Bitcoin Forum
December 13, 2024, 11:24:34 PM *
News: Latest Bitcoin Core release: 28.0 [Torrent]
 
   Home   Help Search Login Register More  
Pages: [1] 2 3 »  All
  Print  
Author Topic: Do we really need Bitcoin?  (Read 2944 times)
ghgr (OP)
Newbie
*
Offline Offline

Activity: 59
Merit: 0



View Profile WWW
July 18, 2014, 09:05:08 AM
 #1

NOTE: There is a tl;dr at the end. But if you plan to participate I beg you to read the full post, since maybe your concerns were already addressed.


I would like to share with you some questions/rants/introspection about this community and Bitcoin in general. Often is hard to look inside and try to challenge what I believe is in some extent echo chambering, collective madness and a little bit of paranoia.

The problem I see with Bitcoin is that, despite the fact Satoshi envisioned a trust-less system, this community strives for mainstream adoption. These two scenarios are simply not compatible. We need to trust someone at some point, or the alternative is to spend great amounts of time and energy to get the expertise of a bank-grade security consultant (in addition to your day job). Maybe some people in this community can reach this level of expertise (although scandals like MtGox or Bitcoinica among others show it is not easy), but what is sure is that the most part of the world are nowhere near. And it is not because they are stupid, but because their role in society is different. They are doctors, chemists, lawyers, mechanical engineers, etc. who may excel at what they do, but they don't know (nor they care) how to set an air-gapped network with two computers communicating through the sound card.

Before you jump to the conclusion "Well, if they actually don't care, they don't deserve this currency" think about your knowledge of how antibiotics and cell division work, the distribution of mechanical/thermal stresses in an aircraft or the differences between the Otto and Diesel cycles in a four-stroke engine. It doesn't mean that you don't care about diseases, cancer, transport or energy, but that your role in society is probably different and you expect the experts on each field to 'dumb down' their findings such that newcomers can more or less understand it.

The problem with Bitcoin is that either you become an expert in the field and you make it all by yourself (and even then you will end up trusting the OS developers) or you will trust someone. And, at that point, why don't simply stick with Visa, who provides chargebacks if I am scammed?


Some proposed solutions involve hardware wallets, but this solves no problem. How can we be sure that the RNG is not backdoored? Should we trust everyone in the distribution chain from development to delivery not to backdoor it, considering the huge rewards that there are in doing so? Or should we expect that everyone becomes a hardware/firmware developer with Master in embedded systems, and do it from scratch?


My point is that a big percentage of people here are invested in Bitcoin (either by buying early or mining) and have a veil in front of their eyes. This phenomenon is normal, it is one of the well understood human cognitive bias called 'Rationalization'. And it can be dangerous since it prevent us to see the big picture. Or, in other words, these people only want Bitcoin to succeeded because it will give them enormous riches. And I find it a wonderful, respectable reason. But we should not let it blind our rational thinking.


The fact that more and more merchants are accepting Bitcoin can be explained by the fact that many people (early miners and adopters) are sitting in huge stashes of Bitcoin with no way to cash them out (at least without sending an identity theft pack to a shady exchange and risking problems with your local bank). That explains why these merchants received huge amounts of transactions when they started accepting Bitcoin. It's just people cashing out. And they will probably stop accepting it once the volume of sales is not enough to balance the risks (with BitPay/Coinbase/etc and the local bank) and the costs of accepting Bitcoin.


I'll try to debunk some commonly accepted points in this community. Feel free to counter my counterarguments:


M) Payment with Bitcoin is easy, just sweep a QR-Code and make the payment.
A) If you do so, you trust that Google(Android) or Apple(iOS) are not evil (modifying the RNG, keylogging you...) or incompetent (allowing a rogue third-party app to do the former). If you lose your phone (or it is stolen) your money is gone. If you are scammed by the seller, it is lost.

M) You can minimize the losses of losing your phone if you keeping a small amount. It would be, in this case, like losing your traditional wallet.
A) I agree, that might work. But at this point I don't see the difference with traditional metal coins and paper bills. And the risks of the previous point.

M) Bitcoin protects you from inflation, currency manipulation, global economic disaster, etc.
A) I agree, too. But this is exactly the 'non sequitur' fallacy. I agree that the governments (or the classes that control them) have way too much control over the currency. But this problem comes from really long ago. And the traditional way to deal with it are offshore investments. Actually, Bitcoin might be just one more investment choice (a particularly, specially risky one), but I don't see how can be anything more.

M) But I cannot make offshore investments with my small wealth!
A) National (or global) instabilities are a problem of the rich. If you have less wealth than a threshold ($100,000 I think?) your deposits are guaranteed. And if the crisis is so big that even that cannot be guaranteed, you'd better learn how to raise your own vegetables and how to clean water. Bitcoin could not help you in this scenario.

M) Bitcoin is so handy to use. Just send instantly money worldwide.
A) So are Paypal/Visa/MasterCard, etc.

M) But they take a fee!
A) So do the Bitcoin miners and Coinbase. Don't expect people to work for free. If you say that Visa's fee is higher... well, that doesn't seem to be a problem for most people, considering the advantages (chargebacks and insurances).

M) My bank does not let me to send money worldwide!
A) Western Union can send money to many places. Of course with a fee.

M) A Bitcoin wallet cannot be frozen
A) Bank accounts are NOT frozen for the most part of people. If you bank freezes your account often, I guess that you are still a niche market.


And now the drawbacks of Bitcoin, which seems to be invisible:

- Your wealth can be gone in a matter of seconds for reasons you might don't event understand (for non-technical but intelligent people). To put an overly complex example. Imagine that with ssltrip someone stole your Gmail credentials and modified an attachment that you then executed in another computer and it slightly changed the RNG of your Linux distribution so the successive keys where not 100% random, giving the attacker a small edge to guess your private key.

- Centralization problem. This issue has been largely discussed and so far the solution is again, trust that the miners won't accumulate 51% of the hashing power, and if they do, they won't be evil.

- Future transaction fees. It is not clear how it will work once the block reward is negligible.

- Conversion to other currencies (in anonymous but somehow not shady exchanges)

- Security. This one is for me a fatal flaw. I am yet to see a satisfactory solution, but unfortunately the current system (not only financial, but the whole society) is based in people's good-faith and reversibility when not.

- Blackmailing, Cryptolocker: here is where my first point point of "[...] and a little bit of paranoia" comes. One might believe by reading this forum that the current financial establishment (from the IMF to your local bank branch) have just one thing in mind: "Screw you". Although economic incentives might turn evil the greatest saint, the most part of the times there are reasons for their decisions. Anonymous transfers incentive thefts and blackmail. Transfers to conflictive countries are likely to be used for illicit purposes (when was the last time you sold something to a Nigerian customer?). Not always, of course, and that is how Bayesian reasoning works. If all you know about a person is that is it interested in making an anonymous payment to Iran (for example), the bank thinks the worst and freezes his account. Then, ideally, they will contact the person and update their 'beliefs' about this client, and with this new information they can choose to unfreeze the account. The system may be perverted at some points, but I don't think it is 'evil' from the roots.



tl;dr
Bitcoin has many drawbacks: Centralization (Damocle's sword), security (even with hardware wallets), shady exchanges, blackmailing. And the advantages are not more than investing in offshore assets and selling them when you need money (so, one could keep wealth in a varied portfolio of offshore assets/shares/commodities/whatever and sell them to fiat in order to make transfers using the traditional banking system (or Western Union, or whatnot).

I didn't mention the two most common red herrings (in my view): price instability and deflation.

I would like to be proven wrong in a peaceful, rational debate. I am sure that newcomers often wonder about these issues, and they cannot find satisfactory answers anywhere.


I have a flashback of Orwell's Animal Farm, where the humans are the bankers. Boxer the horse is the hard-working, idealist people in the "Project Development" subforum. And the pigs are the... guess which Foundation?
Meuh6879
Legendary
*
Offline Offline

Activity: 1512
Merit: 1012



View Profile
July 18, 2014, 09:14:35 AM
 #2

1) My bank don't allow to withdrawn my money in 1 hour.

2) My bank block at a certain amount pay per card ... per day and per week and per month.

3) In 2014, My gov. allow to bank to freeze or stealth money from my account without my approbation (Bail out to Bank run)


... that why, since december 2013 ... i convert all my life economy in Bitcoin.
... because, money IS MY MONEY.



Global crisis is in party because PEOPLE are dumb and trust the bank to allow withdrawn money.
At this moment, only bitcoin allow this.

not the silver (bank deposit)
not the gold (bank deposit)
not other fucking toilet paper money (eXXXXtra fee to convert)
devphp
Sr. Member
****
Offline Offline

Activity: 336
Merit: 260


View Profile
July 18, 2014, 09:16:02 AM
 #3

Look into gen 2.0 cryptos, they are designed to solve many of those issues.
solex
Legendary
*
Offline Offline

Activity: 1078
Merit: 1006


100 satoshis -> ISO code


View Profile
July 18, 2014, 09:20:33 AM
 #4

we need a tl;dr for the tl;dr...

also, if the OP has given up on bitcoin then why not go to another forum entirely, maybe PayPalTalk or VisaTalk where so much must be happening that he approves of?

johnathan32
Full Member
***
Offline Offline

Activity: 127
Merit: 100


View Profile
July 18, 2014, 09:32:53 AM
 #5

You seem to ask a question really is not the right forum, because everyone in this forum will tell you yes, then I do not understand what you're trying to get the message
Elwar
Legendary
*
Offline Offline

Activity: 3598
Merit: 2386


Viva Ut Vivas


View Profile WWW
July 18, 2014, 09:36:37 AM
 #6

Welcome to Bitcoin, I suggest you read the White Paper

https://bitcoin.org/bitcoin.pdf

First seastead company actually selling sea homes: Ocean Builders https://ocean.builders  Of course we accept bitcoin.
Mowcore
Hero Member
*****
Offline Offline

Activity: 592
Merit: 500



View Profile
July 18, 2014, 09:38:46 AM
 #7

Do we really need Bitcoin?

Yes, I really need Bitcoin.

Humble Weekly Bundle.Pay What You Want. Redeem on Steam. Support charity. Pay with BTCitcoin now!--> Paypal Sad
KimNam
Hero Member
*****
Offline Offline

Activity: 644
Merit: 500



View Profile
July 18, 2014, 09:41:27 AM
 #8

maybe you don't need it, but i think most of users here need it Grin

Quote
A) So are Paypal/Visa/MasterCard, etc.
3 of these payment are credit card. (paypal needs credit card). i know in advance country it's very easy to apply credit card, but in third world country it will be harder, too many requirements and it's annoying. don't forget monthly fee Sad
and i don't like credit card, they urge me to spend more for consumer product with their discount

Quote
A) Western Union can send money to many places. Of course with a fee.
I used this service once and never want to use again
their fee is horrible. with bitcoin i can send money to my family with smaller fee, and quick confirmation
@Blockpair
Newbie
*
Offline Offline

Activity: 8
Merit: 0


View Profile
July 18, 2014, 09:45:54 AM
 #9

Quote
If you do so, you trust that Google(Android) or Apple(iOS) are not evil (modifying the RNG, keylogging you...) or incompetent (allowing a rogue third-party app to do the former). If you lose your phone (or it is stolen) your money is gone. If you are scammed by the seller, it is lost.

The answer to Bitcoin's security problem is very simple: do not place all your trust in one place. A very simple example: suppose a traditional wallet on your average person's computer. One set of keys in one place. Very easy to steal. Vulnerable to drive-by exploits, trojans, social engineering attacks - etc. But we can add as many keys and factors as we need to protect a wallet. If the standard Bitcoin client included SMS security codes, it would make stealing coins extremely difficult. Now you need control over the victim's phone to move money and they can issue the final approval by inputting a code. Ultra-paranoid mode would use additional isolated devices.

Though I agree that realistically, anyone can be hacked given enough time and effort... but there does come a point where the probability vs reward isn't worth it for the attacker. Creating these conditions is trivial.


Quote
I agree, that might work. But at this point I don't see the difference with traditional metal coins and paper bills. And the risks of the previous point.

A better idea would be to use multiple redundant keys. Once again, there is no reason to put all your eggs in one basket. With the above security proposal - backup keys could be written to a USB drive or encrypted and saved to a remote server at wallet creation for use in the event that access to the phone was lost. Most of these security proposals are already in wide use.
Elwar
Legendary
*
Offline Offline

Activity: 3598
Merit: 2386


Viva Ut Vivas


View Profile WWW
July 18, 2014, 09:49:28 AM
 #10


First seastead company actually selling sea homes: Ocean Builders https://ocean.builders  Of course we accept bitcoin.
Meuh6879
Legendary
*
Offline Offline

Activity: 1512
Merit: 1012



View Profile
July 18, 2014, 09:56:05 AM
 #11



http://www.youtube.com/watch?v=6wREbzEvM-g&list=PLLzXbE1YfUJhoN2pHlL6lZjI18W2C4h2v
Elwar
Legendary
*
Offline Offline

Activity: 3598
Merit: 2386


Viva Ut Vivas


View Profile WWW
July 18, 2014, 10:06:31 AM
 #12

OP's website is "Buy Bitcoin with Paypal".

I would hate Bitcoin too after trying to sell a non-refundable currency via a haphazardly refundable payment processor.

First seastead company actually selling sea homes: Ocean Builders https://ocean.builders  Of course we accept bitcoin.
Honeypot
Sr. Member
****
Offline Offline

Activity: 420
Merit: 250


View Profile
July 18, 2014, 10:18:41 AM
 #13

No we don't. Bitcoin will be replaced with bitcoin 2.0 of some form soon enough.
Elwar
Legendary
*
Offline Offline

Activity: 3598
Merit: 2386


Viva Ut Vivas


View Profile WWW
July 18, 2014, 10:22:00 AM
 #14

No we don't. Bitcoin will be replaced with bitcoin 2.0 of some form soon enough.

Bitcoin will eventually be bitcoin 2.0.

It is bitcoin .9.2.1 right now.

First seastead company actually selling sea homes: Ocean Builders https://ocean.builders  Of course we accept bitcoin.
jonanon
Full Member
***
Offline Offline

Activity: 154
Merit: 100


View Profile
July 18, 2014, 01:42:45 PM
 #15

Interesting read, I would say that we don't NEED Bitcoin in the traditional sense of what need means, it's just an alternative preferred by some.
inBitweTrust
Hero Member
*****
Offline Offline

Activity: 658
Merit: 501



View Profile
July 18, 2014, 03:05:25 PM
Last edit: July 18, 2014, 03:16:08 PM by inBitweTrust
 #16

May we ask why your site is down - http://www.donotcompare.com? Did you get scammed by accepting an insecure currency <paypal> in exchange for a more secure currency <Bitcoin>?


A) If you do so, you trust that Google(Android) or Apple(iOS) are not evil (modifying the RNG, keylogging you...) or incompetent (allowing a rogue third-party app to do the former). If you lose your phone (or it is stolen) your money is gone. If you are scammed by the seller, it is lost.

Nirvana fallacy. Just because Bitcoin isn't 100% secure doesn't mean that it cannot be used much more securely than cash or credit cards.

A)I agree, that might work. But at this point I don't see the difference with traditional metal coins and paper bills. And the risks of the previous point.


If someone steals my wallet full of fiat usd there is little hope of getting my cash back. If someone steals by cellphone with my bitcoin wallet that is secured than I can retrieve and use my bitcoins with my backup and the thief has almost no chance of using or stealing my bitcoins.


A)  I agree that the governments (or the classes that control them) have way too much control over the currency. But this problem comes from really long ago. And the traditional way to deal with it are offshore investments.

Offshore investments are much more expensive and complicated to setup than bitcoin. They are also far less secure as governments have been successfully going after "terrorist" and money laundering individuals no matter which country they hide their wealth in.

A)  National (or global) instabilities are a problem of the rich. If you have less wealth than a threshold ($100,000 I think?) your deposits are guaranteed.

Inflation actually hurts the middle class and poor most. Your deposits are not guaranteed to do anything but decrease in value. You can guarantee that you will lose 5-8% a year in the US and 25-55% in countries like Argentina. You are also making the false assumption that Fiat currencies never fail completely as history has shown otherwise.


A)   So are Paypal/Visa/MasterCard, etc.

Making the assumption that the unbanked and underbanked don't exist in the world. How provincial.

A)    If you say that Visa's fee is higher... well, that doesn't seem to be a problem for most people, considering the advantages (chargebacks and insurances).

Xapo and other merchants offer insurance as well. Clients can use escrow to protect themselves and businesses prefer not to deal with chargebacks.

A)    Western Union can send money to many places. Of course with a fee.

Bitcoin 6 pennies or free and I get the money instantly. W/U costs 22usd for 1-2 business day transfer.
Day and night difference.

A)    Bank accounts are NOT frozen for the most part of people. If you bank freezes your account often, I guess that you are still a niche market.

Bank accounts are temporarily frozen or permanently all the time for many people even if they are conducting 100% legal business. Ever hear of Operation Choke point or the Cypress Bail ins?

A)    Your wealth can be gone in a matter of seconds for reasons you might don't event understand

This does happen all the time with traditional payment methods. You don't think hackers attack traditional fiat too?

A)    Centralization problem.  

So because there is a risk of less decentralization with Bitcoin we should go straight back to using a centralized solution instead. What is your point?

A)   Future transaction fees. It is not clear how it will work once the block reward is negligible.

In a free market without government regulations you can expect fees to remain low if not get cheaper. Keep in mind that even when the block reward drops the value of Bitcoin will also be higher as well.

A)  Conversion to other currencies (in anonymous but somehow not shady exchanges)

What?

A)  Security

Bitcoin is as secure or insecure as you choose to make it. Example - selling Bitcoin for paypal fiat is just plain stupid.

A)  Anonymous transfers incentive thefts and blackmail.

You are ignoring all the thefts and corruption that exist within Fiat that dwarfs the corruption scam artists using bitcoin. You don't have to be anonymous to steal money from people. People can easily be manipulated into thinking that they aren't being robbed blind. one example out of many - Economists now have over 5 different ways of calculating the CPI. When they normally cite inflation they use the formula that doesn't include food or fuel. Real inflation is actually closer to 5-8 % in the US. This is theft and hurts the middle class and poor more-so.  

A)  ....price instability and deflation.

Volatility is a valid criticism but Bitcoin is provably becoming more stable so in the longterm should not be an issue. The deflationary spiral argument is unfounded and research from payment processors like Bitpay have proven that spending actually increases during rapid deflationary bubbles.


DeathAndTaxes
Donator
Legendary
*
Offline Offline

Activity: 1218
Merit: 1079


Gerald Davis


View Profile
July 18, 2014, 03:06:52 PM
 #17

Quote
Some proposed solutions involve hardware wallets, but this solves no problem. How can we be sure that the RNG is not backdoored?

Simple don't use an PRNG.

Here is a very powerful, unhackable and easy to use RNG
leex1528
Hero Member
*****
Offline Offline

Activity: 784
Merit: 1000


View Profile
July 18, 2014, 03:25:39 PM
 #18

We don't need anything really...I mean do we need Cash?  Nope...it is nice to have though.

Bitcoin is something of a game for me anyway...I used to play a lot of video games trying to collect items...now I try to collect bitcoins and at least they have some value....none the less it is just a game/fun for me
allthingsluxury
Legendary
*
Offline Offline

Activity: 1540
Merit: 1029



View Profile WWW
July 18, 2014, 03:39:11 PM
 #19

If there wasn't such a need and a demand for bitcoin. Bitcoin wouldn't be as big as it is. The free market has decided. Yes we need bitcoin.

gofoter
Full Member
***
Offline Offline

Activity: 182
Merit: 100


View Profile
July 18, 2014, 04:04:21 PM
 #20

Well,I suppose yes,due to many reasons.

Pages: [1] 2 3 »  All
  Print  
 
Jump to:  

Powered by MySQL Powered by PHP Powered by SMF 1.1.19 | SMF © 2006-2009, Simple Machines Valid XHTML 1.0! Valid CSS!