Why Bitcoin is ultimately doomed to fail (not today or tomorrow)

[eternaluniverse]

I believe its because so a person cant have say 1 % of network hashrate, which is a lot, and confirm the transaction with his network so he can double spend. Confirmations take many blocks but I believe its the first transaction of the bitcoin that is confirmed by block chain that is considered the only transaction for the bitcoin. So I beleive if after you receive a btc if your log to the network (or if your allready on it) that you will start the process of getting it confirmed

[deisik]

Maybe you should read Satoshi whitepaper.  You actually did read it right.  I mean it is hard for fix something you don't understand right?  There is no trusted third party confirming txs.  Transactions are confirmed by a network of psuedo anonymous entities.  The proof of work provides security not that you trust a particular miner.

It doesn't matter. You are playing with words trusted/untrusted when you are actually trying to confuse things. You still need someone (or rather someones) out there who would confirm your transactions. When you buy something for cash you don't need anyone to confirm your purchase. And you just said Bitcoin has no disadvantages?

[eternaluniverse]

Maybe you should read Satoshi whitepaper.  You actually did read it right.  I mean it is hard for fix something you don't understand right?  There is no trusted third party confirming txs.  Transactions are confirmed by a network of psuedo anonymous entities.  The proof of work provides security not that you trust a particular miner.

It doesn't matter. You are playing with words trusted/untrusted when you are actually trying to confuse things. You still need someone (or rather someones) out there who would confirm your transactions. When you buy something for cash you don't need anyone to confirm your purchase. And you just said Bitcoin has no disadvantages?

the confirmations are automatic and are to protect you. It isn't a disadvantage, an advantage if anything.

[DeathAndTaxes]

Maybe you should read Satoshi whitepaper.  You actually did read it right.  I mean it is hard for fix something you don't understand right?  There is no trusted third party confirming txs.  Transactions are confirmed by a network of psuedo anonymous entities.  The proof of work provides security not that you trust a particular miner.

It doesn't matter. You are playing with words trusted/untrusted when you are actually trying to confuse things. You still need someone (or rather someones) out there who would confirm your transactions. When you buy something for cash you don't need anyone to confirm your purchase. And you just said Bitcoin has no disadvantages?

If there is no network (I don't need a specific trusted individual I just need the network) then there is no Bitcoin to begin with and banks aren't using it as a reserve currency anyways so the experiment has failed and this is a moot point.   If the network exists I don't need a trusted third party to engage in commerce.

As far as cash not needing a third party?  Are you kidding?  It requires a central authority to mint and actively police the supply for counterfeits.  In order for you to accept "cash" you need to trust the central authority.   Are you willing to accept Zimbabwae dollars?  Why not?  Oh probably because you don't trust the issuing central authority.  If you DID accept Zimbabwe dollars prior to hyperinflation then your trust in the central authority resulting in you losing effectively 100% of your cash wealth. 

Bitcoin is the first "cash" which doesn't need a central authority, and it doesn't need a trusted third party to engage in transactions.    I will probably deposit Bitcoins in a Bitcoin backed bank to receive bank script to use instead.  Will some people?  Maybe (if they are stupid).  Will it hurt me?  No because they no me will suffer the inflation and when those banks inevitably fail all that inflated money will cease to exist.

[deisik]

If there is no network (I don't need a specific trusted individual I just need the network) then there is no Bitcoin to begin with and banks aren't using it as a reserve currency anyways so the experiment has failed and this is a moot point.   If the network exists I don't need a trusted third party to engage in commerce.

Take the benefit of the doubt and let's agree I don't understand how Bitcoin transactions and confirmations actually work. I'm not familiar with Bitcoin protocol intricacies, so I can't say anything. Whatever, this is beyond what this thread is about...

[deisik]

As far as cash not needing a third party?  Are you kidding?  It requires a central authority to mint and actively police the supply for counterfeits.  In order for you to accept "cash" you need to trust the central authority.   Are you willing to accept Zimbabwae dollars?  Why not?  Oh probably because you don't trust the issuing central authority.  If you DID accept Zimbabwe dollars prior to hyperinflation then your trust in the central authority resulting in you losing effectively 100% of your cash wealth.

No, this is not required for confirmation. If I agree to buy and the seller agrees to sell that would be enough in reality to carry out the deal (Zimbabwean dollars or whatever). To make things simple, just exclude money from the equation and take direct barter. But even in the case of barter you could say (I am using your logic) that I may buy something counterfeit, and even then nothing is changed. The deal gets confirmed and the transaction (exchange) takes place...

Though you can always declare the deal as bogus and try to reverse the transaction

[deisik]

I will probably deposit Bitcoins in a Bitcoin backed bank to receive bank script to use instead.  Will some people?  Maybe (if they are stupid).  Will it hurt me?  No because they no me will suffer the inflation and when those banks inevitably fail all that inflated money will cease to exist.

Yes, and just after those banks inevitably fail because of inflating their moneys, here comes the evil Central Bank, monopolizing the emission of Bitcoin based currency and welcome, the new Bitcoin standard and new Great Depression ahead! So we once again get into that dreadful spiral of history...

[DeathAndTaxes]

I will probably deposit Bitcoins in a Bitcoin backed bank to receive bank script to use instead.  Will some people?  Maybe (if they are stupid).  Will it hurt me?  No because they no me will suffer the inflation and when those banks inevitably fail all that inflated money will cease to exist.

Yes, and just after those banks inevitably fail, here comes the evil Central Bank monopolizing the emission of Bitcoin based money and welcome, new Bitcoin standard! So we once again get into that dreadful spiral of history...

Not my Bitcoin fork.  Of course, they can make a new fork, they could today.  Hell they don't even need Bitcoin they could just make a centralized currency which has no non-electronic form.   Imagine bank accounts today with no cash.

So basically in a long round about way your conclusion is Bitcoin will fail because all governments will outlaw it universally in all countries on earth AND be successful in that action.  Ok if you believe they can accomplish that outcome then yes it will fail and there is no hope.  However every other non-state alternative would also fail because this is a power of the state issue not a flaw in Bitcoin.  If you really believe that then why are you here?

[deisik]

So basically in a long round about way your conclusion is Bitcoin will fail because all governments will outlaw it universally in all countries on earth AND be successful in that action.  Ok if you believe they can accomplish that outcome then yes it will fail and there is no hope.  However every other non-state alternative would also fail because this is a power of the state issue not a flaw in Bitcoin.  If you really believe that then why are you here?

No, I'm not saying that Bitcoin will fail because all governments are going to prohibit it, that was not my intention at all. Though, I admit, if they do really try to outlaw Bitcoin, it will have hard times. I was considering only economical reasons that will make its fall inevitable, provided it is accepted by governments in the first place as legal tender (do you follow me?). So we have three stages that are already our past and present, and which may still be ahead for Bitcoin if that condition is satisfied and it actually starts off

The first stage is known as "free banking era". Actually, it is not very important because it is a preparatory stage giving a Central Bank the clue to monopolize the emission of a currency. So, at the second stage we have a Bitcoin standard where there is some means of exchange (say, a simplified, lightweight version of BTC) issued by the Central Bank and completely backed up by Bitcoin (Bitcoin itself serving as a store of value, don't forget Gresham's law here). At this stage we begin suffering from severe economic crises due to Bitcoin's deflationary nature (yes, we have been there too). These economic shocks finally make governments abandon the Bitcoin standard, instead of which reemerges the concept of a free floating fiat currency not backed up by anything (or rather backed by all goods produced and services rendered in the economy). This is the third stage at which we are now and this will be the end of Bitcoin in case we begin anew...

[pand70]

I will probably deposit Bitcoins in a Bitcoin backed bank to receive bank script to use instead.  Will some people?  Maybe (if they are stupid).  Will it hurt me?  No because they no me will suffer the inflation and when those banks inevitably fail all that inflated money will cease to exist.

Yes, and just after those banks inevitably fail because of inflating their moneys, here comes the evil Central Bank, monopolizing the emission of Bitcoin based currency and welcome, the new Bitcoin standard and new Great Depression ahead! So we once again get into that dreadful spiral of history...

There is already a currency that is issued by central banks. What new the bitcoin based currency will bring to the table? I don't get it.

[deisik]

Yes, and just after those banks inevitably fail because of inflating their moneys, here comes the evil Central Bank, monopolizing the emission of Bitcoin based currency and welcome, the new Bitcoin standard and new Great Depression ahead! So we once again get into that dreadful spiral of history...

There is already a currency that is issued by central banks. What new the bitcoin based currency will bring to the table? I don't get it.

You don't get it because you are not following the discussion. There is no currency that is issued by a central bank and we have only Bitcoin as legal tender with no other currencies in circulation (that is the wildest dream of all the bitcoiners out there)...

[johnyj]

People are much smarter today than 50 years ago, bankers can not scam all the people all the time

[aigeezer]

VERY interesting thread. No compelling arguments yet on either side, imho, but well worth pursuing.

In the (very) long run, OP wins because of entropy, but what happens in the next few weeks/years/decades? I'm 70-something (but not yet drooling in public), so my time horizon may differ from yours.     

[AnonyMint]

Anyone who uses "paper" Bitcoins deserves to absorb the risk of loss that obviously implies.

Gold was a pretty crappy currency.  There was at least some argument to be made that paper was more convenient to use.  The same can't be said of Bitcoin.

Bitcoin also has some crappy attributes. The anonymity is not ubiquitous thus coin taint is an incredible problem, meaning that if your identity is known to the authorities (which it will likely be over time!) then you better know the identity of whom you bought and sold, else you are culpable for all upstream and downstream activity associated with the coin. Try using an exchange when the price is rising very fast. Sometimes the transactions take an hour or more for 1-confirmation. The transaction fees appear to be increasing as the price of Bitcoin rises, because security of the proof-of-work needs to rise with the value of the Bitcoin economy.

Thus the OP remains valid.

Altcoins are not the same as fractional reserves. Altcoins only have value if they are difficult to mine and a lot of work has been applied to mining them. To expand debt requires creating money out of thin air, i.e. fractional reserves.

I gave you a much better reason:
Everything will fail sometime , even bitcoin , but it's not that time yet

This logic is infallible in itself and you can always turn to history for examples proving your position as a last resort. But the question is still there. Is it really worth doing the same mistakes all over again?

How about you come up with something perfect,  GOD!?

No we only need to come up with a base money that can't be out-competed by the funny money. Then the funny money users can't get 99% of us to use it and create the social failure outcome of desiring a central bank to backstop the frequent bank runs.

If perhaps 20% of the population uses our decentralized base money and if we are the smart ones who are driving the technology economy which has become 80% of the global economy's GDP, then they can't dictate to us.

A recent Oxford study says 45% of existing jobs will be lost to hitech automation by 2033. The dummies (also the capitalist hoarders) are going to fall away in relative economic importance. Because the industrial age is dying, and we are moving to a new virtual economy.

[Zangelbert Bingledack]

@OP

As someone mentioned, there is no reason for a rational user to risk dealing with a fractional reserve bank with Bitcoin, unlike with gold. All it takes is one bank publishing 100% transparent blockchain data about accounts in custody. Then who is going to put up with fractional reserve?

Central bank? Inflation via derivatives? No, Bitcoin can't be centralized and dissolves the government power necessary to enforce the perverse incentives that created the present fiat money derivative situation.

[AnonyMint]

@OP

As someone mentioned, there is no reason for a rational user to risk dealing with a fractional reserve bank with Bitcoin, unlike with gold. All it takes is one bank publishing 100% transparent blockchain data about accounts in custody. Then who is going to put up with fractional reserve?

Everybody who wants ubiquitous debt. Which is most of dumb humanity, who live in the fixed capital industrial age, where capitalists rule. See my prior post for the solution.

Don't miss the new virtual economy link.

[deisik]

People are much smarter today than 50 years ago, bankers can not scam all the people all the time

Some say quite the opposite, that people have actually become dumber these days than they were some 50 years ago. In any case, I can always retort that banksters have become much smarter in their ways too, so it is a moot point really...

[deisik]

its because you don't have many bitcoins, right OP? Because i have never seen anyone wanting something of his own to fail, unless theres a more wicked reason behind. 

Your logic seems like that of a 3 years old. I don't want Bitcoin to fail, but if see no cogent argument why it will not fail in the long run, all I can hope for is to be lucky enough to jump off a sinking ship before it's too late. And the wicked reason behind can just be weighing the odds before making a long term investment decision...

And even if Bitcoin does ultimately fail, it may still provide a worthy speculation opportunity

[deisik]

As someone mentioned, there is no reason for a rational user to risk dealing with a fractional reserve bank with Bitcoin, unlike with gold. All it takes is one bank publishing 100% transparent blockchain data about accounts in custody. Then who is going to put up with fractional reserve?

Most humans are not rational users, to begin with. And even those who can be considered as rational on the whole are not rational all the time. If it were so, why would we in the first place still have fractional reserve banking now when gold is obsolete?

[deisik]

Central bank? Inflation via derivatives? No, Bitcoin can't be centralized and dissolves the government power necessary to enforce the perverse incentives that created the present fiat money derivative situation.

Bitcoin can't be centralized? Now I'm not sure what you mean by being centralized. Look, I already encountered two contradictory ideas about what Bitcoin decentralization actually is, so what is your take on this? If someone grabs more coins than anyone else, would this go for centralization? Or, rather, what could in this case prevent their owner from inflating Bitcoin derivatives if he decides to?