Unpopular Opinions About Bitcoin

[Pmalek]

The Australian comedian Jim Jefferies had a piece called unpopular opinions. In his shows, he discussed things like shaming fat people, or not washing his hands after peeing.

So today I am presenting Unpopular Opinions About Bitcoin.

Every now and then I will start a new unpopular opinion based on something that is said or thought about Bitcoin. We will then discuss the unpopular opinion and try to oppose it with facts.

First topic on the agenda for this thread:
Derek Sorensen claims that bitcoin will never become the world's #1 currency!?

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[Pmalek]

In his piece titled “Why Bitcoin Will Never Be the Currency of the Future”, he talks about Bitcoin’s scalability issues. He says that the Bitcoin network doesn’t have the capacity to handle the transaction load of an entire economy.   

Bitcoin’s block time is 10 mins on average, and the blockchain can handle 3-7 transactions per second. As a comparison, the throughput of credit cards is several 1000 transactions per second.

What Derek doesn’t realize is that bitcoin doesn’t have to become the world’s premier currency or payment method that you will take with you and pay with everywhere you go. Maybe one day it will, but it isn’t a priority in my opinion.

Bitcoin is an extraordinary store of value. Political figures and elected governors are starting to realize that. Take Cynthia Lummis, a Wyoming Senator as a great example of that. She is an advocate for Bitcoin and has plans to introduce the US Congress to the benefits of bitcoin. Cynthia has a background in Finance. She worked as a State Treasurer and recognized Bitcoin’s capability of being a great store of value. Mainly because Bitcoin doesn’t inflate, compared to the US$. You can watch a quick video of her talking about that here.   

Sooner or later, more elected officials will begin to share her views and understand the benefits of what bitcoin is.   

Another point that Bitcoin is a great store of value can be observed on the graph below. It shows that the number of wallets holding 1.000 BTC or more has been on the rise throughout 2020. We begun at above 1.700, and that number has increased to about 1.900 now.

Image source

Derek Sorensen goes on to mention that the Lightning Network has improved the scalability problem, it can handle a bigger quantity of transactions, but it compromises other elements of the Bitcoin blockchain. Namely:

decentralization, trustlessness, and peer-to-peer interactions (i.e., no third party).

While transacting over the LN, you open payment channels to another party or connect to other nodes to route your payment. The opening and closing of the channel are done on-chain, all transactions in between are done off-chain.

Seems interesting, but Derek says that is not the way most people shop:

If I had one grocery store, one pharmacy, one restaurant, one movie theater, and one gas station where I bought everything from, it might make sense for me to have running tabs, put money in them every month, and draw from that sum each time I go to the store. The problem is that this isn’t how it works. I constantly transact with a variety of business, both online and in person. It wouldn’t make any sense at all for me to put money into these sorts of charge accounts with individual grocery stores, gas stations, online retailers, etc. because the stores I transact with are constantly changing. Tying up money that way is a hassle. It’s impractical and highly inefficient.

But to take advantage of the Lightning Network, you don’t have to open your own channels. There are custodial wallets, like Bluewallet where you don’t have to maintain your own node or provide liquidity. You will be able to receive coins and the liquidity is provided by others. Thanks to Rath and Loyce for explaining that here and here.     

He continues by comparing the LN liquidity providers to banks, and says that they have connections to stores and services you want to purchase. You use their routes to get your bitcoin to the correct recipient. It is a similar approach to what banks do, but he says that:

Lightning Network “banks” are unregulated, and this is a serious problem.

His opinion is that those liquidity providers introduce more centralization. He expresses concerns that:

If we aren’t careful about the market forces we introduce into our currency system, we will allow agents to freely extort other members of the network without repercussions. Banks, historically, have been one of these kinds of bodies — regulations on them exist for good reason.

What are your thoughts on all this and what would you like to say to Derek?
Quotes and basis for the discussion were taken from
https://medium.com/pyrofex/why-bitcoin-will-never-be-the-currency-of-the-future-4b63415a1dfd

[Pmalek]

Reserved

[HabBear]

Bitcoin’s block time is 10 mins on average, and the blockchain can handle 3-7 transactions per second. As a comparison, the throughput of credit cards is several 1000 transactions per second.

Credit card transactions are quick, but settlement with the buyer is slow. If I buy something today with a credit card it will be at least a month before money from pocket actually pays for that product or service I bought today. I'm paying for a middle man to give me a loan. It's a different thing, you can't use this as a fair comparison for how Bitcoin could work as a currency.

That said, i agree with you - i don't think Bitcoin will ever be a true currency. The market has already decided that it shouldn't be a currency, but rather an asset to be used as an investment.

When most bitcoin owners are hodlers, the unpopular opinion is saying bitcoin should be a currency.

[Pmalek]

Credit card transactions are quick, but settlement with the buyer is slow. If I buy something today with a credit card it will be at least a month before money from pocket actually pays for that product or service I bought today. I'm paying for a middle man to give me a loan.

Fair point. That is true when you are paying with credit cards, because you are taking a loan that you promised your bank that you will eventually pay back sometimes in the future. But if you are using a debit card or a prepaid card, it's somewhat different. You spend your own money, you can't take loans or spend money that you don't have. Unless banks no offer some sort of deals and bonuses that allow you to do exactly that. But that is not the case for my card provider anyway.

[ShowOff]

I don't need to tear down the great wall just to say that what I believe about bitcoin is true for those who don't believe in the potential of bitcoin. When he has a mouth to speak and a hand and a pen to write, then leave him with his argument as it won't affect any bitcoin. Derek won't be able to break the trust of the community that has been built on bitcoin for more than a decade.
Could what Derek say and his argument against bitcoin be considered FUD?

[Pmalek]

Could what Derek say and his argument against bitcoin be considered FUD?

I have never read anything else he has written or commented, so I don't know his overall thoughts on bitcoin. He does begin by saying that crypto will significantly influence the future economy, and that in the future we will be using cryptocurrencies when paying for the majority of things. He doesn't say explicitly that it will be bitcoin though. He is probably shilling his own company in that way.

I didn't find his tone to be against bitcoin. When he says that Bitcoin will struggle to fully scale an entire economy, I wouldn't consider that FUD. The underlying network is unfortunately limited, and millions of users would struggle using the network on a daily basis.  

[cryptoaddictchie]

I didn't find his tone to be against bitcoin. When he says that Bitcoin will struggle to fully scale an entire economy, I wouldn't consider that FUD. The underlying network is unfortunately limited, and millions of users would struggle using the network on a daily basis.

But if you did think of his statement and consider his personality( known to many) then you could say he is already saying a fud in a very subtle way. But that would be the initial impression of media hypers. But if you think carefully what he meant. Somehow I agree, we can't utilized bitcoin as currency since its value is unstable and fluctuate easily. How come community can be able to use it efficiently? Much suited to be an investment asset if you think of it. But some are keeping bitcoin on more adoption since countries developing use cases for it. Maybe someday we could achieve this? Though not really sure.

[traderethereum]

If only he says like that, I would not bother and not overthinking because I don't think that what he says will happen.
But if bitcoin can not become the #1 currency globally, I think that will not be a problem, but bitcoin price will still increase in the future.
So no matter if that does not happen, we can still make money from bitcoin, and I think he will regret to say that.
Meanwhile, we see that the adoption progress still happens in many places, so even bitcoin can not be the #1 currency, bitcoin will still exist among us and will help us to make money.
If the adoption is still running, then there will be a chance that bitcoin will be accepted in many countries, but bitcoin can be the new solution in the payment system.

[mrob82]

I think one of the biggest issues is the intent of "individuals" geared around Bitcoin and crypto in general.  Right now, which has been building for 18-24 months, more and more people are using it as a hedge against the dollar rather than an adoption of currency.  The general discussion I'm always hearing around bitcoin is should we buy it because of the dollar falling, the stock market falling, a hedge against inflation, etc. 

My question is two fold.  One, is it better for bitcoin and other crypto's to be viewed as a hedge of some sort?  Two, do we really want the government and banks (although they are one in the same) turning this into a form of adopted "currency."

[Pmalek]

My question is two fold.  One, is it better for bitcoin and other crypto's to be viewed as a hedge of some sort?  Two, do we really want the government and banks (although they are one in the same) turning this into a form of adopted "currency."

If more and more people and institutions start looking at it as a hedge and a form of safe asset against inflation, it will lead to more institutional money and investments of bigger amounts. That can't be bad for Bitcoin overall. If you are thinking that more government adoption will increase price manipulation, we have got plenty of that already.   

[mrob82]

My question is two fold.  One, is it better for bitcoin and other crypto's to be viewed as a hedge of some sort?  Two, do we really want the government and banks (although they are one in the same) turning this into a form of adopted "currency."

If more and more people and institutions start looking at it as a hedge and a form of safe asset against inflation, it will lead to more institutional money and investments of bigger amounts. That can't be bad for Bitcoin overall. If you are thinking that more government adoption will increase price manipulation, we have got plenty of that already.   

That's very true, I just see a full adoption of crypto will end up turning crypto into more of a fiat.  The best outcome, in my opinion, is that you have an equality of individuals hedging and small adoption of crypto throughout several decades.  Small instrumental adoption over a long period of time would be sustainable rather than mass adoption across the board.  I worked for the government for too long to see how they can screw the pooch, beyond what general people see, lol.

[BrewMaster]

Derek Sorensen claims that bitcoin will never become the world's #1 currency!?

the title and the arguments are mostly unrelated in my opinion. bitcoin is already a world currency and it has been used by millions of people as payment. but even if bitcoin could handle 8 billion transactions per second (more than number of people on the planet) it still won't be "world's #1 currency" because that title is a more of a political one. for example when USD is used in global trades it is not because it is a good, strong or convenient currency. it is all political and is decided by the governments. meanwhile bitcoin is more of a people's currency not the governments.

[CryptocurencyKing]

If bitcoin can be used almost anywhere in the world, I wonder what is the universality about it to be attained again. It's not universally recognized yet, of course some people would always be backward on developments as they occur, you don't expect these people to be out of the population with all these corruption in the world, there will always be ignorant once.
The problem is, when we talk about universality of Bitcoin, most users mind tend to look at it from the physical nature of the way fiat is been spent which makes it look impossible and yes, it won't be.

Bitcoin is a virtual currency on the blockchain network in a Decentralized system and it won't stop being what it is or attaining a physical nature the way I see it. If universality intells it been spent anywhere in the world, it's as well been done today just not all enterprise accepts it as a medium of exchange yet.

[koabear63]

TIME
ACTUAL USE TOO COMPLICATED
FEAR OF LOSING MONEY, ESPECIALLY CHANCE OF EVERYTHING GONE IN ONE CLICK

It takes too long to do a transaction. people get impatient when the card reader takes more than 10-20 seconds, do you really expect them to wait 10 minutes to buy a candy bar.

Also the complexity of using it. I am below average with computers (but 50% of us are) so if it is too complicated for average users obviously it can't be number one.

Fear of losing one's money is probably the number one reason people won't accept it. Due to it's complexity.

WHILE IT WOULD BE NICE TO HAVE THE QUESTIONS BELOW ANSWERED OR AT LEAST DIRECTED TO WHERE I CAN ASK THEM
     i REALLY AM JUST TRYING TO EXPLAIN WHAT I MEAN BY THE COMPLEXITY AND CONFUSION

I don't mean fear as an investment, I mean simply losing the numbers or sending them the wrong place or losing the "wallet" or hacking.

Complexity in using I don't mean the complex blockchain of how it works, but just the simple mechanics of how to use it are complex.

I compare to using a credit card with chip reader. The chip technology is obviously complex, but average people can understand the simple mechanics of inserting the card without understanding "how" it actually works.

Can I use bitcoin with out understanding "how" it works? I would think so, but it is not as easy as inserting a card.

I managed to buy bitcoin on coinbase and make a transfer to bittrex following step by step (x about 30 steps) intSructions on youtube.

Now I think I am supposed to have a wallet (or maybe not I read some places) but why does coinbase have "wallet" in the name?

I think I am supposed to have a private address and a public address but which numbers are they?

Then there are places to put just "address" --which one? or is this a 3rd address consisting of a combination of the other 2?

I think I am supposed to have a private key. Is that one of the numbers? That is what I read on google.

They gave me 12 word code. Is that my "secret" key? Hardly a secret since I had to rearrange the words in order to send the bitcoin to bittrex so obviously coinbase has it.

I am below average on crpto but probably in top percentage of average actual research of the actual mechanics of this. Most people do not spend literally hours a day for 3 weeks as I have and this is where I'm at.
 
So now I am scared to do anything because if I put the wrong numbers somewhere I am cautioned that my money will be lost.

This is the fear of losing money that 99.9% of people have

[Pmalek]

It takes too long to do a transaction. people get impatient when the card reader takes more than 10-20 seconds, do you really expect them to wait 10 minutes to buy a candy bar.

I don't. I know I wouldn't. But I also don't consider bitcoin to be the perfect asset for small transactions, such as buying a candy bar or a lollipop. When it comes to bigger deals, especially where money goes across international borders that would require currency conversions and international bank fees if you are using traditional systems, bitcoin performs quite well.

I don't mean fear as an investment, I mean simply losing the numbers or sending them the wrong place or losing the "wallet" or hacking.

Those are the risks you have to bear with to become financially independent and make decisions when you want to and how you want to. 

I managed to buy bitcoin on coinbase and make a transfer to bittrex following step by step (x about 30 steps) intSructions on youtube.

The process of sending/receiving bitcoin isn't that difficult. Exchanges guide you throughout the process. it's as simple as inserting your wallet address, confirming your transaction via 2FA (if activated) maybe an additional confirmation via SMS/email, and that is it.

Now I think I am supposed to have a wallet (or maybe not I read some places) but why does coinbase have "wallet" in the name?

You can keep the coins you purchase in the online wallets of the exchanges. But this is not recommended for various reasons. It's not your coins, it belongs to the exchange. They become yours when you transfer them to a wallet whose private keys you control. You are also relying on an exchange to keep your coins safe and that is not how bitcoin should be used. You should be the one who safeguards the assets, and only you.   

I think I am supposed to have a private address and a public address but which numbers are they?

Your public address is used to receive bitcoin. If you need someone to send you coins, you need to give that person your receiving address. The addresses are the strings that start either with a '1', '3', or 'bc1'. The private key is what gives you access and unlocks the coins located on those addresses. It is that long string (from 51-64 characters) of letters and numbers. You will most probably see them beginning with '5', 'K', or 'L' depending on if they are compressed or uncompressed, but don't bother yourself with the terms for now.

Then there are places to put just "address" --which one? or is this a 3rd address consisting of a combination of the other 2?

Your public address, always your public address. Your private key is called 'private' for a reason. Only you should have it and know where to find it. Whoever has it, can empty the public address it is associated with.

I think I am supposed to have a private key. Is that one of the numbers? That is what I read on google.

I mentioned that above. It is that long string of characters that has to be kept safe and remain private. 

They gave me 12 word code. Is that my "secret" key? Hardly a secret since I had to rearrange the words in order to send the bitcoin to bittrex so obviously coinbase has it.

Those 12 words are called a seed, seed phrase, mnemonic phrase, recovery seed, and there are probably some other names for it. That is the most important part of your wallet. All your public and private keys are generated and restored from that seed. One private key gives you access to the funds located on one public key. You can lose these private keys but still restore your coins thanks to the seed phrase. But it doesn't work the other way around. If you lose your seed, and have only one private key, you can only gain access to the one public address that key corresponds to.

I am not sure what you meant when you said you had to rearrange your seed before sending your coins to another exchange. Care to elaborate on that? That is not how it works and you don't need the seed for sending/receiving. It should never by inserted online or saved digitally. You should write it down on a paper and keep it somewhere safe. If you have already entered it somewhere, consider it compromised. I would suggest you move your funds to properly created wallet.   

[koabear63]

Thanks  Pmalek

I have been doing more research and I sure appreciate your detailed and clear response.

I think what happened with the words I had to rearrange was in the setup of coinbase wallet. I was given a list of words which I wrote down then later I was taken to a screen where the words were written in a grid pattern and I was instructed to click and drag them into a list in the correct order.

I have not used the coinbase wallet. It seems to me insecure to have a wallet online if the seed phrase is given to me by coinbase.

Or maybe (actually what it seemed at the time) it was just a complex way of logging in, maybe other coinbase users can verify this.

I study a couple hours a day, and a lot of things I have a better understanding of.

I have a ledger wallet and frequently see advise to not keep BTC on exchanges but since I am uncertain how to use it correctly I have BTC on 4 exchanges to hopefully at least not have it all in one place.

Pmalek your answers have been awesome! By being very clear and concise. So much of what I read here and everywhere is just very confusing to beginner.

I did figure out to send BTC from coinbase to Kucoin so can I use only that Kucoin address in my ledger? Can I send all of my BTC to that address then after putting it in my ledger? Or do I need to get a sending address from each of the exchanges? I mean like sending BTC to each address after putting all four addresses in my wallet.

Conflicting info I get on private keys (is same as private address??) I have read the private keys go to the BTC or do they go to the wallet?
        I see all the time
"if you don't have the keys you don't own the bitcoin"
                      Then I saw coinbase won't give me my private keys, hence my confusion about the 12 words they gave me!! I thought maybe those were my priv keys but I just don't know. Why give the phrase and then tell me I can't get the keys? Now I'm leaning more to thinking the words is just lengthy password.

I will have to keep researching I guess. I don't understand how to put the BTC from the 4 exchangesin to my ledger if they don't give me the private keys.

I just realized I have seriously deviated from the title "unpopular opinions" Please someone let me know if I shouldn't be just replying here and should ask somewhere else.

Thanks!

[Pmalek]

I just realized I have seriously deviated from the title "unpopular opinions" Please someone let me know if I shouldn't be just replying here and should ask somewhere else.

Hi again koabear63,

Yeah, the thread seems to be moving towards an off-topic discussion, so it's better if we don't continue down that path any further, so that admins wont feel the need to delete any posts. Feel free to open a new thread with all your questions and doubts in Beginners & Help. You can PM me the link and I will gladly answer you there + other members will surely chip in. There is a big group of very helpful members here. 

[MIner1448]

I didn’t virilize in bitcoin before, just when I didn’t run into it and thinking how such an intangible asset could be so expensive, when I ran into it, I began to buy it naal and believe in it. the price and speculate on the price of a reddish kind of exchanges, and I realized that bitcoin is one of the forms of speculation by rich people, because they cut money with a hamster in a matter of seconds, many did not even know about it.

[kritikus]

I apologize for not addressing the topic. Where to go to withdraw coins from FreeDoge.co.in. On January 15, 2021, I received an email in which I confirmed the withdrawal of coins to my wallet. But to date, I have not received my coins!
Thank you in advance!