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Author Topic: Why bitcoin is worthless  (Read 434 times)
budakjawa
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March 08, 2018, 04:25:17 PM
 #41

I just stumbled upon this article that The Guardian published today, I think it's the best ever written on bitcoin, really good sum-up about blockchain and bitcoin: https://www.theguardian.com/business/2018/mar/05/bitcoin-is-based-on-the-blockchain-pipe-dream
how can bitcoin not worth it? I think bitcoin is a very useful and very successful digital currency because if you know it with bitcoin you can trade in different countries easily and you can use it for other highly secure payments.

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March 08, 2018, 04:37:49 PM
 #42

The value of the coin is in our minds. More recently, the leader of preferences was the us dollar. Now the situation has changed. Every day there are new supporters of cryptocurrency. We see the struggle of the two worlds. It seems to me that the virtual world will win this fight. The growing popularity will increase the value of bitcoin.

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Claudyah
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March 08, 2018, 04:42:00 PM
 #43

This digital currency has no intrinsic use such as gold in electronics or jewelry. However, investors seem to assume some value for such things.
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March 08, 2018, 05:13:54 PM
 #44

how can bitcoin not worth it? I think bitcoin is a very useful and very successful digital currency because if you know it with bitcoin you can trade in different countries easily and you can use it for other highly secure payments.

Yes you can trade but you can not pay anything. I don't know any shop at all in my country that accepts bitcoin. That's the whole key here, the author in the article explains why blockchain is not suitable at all for a payment system. It's way too slow.
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March 08, 2018, 05:20:05 PM
 #45

LN removes obstacles such as transaction precessing speed, confirmation times, costly fees, etc. You however fail to see the value in it, because for some reason you keep hammering on that second layer like it's something that can't and won't work, while it does already deliver an outstanding job.
No LN will never work because it's a really stupid system. If you were to build a payment system from the ground up you'd NEVER EVER design a system like LN. The whole reason LN exists is that people saw that blockchain is not suitable for payments, it's too slow, so they figured we need to find a way to allow for payments outside the blockchain but something that we can integrate within the blockchain system. That's when somebody thought "hey wait a minute, let's use multisig wallets where we can just change how much each party owns in that multisig wallet, that way we don't need the blockchain to perform a payment". And while it's actually a very smart idea, *given those constraints*, it's a stupid idea outside those constraints and people would NEVER even think of it when building a system from the ground up. It's some hippy idea that people will be part of payment routes and use their accounts for that but that will never work of course for reasons I've outlined in my topic.
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March 08, 2018, 05:44:20 PM
 #46

The value of the coin is in our minds. More recently, the leader of preferences was the us dollar. Now the situation has changed. Every day there are new supporters of cryptocurrency. We see the struggle of the two worlds. It seems to me that the virtual world will win this fight. The growing popularity will increase the value of bitcoin.
Bitcoin as this days is not worthless because right now its value will continues to be very existing and fluctuating in the market. Yes the more supports from the users the more it become growing its value. It is still been going strong so I can say bitcoin is really worth.

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March 08, 2018, 06:49:00 PM
 #47

...
What are you talking about? That concept doesn't make any sense. Decentralization is a concept, not an asset. It doesn't have a quantitative value. If that is really what you are asking then your question has no answer.

I agree (with the bold part). But yet you gave decentralisation some value by saying: "The benefit of decentralization is not nearly large enough to outweigh the massive costs". Costs are measurable and you valued decentralisation below that. What if costs were 50% lower, or 75%, would decentralisation outweigh the costs then? Is there any deeper logic behind your statement, or is it just "I don't like it - not worth it"?

You don't need to have a numeric way to measure two things against each other to say one is greater than the other. You don't need quantitative data to back every statement you make in your life. I can say that Mozart was more talented at writing and performing music than Kirk Cousins is at playing quarterback in the NFL and there is no way to measure this, but everyone would agree that it is true. It's not an unreasonable statement to make at all.

I had never even heard of Aliexpress but the problem you are describing is most likely not an issue with the credit card. Either way, your evidence is completely anecdotal. The last bitcoin transaction I made took 8 days and cost $40.

Aliexpress is a sub-brand of Alibaba, only the biggest e-commerce platform in the world. Not quite an anecdotal evidence if there are plenty of others with similar problems and when they have dedicated FAQ section for that. What's anecdotal (purposely?) is your BTC transaction, if really happened at all (care to share tx id?).

You really don't believe me? Transactions were costing insane amounts of money in November/December last year and taking weeks to process. They were stuck sitting in mem pools forever. Here is the ID, although I don't think there is any way you can see when I submitted it: 7345a9bc63c1532082414d1849ff908a18f4dbdc0859959197fa022c66a2dd3e

Speed/cost may be performing better for crypto recently, but 10 minutes is still WAY too slow. If I go into a store to buy something, I'm not going to wait 10 minutes for the payment to process. Furthermore, the costs for bitcoin transactions are higher than credit card costs to vendors for reasonably small transactions. This problem will only become larger as mining becomes more difficult and fees rise. For bitcoin to be worth anything, it needs to be able to scale to thousands of times its current size, and it is running into major hurdles way before even coming remotely close to that point.

Are you of impression that fiat transaction are settled instantly?
You can build any 3rd party payment services on top on Bitcoin, with instant transactions (ie transfers between Coinbase accounts, pre-RBF BitPay purchases), you could accept BTC zero-conf for smaller purchases before RBF was implemented (you can still do it with BCH), you have BTC powered debit cards, you have Lightning Network, you have coins that scales on-chain, you have non-blockchain coins that claim to have unlimited capacity (IOTA) etc.

I never claimed they were settled, that is irrelevant. It just has to be confirmed for a credit card transaction... you can't just accept that a bitcoin transaction will be all set when it enters the mem pool... in the case of bitcoin, you NEED to wait for it to settle.

If you build a payment system on top of bitcoin then you are taking something decentralized and improving it by centralizing it. Coinbase can do instant transfers because they control all of the bitcoin and know all of their private keys are valid. You can't transfer into or out of Coinbase instantly. If you want all bitcoin payments to be controlled by a sytem like Coinbase then why even use bitcoin at all? What is the benefit of that over credit cards?

There is always a tradeoff between decentralization/trustlessness and speed/scalability. Nobody is SOLVING the pitfalls of crypto without sacrificing decentralization and trustlessness.

Bitcoin was created primarily as a response to the flawed global financial system, not as competition to payment processors. Even if it can compete with the latter - comparing them is bit missed.

Saying BTC is only worth something if it has capacity to replace fiat entirely is simply retarded and no different than saying McDonalds is worthless until they have capacity to feed entire world.
There's nothing stopping BTC from existing forever as a niche-alternative to fiat. What gives it value is the free market - not the way how you feel about it.

Your understanding of the purpose of bitcoin's creation is vague so allow me to clarify for you - it was created to replace fiat. I would make an argument here in support of this but honestly it doesn't really matter at this point.

The difference between bitcoin and mcdonalds is that mcdonalds has a book value. They have stores, inventory, etc. They also have sales, and earnings... income... bitcoin has none of that. It has no intrinsic value, which is why it cannot exist in this limbo state you described forever.

Your argument is that private blockchains must be valuable otherwise people wouldn't be spending money and looking into it. That argument is horribly flawed. Go read the last few Snapchat earnings reports and tell me that Snapchat Spectacles are valuable. They spent a ton of money on it and then gave up when it fell flat on its face.

No. My argument was that: "Furthermore, blockchain technology necessarily requires cryptocurrency" and "A centralized and non-trustless blockchain ... is completely pointless" are false, as evidenced by Swift (among others). Private blockchains are just a form of distributed database and some find this tech very useful.

I have impression that you got stuck in some weird "something-is-overhyped-therefore-completely-useless" kind of logic.

No, you are saying that Swift and others investing in private non-trustless blockchains means they have value. What about the dozens of important figures who have claimed that bitcoin is worthless? Just because somebody or some organization invests in something or says something doesn't mean they are right. That was the point of my SNAP example. Look at all the smart people who invested in Bear Stearns in 2007.

Your argument relies on others' opinions and is therefore weak. If you want to argue about the merits of blockchain as a distributed database versus, say, an actual distributed database, then I'm happy to have that conversation. I work with software and databases so I would be happy to help you understand why it is so much less efficient than something like Cassandra or even regular SQL databases.

One reason I can give you for many companies to be looking into blockchain is that simply saying the word "blockchain" in public will cause a company's stock price to go flying to stupidly high levels. Look at Long Island Blockchain, formerly Long Island Iced Tea. They are an iced tea distributer based on long island and their business has NOTHING to do with blockchain. They announced that they would look into blockchain technology and changed their name, and all of a sudden their stock price surges to wildly irrational levels.

Agree. What are you arguing here? Yes, 'blockchain' is overhyped and mis-used to screw investors. How does this affect cryptocurrencies?

This was a response to your argument that companies would not be looking into blockchain tech if it didn't have some large value it could bring.

And just to add, the bottom line really is that more and more crypto can be created infinitely, and none of them ever have any intrinsic value (yes, the USD DOES have intrinsic value). The crypto space is infinitely inflationary for this reason, and IMO will eventually fail. It is only getting so much attention because it is new and people made a lot of money. This is not anything remotely like the internet.

No, USD DOESN'T have intrinsic value.
Cryptos are infinitely inflationary only if you assume that every newly created crypto is somehow automatically valuable and gets its share of crypto market cap (at expense of other coins). If that's what you believe, then put all your money in, go margin-short on BTC and create new coins at rate of thousands per day. Instant billionaire. What's stopping you?

Creating a new crypto and automatically assigning it value is exactly what is happening every day! Look at all the IPOs everywhere. This is literally what bitcoin is... creating value out of nothing. If it worked for bitcoin, eth, bch, ltc, iota, xrp, doge, etc... why would we think this will stop?

USD has intrinsic value because every person and organization in the US is required by law to accept it as payment for debt. It is legally guaranteed value by the US government. I would argue that this is intrinsic value. This differs from bitcoin, which nobody is required to accept anywhere.

BTW I don't believe in bitcoin but I would NEVER short it. It is too volatile. I'm not arguing that it will fall in the short term, I'm arguing that it will fall in the long term. I'm not going to pay margin interest until bitcoin dies, which could be several years or more. However, if it were available I would happily buy PUT options expiring in like, 5 years or so... that way risk is limited, as opposed to short selling where risk is unlimited.

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March 08, 2018, 09:37:47 PM
 #48

Your argument relies on others' opinions and is therefore weak. If you want to argue about the merits of blockchain as a distributed database versus, say, an actual distributed database, then I'm happy to have that conversation. I work with software and databases so I would be happy to help you understand why it is so much less efficient than something like Cassandra or even regular SQL databases.

I always find it very interesting how the technically skilled are very wary of crypto's, while the noobs, who really don't understand it, are bullish.
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March 09, 2018, 05:35:06 PM
 #49

All journalists write their articles for the money of bankers. I don't believe them. They don't understand what bitcoin is. For them, it is only a virtual currency. For users, this is much more. This is the ideology of a free economy. People may not have a significant impact on the actions of governments. But they do not want to quietly observe the irrational spending of their taxes. Therefore, bitcoin will never die.
Obviously, they are always busy looking for traffic to help get the bills paid. Over hyping may have occurred at some point but regarding it as worthless is what I disagree with. If it is worthless, at least in the literal sense, it should even be zero by now. If anyone feels bitcoin is in the verge of dying, then there is no point spreading it, they can just easily sell all they have, close their bitcointalk account and leave the rest to us to tell them the outcome in the future because we are just getting started.

OP's must be another dumb article from a dumb author. If OP can see this as the best written article ever, I wonder how the level of his intelligent quotient is, including the person that merited his post, if it is probably not a his alt. The mistake he even made was comparing with SWIFT. The same swift that sees greatness in blockchain and trying to explore it or another one? Well, good for him since the article was at least able to help someone like him.

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March 09, 2018, 05:41:28 PM
 #50

OP's must be another dumb article from a dumb author.
What part particularly struck you as dumb?

Quote
If OP can see this as the best written article ever, I wonder how the level of your intelligent quotient is,
Last time I tested it was 140. Is that enough for you?

Quote
The mistake he even made was comparing with SWIFT. The same swift that sees greatness in blockchain and trying to explore it or another one? Well, good for him since the article was at least able to help someone like him.

LOL. Did you even read what SWIFT said? Yesterday they said: "Blockchain technology needs to make more progress before it can handle the billions of dollars of daily cross-border payments between the world’s banks" https://www.ft.com/content/966f5694-22c6-11e8-ae48-60d3531b7d11 which is EXACTLY the author's point too. Blockchain tech as it is is NOT suitable for payment systems. Maybe some day in a future it will be. But who knows when that day will arrive and IF that day will arrive. Right now it's worthless as a payment system.
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March 10, 2018, 11:29:04 AM
 #51

If bitcoin is worthless then why is the author writing an article and his praising decentralization?

LOL. It earned the author some money!

Of course bitcoin isn't worthless. Last I checked it was worth $10,933, which is great considering that this time last year it was worth about $900.
They may say what they want to say; at least it is serving its purpose for the people in OP's shoes. It is his opinion but he really messed it up by saying that was the best article he ever read on bitcoin.

If anyone have seen what you have stated with their own eyes and still call bitcoin worthless, then I am so sorry for them. Bitcoin will keep growing anyway, irrespective of what anyone says, and I really would not be surprised, because even at $1million, people like the OP and his mentor who wrote the article will still consider bitcoin worthless.

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March 10, 2018, 12:16:27 PM
 #52

OP's must be another dumb article from a dumb author.
What part particularly struck you as dumb?

Quote
If OP can see this as the best written article ever, I wonder how the level of your intelligent quotient is,
Last time I tested it was 140. Is that enough for you?

Quote
The mistake he even made was comparing with SWIFT. The same swift that sees greatness in blockchain and trying to explore it or another one? Well, good for him since the article was at least able to help someone like him.

LOL. Did you even read what SWIFT said? Yesterday they said: "Blockchain technology needs to make more progress before it can handle the billions of dollars of daily cross-border payments between the world’s banks" https://www.ft.com/content/966f5694-22c6-11e8-ae48-60d3531b7d11 which is EXACTLY the author's point too. Blockchain tech as it is is NOT suitable for payment systems. Maybe some day in a future it will be. But who knows when that day will arrive and IF that day will arrive. Right now it's worthless as a payment system.
It is possible to increase the block size. This will increase the network performance. But it will only be a temporary solution. It seems to me that in the future blockchain will be used only for external transactions. The main exchange will take place within a closed network such as bitcoin Bank. But this position will have a lot of discussions.
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March 10, 2018, 01:30:26 PM
 #53

You don't need to have a numeric way to measure two things against each other to say one is greater than the other. You don't need quantitative data to back every statement you make in your life. I can say that Mozart was more talented at writing and performing music than Kirk Cousins is at playing quarterback in the NFL and there is no way to measure this, but everyone would agree that it is true. It's not an unreasonable statement to make at all.
But what you said is more in line with:
You- Kirk Cousins is not worth $20m/year contract!
Me- How much do you think he's worth then?
You- Hurr durr what kind of question is that? You can't put a figure on skills!
Me- wtf??

You really don't believe me? Transactions were costing insane amounts of money in November/December last year and taking weeks to process. They were stuck sitting in mem pools forever. Here is the ID, although I don't think there is any way you can see when I submitted it: 7345a9bc63c1532082414d1849ff908a18f4dbdc0859959197fa022c66a2dd3e

Yes you can. Your tx took less than 5 days, not 8. You paid $20.43 worth of fees (at that time) not $40. You exaggerated by a factor of x3.2. With $40 fee, standard sized tx would likely get included in the next block (even during peak congestion time), that's why I called you out on that.

I never claimed they were settled, that is irrelevant. It just has to be confirmed for a credit card transaction... you can't just accept that a bitcoin transaction will be all set when it enters the mem pool... in the case of bitcoin, you NEED to wait for it to settle.
You could before RBF was implemented and blocks weren't full. The risk was there but it was far lower than the risk of fraudulent credit card chargeback (btw, merchant can consider cc payment fully settled when chargeback time limit expires), so perfectly fine for small/mid transactions. You can still do that with BCH, you have other coins with near-instant confirmations (or instant non-blockchain coins) and you have other solutions like LN in a making. Wait, why am I feeling like I'm repeating myself...

If you build a payment system on top of bitcoin then you are taking something decentralized and improving it by centralizing it. Coinbase can do instant transfers because they control all of the bitcoin and know all of their private keys are valid. You can't transfer into or out of Coinbase instantly. If you want all bitcoin payments to be controlled by a sytem like Coinbase then why even use bitcoin at all? What is the benefit of that over credit cards?
There is always a tradeoff between decentralization/trustlessness and speed/scalability. Nobody is SOLVING the pitfalls of crypto without sacrificing decentralization and trustlessness.

Relying on 3rd parties on top of blockchain is hypothetical dark scenario when everything else fails. Even then you have benefit of having control over majority of your funds and only depositing smaller amounts to the 3rd parties. Having to trust someone with your $200 is not the same as having to trust someone with all your money, all the time, isn't it?

I'm sure even you put at least a tiny value in having an option in life (to use crypto if you ever feel like it), it's better than not having such option.

The difference between bitcoin and mcdonalds is that mcdonalds has a book value. They have stores, inventory, etc. They also have sales, and earnings... income... bitcoin has none of that. It has no intrinsic value, which is why it cannot exist in this limbo state you described forever.
Bitcoins also have book value. You didn't address the point. Can you explain, precisely at what tx/sec capacity rate BTC moves from being completely worthless to being worth something. What's the magic number?

No, you are saying that Swift and others investing in private non-trustless blockchains means they have value.

It's a strong indicator that they find the technology useful. I don't expect Swift is spending shitloads on blockchain solutions just to bump their stock price, because they are a Society and don't even have a listed stock + probably they would be the first to debunk the blockchain tech if it was indeed useless (as it's a direct competition to their service). Just as I find it hard to believe that Blockstream would manage to sell their private blockchain solutions to any business if it was indeed inferior to the existing tech etc.

Yes, I find it more credible than word of an anonymous forum "expert", with no history, saying "they're all wrong/they're a fraud".

Second of all, I don't see any real connection between BTC's worth and usefulness of private chains, so couldn't care less.

Creating a new crypto and automatically assigning it value is exactly what is happening every day! Look at all the IPOs everywhere. This is literally what bitcoin is... creating value out of nothing. If it worked for bitcoin, eth, bch, ltc, iota, xrp, doge, etc... why would we think this will stop?

So if I create my own premined shitcoin and assign its value at $1m/coin, I'd be instantly the richest man in the world? Or, could it be, I actually need someone to buy from me at that price?


USD has intrinsic value because every person and organization in the US is required by law to accept it as payment for debt. It is legally guaranteed value by the US government. I would argue that this is intrinsic value. This differs from bitcoin, which nobody is required to accept anywhere.

What's guaranteed is USD acceptance, not its value. Zimbabwean Dollars were also a legal tender and how did that work in terms of retaining the value?  There's no intrinsic value in USD. What's funny, it can get worse than that, in some cases being legal tender can prevent you from extracting intrinsic value from physical notes/coins, i.e. scrap metal value of 1 cent coin exceeds 1 cent, but scrapping/destroying official money is a criminal offence.

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March 10, 2018, 04:02:57 PM
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It's a strong indicator that they find the technology useful. I don't expect Swift is spending shitloads on blockchain solutions just to bump their stock price, because they are a Society and don't even have a listed stock + probably they would be the first to debunk the blockchain tech if it was indeed useless (as it's a direct competition to their service). Just as I find it hard to believe that Blockstream would manage to sell their private blockchain solutions to any business if it was indeed inferior to the existing tech etc.
You did read my previous post? SWIFT actually agrees with the author that blockchain in its current state is NOT suitable for payment systems (which is no surprise given the current 14 tx/sec limit for bitcoin for example). Maybe some day someone will invent a new algo and it will work. But who knows if that's even possible. Until that day bitcoins is worthless as a payment system.
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March 10, 2018, 05:22:28 PM
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It's a strong indicator that they find the technology useful. I don't expect Swift is spending shitloads on blockchain solutions just to bump their stock price, because they are a Society and don't even have a listed stock + probably they would be the first to debunk the blockchain tech if it was indeed useless (as it's a direct competition to their service). Just as I find it hard to believe that Blockstream would manage to sell their private blockchain solutions to any business if it was indeed inferior to the existing tech etc.
You did read my previous post? SWIFT actually agrees with the author that blockchain in its current state is NOT suitable for payment systems (which is no surprise given the current 14 tx/sec limit for bitcoin for example). Maybe some day someone will invent a new algo and it will work. But who knows if that's even possible. Until that day bitcoins is worthless as a payment system.
It came from worthless but now it is now worth it because of the demand that it has right now, and bitcoin has been widely used in different aspects so it is not worthless it is so worthy to invest at although we cannot see it physically but we can see the big opportunity enclosed in it.
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March 10, 2018, 05:49:26 PM
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You did read my previous post? SWIFT actually agrees with the author that blockchain in its current state is NOT suitable for payment systems (which is no surprise given the current 14 tx/sec limit for bitcoin for example). Maybe some day someone will invent a new algo and it will work. But who knows if that's even possible. Until that day bitcoins is worthless as a payment system.

Author of the original article was almost certainly clueless about Swift's project and probably moreso about the hacks they suffered.

As for FT piece - There's a difference between 'not ready yet' and 'inherently useless or inferior to current systems'. There's a difference between 'not suitable for payment systems' and 'not yet ready to support all 11,000 banks'.

According to Swift, test went 'extremely well' and are 'convinced that these obstacles will be overcome'. Change the title and you have pretty bullish piece.

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March 10, 2018, 05:51:28 PM
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"Blockchain technology" is indeed overhyped bullshit.
It is indeed overhyped, but calling it bullshit is completely wrong. The amount of hype it is receiving is probably a lot more than its potential, but blockchain is still a very useful technology with many real world applications.

Same opinion here. Many people compare blockchain to internet. People know that it is better to not underestimate this great potential of blockchain and want to be at the beginning of the next technological revolution. In my opinion hype here is natural.

yes you are right I agree with you, right now it is very much startup that use or support payment using bitcoin, but I hope bitcoin can be used for all countries as a valid payment instrument.

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March 10, 2018, 05:59:17 PM
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You did read my previous post? SWIFT actually agrees with the author that blockchain in its current state is NOT suitable for payment systems (which is no surprise given the current 14 tx/sec limit for bitcoin for example). Maybe some day someone will invent a new algo and it will work. But who knows if that's even possible. Until that day bitcoins is worthless as a payment system.

Author of the original article was almost certainly clueless about Swift's project and probably moreso about the hacks they suffered.

As for FT piece - There's a difference between 'not ready yet' and 'inherently useless or inferior to current systems'. There's a difference between 'not suitable for payment systems' and 'not yet ready to support all 11,000 banks'.

According to Swift, test went 'extremely well' and are 'convinced that these obstacles will be overcome'. Change the title and you have pretty bullish piece.

Ok wake me up when bitcoin can do more than 14 transactions per second. Something like the 65.000 per second that VISA currently processes. And don't start about LN, because that's just the dumbest system ever that won't work, like I explaind before: https://bitcointalk.org/index.php?topic=2792933.0
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March 10, 2018, 06:07:49 PM
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Ok wake me up when bitcoin can do more than 14 transactions per second. Something like the 65.000 per second that VISA currently processes. And don't start about LN, because that's just the dumbest system ever that won't work, like I explaind before: https://bitcointalk.org/index.php?topic=2792933.0

WTF Bitcoin has to do with Swift's private blockchain again?

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March 10, 2018, 07:02:06 PM
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WTF Bitcoin has to do with Swift's private blockchain again?

See topic title. You started about SWIFT. Regardless of that, it's at the core of blockchain technology that it can't do many transactions per second. It's not only bitcoin, it's blockchain in general that's unsuitable for payment systems. Exactly like the author describes in his article.
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