Why Do People Believe Bitcoin Will Replace Fiat?

[HELP.org]

I'm not even convinced that Bitcoin will be the survivor in the crypto coin wars. Most initial iterations of software are not the final useful form that becomes popular.

But bitcoin isn't software, it's a protocol. Open and upgradeable at that.

Bitcoin is both a protocol and a software program.  "Upgradeable" means breaking the consensus and a new consensus must be achieved.

Easy to do, and was done at least once already. Just have the code be released as dormant in the new versions of bitcoin, have it track how many nodes have updraged, and  then switch on automatically once about 90% to 95% of the network has installed the version with the new code. Users won't even notice the switchover as it goes from an old style block to a new style block. P2Pool publishes upgrades to their systems this way all the time, and unless you know what is going on, you wouldn't even notice the hard forks, other than installing a new version once in a while.

You are missing the point.  When you tell new users that Bitcoin is easily upgraded the first thing say is that it must be easy to change the 21 million limit.  Then Bitcoiners often respond respond with explaining the consensus and how hard it would be to change.  This confuses people because if Bitcoin is so easy to change then many of the claimed benefits would be worthless.

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[QuestionAuthority]

Tell me if this is one of the fixes that's about to be released or if it one of the not so serious ones.

https://bitcointalk.org/index.php?topic=758927.0

I happen to think this is a pretty serious drawback for adoption.

That's just Hive. Bitcoin let's you chain transactions one after another. If they all have proper fees, they will all get accepted in the next block at the same time. Mycelium let's you do this without a problem. The only issues you might see is if you use LocalTrader's confidence graph it will not go past 50%, or if some wallet service tracks for unusual transactions (such as those with unconfirmed inputs) they may not accept your transaction until it is confirmed in a block (happened to me with BitPay, but my unconfirmed input was a single transaction sending 1mBTC to 30 wallets, with no fee, that took 30 hours to confirm).

You evidently either completely missed or don't care about the problem. That's like saying, oh, it's just BitPay, or just Blockchain, or just whoever. That's ridiculous. Hive wants to protect itself and you think it's their problem? You probably thought the transaction malleability issue was no big deal too, right? It shouldn't ever happen because you can't ask vendors to be responsible for correcting the faults with Bitcoin! You can't ask them to take the financial responsibility for flaws. Blocks are too god damn slow to confirm and waiting for 6 fucking confirmations is business suicide. Hell, waiting for one will put you out of business. Bitcoin is useless for everyday life until a multitude of problems are fixed. I see this as an issue and a big one. If some other coin fixes them first - they win. Good luck with replacing fiat or ATM cards or credit cards or checks or store cards or gas cards or prepaid cards or EBT cards or PayPal POS because they're all instant.

[Rassah]

You are missing the point.  When you tell new users that Bitcoin is easily upgraded the first thing say is that it must be easy to change the 21 million limit.  Then Bitcoiners often respond respond with explaining the consensus and how hard it would be to change.  This confuses people because if Bitcoin is so easy to change then many of the claimed benefits would be worthless.

I just tell them that consensus to fix a bug, or to add a beneficial feature, is basically guaranteed. And if it's never reached (90% of nodes never add that code), consensus won't be reached and the new code will never be implemented. On the other hand, consensus to have everyone give away a part of their money, and at the same time consensus on whom to actually give it to (miners, charity, some "bank") is practically impossible.

You evidently either completely missed or don't care about the problem. That's like saying, oh, it's just BitPay, or just Blockchain, or just whoever.

No, I'm saying that's a bug in Hive's software, or them restricting what is actually perfectly fine in bitcoin.

Hive wants to protect itself and you think it's their problem?

Not allowing a transaction to have an unconfirmed input doesn't actually protect Hive from anything. They should just check to make sure that the unspent input has enough of a priority (fees, etc.), and if yes, let you spend again. Mycelium and Blockchain.info wallets do that and work fine.

You probably thought the transaction malleability issue was no big deal too, right?

I didn't know enough about the technical details of that, so couldn't have anything more than an opinion based on whatever I heard devs say about it. Not being an expert on that topic, what I thought was irrelevant.

It shouldn't ever happen because you can't ask vendors to be responsible for correcting the faults with Bitcoin! You can't ask them to take the financial responsibility for flaws.

Thanks to BIP70 (Merchant Payment Protocol), you don't have to. Since the signed transaction will be sent to them for review, instead of broadcasted outright, their software can automatically check for unconfirmed inputs, verify that they have enough fees, and if not, reject the transaction back to the customer. Soon they may even be able to add their own fees to customer's unconfirmed inputs, to make sure that they do confirm. And hopefully wallet developers will keep up, or their wallets will be abandoned for having too many problems. As I said, this issue is a non issue that already has a fix.

Blocks are too god damn slow to confirm and waiting for 6 fucking confirmations is business suicide

Are you comparing this to a 6 months chargeback waiting period? Or buying a beer at a bar? Cause it's true what they say, bars and restaurants (and BitPay) don't even wait for one confirmation. I buy stuff with bitcoin all the time, and I don't know any shop (except Piiko) that does. So I don't know why Hive enforces it on its users

[QuestionAuthority]

I guess the entire Bitcoin economy will depend on BitPay, Coinbase and a short list of others that will take all the risk. I guess they are making a tidy little profit eating that risk so it's ok. What if smaller businesses want to accept Bitcoin without the centralized oversight of the Bitcoin Mafia? How can they ring up a sale and let the customer walk out the door without one confirm? Or perhaps the idea is that a couple of enormous companies will be necessary to make Bitcoin work forever?

Wow we've managed to make a currency that's even more centrally controlled than any government fiat except there's no elected oversight. Just a few big boys getting bigger every day. Power to the people. lol

[Rassah]

I guess the entire Bitcoin economy will depend on BitPay, Coinbase and a short list of others that will take all the risk.

Typically!my merchants hire other companies to do their payment system man agent already, since those companies can then handle tracking their balances, and maybe even doing accounting. So it's likely, yes. But even if merchants accept payments themselves, with a BIP70 style payment, they receive the payment, hold onto it for a few seconds while monitoring the blockchain for double spend attempts, and then publish it. If this becomes a problem, they could even set up a deal with mining pools where they register their key with them, sign the transaction with their own key, and upload it to the pools to let them know that this should be the only transaction from that output that they should mine. Sure some minor pool might ignore it and still get lucky, but if pools charge a fee for this service, they'll have incentives to cary it out, and fairly, so their miners get the most revenue. And this is just a solution I came up with just now off the top of my head. I'm sure others will come out with something even better.

Wow we've managed to make a currency that's even more centrally controlled than any government fiat except there's no elected oversight. Just a few big boys getting bigger every day. Power to the people. lol

The point, as with all things bitcoin, is not oversight, but incentives. Are incentives lined up properly, and if not, how do we fix them. Above is an example.

[cccarnation]

There will certainly be a period where they will coexist for a time. This transitionary period could possibly be quite lengthy. But in the end, there will simply be no competing against a deflationary currency. When you throw a deflationary currency among inflationary currencies, it starts acting as a black hole absorbing all the wealth in the world. This doesn't even take into account that bitcoin is more than a currency and cannot be seen in just this light.

[marife01]

Most people don't use internet banking, and there are billions or so people without a bank account. Even internet and smartphones aren't global

This is exactly why many of us think bitcoin will grow so much. It doesn't need a bank account, and you can even use it with a dumbphone through SMS. So if most people don't have bank accounts or internet or smartphones, then bitcoin is the only option for most people.

This is exactly right. Not all can or have access on it especially at this moment.

[unexecuted]

The beauty of Bitcoin is that it is universal. So while we can compare it to USD for value, it can be converted to any countries dollar. This is what gives it such tremendous value.

[illymoka]

I've never heard this or seen it written. If you're sure that's what the person said, ask them directly.

[StatusSeeking]

There will certainly be a period where they will coexist for a time. This transitionary period could possibly be quite lengthy. But in the end, there will simply be no competing against a deflationary currency. When you throw a deflationary currency among inflationary currencies, it starts acting as a black hole absorbing all the wealth in the world. This doesn't even take into account that bitcoin is more than a currency and cannot be seen in just this light.

Yeap my thoughts exactly too

[QuestionAuthority]

I guess the entire Bitcoin economy will depend on BitPay, Coinbase and a short list of others that will take all the risk.

Typically!my merchants hire other companies to do their payment system man agent already, since those companies can then handle tracking their balances, and maybe even doing accounting. So it's likely, yes. But even if merchants accept payments themselves, with a BIP70 style payment, they receive the payment, hold onto it for a few seconds while monitoring the blockchain for double spend attempts, and then publish it. If this becomes a problem, they could even set up a deal with mining pools where they register their key with them, sign the transaction with their own key, and upload it to the pools to let them know that this should be the only transaction from that output that they should mine. Sure some minor pool might ignore it and still get lucky, but if pools charge a fee for this service, they'll have incentives to cary it out, and fairly, so their miners get the most revenue. And this is just a solution I came up with just now off the top of my head. I'm sure others will come out with something even better.

Wow we've managed to make a currency that's even more centrally controlled than any government fiat except there's no elected oversight. Just a few big boys getting bigger every day. Power to the people. lol

The point, as with all things bitcoin, is not oversight, but incentives. Are incentives lined up properly, and if not, how do we fix them. Above is an example.

The solution is simple. I want everyone in the world to start using Bitcoin as quickly as possible so I can sell my 2k Bitcoins mined in 2011 and retire to a private island in the South Pacific. However, all I see when I open a new page on this forum is not, "good news Bitcoin will be worth $10k each soon". No, what I see is, "oops here is another issue we need to fix before everyone can take Bitcoin".

Don't get me wrong, BitPay and Coinbase are great and I trust them to handle a lot of business without a mistake. They have proven to be exemplary at convincing complete nutters running big businesses to take Bitcoin if they convert it to fiat quickly. I was very impressed with Coinbase for convincing super nutter Patrick Byrne to keep 10% of the coin he takes in. They are also obviously masters at managing exchange risk and are a part what's creating the relative exchange stability. None of the miners are going to let go of their coins to Overstock if the value is five bucks. So BitPay and Coinbase are juggling the order books with carefully placed orders. All of that is genius but it's not the recipe for a large thriving economy. Just the opposite, it's the recipe to ensure the power of fiat, the power of a few large companies and maintain a manageably small economy (only as large as merchant services companies can support).

You speak of incentives and that's exactly the issue. There are no incentives to change Bitcoin. The current powers refuse to risk improvements for fear of screwing up their little money maker. You talk about BIP70 with respect like it's the only option. But BIP 70 is a patch and not even a good one. I'm not really even sure why Mike Hearn defends it so staunchly when it uses a rich centralized corrupt corporate SSL PKI. He says no alternatives exist but refuses to consider CA Cert. That's incredibly peculiar behavior coming from a man that said, "We don’t want bitcoin to be controlled just by rich people. There has to be some reason to it". I would love to take the credit for discovering that Bitcoin isn't being fixed but this is not my idea alone. Mike Hearn believes that, "because developers are not incentivised they simply don’t tend to tackle the big problems and little progress is being made. The result is that development of the bitcoin protocol has ground to a complete halt. He describes the situation as a “crisis period for bitcoin, in this respect”.

If large companies are going to control Bitcoin then we're not fighting against "The Establishment" we're becoming "The Establishment".

[qwerty555]

I guess the entire Bitcoin economy will depend on BitPay, Coinbase and a short list of others that will take all the risk.

Typically!my merchants hire other companies to do their payment system man agent already, since those companies can then handle tracking their balances, and maybe even doing accounting. So it's likely, yes. But even if merchants accept payments themselves, with a BIP70 style payment, they receive the payment, hold onto it for a few seconds while monitoring the blockchain for double spend attempts, and then publish it. If this becomes a problem, they could even set up a deal with mining pools where they register their key with them, sign the transaction with their own key, and upload it to the pools to let them know that this should be the only transaction from that output that they should mine. Sure some minor pool might ignore it and still get lucky, but if pools charge a fee for this service, they'll have incentives to cary it out, and fairly, so their miners get the most revenue. And this is just a solution I came up with just now off the top of my head. I'm sure others will come out with something even better.

Wow we've managed to make a currency that's even more centrally controlled than any government fiat except there's no elected oversight. Just a few big boys getting bigger every day. Power to the people. lol

The point, as with all things bitcoin, is not oversight, but incentives. Are incentives lined up properly, and if not, how do we fix them. Above is an example.

The solution is simple. I want everyone in the world to start using Bitcoin as quickly as possible so I can sell my 2k Bitcoins mined in 2011 and retire to a private island in the South Pacific. However, all I see when I open a new page on this forum is not, "good news Bitcoin will be worth $10k each soon". No, what I see is, "oops here is another issue we need to fix before everyone can take Bitcoin".

Don't get me wrong, BitPay and Coinbase are great and I trust them to handle a lot of business without a mistake. They have proven to be exemplary at convincing complete nutters running big businesses to take Bitcoin if they convert it to fiat quickly. I was very impressed with Coinbase for convincing super nutter Patrick Byrne to keep 10% of the coin he takes in. They are also obviously masters at managing exchange risk and are a part what's creating the relative exchange stability. None of the miners are going to let go of their coins to Overstock if the value is five bucks. So BitPay and Coinbase are juggling the order books with carefully placed orders. All of that is genius but it's not the recipe for a large thriving economy. Just the opposite, it's the recipe to ensure the power of fiat, the power of a few large companies and maintain a manageably small economy (only as large as merchant services companies can support).

You speak of incentives and that's exactly the issue. There are no incentives to change Bitcoin. The current powers refuse to risk improvements for fear of screwing up their little money maker. You talk about BIP70 with respect like it's the only option. But BIP 70 is a patch and not even a good one. I'm not really even sure why Mike Hearn defends it so staunchly when it uses a rich centralized corrupt corporate SSL PKI. He says no alternatives exist but refuses to consider CA Cert. That's incredibly peculiar behavior coming from a man that said, "We don’t want bitcoin to be controlled just by rich people. There has to be some reason to it". I would love to take the credit for discovering that Bitcoin isn't being fixed but this is not my idea alone. Mike Hearn believes that, "because developers are not incentivised they simply don’t tend to tackle the big problems and little progress is being made. The result is that development of the bitcoin protocol has ground to a complete halt. He describes the situation as a “crisis period for bitcoin, in this respect”.

If large companies are going to control Bitcoin then we're not fighting against "The Establishment" we're becoming "The Establishment".

Re retiring to Island...here's a new option coming ..with incentives  starting Oct 1st Intention to make Boracay a bitcoin Island..one small step for Man.....one giant leap for Bitcoin !


From Sept 15th... payment in bitcoin accepted with 10% discount for pre booked sulit amakan rooms. P1,100 will be P990.

https://www.facebook.com/profile.php?id=100005312025087&fref=ts

[inBitweTrust]

Mike Hearn believes that, "because developers are not incentivised they simply don’t tend to tackle the big problems and little progress is being made. The result is that development of the bitcoin protocol has ground to a complete halt. He describes the situation as a “crisis period for bitcoin, in this respect”.

If large companies are going to control Bitcoin then we're not fighting against "The Establishment" we're becoming "The Establishment".

Your motivations are shortsighted, because bitcoin is more important than some get rich quick investment.  If you are that concerned about development progress the best thing to do is either help test the code or donate to developers. We are all in this struggle together and your involvement affects the outcome of the investment.

Mike Hearn's project won a 40k bounty to address your concerns:
http://www.coindesk.com/mike-hearn-wins-40000-bounty-bitcoin-core-crowdfunding/

http://www.coindesk.com/new-decentralized-crowdfunding-platform-reshape-bitcoin-landscape/

[QuestionAuthority]

Mike Hearn believes that, "because developers are not incentivised they simply don’t tend to tackle the big problems and little progress is being made. The result is that development of the bitcoin protocol has ground to a complete halt. He describes the situation as a “crisis period for bitcoin, in this respect”.

If large companies are going to control Bitcoin then we're not fighting against "The Establishment" we're becoming "The Establishment".

Your motivations are shortsighted, because bitcoin is more important than some get rich quick investment.  If you are that concerned about development progress the best thing to do is either help test the code or donate to developers. We are all in this struggle together and your involvement affects the outcome of the investment.

Mike Hearn's project won a 40k bounty to address your concerns:
http://www.coindesk.com/mike-hearn-wins-40000-bounty-bitcoin-core-crowdfunding/

http://www.coindesk.com/new-decentralized-crowdfunding-platform-reshape-bitcoin-landscape/

No, that was my joke about the people in this community and what they really want out of Bitcoin. I already have quite a bit of money because I ran my own business and sold it. There are a lot of old miners here waiting for Bitcoin to explode but that will never happen with the current system.

BTW: I do help and I did donate. That might do a some good, especially if Mike can truly live on donations alone. People will see that and might join in but currently a few businesses control development and are shaping Bitcoin. Fixes to problems that have been known from the beginning are not being addressed. That's the joke to me about this thread, "Why Do People Believe Bitcoin Will Replace Fiat?" Of course it couldn't possibly do that because it can't even replace ATM cards and that should be easy.

[DDuckworth]

I have a hard time following the logic when people make a statement that Bitcoin will replace all fiat currency.  In my world view, they coexist and will continue to coexist.  I can see where some fiat currencies die and Bitcoin fills in the gap, but not on a global level.  Your thoughts?

Because the way traditional fiat is handled by the banks (at least as far as I know, all fiats have interest from the people who print them) the inflation is not only inevitable, but infinite.  If you put a monies side by side that has no inflation, why would it not end up being the one and only currency?  The only other alternatives I see coexisting is other altcoins. It probably won't be in our lifetimes, but I believe a good 200 years from now would be no doubt. The only way this wouldn't happen is if the world goes dark (no electricity) or the internet ceases to exist.

[DoraTheBTCexplorer]

I do not think so, but it will be a complementary currency.

[inBitweTrust]

Of course it couldn't possibly do that because it can't even replace ATM cards and that should be easy.

Ok, sarcasm doesn't travel over the internet easily. I understand your frustration, I just haven't heard many who suggest BTC will replace Fiat. Lets continue to work on the development.

I would have to disagree that replacing "ATM cards" should be easy. The debit card network is an infrastructure with billions of dollars of investment and many years in development. BTC atm's are just starting to be sent out.

[Rassah]

You speak of incentives and that's exactly the issue. There are no incentives to change Bitcoin. The current powers refuse to risk improvements for fear of screwing up their little money maker. You talk about BIP70 with respect like it's the only option. But BIP 70 is a patch and not even a good one. I'm not really even sure why Mike Hearn defends it so staunchly when it uses a rich centralized corrupt corporate SSL PKI. He says no alternatives exist but refuses to consider CA Cert. That's incredibly peculiar behavior coming from a man that said, "We don’t want bitcoin to be controlled just by rich people. There has to be some reason to it". I would love to take the credit for discovering that Bitcoin isn't being fixed but this is not my idea alone. Mike Hearn believes that, "because developers are not incentivised they simply don’t tend to tackle the big problems and little progress is being made. The result is that development of the bitcoin protocol has ground to a complete halt. He describes the situation as a “crisis period for bitcoin, in this respect”.

Don't forget Aamir Taki's libbit coin, BitPay creating their own versions of addons, and that Bitcoin Core devs are mainly working on splitting it into separate components, so that different coders can make their own versions of components, instead of having to code the entire core (like Aamir had to). Yes, progress is slow, but thankfully so is adoption for now, and I'm optimistic that it will pick up when there is demand for it and its easier to implement.

That's the joke to me about this thread, "Why Do People Believe Bitcoin Will Replace Fiat?" Of course it couldn't possibly do that because it can't even replace ATM cards and that should be easy.

That has almost entirely to do with regulations, not technology. There are a bunch of people in US who have ATMs already, with locations where they want to set them up, but the only thing that has been keeping them from turning those machines on in the last year is lack of regulatory approval and licenses.

[QuestionAuthority]

You speak of incentives and that's exactly the issue. There are no incentives to change Bitcoin. The current powers refuse to risk improvements for fear of screwing up their little money maker. You talk about BIP70 with respect like it's the only option. But BIP 70 is a patch and not even a good one. I'm not really even sure why Mike Hearn defends it so staunchly when it uses a rich centralized corrupt corporate SSL PKI. He says no alternatives exist but refuses to consider CA Cert. That's incredibly peculiar behavior coming from a man that said, "We don’t want bitcoin to be controlled just by rich people. There has to be some reason to it". I would love to take the credit for discovering that Bitcoin isn't being fixed but this is not my idea alone. Mike Hearn believes that, "because developers are not incentivised they simply don’t tend to tackle the big problems and little progress is being made. The result is that development of the bitcoin protocol has ground to a complete halt. He describes the situation as a “crisis period for bitcoin, in this respect”.

Don't forget Aamir Taki's libbit coin, BitPay creating their own versions of addons, and that Bitcoin Core devs are mainly working on splitting it into separate components, so that different coders can make their own versions of components, instead of having to code the entire core (like Aamir had to). Yes, progress is slow, but thankfully so is adoption for now, and I'm optimistic that it will pick up when there is demand for it and its easier to implement.

That's the joke to me about this thread, "Why Do People Believe Bitcoin Will Replace Fiat?" Of course it couldn't possibly do that because it can't even replace ATM cards and that should be easy.

That has almost entirely to do with regulations, not technology. There are a bunch of people in US who have ATMs already, with locations where they want to set them up, but the only thing that has been keeping them from turning those machines on in the last year is lack of regulatory approval and licenses.

I suppose I should have said debit cards. I'm not talking about using it to withdraw fiat from a bank account. Let's hope everyone else's development of new financial products are as slow as Bitcoin.

[tooil]

I have a hard time following the logic when people make a statement that Bitcoin will replace all fiat currency.  In my world view, they coexist and will continue to coexist.  I can see where some fiat currencies die and Bitcoin fills in the gap, but not on a global level.  Your thoughts?

Majority of the users here just want to get rich as soon as they can trying to talk the price up.

The irony is they will sell whatever they can for "FIAT" if the price is high enough.