The purpose of Bitcoin

[TheQuin]

I was just reading this article in this months The Spectator https://www.spectator.co.uk/2018/01/why-cryptocurrencies-are-the-answer/ and there it was in the last sentence of the first paragraph:

The craze for cryptocurrency can be explained by a host of factors: the allure of getting rich quick; the attraction of off-the-grid accountancy for malefactors like tax evaders and drug dealers (though Bitcoin is traceable); the glamour of the new. Despite blockchain currencies’ wild volatility thus far, I’d still posit that the more underlying attraction is to a reliable store of value. Bitcoin investors may not recognise their motivation as such, but the impulse behind computer-generated currency is revolutionary: to take the production and control of money away from government.

This was exactly the motivation I had had back in 2012 when I first became involved, but it is far too easy to lose sight of that over time. This is about taking back control of money from those that have devalued it so recklessly over the last century. As the article goes on to point out both the US Dollar and the Britsh Pound are now worth 1/100th of what they were 100 years ago.
I find it interesting and unusual that a mainstream publication like The Spectator actually gets what this is all about.

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[franky1]

bitcoin lost that ethos of taking control of money

i too had your mindset when i too started in 2012.

but the politics of a certain dev team and their ambition to intensionally hike the fee's up have priced bitcoin out of the daily us money market. and now bitcoin is just a speculation asset with little to no real world function.

in short it flipped out of the money market and now in the stock market, as a close analogy as you can get.
no one wants to swap shares to buy a coffee. re certifying a share to a new owner costs too much

[bakerlisa510]

The main purpose of Bitcoin was to make a currency which is controlled by the people or the users itself. But now bitcoin is used just as a gambling token.

[TheQuin]

bitcoin lost that ethos of taking control of money

i too had your mindset when i too started in 2012.

but the politics of a certain dev team and their ambition to intensionally hike the fee's up have priced bitcoin out of the daily us money market. and now bitcoin is just a speculation asset with little to no real world function.

in short it flipped out of the money market and now in the stock market, as a close analogy as you can get.
no one wants to swap shares to buy a coffee. re certifying a share to a new owner costs too much

I may be just a natural optimist but I see this as a temporary phase of Bitcoins development. I do see Lightning Network as the best scaling solution and Bitcoin is well ahead of everyone else in developing that. The high transaction fees now are in main due to the increase in value having overtaken the technical development. I think it was a mistake that Segwit2x was not backed by the whole community as it probably would have been a good compromise solution to get us through this period until LN is fully ready.

BTW, thanks for being the only person to comment that actually read the OP and not just the title.

[franky1]

bitcoin lost that ethos of taking control of money

i too had your mindset when i too started in 2012.

but the politics of a certain dev team and their ambition to intensionally hike the fee's up have priced bitcoin out of the daily us money market. and now bitcoin is just a speculation asset with little to no real world function.

in short it flipped out of the money market and now in the stock market, as a close analogy as you can get.
no one wants to swap shares to buy a coffee. re certifying a share to a new owner costs too much

I may be just a natural optimist but I see this as a temporary phase of Bitcoins development. I do see Lightning Network as the best scaling solution and Bitcoin is well ahead of everyone else in developing that. The high transaction fees now are in main due to the increase in value having overtaken the technical development. I think it was a mistake that Segwit2x was not backed by the whole community as it probably would have been a good compromise solution to get us through this period until LN is fully ready.

BTW, thanks for being the only person to comment that actually read the OP and not just the title.

LN is another bitcoin ethos losing scheme.
research multisig/smart contracts
then review LN technically, not optimistically... its an eye opener

then when you actually look at LN you will see that people will need to transfer funds into a co-owned address with a counter party.
which is pretty much like depositing funds into a walmart giftcard to then spend funds at walmart and whereby walmart can then act as your banker if you wanted to spend your walmart funds at any other merchant(with extra fees added for that privilege)

LN is banking 2.0.

other issues are that although its said to be dirt cheap tx fee's inside LN, ALL LN proposals are more infavour of the hubs/counterparties making money out of being hubs/counterparties/service providers by means of charging a fee.

oh and may you not forget to get your funds into a LN channel you need to do a onchain transaction.  and as such it will still cost a lot just to deposit into a LN channel. much like having to pay a few dollars just to use paypal.. yet in the real world paypal are not stupid enough to charge people just to deposit with them

there are many, many other issues with LN. but in short its not the scaling solution.. its a off chain service to avoid the headaches of bitcoin by compromising your funds into no longer permissionless controlled account.

p.s i lost my optimism when blockstream took over the reigns after 2014.. bitcoins ethos has not been the same since then
.. yes i spelled reigns intentionally because the devs think they are the new head of state

[TheQuin]

then when you actually look at LN you will see that people will need to transfer funds into a co-owned address with a counter party.
which is pretty much like depositing funds into a walmart giftcard to then spend funds at walmart and whereby walmart can then act as your banker if you wanted to spend your walmart funds at any other merchant(with extra fees added for that privilege)

LN is banking 2.0.

other issues are that although its said to be dirt cheap tx fee's inside LN, ALL LN proposals are more infavour of the hubs/counterparties making money out of being hubs/counterparties/service providers by means of charging a fee.

The difference as I see it is that there will be little barrier to anyone setting up a hub. All these hubs will be interlinked with channels between them so you can set up a channel to any one of them and still have access to the whole network. That level of competition is going to have a significant impact on what level of fees anyone is able to charge.

oh and may you not forget to get your funds into a LN channel you need to do a onchain transaction.  and as such it will still cost a lot just to deposit into a LN channel. much like having to pay a few dollars just to use paypal.. yet in the real world paypal are not stupid enough to charge people just to deposit with them

That's a fair point, there will still be a transaction fee to open or close a channel.

there are many, many other issues with LN. but in short its not the scaling solution.. its a off chain service to avoid the headaches of bitcoin by compromising your funds into no longer permissionless controlled account.

p.s i lost my optimism when blockstream took over the reigns after 2014.. bitcoins ethos has not been the same since then
.. yes i spelled reigns intentionally because the devs think they are the new head of state

It's a level two network that is complementary to the existing network, not a replacement. I think it will have an impact in making small retail purchases possible. Time will tell if I'm right or wrong, but if it fails then another crypto will take over. The ethos of Bitcoin will live on whatever happens to Bitcoin itself.

[dothebeats]

Bitcoin has since declined on the utility and I feel like it's nothing more than an investment vehicle nowadays and doing transactions with it would only be a pain and a waste of money. Back in 2014, I immediately thought that bitcoin would always be better than the banks, fiat and the currently existing payment systems because of its efficiency, cost and most especially, the trust-less system. However gradually it declined, and has only been a money-making machine for the devs who direct any developments they make to their own interests (hi blockstream).

Bitcoin is in a losing battle in terms of its features. Value is up, yes, but what about the fundamentals and such that took it to where it is now?

[franky1]

The difference as I see it is that there will be little barrier to anyone setting up a hub. All these hubs will be interlinked with channels between them so you can set up a channel to any one of them and still have access to the whole network. That level of competition is going to have a significant impact on what level of fees anyone is able to charge.

to be hub you need to have connected to many channels.
this means depositing funds into MANY addresses to open such channels and have enough funds to act as a provider(hubs are for rich guys)

also to be a successful hub you need to be listed as part of LN's DNS seed (routing table).

..
that said we both agree its not a replacement for bitcoin. its just a third party service. thus does not actually alleviate bitcoins situation. infact when a hub needs to close its channels, it will be a blanket bomb effect because to ensure the hubs many channels tally onchain. it will ned to close them all simultaneously and with a large enough onchain fee for each of those tx's to ensure block acceptance

think of it this way. at the moment the blocks can only handle around 2500 tx's. which means when its time to close a hubs channels. that hub better not have connections to more than 2500 customers, otherwise there will be a bottleneck.

and yes hubs will need to close channels because funds will need to move. to refill the channels
EG

if A connects to B which connects to C
if A wants to use B as the hub to pay C for a coffe each day

A+B have a channel and both fund it
B+C have a channel and both fund it

so day 1
channel1      |     channel2
A:0.001        |     B:0.001
B:0.001        |     C:0.001

so day 2 - a pays b in channel 1 .. and then B separately uses B's channel2 funds to pay C.. the funds of channel 1 dont physically touch C. its B that does the borrowing for A
channel1       |     channel2
A:0.0009       |     B:0.0009
B:0.0011       |     C:0.0011

so day 10 - a pays b in channel 1 .. and then B separately uses B's channel2 funds to pay C.. the funds of channel 1 dont physically touch C. its B that does the borrowing for A
channel1       |     channel2
A:0.0000       |     B:0.0000
B:0.002         |     C:0.002

A in channel one has nothing left.
B in channel two has nothing left. thus B will need to close channels to settle up

now imagine it if B was paypal with thousands of customers not just 2

stil unsure about the need to close channels.
imagine you had a $30 walmart giftcard.
your wife gives you $10 CASH and says she wants to buy stuff at walmart with your giftcard.
your wife the next week gives you another $10 cash, same again

your wife cannot just keep handing you $10 forever and just use the walmart card. at som point you will have $30 CASH in one hand and a walmart card of $0 balance so you will need to refill the giftcard with the cash. which involves closing and reopening channels

[TheQuin]

Value is up, yes, but what about the fundamentals and such that took it to where it is now?

That's the whole point of the article I linked to in the OP. "to take the production and control of money away from government." It's a response to the constant devaluation of fiat that has taken place over the last 100 years. In that purpose, it is succeeding.

[poor-yorik]

I was just reading this article in this months The Spectator https://www.spectator.co.uk/2018/01/why-cryptocurrencies-are-the-answer/ and there it was in the last sentence of the first paragraph:

The craze for cryptocurrency can be explained by a host of factors: the allure of getting rich quick; the attraction of off-the-grid accountancy for malefactors like tax evaders and drug dealers (though Bitcoin is traceable); the glamour of the new. Despite blockchain currencies’ wild volatility thus far, I’d still posit that the more underlying attraction is to a reliable store of value. Bitcoin investors may not recognise their motivation as such, but the impulse behind computer-generated currency is revolutionary: to take the production and control of money away from government.

This was exactly the motivation I had had back in 2012 when I first became involved, but it is far too easy to lose sight of that over time. This is about taking back control of money from those that have devalued it so recklessly over the last century. As the article goes on to point out both the US Dollar and the Britsh Pound are now worth 1/100th of what they were 100 years ago.
I find it interesting and unusual that a mainstream publication like The Spectator actually gets what this is all about.

Personally, I think it is mostly the get-rich-quick thing. But even though I agree with the part you emphasized about taking control over money from the government hands, control over Bitcoin is still or already in the hands of the few. So how is it different in this department?

[TheQuin]

Personally, I think it is mostly the get-rich-quick thing. But even though I agree with the part you emphasized about taking control over money from the government hands, control over Bitcoin is still or already in the hands of the few. So how is it different in this department?

It's different because it is not in the hands of the few. When there is any proposed change in the network we all have the choice to go along with it or to fork off. It is completely in the hands of the majority. The emphasized part was referring to governments running the printing presses and devaluing our money. There are no few in a position to do that to Bitcoin.

[franky1]

I talked about everything with my family and my friends. I think it should be done because I want my family and friends to also get success. They were all surprised because I showed them what I had, for them it was impossible but I again reminded that I got all this after I got to know cryptocurrencies. It's like a dream, but it's all happening. I know the first time people know cryptocurrencies they will think weird and feel this is impossible, believe me when we manage to find the best way to introduce cryptocurrencies then that will make us contribute to increase the use of cryptocureencies in the world. As more people are acquainted with Cryptocurrencies it will make progress and profit for everyone.

personally i have made mega profit from btc, but to me its the ethos i cared much more about. and here is how i seen it

imagine it like housing
you lived in an apartment complex with an over protective maintenance guy, named the 'gov' who loved coming into your apartment at his leisure under the pretence of fixing the plumbing/electrics as a service he provides as part of you living in his building.
you then hear about this new thing.. its called a detached self contained house. great you move out of the complex and get your own house

now here is the rub. you now realise that there is a toll road at your suberb/block.. $5 everytime you wanna come in or out. you also find out that your plumbing is costly too. the house loses all its utility and desire to use. but you hold onto it anyway purely for its real estate value.

but after a few years although millions of people are holding onto houses that cost a bomb just to enter, and have no utilities, the demand for housing is still there because the real estate values are booming. and people think they can get rich just holding onto empty houses

eventually though. people realise that all the houses are functionally useless and cost more than other living conditions.

in short. bitcoins value is now only speculative real estate boom.. not real living in independent comfort value.

[tumokatok]

I was just reading this article in this months The Spectator https://www.spectator.co.uk/2018/01/why-cryptocurrencies-are-the-answer/ and there it was in the last sentence of the first paragraph:

The craze for cryptocurrency can be explained by a host of factors: the allure of getting rich quick; the attraction of off-the-grid accountancy for malefactors like tax evaders and drug dealers (though Bitcoin is traceable); the glamour of the new. Despite blockchain currencies’ wild volatility thus far, I’d still posit that the more underlying attraction is to a reliable store of value. Bitcoin investors may not recognise their motivation as such, but the impulse behind computer-generated currency is revolutionary: to take the production and control of money away from government.

This was exactly the motivation I had had back in 2012 when I first became involved, but it is far too easy to lose sight of that over time. This is about taking back control of money from those that have devalued it so recklessly over the last century. As the article goes on to point out both the US Dollar and the Britsh Pound are now worth 1/100th of what they were 100 years ago.
I find it interesting and unusual that a mainstream publication like The Spectator actually gets what this is all about.

which became one of the bitcoin goals to make it easy for trading to make easy online transactions and no government regulations restricting their engagement.

[TheQuin]

personally i have made mega profit from btc, but to me its the ethos i cared much more about. and here is how i seen it

I read your points about LN, TBH I'm relatively new to learning about it so I'm not getting into the technical arguments of whether or not it can succeed.

To me, the ethos is still there and I have the belief that technical solutions will be found to make it functional whether that is LN or whatever comes next. There's just too much to be gained from doing it for someone not to. It may even be the case that it isn't Bitcoin in the end but another coin not yet invented, but I'm convinced that the future is a cryptocurrency that takes back control of the supply of money from government.

[LeGaulois]

I had this mindset as well but to be honest I am less optimist.

It was created to take back the control of money without the need for a trusted third party (the financial institutions) but instead, it's used to speculate. It can't be used for the daily needs and so can't be mass adopted. Thanks to the dev team(/sarcasm). As well when you see AXA investing in Bitcoin, you can start to smell the fire. I won't be surprised if in a near future another cryptocurrency takes the throne.

I see another problem also: with all the regulations from governments taking place (taxes, bans, restrictions, etc...) the total control of money and the "be your own bank" slogan may be just out of the "dream" to a certain extent. If at the end of the chain there are governments, it is useless.
I still see a huge potential for cryptocurrencies because Fractional Reserve Banking is Obsolete and the technologies behind cryptos are still valuable.

I am not sure if this is a good comparison but look GNU/Linux. First came Debian, it wasn't perfect, it wasn't easy to use for the mass, but to help Ubuntu came, with improvements etc, Then from Ubuntu came the other forks, and the story goes on... What I mean is, GNU/Linux learned and improved with time and the community, etc. Maybe, cryptocurrencies are still too young for our dream.

[franky1]

personally i have made mega profit from btc, but to me its the ethos i cared much more about. and here is how i seen it

I read your points about LN, TBH I'm relatively new to learning about it so I'm not getting into the technical arguments of whether or not it can succeed.

To me, the ethos is still there and I have the belief that technical solutions will be found to make it functional whether that is LN or whatever comes next. There's just too much to be gained from doing it for someone not to. It may even be the case that it isn't Bitcoin in the end but another coin not yet invented, but I'm convinced that the future is a cryptocurrency that takes back control of the supply of money from government.

the government has laws.
such as taxes needing to be paid in fiat (legal tender)
wages being measured in fiat (minimum wage law)
court, parking, other fines being paid in fiat (legal tender)

its not as simple as just introducing a new currency and the government gives up. after all rationally.. the euro has been around a few decades now and yet americans still use the dollar..
yep thats right. just having a currency that many countries recognise, does not mean governments are toppled
 because the US government dont want the euro as a legal tender in the US even if its a currency that has utility and recognition in many countries.

bitcoin has lost its utility and so people wont adopt it for buying coffee, or sandwiches. and until the devs actually implement a fee formulae again that punishes people for spamming every 10 minutes via high fee's and rewards people who only spend once or twice a day with low fee's.. bitcoin will remain just a speculation real estate/domain squatting scheme.

yes crypto's as a whole has potential as an alternative choice to sit beside fiat, but bitcoin as it stands right now has no chance...
and crypto as a whole and bitcoin will not topple the governments legal tender laws. both crypto and bitcoin will just be a secondary currency to sit alongside fiat, not topple it.
much like deciding to open an EU bank account so you can choose to buy things with Euro around the world while still using dollars in the US

[hatshepsut93]

then when you actually look at LN you will see that people will need to transfer funds into a co-owned address with a counter party.
which is pretty much like depositing funds into a walmart giftcard to then spend funds at walmart and whereby walmart can then act as your banker if you wanted to spend your walmart funds at any other merchant(with extra fees added for that privilege)

LN is banking 2.0.

other issues are that although its said to be dirt cheap tx fee's inside LN, ALL LN proposals are more infavour of the hubs/counterparties making money out of being hubs/counterparties/service providers by means of charging a fee.

Lightning "hubs" is a myth created by big blockers to misguide noobs into thinking that LN is some centralized system like Visa. In reality anyone can open channels with anyone, it is peer-to-peer just like Bitcoin itself, and it is trustless - you don't "deposit" your funds and lose control over them like it happen with banks, you can always close the channel and get your coins back to your address, because Lightning funds and transaction are real Bitcoins, they are not some tokens or giftcards. There's no reason why Lightning Network should have big hubs, because anyone who is currently running a full node, which is thousands of home users, can also run a Lightning node and collect fees.

At the same time, it is big blockers who want to have a small centralized network of big full node hubs while most users are connected with SPV clients, because no one can afford to run a full node with gigabyte blocks.

[TheQuin]

I won't be surprised if in a near future another cryptocurrency takes the throne.

That is quite possible but if it does happen I think it is still quite far off in the future.

I see another problem also: with all the regulations from governments taking place (taxes, bans, restrictions, etc...)

Governments have been very slow to recognise the nature of the threat. Things are going to get interesting when they do.

the total control of money and the "be your own bank" slogan may be just out of the "dream" to a certain extent. If at the end of the chain there are governments, it is useless.
I still see a huge potential for cryptocurrencies because Fractional Reserve Banking is Obsolete and the technologies behind cryptos are still valuable.

This is what I was really getting at, that dream is still alive and that article really reminded me of it yesterday. I've always had doubts whether it will succeed but just about convinced myself that it will in the end.

I am not if this is a good comparison but look GNU/Linux. First came Debian, it wasn't perfect, it wasn't easy to use for the mass, but to help Ubuntu came, with improvements etc, Then from Ubuntu came the other forks, and the story goes on... What I mean is, GNU/Linux learned and improved with time and the community, etc. Maybe, cryptocurrencies are still too young for our dream.

It is a very good comparison. It doesn't really matter if it has the Bitcoin name at the end of it all, there will be many forks and always some will give improvements and others fail. This is very early days indeed and this journey has a long way to go.

@ franky1
That's part of the point of it being a store of wealth currency. Yes, you will always have to exchange some to pay your taxes but the person selling you a coffee, new car or a house will probably be delighted to take the currency that will hold its value over the fiat one.

[franky1]

Lightning "hubs" is a myth created by big blockers to misguide noobs into thinking that LN is some centralized system like Visa. In reality anyone can open channels with anyone, it is peer-to-peer just like Bitcoin itself, and it is trustless - you don't "deposit" your funds and lose control over them like it happen with banks, you can always close the channel and get your coins back to your address, because Lightning funds and transaction are real Bitcoins, they are not some tokens or giftcards. There's no reason why Lightning Network should have big hubs, because anyone who is currently running a full node, which is thousands of home users, can also run a Lightning node and collect fees.

At the same time, it is big blockers who want to have a small centralized network of big full node hubs while most users are connected with SPV clients, because no one can afford to run a full node with gigabyte blocks.

1. you have been reading too much of the reddit propaganda.. with your "gigabyte blocks" falsehood
2. you have not read the technicals of LN and just the promotional material

3. even core devs have now admitted that 8mb blocks was always safe and that 4mb blocks are ultra safe. hense why they are allowing 4mb 'weight'
yet they still refuse real legacy utility of the blockchain for 2mb... think about that..
4. LN is not trustless. and yes you do have to put funds into a new address and yes that new address is no longer permissionless because it needs you AND the counterparty to agree.
5. you need run some rational scenarios in your head about the functionality of LN. but only do this after you have read the technicals.
6. oh and stay away from reddit. its propaganda heaven

[eann014]

The main purpose of Bitcoin was to make a currency which is controlled by the people or the users itself. But now bitcoin is used just as a gambling token.

Not all people uses bitcoin as a gambling token. In my case bitcoin has a big purpose in my life. It can help me a lot in life, I can have an extra income to have profit because of bitcoin. I can easily encash everytime I want and I need. Especially during emergency. I can save some of my income so this is very helpful for me. Bitcoin has a very big purpose.