Why Bitcoin will never reach mainstream

[yayayo]

Before, the dystopian scenario of a cashless society had always been that everything can be tracked, and that if you were an "unperson", the central computer would be able prevent you from buying and selling, thus locking you out of society.

However, now, as there exist crypto-currencies that function in a way that's abstracted from real-life identities and accounts, there are ways around this dystopic outlook.

...and that is a great achievement in its own right.

Even if Bitcoin does not make it, it altered the way to think about electronic cash. The proof that it is possible to have a decentralized genuineness control is of greatest benefit to the preservation of human rights and individual freedom in the future society.

ya.ya.yo!

[CasinoBit]

Bitcoin will never reach the mainstream because there are far too many crooks, scammers, hackers and the like preying on everyone else aswell as each other. And because of the anonymity they are much less likely to be traced.

Unless the whole business has more accountability it will always remain underground and be treated with suspicion by mainstream consumers and businesses alike.

With difficulty reaching such high levels in a few months putting mining outside the realm of 99% of current miners I forsee the interest in BTC dieing out quite rapidly and the whole charade collapsing.

Dramatic, yes. Probable, yes.

There are many more crooks, scammers and hackers reversing Paypal transactions (and Paypal themselves) than Bitcoin will ever have.

[TTBit]

People aren't going to like what I'm going to say but it needs to be said regardless.
The only way bitcoin or any other alternative currencies will become mainstream is if enough infrastructure is built around it.

Person A sending bitcoins to person B (irreversibly) is simply not going to cut it. There is no inherent trust between both parties. We need 3rd party business (banks, insurers,lenders, exchanges etc) to build trust.

I doubt it.  I bought a $1,600 domain using namecheap and sent them irreversible funds by Bitcoin.  OH NOES was I worried, did I use a trusted bank as a third party?  Nope.  namecheap has a solid reputable business and they stand to lose a lot ripping me off.  I had not a second of doubt/fear sending them the BTC.

Imagine your local power company, amazon.com, newegg, namecheap, (insert company you already trust here) asked you to pay with Bitcoins would you have a problem?  I don't think most people would.

Now for fly by the night never heard of the "company" (which isn't even a real company) until they got out of noob jail and starting asking for tens of thousands of bitcoins in "pre-orders" well yeah you probably want to escrow that, then again if they asked for cash you probably would want to escrow it just the same.

I pay for gas the old-fashioned way, with cash. I walk into the store, "$60 on pump #3", give her $60 and leave without a receipt. Every time I think how easy would it be for the teller to just pocket the money and say she has no idea what I'm talking about when I come back and ask why pump #3 isn't on. Haven't been scammed yet.

[wachtwoord]

People aren't going to like what I'm going to say but it needs to be said regardless.
The only way bitcoin or any other alternative currencies will become mainstream is if enough infrastructure is built around it.

Person A sending bitcoins to person B (irreversibly) is simply not going to cut it. There is no inherent trust between both parties. We need 3rd party business (banks, insurers,lenders, exchanges etc) to build trust.

I doubt it.  I bought a $1,600 domain using namecheap and sent them irreversible funds by Bitcoin.  OH NOES was I worried, did I use a trusted bank as a third party?  Nope.  namecheap has a solid reputable business and they stand to lose a lot ripping me off.  I had not a second of doubt/fear sending them the BTC.

Imagine your local power company, amazon.com, newegg, namecheap, (insert company you already trust here) asked you to pay with Bitcoins would you have a problem?  I don't think most people would.

Now for fly by the night never heard of the "company" (which isn't even a real company) until they got out of noob jail and starting asking for tens of thousands of bitcoins in "pre-orders" well yeah you probably want to escrow that, then again if they asked for cash you probably would want to escrow it just the same.

I pay for gas the old-fashioned way, with cash. I walk into the store, "$60 on pump #3", give her $60 and leave without a receipt. Every time I think how easy would it be for the teller to just pocket the money and say she has no idea what I'm talking about when I come back and ask why pump #3 isn't on. Haven't been scammed yet.

Also, with Bitcoin you do have proof of the transaction while transactions done using banks or federal reserve notes aren't guaranteed to be. If companies use publically known addresses you can always prove you send them a certain amount.

[NewLiberty]

Also, with Bitcoin you do have proof of the transaction while transactions done using banks or federal reserve notes aren't guaranteed to be. If companies use publically known addresses you can always prove you send them a certain amount.

This is an often overlooked point.

Along with the potential for anonymity, there is the polar opposite with full transparency.

In any given transaction, any or all party may elect to use either full transparency or anonymity (or pseudo-anonymity), and have a record maintained in the blockchain, and you can know which your counter-party chooses so that you can act appropriately.

Having money with more features than ever previously existed is not something that is going to prevent Bitcoin from becoming mainstream.  The economic ecosystem will fill in the gaps without so much difficulty.


If anything is going to keep it from becoming mainstream it will be entrenched power in opposition, or subversion by existing money systems which are many orders of magnitude more powerful.  A major chip fab co could be ordered by some entity with too-much-to-lose to produce a few million ASICs at a 21nm fab plant, lots of things could derail our noble experiment but not this.  Need for (or lack of) KYC (Know Your Customer) is not going to be the Bitcoin killer.

[ibminer]

DISCLAIMER: I've only been involved with bitcoins for the past 7 months or so... just basing my comments on what I have seen/learned/adapted to as a 'newbie'.

I had come to the same conclusion in my mind a few months ago. There is a hump that will need to be overcome when 'good' people/businesses get involved with bitcoin. Right now, I don't think the OP is too far off from the fact that the market is saturated with people attempting & succeeding at scams, not to mention the amount of fear, uncertainty and doubt that exists. It should really only take 1 or 2 large companies to adopt bitcoins to push it into the next realm of existence where the ratio will change and the 'bad' part of the market will be reduced  (although would never disappear, even if regulation existed).

I feel like there is enough hardcore support for bitcoins to keep it alive until such an event occurs... but that time seems to be closing in, or at least - the bitcoin market is primed and ready for such an event.

There is a group of people involved in this community that have gained their coins somewhat easily and likely with little expenses, but definitely accepted risk. (early adopters/miners)... and there seems to be a group that have converted hard-earned money (even if for a hobby) to BTC. Assuming that the jumps/spikes in price over this past year means that more of the 2nd group of people have joined the community, I personally put the current value of BTC at maybe $20-$30, simply because the '2nd group of people' are up in the air right now and I fear a chunk of them could bail out due to the FUD or just falling victim to a small-time scam, even if for a small amount. The 2nd group of people are followers, but they need to have some type of trust for the people/idea they follow. A large company coming out in support of that, especially a company people already trust, would be when the true value jumps, IMO. I would doubt the first group is going anywhere for a while, which I am assuming would be enough to keep BTC 'alive'.  

The primary issue with all of this is greed... bitcoin is anonymous, and if those 2nd group of people feel like they have a 'get out of jail free' card, not sure what is stopping them from just attempting their own scams, but I have some level of hope for humanity and that people do have some minor trace of morals left.  

Obviously making a good amount of assumptions that I would believe to be true in the comments above, but take it for what its worth  

[DeathAndTaxes]

Don't get me wrong: I fully appreciate the option to conduct business anonymously, and I have no problem with that. But if we really want to encourage wider adoption, fixating on anonymity and how to remedy the problems that anonymity creates just won't cut it.

That is the important part.  Large verifiable trusted companies using Bitcoin don't remove the choice of (psuedo) anonymity.  The payment protocol Gavin is working on actually combines both.  It allows one to verify the recipient (using CA and signed payment orders) while still making the tx itself psuedo anonymous.  If you don't want the gubbermint tracking your battery or tinfoil purchases made on Amazon with Bitcoins you could use a mixer.  This is something that can't be done with CC for example. 


I think a lot of the "issues" with Bitcoin are really issues with user naivety.  Bitcoin is like digital cash.  It is an imperfect metaphor but it works for the most part.  Most people would not hand a bag stuffed with cash (hereafter refered to as "bag-o-cash" to a "company" rep standing in an random alley which changes every day that has no ID, no name, no method of verification.  You don't even need to post warnings about how/why you shouldn't do that.  "Thanks for the bag of cash, wait here and I will get your product ... soon (sucker)".  However for some people they essentially do the EXACT same thing with Bitcoins and are surprised that they got scammed.  Somehow it is less risk because .... Bitcoin.

I think it is good for all Bitcoin users to stop before pushing [Send] and just ask themselves "If Bitcoin didn't exist and my only option of payment was fiat cash would I feel comfortable handing this "person" a bag-o-cash given the information I have and can verify?"  If the answer is "no" then you absolutely shouldn't be sending them Bitcoins either, so take your hand off the mouse and slow down.  It really is that simple.

If NewEgg, Amazon, or namecheap tomorrow started accepting only cash I would have issues with the risk of paying that way (it would be annoying but that is a different topic).  Likewise if they accept Bitcoins I wouldn't have any more or less issue then paying them by cash.  Escrow in those cases simply adds cost and expense.

On the other hand if some guy on Craigslist wanted to sell me a pre-order "super ultra hyper Bitcoin ASIC miner" but I had to buy today (they only have one left) and I need to pay in advance by sending a bag-o-cash to a PO BOX and wait 3 months I "probably"* would decline.  The same guy asking for Bitcoins instead doesn't make is less risky so the answer is still no.

I can't explain it beyond absolute naivety on the part of some users.  The problem is that enough "foolish" users makes it a target rich environment.  That brain dead scammer knows his pay cash and wait 3 months for magical beans won't work but change cash to Bitcoin and magical beans to ASICs and there is a line of suckers fighting to get rid of their wealth.  The amount of scamming will not go down until the "street smarts" of the users go up and the bad news is it will take a lot more losses for that to happen.  It likely will take time for "common sense" to catch up with the technology.  It doesn't help that credit cards have made the average consumer brain-dead when it comes to managing risk.  CCs transfer all the risk (and consequences for asinine decision making) from the consumer to the merchant so why bother managing risk.  Hell you can post your CC on facebook homepage (so you don't have to look in your wallet) and it costs you absolutely nothing. Consumers don't need to be "smart" with CC like they do with cash (or Bitcoins).  It will take time to deprogram the average user.

These aren't technological issues and they can't be solved by technology.  


* "Probably" means WTF? Are you on crack?

[J603]

Bitcoin will never reach the mainstream because there are far too many crooks, scammers, hackers and the like preying on everyone else aswell as each other. And because of the anonymity they are much less likely to be traced.

Unless the whole business has more accountability it will always remain underground and be treated with suspicion by mainstream consumers and businesses alike.

With difficulty reaching such high levels in a few months putting mining outside the realm of 99% of current miners I forsee the interest in BTC dieing out quite rapidly and the whole charade collapsing.

Dramatic, yes. Probable, yes.

I think that it has less to do with the scammers and more with the fact that there aren't very many legitimate uses right now. There's nothing worth spending bitcoins on, unless you're buying drugs. Most people won't bother with bitcoins because they have no reason to.

However, even if every single Internet user starts using bitcoins, there simply aren't enough Internet users for it to become mainstream. Less than a third of the world has Internet, so large businesses would lose money if they were to switch solely to bitcoins. Bitcoins also fluctuate much more rapidly. Businesses would have to change prices day to day, whereas with traditional currency they don't have to. It would be too much of a risk and not enough of a gain to make the switch. Why bother accepting bitcoins when people have no choice but to pay with fiat anyways?

[DrGregMulhauser]

..."Thanks for the bag of cash, wait here and I will get your product ... soon (sucker)".  However for some people they essentially do the EXACT same thing with Bitcoins and are surprised that they got scammed.  Somehow it is less risk because .... Bitcoin...

...That brain dead scammer knows his pay cash and wait 3 months for magical beans won't work but change cash to Bitcoin and magical beans to ASICs and there is a line of suckers fighting to get rid of their wealth...

ROTFL. That post should be left as a sticky somewhere -- not just in the newbie section, but pretty much everywhere.

I hadn't given this much thought before, but I think this is exactly right, that somehow people are sensing less risk, or turning down the volume on their BS detectors, because it involves Bitcoin.

Just to speculate wildly: could it have something to do with the sense of empowerment that Bitcoin provides (and which I otherwise see as a fantastic thing)? Bitcoins are so dang easy to move from point A to point B, without waiting on some institution to do it for you, possibly while charging you for the privilege, so you start feeling more in control of your own destiny, you appreciate the greater choice you have, the greater freedom, suddenly all that transitions into a teeny bit of recklessness, and you say "to Hell with them, I'm going to buy me some of those magical beans"?

Or, speculating wildly again: could it be that some users have already discounted the risk right up front (say, when buying Bitcoins with fiat, or when having previously mined them back in the good ole days), so that whatever they do with them now doesn't have to pass the same sorts of sniff tests they would otherwise apply to financial transactions? In other words, they've already taken a risk when deciding to allocate any capital to Bitcoins, so what's a bit more here and there, in case those magical beans really do work out?

I could imagine there being significant value for the development and wider acceptance of Bitcoin as a currency in getting a better handle on the whys and the wherefores of what really does seem like a Bitcoin-induced tendency to underestimate risk.

[herzmeister]

I had come to the same conclusion in my mind a few months ago. There is a hump that will need to be overcome when 'good' people/businesses get involved with bitcoin the internet. Right now, I don't think the OP is too far off from the fact that the market is saturated with people attempting & succeeding at scams, not to mention the amount of fear, uncertainty and doubt that exists. It should really only take 1 or 2 large companies to adopt bitcoins the internet to push it into the next realm of existence where the ratio will change and the 'bad' part of the market will be reduced  (although would never disappear, even if regulation existed).

FTFY.

Works every time. 

[QuestionAuthority]

The fine art of trolling is truly dead! OP is a perfect example of the sloppiness that permeates trolling today. God I miss PinkiePie.

First, reel in your targets with something that's plausible even if unlikely then you can play awhile: Bitcoin will never be mainstream because the USA will eventually bring all its power, legal and financial, to bear against any established businesses. This sets up a debate parameter allowing two clear sides to form.

Have a counter point available to both possible arguments at the ready. Example: Response: USA doesn't control the world. Your answer: No but it has established worldwide relationships that spreads its reach further than its national boundaries.

If someone sides with you roll with it for a few pages then vehemently turn on your supporter. This makes for some very entertaining conversations.

Finally, start the ball rolling with a few realistic arguments, have your fun and then completely leave the thread and watch the posters piss all over each other.

rotfl

[ibminer]

I had come to the same conclusion in my mind a few months ago. There is a hump that will need to be overcome when 'good' people/businesses get involved with bitcoin the internet. Right now, I don't think the OP is too far off from the fact that the market is saturated with people attempting & succeeding at scams, not to mention the amount of fear, uncertainty and doubt that exists. It should really only take 1 or 2 large companies to adopt bitcoins the internet to push it into the next realm of existence where the ratio will change and the 'bad' part of the market will be reduced  (although would never disappear, even if regulation existed).

FTFY.

Works every time. 

Yes, Find & replace does work every time... glad you know how to use it.

That being said, I have no clue what your trying to say here... are you saying good people/businesses have not already adopted the 'internet'?   
When is the last time you surfed the internet outside of these forums?? 

[herzmeister]

Yes, Find & replace does work every time... glad you know how to use it.

That being said, I have no clue what your trying to say here... are you saying good people/businesses have not already adopted the 'internet'?   
When is the last time you surfed the internet outside of these forums?? 

haven't you been around in the early days of the internet? (the era starting with the Eternal September)

[CryptoCoinShops]

Bitcoin is allready hitting mainstream and will continue and grow as it has done over the past year. Fancy seeing Bitcoins mentioned on so many news programs accross the world.

If you think there are way to many scammers using bitcoin you might want to take a look at just how many scammers are defrauding internet users out of millions who use ATMS,  online banking, credit cards. debit cards, ect, and the detection rate and prosecution of online fraud is very low compared to how many millions are being scammed out of users.  You could say the same thing about insurance fraud too. Where ever there is an opertuinity be it Bitcoins or the USD or other currencys there are always going to be people scamming other people to make a quick buck.

[LeslieDilley]

Wall Street could easily be defined as the 'mainstream'

Bitcoin has reached relevance with Wall Street... thus Bitcoin has already reached the mainstream.

[ibminer]

Yes, Find & replace does work every time... glad you know how to use it.

That being said, I have no clue what your trying to say here... are you saying good people/businesses have not already adopted the 'internet'?  
When is the last time you surfed the internet outside of these forums??  

haven't you been around in the early days of the internet? (the era starting with the Eternal September)

Sorry, Slight misinterpretation of what you were trying to do... but that's what happens when you don't explain yourself  
I believe I understand where you were going with this... it seems like you are comparing the beginning stages of usenet to the beginning stages of bitcoins and assuming the same result?    

IMO, The idea of the internet started a long time ago, but the early days of the internet was well before AOL & Usenet... what about all of the games of Global War I hosted on my BBS??  

Anyhow, I have read the usenet wiki but I am still not understanding how your comparing 2 different creatures and assuming the same outcome just because they have a similar beginning. Would you look at 3 different types of eggs and assume the same 3 creatures will be popping out?  This might be a bad analogy, but I'm tired 

[herzmeister]

it seems like you are comparing the beginning stages of usenet to the beginning stages of bitcoins and assuming the same result?    

exactamente 

IMO, The idea of the internet started a long time ago, but the early days of the internet was well before AOL & Usenet... what about all of the games of Global War I hosted on my BBS??  

Even that comparison holds true. In the beginning, it was just Satoshi and a few crypto-nerds on these forums. Then after the first mainstream exposures, "businessmen" and scammers alike were attracted. Same with the internet going AOL mainstream. That's when the first credit card frauds happened.

Would you look at 3 different types of eggs and assume the same 3 creatures will be popping out?  This might be a bad analogy, but I'm tired 

I'm not predicting the same 3 creatures would be popping out. The analogy here would be that anything will be popping out that will grow and live, and live long and successfully.