Help me debate an economist on Bitcoin!

[SheHadMANHands]

This individual and I are in a sort of informal debate over Bitcoin. 

He says, in response to one of my arguments:

You state: "What interests me a bit, are the new applications that crypto-currency allows for: "smart contracts", "decentralized autonomous organizations", machine to machine transactions." None of these are new: smart contracts - options; decentralized autonomous organizations - commercial banks; machine to machine transactions - internet transactions and ATMs.  The environment might be different but the ideas and their applications already exist.

I feel like he's shown his cards here, and his lack of understanding of these technological applications.  Are there any great examples that could be presented to best demonstrate that to him? 

[Meuh6879]

tell here that nothing currency have more than 50 years (and less than that when you see the devaluation every 10-15 years) ... than gold and silver (and diamands).

why ?

because it's limited.


bitcoins are limited ... and that why they will win.

because you can't spend silver or gold (and diamands) in this free world.

[Snagglebone]

This individual and I are in a sort of informal debate over Bitcoin. 

He says, in response to one of my arguments:

You state: "What interests me a bit, are the new applications that crypto-currency allows for: "smart contracts", "decentralized autonomous organizations", machine to machine transactions." None of these are new: smart contracts - options; decentralized autonomous organizations - commercial banks; machine to machine transactions - internet transactions and ATMs.  The environment might be different but the ideas and their applications already exist.

I feel like he's shown his cards here, and his lack of understanding of these technological applications.  Are there any great examples that could be presented to best demonstrate that to him? 

All of those "existing ideas" are prone to fraud and corruption. With bitcoin, that is prevented via mathematics and the protocol. You can't embezzle, or flake out on the options, or claw back funds with bitcoin, but you can do all of those things with options, commercial banks and internet transactions/ATMs.  The value you store in those "traditional" methods can also be confiscated or devalued without your consent, and while the underlying "things" that the blockchain represents can be confiscated or devalued, the information in the blockchain can't be changed, seized or devalued without your consent. When and if the underlying "things" are taken away, devalued, etc... you still have an immutable record of everything that can't be forged or altered, so you have complete transparency as far as that goes.  These are things "existing ideas" simply don't and can not have.

[odolvlobo]

This individual and I are in a sort of informal debate over Bitcoin.  

He says, in response to one of my arguments:

You state: "What interests me a bit, are the new applications that crypto-currency allows for: "smart contracts", "decentralized autonomous organizations", machine to machine transactions." None of these are new: smart contracts - options; decentralized autonomous organizations - commercial banks; machine to machine transactions - internet transactions and ATMs.  The environment might be different but the ideas and their applications already exist.

I feel like he's shown his cards here, and his lack of understanding of these technological applications.  Are there any great examples that could be presented to best demonstrate that to him?  

Options are not "smart contracts". A smart contract automatically resolves itself. Options need a third party clearing house to be resolved. The clearing house in the U.S. is the OCC. It couldn't be more centralized and "dumb".

DAO's are not a new concept. A very old example of a DAO is the The Underground Railroad, which was a network of persons who helped escaped slaves on their way to freedom in the northern states or Canada.

Bitcoin is a DAO. It is a payment processor like Paypal and all the others, but it is owned and controlled by nobody, and it is decentralized.

A commercial bank is a corporation. It is owned and controlled by people. A "distributed autonomous organization" is not owned by anyone and it is not controlled by anyone. A commercial bank is not a DAO. Imagine a company like Uber that wasn't owned or controlled by by anyone. That could be a DAO.

The machine-to-machine transactions that we care about involve autonomous decision making. The example of internet transactions and ATMs misses the point. However, machine-to-machine transactions do already exist. For example, high frequency trading systems buy and sell stock without any human control or interaction.

[SheHadMANHands]

Thanks odolvlobo, I think that'll be really helpful.  Great examples too.

[kelsey]

This individual and I are in a sort of informal debate over Bitcoin. 

He says, in response to one of my arguments:

You state: "What interests me a bit, are the new applications that crypto-currency allows for: "smart contracts", "decentralized autonomous organizations", machine to machine transactions." None of these are new: smart contracts - options; decentralized autonomous organizations - commercial banks; machine to machine transactions - internet transactions and ATMs.  The environment might be different but the ideas and their applications already exist.

I feel like he's shown his cards here, and his lack of understanding of these technological applications.  Are there any great examples that could be presented to best demonstrate that to him? 

All of those "existing ideas" are prone to fraud and corruption. With bitcoin, that is prevented via mathematics and the protocol. You can't embezzle, or flake out on the options, or claw back funds with bitcoin, but you can do all of those things with options, commercial banks and internet transactions/ATMs.  The value you store in those "traditional" methods can also be confiscated or devalued without your consent, and while the underlying "things" that the blockchain represents can be confiscated or devalued, the information in the blockchain can't be changed, seized or devalued without your consent. When and if the underlying "things" are taken away, devalued, etc... you still have an immutable record of everything that can't be forged or altered, so you have complete transparency as far as that goes.  These are things "existing ideas" simply don't and can not have.

In theory..............

[twiifm]

This individual and I are in a sort of informal debate over Bitcoin.  

He says, in response to one of my arguments:

You state: "What interests me a bit, are the new applications that crypto-currency allows for: "smart contracts", "decentralized autonomous organizations", machine to machine transactions." None of these are new: smart contracts - options; decentralized autonomous organizations - commercial banks; machine to machine transactions - internet transactions and ATMs.  The environment might be different but the ideas and their applications already exist.

I feel like he's shown his cards here, and his lack of understanding of these technological applications.  Are there any great examples that could be presented to best demonstrate that to him?  

Options are not "smart contracts". A smart contract automatically resolves itself. Options need a third party clearing house to be resolved. The clearing house in the U.S. is the OCC. It couldn't be more centralized and "dumb".

DAO's are not a new concept. A very old example of a DAO is the The Underground Railroad, which was a network of persons who helped escaped slaves on their way to freedom in the northern states or Canada.

Bitcoin is a DAO. It is a payment processor like Paypal and all the others, but it is owned and controlled by nobody, and it is decentralized.

A commercial bank is a corporation. It is owned and controlled by people. A "distributed autonomous organization" is not owned by anyone and it is not controlled by anyone. A commercial bank is not a DAO. Imagine a company like Uber that wasn't owned or controlled by by anyone. That could be a DAO.

The machine-to-machine transactions that we care about involve autonomous decision making. The example of internet transactions and ATMs misses the point. However, machine-to-machine transactions do already exist. For example, high frequency trading systems buy and sell stock without any human control or interaction.

How is bitcoin a smart contract?  Contracts are legal agreements.  Ultimately laws enforce contracts

Decentralise deschmentalize.  Who gives a shit when its wasteful and inefficient

Why the hell would someone convert USD to bitcoin to make a purchase.  Then the vendor has to convert it back to USD to pay his suppliers.  Extra uneeded steps when you can use credit card, cash, paypal, opaypor whatever

[pawel7777]

...Contracts are legal agreements.  Ultimately laws enforce contracts

Are contract killings also legal agreements?

Point of "smart contracts" is you will no longer need law enforcement for all the things that can be auto-resolved by simple "if - then" rules.

Why the hell would someone convert USD to bitcoin to make a purchase.  Then the vendor has to convert it back to USD to pay his suppliers.  Extra uneeded steps when you can use credit card, cash, paypal, opaypor whatever

Why the hell would anyone use paypal instead of bank-to-bank transfer? Why the hell would anyone use bank-to-bank transfer instead of using cash? Why the hell such middlemen exist?

Reduced costs? Convenience? Anonymity? No restrictions? Speed? Discounts?

[Beliathon]

You state: "What interests me a bit, are the new applications that crypto-currency allows for: "smart contracts", "decentralized autonomous organizations", machine to machine transactions." None of these are new: smart contracts - options; decentralized autonomous organizations - commercial banks; machine to machine transactions - internet transactions and ATMs.  The environment might be different but the ideas and their applications already exist.

The applications of those ideas exist as organizations of men. On the blockchain they will exist as code, reaching a level of efficiency traditional organizations couldn't dream of.

[twiifm]

...Contracts are legal agreements.  Ultimately laws enforce contracts

Are contract killings also legal agreements?

Point of "smart contracts" is you will no longer need law enforcement for all the things that can be auto-resolved by simple "if - then" rules.

Why the hell would someone convert USD to bitcoin to make a purchase.  Then the vendor has to convert it back to USD to pay his suppliers.  Extra uneeded steps when you can use credit card, cash, paypal, opaypor whatever

Why the hell would anyone use paypal instead of bank-to-bank transfer? Why the hell would anyone use bank-to-bank transfer instead of using cash? Why the hell such middlemen exist?

Reduced costs? Convenience? Anonymity? No restrictions? Speed? Discounts?

Contract killings arent legal therefore they are not contracts.  Besides this point.  How is bitcoin a smart contract if I wanted hire a hitman?

You use paypal vs back to bank depending on the situation but you stay within the currency.  Why make a conversion take exchange risk and convert it back?  Just the exchange risk is not worth the trouble

[pawel7777]

Contract killings arent legal therefore they are not contracts.  Besides this point.  How is bitcoin a smart contract if I wanted hire a hitman?

I really don't know, don't care and don't want to know.

I only mentioned 'contract killing' to point that the word 'contract' can be used outside of definition of 'legally enforced agreements', whether you want to accept it or not.
The same goes with 'smart contracts', you can refuse to use word 'contract' and replace it with something else, but that doesn't change anything.
The fact that 'contracts' are tied to definition of 'legal agreements' is because up until now there was pretty much no possibility of resolving issues automatically.

You use paypal vs back to bank depending on the situation but you stay within the currency.  Why make a conversion take exchange risk and convert it back?  Just the exchange risk is not worth the trouble

You choose to use bitcoins instead of USD depending on the situation. For every man, or every purchase the reasons could be different.

Sure, if you don't have any bitcoins, there would make no economical sense to try to pay with bitcoins for a pair of socks. But if the merchant offers you discount for BTC payment (he can charge you less, because he doesn't have to include risk of stolen cc or unfair chargebacks in the price) then you could be better off buying BTC and paying with them. Pair of socks may not be worth it, but 10 pairs + some shirts and pants could give you enough incentive.

That's just one possible reason to use BTC.

[criptix]

...Contracts are legal agreements.  Ultimately laws enforce contracts

Are contract killings also legal agreements?

Point of "smart contracts" is you will no longer need law enforcement for all the things that can be auto-resolved by simple "if - then" rules.

Why the hell would someone convert USD to bitcoin to make a purchase.  Then the vendor has to convert it back to USD to pay his suppliers.  Extra uneeded steps when you can use credit card, cash, paypal, opaypor whatever

Why the hell would anyone use paypal instead of bank-to-bank transfer? Why the hell would anyone use bank-to-bank transfer instead of using cash? Why the hell such middlemen exist?

Reduced costs? Convenience? Anonymity? No restrictions? Speed? Discounts?

You use paypal vs back to bank depending on the situation but you stay within the currency.  Why make a conversion take exchange risk and convert it back?  Just the exchange risk is not worth the trouble

You either have no clue how payment processor are working or never bought something outside of your home country.

Because - what a surprise - exactly that happens x)

@pawel

Stop defending bitcom russian communist

[Lethn]

If you have people who are trying to have arguments about something when their opinions are entirely based on their own ignorance then there really is not much you can do with those types of people, doesn't matter what the debate is, if they refuse to even learn about the things you've explained to them then they're just either intentionally or unintentionally wasting your time.

[Snagglebone]

You use paypal vs back to bank depending on the situation but you stay within the currency.  Why make a conversion take exchange risk and convert it back?  Just the exchange risk is not worth the trouble

I just wanted to point out that you don't stay within the currency (USD), you are in another currency entirely... Call them whatever you want, "bank credits," "USD surrogates," etc... but it isn't USD. It's a digital ledger when you do it that way, so it is, by definition, not USD itself. Only cash is USD. But in the spirit of your point, if not the letter of it, you do run that risk when you transfer internationally say from a US Bank to a European bank.

That said, if and when bitcoin becomes popular enough, staying within bitcoin is entirely possible and even likely, so your argument falls flat. Just because bitcoin isn't big and popular enough right now doesn't invalidate the point. If there are no people "taking the conversion risk" then bitcoin won't gain in popularity. You need people that are willing to take that risk to help bitcoin grow. That's the whole point as to why you'd do it at this early stage.

[Furio]

This individual and I are in a sort of informal debate over Bitcoin. 

He says, in response to one of my arguments:

You state: "What interests me a bit, are the new applications that crypto-currency allows for: "smart contracts", "decentralized autonomous organizations", machine to machine transactions." None of these are new: smart contracts - options; decentralized autonomous organizations - commercial banks; machine to machine transactions - internet transactions and ATMs.  The environment might be different but the ideas and their applications already exist.

I feel like he's shown his cards here, and his lack of understanding of these technological applications.  Are there any great examples that could be presented to best demonstrate that to him? 

All of those "existing ideas" are prone to fraud and corruption. With bitcoin, that is prevented via mathematics and the protocol. You can't embezzle, or flake out on the options, or claw back funds with bitcoin, but you can do all of those things with options, commercial banks and internet transactions/ATMs.  The value you store in those "traditional" methods can also be confiscated or devalued without your consent, and while the underlying "things" that the blockchain represents can be confiscated or devalued, the information in the blockchain can't be changed, seized or devalued without your consent. When and if the underlying "things" are taken away, devalued, etc... you still have an immutable record of everything that can't be forged or altered, so you have complete transparency as far as that goes.  These are things "existing ideas" simply don't and can not have.

In theory..............

Which theory do you mean, people and organization have tried to manipulate the blockchain, I bet even the NSA took a crack at it, all have failed, so it's no theory, it's fact.

[spazzdla]

How is bitcoin a smart contract?  Contracts are legal agreements.  Ultimately laws enforce contracts

Decentralise deschmentalize.  Who gives a shit when its wasteful and inefficient

Why the hell would someone convert USD to bitcoin to make a purchase.  Then the vendor has to convert it back to USD to pay his suppliers.  Extra uneeded steps when you can use credit card, cash, paypal, opaypor whatever

This sounds like the guy going on about how he has to maintain his car, fuel his car and how a horse is just so much better than a car.

[criptix]

How is bitcoin a smart contract?  Contracts are legal agreements.  Ultimately laws enforce contracts

Decentralise deschmentalize.  Who gives a shit when its wasteful and inefficient

Why the hell would someone convert USD to bitcoin to make a purchase.  Then the vendor has to convert it back to USD to pay his suppliers.  Extra uneeded steps when you can use credit card, cash, paypal, opaypor whatever

This sounds like the guy going on about how he has to maintain his car, fuel his car and how a horse is just so much better than a car.

Well my girl would probaly agree to that....