Usability of bitcoin

[miztaziggy]

Im no technical expert, and no economist, but I do live in the real world and I do know that as it is right now, Bitcoin will never take off beyond a hobby for the minority. There are a number of reasons why I think this and I will list them below, in the hope that someone who knows more about all of this can answer my points:


Also, let me just say that I am in no way against the idea of bitcoins, in fact I believe something like this is what the world actually needs. Something that has the chance to take away the power the banks give themselves by being able to print money. I really despise that fact that the federal reserve is actually a group of private banks that create money to loan the government (and by government, I mean ordinary citizens), then charge them interest on that money that has to be paid back by more loans. Its the biggest con in the history of the world and is the source of so much evil. How can a system where the same people who decide policy and whether to go to war or not actually profit from war. It is and always will be corrupt and I hate it.

I would like to point out that I really like the idea of bitcoins and I want it to work - I think however, that people who use bitcoins, and people with good technical knowledge need to think seriously about some of the problems below, especially the top 2 and come up with a solution. Some sort of easy to transport, easy to understand app for PC, Mac, iphone, android etc etc that is somehow linked and can work in a way that the average joe public will understand.


- Bitcoin is not portable, people will not be able to transport it around, pay for their weekly food shopping with it, pay for their fuel etc etc. As I understand it, you need your bitcoin wallet, which is stored on a PC and cant be stored in more than one location to be used at the same time? Bitcoins as they currently are, are less convenient that standard currency.

Edit - just seen this http://forum.bitcoin.org/index.php?topic=26718.0
A step in the right direction


- Bitcoin is not easy to understand - Money is. People (in general) are stupid and if they dont understand something, wont use it or wont want to know about it.

- People actually think that money is still back by gold. They think that money has real value.

- You cant and probably will never be able to pay taxes with bitcoin. Even if you started to get paid in bitcoins for working, the government would demand taxes from you in £ or $ or whatever.

- Bitcoins can be lost too easily at the moment if you lose a wallet file. I know you can store online, but who really wants to trust their bitcoins to an online wallet.

- Eventually, at some point in the future, if/when bitcoin gains in popularity the people in power, who stand to lose out from the growth of bitcoins will ban it somehow. Although it wont stop the majority of users on here using bitcoins, it will stop any legitimate businesses accepting bitcoins in payment and crash the price.

I quite like the quote in this article: http://apenwarr.ca/log/?m=201105

Governments have big weapons and propaganda machines and actual secret agents and citizens who believe that keeping the economy under control is a good idea. If you threaten the currency, you are threatening the entire power structure of the civilized world. You are, quite literally, an enemy of the state. You are attempting to build nuclear weapons in your bedroom. Or at least they'll see it that way.

Do you think you'll get away with it because your monopoly money is made of bits instead of paper? I don't.

The only reason you'd get away with it is if you're too small to matter. Which is certainly the current situation.

I think this last point is the real killer - the people in power will not give up that power easily. They control the army, they control the mass media, they have the support of the simple minded majority who like to call themselves "patriots".

Bitcoin will be it's own downfall, it will get too big, it will get big enough that it gets noticed and then it will all come tumbling down when those in power start to pay attention.

Edit - also just been thinking about the fact that bitcoin isnt a real currency is it? It is a commodity, everyone wants bitcoins to trade for their own regional currency. If you could not trade bit coins for currency, then I would bet my last penny that no one would accept bitcoins for payment when selling goods and services

Second edit - the more I think about this, the more I dont see it working long term. If you think about it, bitcoin is almost like a very early primitive currency. When people first began to record transactions on clay tablets, there was no central bank, there was no control or government inflation etc. Someone came up with the idea of a bank and then came credit. Borrowing more money than you had at that current time and paying it back over some time period, with interest.

Even if bitcoin does get big enough to be a major success, and the government cant or doesnt stop it, and lots of people in the world got paid in bitcoins and never had to think about transferring them to £ or $. Someone somewhere will have 10 bitcoins and want to spend 20. They will need a bank or someone with more bitcoins than them to loan them. That person or 'bank' will charge interest. If you follow this through to its conclusion, then we will end up in exactly the same situation we are in now. Those with money will buy enough bitcoins to be able to act as a bank. They will make money in exactly the same way as they do now, only money cant be created any more, so over time, the interest paid to the banks decreases the amount of bitcoins in circulation as more and more are sat in the accounts of the banks. 

[1714078593]

1714078593

[istar]

- Bitcoin is not portable

Now it is. And more portability will come.
http://forum.bitcoin.org/index.php?topic=26718.0

-People actually think that money is still back by gold
Not everyone do but you are right, a lot of people do, even "smart" ones. But everyone can get educated.

- You cant and probably will never be able to pay taxes with bitcoin.
Does not matter, if it has other nice uses. You cant pay taxes with facebook credits yet it will be used etc.

- Bitcoins can be lost too easily at the moment if you lose a wallet file.
Its worked on.

Bitcoin will be it's own downfall, it will get too big, it will get big enough that it gets noticed and then it will all come tumbling down when those in power start to pay attention.

Yes it will get big.
Have those powers managed to shut down piracy? No.
When its too big, its too big. There are more than one country on earth...

Bitcoins or another crypto currency is here to stay in one way or another.

[luv2drnkbr]

1.  I agree with this point.  The main obstacle is portability and usability.  Fortunetely within the past week or two, this problem is being solved on many platforms....  This works flawlessly and opens up the door to all kinds of things.  When things like this start to happen, bitcoin could become huge.  Most likely there will just be a Paypal app instead, but there is a significant non-zero chance that bitcoin could corner that type of thing first and really wedge itself into the mainstream.

2.  Meh, most of my friends who I've talked to about it have been satisfied with "no, I promise you can't just copy the coins, and it's safe".  Although to be fair, I don't think they were interested.  Anybody who is truly interested in using it as money would surely want to know what they were doing.  So I can see your point here, although I'm not as worried about it as you are.  All that needs to be done is finding a short sweet brief explanation that makes them feel it's safe and reliable.

3.  Surely you can explain that time and electricity have value as well, so bitcoin is also "backed" but by a different form of limit resource.  (Then remind them that dollars aren't backed.)

4.  Yeah, so, and, but, therefore...??

5.  Are bitcoins more easily lost than cash???  The only reason you don't lose cash is because you keep it in a bank and can sue them if THEY lose it.  So for bitcoin, you just keep it in a "bank" like mybitcoin or an exchange like mtgox because if they fuck up you can demand--- OH WAITAMINUTE....  nm fair point.  GOXED

6.  If there is use, there is demand.  If there is demand, there is a market, legal or not.  Most likely instead of bitcoins being illegal, you'll just see Amazon Bucks and Chase Coins which aren't traded 1:1 with USD.  And because people are always brand loyal because they are comfortable with what they know, those will be used far more than bitcoins.  All the while, the money you pay your taxes with will still be used everywhere as well and be worth less and less.

All of this is the beauty of Bitcoin.  It HAS a purpose.  It IS USEFUL.  It is BACKED by effort and as stated, serves a purpose that nothing else serves, which gives it INTRINSIC value.  It's very programmed nature means it CANNOT be stopped.  Something similar may popup, but where it's Bitcoins or Bytecoins or FutureCoins, the type of thing that Bitcoin is is the future of money.  Bitcoin will prosper, or it will at least be the first and lay the road for what does end up taking root.  It's just too brilliant--it's what money should and will be.

[pokwer]

Most of the issues you've mentioned are already on the way to being addressed.  Bitcoin is still very young.  As it grows, it will become portable/secure/easy to use/etc.  I believe this includes the government / threat to power argument, but this is an interesting one, and the topic of the following ramble: 

I think that by its very existence, bitcoin has let the cat out of the bag.  Cryptocurrency is here now.  Barring something on the level of a cataclysmic nuclear war which takes out most of the internet, it's here to stay.  I watch with great interest to see what will unfold.  I truly hope it will turn over a new leaf for humanity as much as it theoretically could in my idealistic fantasy land. 

Just looking at the state of humanity right now, it is clear to see there are turbulent times ahead; even if bitcoin were to vanish from existence right now, it would still be so.  The power structure of the entire civilized world is already threatened, heaving under its own weight.  But it doesn't necessarily have to become World War 3 -- I mean look, there's even a place for central banks in a bitcoin economy:  People will continue to use "trustworthy" services to protect their assets; banks could adapt to profit from this.  Naive?  Probably, but change is required regardless.  No, it won't come easily, but maybe, just maybe, bitcoin will help humanity move toward a better society than they could have if the illusion of the status quo could somehow be maintained. 

I could paraphrase your closing statement:  The big guns in the financial industry will be their own downfall, they will get too big, they will get big enough that they get noticed and then it will all come tumbling down when those in [real] power (i.e., the people) start to pay attention.

The "why can't we just work together" argument only fails when someone wants to be king of the castle.  Well, now we have to work together, whether we like it or not.  Sounds to me like the only acceptable way forward.  Vires in Numeris

[RodeoX]

I think you have some valid criticisms. But remember this project is an infant. It is still in beta, and no claims should be made that it is ready for a general audience. As far as being a commodity vs. a currency, it can be both. I use it as a currency primarily. But I know many people never buy stuff with it, they do arbitrage or shorting or whatever.

[miztaziggy]

I think you have some valid criticisms. But remember this project is an infant. It is still in beta, and no claims should be made that it is ready for a general audience. As far as being a commodity vs. a currency, it can be both. I use it as a currency primarily. But I know many people never buy stuff with it, they do arbitrage or shorting or whatever.

As I said, I hope bitcoin succeeds as a currency, and im playing devil's advocate a little here, but:

Do you work? Do you get paid in bitcoins?
Do you pay your taxes in bitcoins? Do you pay for your food and water and travel in bitcoins?

Or do you use £ or $ to buy bitcoins, or mine them? Do you think of items for sale in their worth in bitcoins or their worth in £ or $ converted to bitcoins? Do you sell your bitcoins for £ or $?

[mouse]

beware of a false dichotomy in regards to 'success'.

It's far more likely that bitcoin settles into one or more specialist/niche roles as a currency, and serves them well. So no, you may never be paid wages in BTC. And you cant eat BTC. But you will be able to do a whole lot of other useful stuff with them; stuff that is done better with bitcoins than dollars.

I'll leave it as an exercise for the readers to work out that that stuff is

[RodeoX]

I agree with the "specialized currency" idea. Think of the things that BTC does best. I bought a recipe for Chinese food as a PDF  file from a guy in China.  A direct person-to-person exchange like that could not have happened in any other currency. It took only a few seconds, email, Google translate and bitcoin.  That is game changing for the global economy.

[qikaifu]

The United States is somewhere people vote to chose their senator and president, which is very different from China or North Korea.

That's why we should let more people adopt bitcoin. They are bitcoiners, and voters, which is hope of bitcoin becoming a completely legal CURRENCY.