you haven't figured out what that means, i can say it like this:

its very likely that there will be a "re-balance of wealth".

I'll let you figure out the rest.

I wouldn't trust a hardware wallet since the hardware can fail. And without backup the money would be gone. And with backup we are back into paper wallets, offline hard drives or MtGox again.

If ordinary banks, PayPal and Visa etc would accept cryptocurrencies, then that would work for ordinary people. There is a great risk however that this will not happen.

An alternative is that new cryptocurrency companies can become trustworthy enough to replace ordinary financial services like banks, PayPal and Visa. But then there is the messy problem of legal regulations.

everything you said just now is insane and makes no sense - but you seem like a nice guy.

moving forward ...

what's the "global ID" all about ?

sound like a winner.

Sounds like you believe a hardware wallet is infallible.

The idea of a global personal ID system is to have it to generate anonymous coin addresses. So that the coins would be safely stored on the different block chains without needing to have private keys to worry about and keep safe oneself or trust a third party to manage. The main drawback is that it could be used by governments for Orwellian control.

Dude this timeline is awesome!

And how is an ID system supposed to work without private keys?

I was saying that blockchain technology allows us to create a new decentralised type of ID verification. Like with Namecoin, you could store your ID information there, if I knew you then I could also store my verification of your information.

The ID system would be like a deterministic wallet. So from a single master key, many new keys can be generated. If an ID system like that can be implemented with blockchain technology, then that would be good.

Then what about currency systems like Ripple and Stellar? Those are more like open greed than open source. Like the virtual currency Beenz where the owners kept 50% to themselves.

A common excuse is that they need to reward the developers, the risk takers, fund marketing etc. Yeah, right. Like Linux. ::)

Ripple and Stellar will not gain big market share due to it being highly controlled and highly concentrate of ownership.

For someone to willingly add value to the coin, the distribution of the coin need to be more even.

Fractional reserve banking is pretty horrible, but it has been useful for taking our civilization to where we are today. That's an old model. Ripple and Stellar seem to cling to that old model of concentration of power.

Greed can be ok (or at least profit is good), if someone can separate that from the actual currency. There are many companies making money on Linux today, but not by owning or controlling Linux itself.

Making money by trading money is like gambling. Nothing wrong with gambling. It's great fun. It's just that a serious future currency should primarily be used for trading goods and services. And I think an official cryptocurrency with zero transaction fees will come to dominate. Transaction fees are just middleman interference, causing unnecessary friction in the system. Spam transactions can be avoided by having a user ID system. And governments could run miners as a public service. Plus an officially regulated cryptocurrency would integrate easily with the ordinary fiat systems.

I see two problems:

1. The "Government Orwellian" problem  ( which has a bunch of sub problems) (it will be a "Corporation Orwellian" anyhow)

2. unnecessary inefficiency, it will fail because in a free market a better design than the "Global ID" system will prevail, the reasons we have "Debt turd money" now is because of the threat of military and Orwellian police state, (and the lack of any alternative) - given a more efficient alternative and it will eventually become the system.


No i don't think hardware wallets are infallible, but that of course is irrelevant.

I would only trust a hardware wallet with small amounts of money in it. And I wouldn't want to manage my own cold storage. Maybe deterministic wallets will be good enough. But even that is a bit shaky:

"The problem is this: although you certainly can securely hand out child keys with no risk to the parent key, and you can hand out master public keys with no risk to the master private key, you cannot do both at the same time. The exploit for when that situation does arise is actually quite simple, and can be done with two lines of pybitcointools code." -- http://bitcoinmagazine.com/8396/deterministic-wallets-advantages-flaw/

I'm not so worried about Orwellian ID systems. The main problem as I see it is that it will take many years for such system to become a reality. Unless, some clever open source project can achieve both user IDs and anonymity in a secure way.

i will make a bet with you -

the market will find the solution without a "Global centralized ID"

You could be correct. So I'm not going to bet against that. If some open source project solves how to secure private keys easily on a distributed system, then checkmate! The banks and the other centralized financial services will be crushed. Not immediately of course. In the long run. The trustless distributed solution will be so superior that it will replace the whole old model.

Sure most of the shitcoins out there will be dead within a year but Bitcoin is beyond the point of no return. It will not die!

Dot.com was actually around $7 trillion in the late 1990s.  $2 trillion in investment gold.  The more recent housing bubble was $10 trillion.  There's $37 trillion in worldwide investments.  $400 trillion in derivatives. 

Crypto Currencies are like $7 billion?  Digital currencies are getting more attention from the government and media than Dropbox (which has a capitalization around $10 billion).

There's still a lot of room for crypto currencies to grow.  Bitcoin at $6 billion has far from taken over the idea - it's like in 2003-2005 when everyone thought Myspace would be the dominant social media website forever.

I think this is mainly what I believe.  The storm of coin-a-day shitcoins is dying down and this is a good thing.  If a bitcoin alternative does arise, it's going to be something that the bitcoin community eventually transitions to, not something a script-kiddie dreamed up as a pump-n-dump scam.  Note that while the dot-com bubble did burst, internet activities did not.  Similarly, many bitcoin is going to be around after the many spin-offs fail.

yeah it's central mining authorities that are now split between China and the West will make sure of that !

that will work out because they will both work together to make sure that the network is secure !!!111

Dot.com ended because it theoretically hit the limit that subsequent buyers were unwilling to continue the bubble, especially with all the scams that were ongoing at the time.

  All you had to do was label a stock "IT" or dot something and people would pump it to millions, even if the company had nothing substantiated.


Thing is cryptos is only $7 billion or so at the moment.  No one would be bothering with alternates and the government wouldn't be drafting laws or overhauling the tax code if people thought the limit was $10 billion.  Cryptos are going to $trillions whether this takes 5 or 10 years.

Many alts will just die off but something can easily come along that receives widespread adoption, maybe even more than Bitcoin.

I read one article where some guy predicted some sort of corporate run crypto could come along (like from a gas company, cellular company) that would allow people to pay for that service using the coin. Personally I don't see that taking off as distrust in corporations is growing. If a crypto comes along that surpasses Bitcoin, it will definitely be decentralized.

OP your lack of knowledge is amazing.
Do you even know how long does it take for a CC to process (Visa) ? You don't obviously.
Have you heard of Satoshis idea of pruning the blockchain? You have not.
You don't have to store anything under the mattress.
The fees can always be reduced, as they already have.
POS is bad, yes.
The point of it is to stay away from them.
That will change with time.
Anything else?