Please see this thread for a discussion about whether Bitcoin enthusiasts should be asking for the central government's help in forcing people to adopt Bitcoin.

I think the answer is door number three: technical factors.

Bitcoin transactions can cost 30 dollars and take 30 minutes. That technical limitation will do far more than any government could ever do to prevent Bitcoin from being widely adopted as a means of everyday transactions.

As for adoption as an investment... what more do you want? With the ETF, every single investor in the US can buy into a Bitcoin instrument using their existing brokerage account. This is as mainstream as it gets.

The other factor, of course, will be the price of Bitcoin: if more people buy it, then the price will go up, and then... more people will buy it. And that too will be a far bigger factor than any sort of regulations. And by the same token, if the price crashes, then people will hate Bitcoin, and this won't be the fault of anything the government did.

Okay, this is getting too personal for me, so I'm going leave this conversation.

So you object to governments providing any oversight on commerce whatsoever?

Yes, it's theoretically possible to curtail trade in Bitcoin with government regulations.

But it hasn't happened, and there's no sign of it happening in the USA (quite the opposite, given the approval of the ETF), and millions of people own Bitcoin and other cryptos.

People complaining about Bitcoin not being a mainstream means of payment right now have no reason to blame "the government".

How do explain the thousands of merchants all over the world, including the USA, who accept Bitcoin then? Are they all breaking the law?



I said meaningful hinderances. There are freakin Super Bowl commercials selling Bitcoin to millions of people. This sure doesn't look like a country where Bitcoin is banned to me.

And not only not banned, but not hindered in any way such that it would meaningfully reduce adoption.

And doing a little KYC--which is required for every sort of financial instrument, not just Bitcoin--does not hurt anything.

And for what it's worth, if I understand it correctly, most of that stuff is done voluntarily by the brokerages to protect themselves from fraud, not some commandment from the government. At minimum they would have to do at least some checks or they would get ripped off. This is not some government killing their business through regulation specially targeted at Bitcoin because they want to eliminate Bitcoin because it "competes with the dollar" or something.

There are no meaningful restrictions on the use of Bitcoin in the USA. Anybody can buy, hold and sell Bitcoin, cryptos, and non-blockchain digital currencies. This is demonstrated by the fact that billions of dollars worth of Bitcoin is traded every single day in the USA, and there are millions of holders of Bitcoin investments which are ultimately backed by companies that trade directly in Bitcoin.

When you can go on the Internet and buy Bitcoin in five minutes with your credit card and the US government will not arrest or otherwise penalize you for doing so, this is what I call "perfectly legal". Maybe your definition of that is different, but that's how I use the term.

What governments are you talking about? Certainly in the USA that is not the case--Bitcoin and other cryptos are perfectly legal here.

What country do you live in where Bitcoin is being thwarted by the government?

I guess we shouldn't be surprised, but it's still amazing to me that something invented in the context Bitcoin was invented would now have proponents begging the government for special favors so their investment will increase in value. I'm not saying it's all Bitcoin enthusiasts or even a majority, but it's still amazing.

Can you give us a specific example? As my link in the OP shows, there are almost no countries in the world that outlaw Bitcoin. And the countries where it is legal represent about 98% of the world's economy.



These two statements seem to contradict one another. On one hand you are saying that using the government to force people to accept Bitcoin will never work, and then you go on to say that it will require governments to... force people to use crypto.

The "buddy cop movie" approach between a private entity and the government is also known as "crony capitalism", wherein businesses extract special favors from the government in order to get ahead. Why do you think Bitcoin needs that? Why can't it succeed on its own?

And do you understand how contrary that is to Bitcoin's libertarian roots?

That doesn't sound like you are interested in hearing any evidence, it sounds like you've already decided to vote for Trump regardless of what the evidence is.

I completely agree that something that is not Bitcoin can handle worldwide transaction volume. Take Haypenny for instance.

Of course the question people will ask is, why have a 2nd layer at all? If there is a digital currency that truly scales to worldwide transaction volume (or a platform that supports a multitude of such currencies), then why worry about the "first" layer?


 


Bitcoin being widely held won't make any difference--the same technical limitations will be there regardless of how many individual holders there are.



Bitcoin (the actual Bitcoin and not some system that "theoretically represents" Bitcoin that isn't actually Bitcoin) will never get mass adoption in terms of transactions because of blockchain's technical limitations.

We are already in the final stage of Bitcoin adoption with the ETF: it is now a mainstream investment instrument. Bitcoin does not have a future as a mainstream means of transacting e.g. as a currency.



Maybe. I'm personally going to bet that even in 2045, the speed of light is still only going to travel at 186k miles per second, so blockchain's technical limitations will still be there .

For me the phases of Bitcoin will look like this:

1. Bitcoin establishes itself as a mainstream investment instrument (today).

2. A viable non-blockchain digital currency system emerges that has a better user model and can scale to worldwide transaction volume.

3. Somebody uses that currency platform to front Bitcoin transactions (and all kinds of other transactions), meaning end-users only actually interact directly with the non-blockchain system when they transact.

4. At some point lots of people wonder why Bitcoin and other blockchain currencies even exist since they never actually see them or interact with them ("what is a private key?", they ask).

Will Bitcoin survive being "layered" by systems that actually work for the masses? Who knows. But ask any major technology company whether they'd rather own layer one or layer two .

I agree it was never designed to do so, but many people talk as though it will and then thing the sky is falling when, year after year, most of the world still uses traditional sovereign currencies.

Bitcoin and cryptocurrencies in general are not meaningfully restricted. There is nothing, legally speaking, stopping them from supplanting most of the world's daily transactions. As such, I really don't see any evidence that governments like the US government would try to stop a viable digital currency from taking over most transactions. Why would they care? I guess I was never a big believer in the Illuminati .

What I want to say with that is that they've been working on LN for a very long time--might as well be centuries in the realm of technology--and yet it doesn't come even within several orders of magnitude of being able to handle worldwide transaction volume.


Well, yeah, of course it does. I guess I should have more carefully defined my context with that statement. It doesn't solve the problem I was talking about solving...


I agree. I think blockchain-based cryptos are perfectly fine as investment instruments or large-scale value stores. But they will never be, themselves, actual mainstream currencies. For that you will need a system like Haypenny, which can support currencies based on whatever value store you want in the backend, but do so in a way that supports worldwide transaction volume.

There's a lot of disinformation and incorrect notions going around about the legality of Bitcoin, cryptocurrencies and digital currencies.

Here is a good place to start if you want the facts about Bitcoin's legality:

Legality of cryptocurrency by country or territory

What you can learn from is that for almost all purposes, Bitcoin (and by extension cryptocurrencies and digital currencies) are not meaningfully curtailed by government regulation on individuals. Even China's ban on Bitcoin hasn't stopped Binance from trading $90 billion per month there. Based on this, you would be hard-pressed to find a civilized country where you could be put in jail for owning or trading Bitcoin. They exist, but they amount to a tiny fraction of the world's economy.

And yet in the face of these facts, a near constant refrain from many crypto enthusiasts is that the reason Bitcoin hasn't replaced the world's sovereign currencies like the USD and the Euro is because there's a conspiracy of government regulations to stop it. They can't point to how exactly this works, but more importantly, they seem to ignore the fact that Bitcoin transactions can take 30 minutes to complete and cost 30 US dollars, making the transaction unthinkable for all but a microscopic fraction of worldwide daily transactions. And while more centralized blockchain-based approaches improve this situation somewhat, they are still orders of magnitude away from the scalability necessary, and the key pair requirement for end-users is clunky and makes it hard to adopt.

When I first designed the Haypenny transaction platform, my first task was to calculate the number of monetary transactions going on in the whole world on any given day, and then calculate that number for peak times of the year (e.g. Christmas), and then multiple that by a factor for the peak hours of the day, and then multiplying that by a factor of five to account for "peak-second" loads (yes, my professional background is whole-internet scale systems in case you couldn't tell ).

The number you arrive at when you do these calculations is that you'd need a system that could handle a transaction load in the signal-digit millions of transactions per second if you wanted to replace daily credit card and physical cash transactions worldwide. And you'd need to handle several hundred billion transactions a month.

That is what is required for a currency to replace the current status-quo, and Bitcoin and other blockchain-based cryptocurrencies can't do it, and they can't even get close.

And it should go without saying that transactions would need to cost far less than today's transactions in order to replace the status-quo: people don't make a major change to their long-held behavior unless there is a significant incentive to do so.

And then there's the usage model. Not only does any new technology that replaces the exact functionality of an existing one need to be far cheaper in order to have a chance, it needs to be easier for end-users, too. Requiring every consumer to have a private key is something we've been dreaming about since about 1994 (I was there ), but its a pain in the ass that most consumers don't want to deal with.

These are the reasons there is not mainstream adoption of Bitcoin for everyday payments, not some conspiracy by "the government".

What government are you talking about? In my country (USA), Bitcoin is 100% legal to hold, transact, buy and sell. That's also the case in almost every other major country. Even in China you can buy and sell Bitcoin as an individual, you just can't hold it if you are a bank.

The huge challenge with cryptocurrency is technical limitations that make it impractical to use in a mainstream way.

Crypto is 100% legal in the US and in most countries.

The problem is not legal, it's technical. Something that takes 30 minutes to complete one transaction will never EVER be a mainstream transaction platform.

No, I said it was unnecessary for most people. I said that in my original paper as well. Most average consumers simply don't need a way to evade the government.



I never said it did. If you are living in a oppressive regime, then it's proper and moral to try to evade the reach of your government (if it's safe to do so).


I'm quite aware of these injustices, and they are terrible.

But in the USA its virtually impossible to own a home without using your real name, so how is some technical means of anonymity (e.g. crypto) going to help you with this problem?

The thesis of my article here was that most people would never want to own their home based on a private key (for instance) that they could physically lose or could be physically stolen. People buy their home in their own name, as they do with their car, their savings, and their crypto accounts.

Living in a country where your home could be physically stolen from you by any sort of criminal would be a nightmare. Our system isn't perfect and has lots of problems like the one you are talking about here, but most people don't have the problem with this even though there are a few very unfortunate exceptions.

But the solution is not to wage war against your own government--that's a losing battle in the long run no matter what. The solution is to vote and to change your government. That's not a very good-sounding solution because it might not work and it's often very slow, but it's the only one that has a chance of working in the real world. Everything else is just a fantasy.

I assume no such thing, and I made that very clear.

What I assumed, and I think correctly, is that most people don't want to go against their government, either because they are not criminals, or they fear being caught regardless of the technical safeguards (and trusting your life to Bitcoin privacy, for instance, would be, well, naive ).

The fact is that most people don't have the problem that decentralized architectures purport (often incorrectly) to solve.



I don't see how that contradicts anything. People usually don't like to go against their government, even if it's the proper and moral thing to do, because they fear they may be imprisoned or killed. I don't see how that statement is particularly controversial.

I have a Social Security number, I file taxes every year, my bank can be subpoenaed for my records, my house is in my name, as is my car, brokerage accounts, crypto accounts, and so on. In this regard I am exactly like almost all voting Americans. Democracy exists just fine here.



That statement is nonsensical, but no matter: I care about privacy just like everybody else. I don't want my data shared with marketers, or companies I don't trust, or my neighbors, or even the government unless they have a valid subpoena. I simply don't have a need for a place to put my money where the government can never know about it even if they investigate me for a crime. And if I ever do have a need because the US government has collapsed to the point of lawlessness, Bitcoin isn't going to help me nor will anything else. Indeed, if you are fugitive, probably the last thing you want to do is leave a digital trail, however obscured you think it might be.

I actually thought this was an actual news story until I read that.