Blinken (OP)
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January 07, 2015, 08:32:34 PM |
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The slow growth of Bitcoin and value declines seem anomalous to many people. If Bitcoin is so great, shouldn't it be expanding faster, like the internet?
To understand this we can take a close look at the Bitcoin Rationale, the value proposition. You will find many people who say it has no rationale, other than that of a Ponzi scheme or tulip mania, but this is patently incorrect. Bitcoin offers 3 major values:
Value S: The ability to securely STORE money without the help of a 3rd party (such as a bank) and without physical plant (safes/warehouses)
Value T: The ability to TRANSFER money quickly anywhere in the world (once again needing no 3rd party or intermediary)
Value A: The ability to pay money relatively ANONYMOUSLY
Let's compare and quantify Value T:
Credit/Debit Card (recipient must be a authorized merchant): less than 30 seconds with limit dependent on card Western Union: typically 24 hours and $3,000 limit Fedwire (US only, both parties must have a bank account): 24 hours SWIFT (both parties must have a bank account): 3-5 days Bitcoin: 10 minutes
This advantage looks huge and would appear to be dominating. The drawback? Cost of currency conversion. Typical brokers charge up to 5%. If you pay that coming and going, it's a 10% surcharge on your transfer. So, if you are transferring $50,000 you could easily pay $5,000 for the transaction. Compare that to a bank transfer which has a fee of $50. If your transaction is denominated in Bitcoin, then the transfer is free, but if the transaction is in dollars or some other currency, you could pay quite a lot. Since most businesses use national currencies, this cost is often a deal breaker. Its a chicken and egg problem. If everybody did business in BTC, then money transfer would be free (or at most a small transaction fee), but so long as it is a fringe currency, the conversion costs are high.
This liquidity problem holds back growth, but eventually I expect there to be a snowball effect as adoption grows and more and more people keep wealth permanently in BTC.
The internet infrastructure was in place in the Reagan administration (1980-1984), but it did not really start growing until the world wide web was underway around 1990. Even so, it took another 10 years after that before it became a household commonality. If we consider that Bitcoin software has been available for only 6 years, this comparison suggests significant continued growth and adoption is possible.
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Bitcoin ♦♦♦ Trust in Mathematics, Not Bankers ♦♦♦
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Once a transaction has 6 confirmations, it is extremely unlikely that an attacker without at least 50% of the network's computation power would be able to reverse it.
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Elwar
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Viva Ut Vivas
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January 07, 2015, 10:12:20 PM |
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T
Bitcoin takes a few seconds to transfer.
The first confirmation stored on the blockchain takes 10 minutes.
You are mathematically safe from a chargeback after 60 minutes.
With a credit card you are not safe from a chargeback until 180...
days
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First seastead company actually selling sea homes: Ocean Builders https://ocean.builders Of course we accept bitcoin.
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Muuurrrrica!
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January 07, 2015, 10:27:17 PM |
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-you can store money in it when you are happy with a constant loss (outsized inflation) -there is no anonymity as people can find out your location when you send btc (IP)
just to put the facts straight.
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rax
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January 07, 2015, 11:03:33 PM |
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-there is no anonymity as people can find out your location when you send btc (IP)
https://en.bitcoin.it/wiki/Tor
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MineForeman.com
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January 07, 2015, 11:11:01 PM |
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-you can store money in it when you are happy with a constant loss (outsized inflation) -there is no anonymity as people can find out your location when you send btc (IP)
just to put the facts straight.
Really? Find the location of who is sending stuff to this address then;- https://blockchain.info/address/1L2JsXHPMYuAa9ugvHGLwkdstCPUDemNCfDo us all a favor.
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BreathOfZen
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January 07, 2015, 11:28:56 PM |
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The single largest issue facing Bitcoin is it's constant inflation, and it's lack of actual Use Value. Before gold was a currency, it was a superb material for making jewelry. The funny thing is that Bitcoin actually does have a really good Use Value, which is to spend it storing data onto the blockchain. The technology is available, and if the world learned how to use it Bitcoin's reach, and value, would skyrocket immediately.
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Aoeui Artifacts
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Muuurrrrica!
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January 08, 2015, 12:32:11 AM |
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-you can store money in it when you are happy with a constant loss (outsized inflation) -there is no anonymity as people can find out your location when you send btc (IP)
just to put the facts straight.
Really? Find the location of who is sending stuff to this address then;- https://blockchain.info/address/1L2JsXHPMYuAa9ugvHGLwkdstCPUDemNCfDo us all a favor. the pools will know exactly
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MineForeman.com
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January 08, 2015, 12:37:44 AM |
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the pools will know exactly
Why? Magic weegie board? It is not like you submit transactions to the pool. Transactions go into the p2p network, the best you can ever get is to say;- "This is the IP of my peer that passed the transaction to me"
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mlferro
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January 08, 2015, 02:10:43 AM |
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-you can store money in it when you are happy with a constant loss (outsized inflation) -there is no anonymity as people can find out your location when you send btc (IP)
just to put the facts straight.
Really? Find the location of who is sending stuff to this address then;- https://blockchain.info/address/1L2JsXHPMYuAa9ugvHGLwkdstCPUDemNCfDo us all a favor. surely find the position of this transaction, will make many people happy.
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botany
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January 09, 2015, 03:00:56 PM |
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The single largest issue facing Bitcoin is it's constant inflation
The inflation built into Bitcoin is known and will decrease gradually. This to my mind is an advantage. Businesses hate uncertainty.
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BreathOfZen
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January 09, 2015, 04:45:43 PM |
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The single largest issue facing Bitcoin is it's constant inflation
The inflation built into Bitcoin is known and will decrease gradually. This to my mind is an advantage. Businesses hate uncertainty. The price of Gold in btc has doubled in the last six months. That is more then a little inflation.
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Aoeui Artifacts
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stellar1
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January 10, 2015, 11:55:56 AM |
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The slow growth of Bitcoin and value declines seem anomalous to many people. If Bitcoin is so great, shouldn't it be expanding faster, like the internet?
To understand this we can take a close look at the Bitcoin Rationale, the value proposition. You will find many people who say it has no rationale, other than that of a Ponzi scheme or tulip mania, but this is patently incorrect. Bitcoin offers 3 major values:
Value S: The ability to securely STORE money without the help of a 3rd party (such as a bank) and without physical plant (safes/warehouses)
Value T: The ability to TRANSFER money quickly anywhere in the world (once again needing no 3rd party or intermediary)
Value A: The ability to pay money relatively ANONYMOUSLY
Let's compare and quantify Value T:
Credit/Debit Card (recipient must be a authorized merchant): less than 30 seconds with limit dependent on card Western Union: typically 24 hours and $3,000 limit Fedwire (US only, both parties must have a bank account): 24 hours SWIFT (both parties must have a bank account): 3-5 days Bitcoin: 10 minutes
This advantage looks huge and would appear to be dominating. The drawback? Cost of currency conversion. Typical brokers charge up to 5%. If you pay that coming and going, it's a 10% surcharge on your transfer. So, if you are transferring $50,000 you could easily pay $5,000 for the transaction. Compare that to a bank transfer which has a fee of $50. If your transaction is denominated in Bitcoin, then the transfer is free, but if the transaction is in dollars or some other currency, you could pay quite a lot. Since most businesses use national currencies, this cost is often a deal breaker. Its a chicken and egg problem. If everybody did business in BTC, then money transfer would be free (or at most a small transaction fee), but so long as it is a fringe currency, the conversion costs are high.
This liquidity problem holds back growth, but eventually I expect there to be a snowball effect as adoption grows and more and more people keep wealth permanently in BTC.
The internet infrastructure was in place in the Reagan administration (1980-1984), but it did not really start growing until the world wide web was underway around 1990. Even so, it took another 10 years after that before it became a household commonality. If we consider that Bitcoin software has been available for only 6 years, this comparison suggests significant continued growth and adoption is possible.
Its often believed the enduse steers the unfolding path. Selling a BTC at USD 1000 (or 300) was definitely not a rationale. Fraudsters/tricksters taking advantage of near-anonymity and lack of regulation features of BTC to devise scam upon scam are probably driving the enduse spectrum of BTC today. Since it is fully decentralized (so no cops) it is going to be near impossible to prevent/punish such enduse. So how do we steer it back to mostly positive enduses?
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Q7
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January 10, 2015, 12:11:32 PM |
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Somehow I agree that despite we are already in the 6th year, the fact is that bitcoin's influence is not that outreached. It will definitely take time.
And concerning your statement on The ability to securely STORE money without the help of a 3rd party (such as a bank) and without physical plant (safes/warehouses)
I still don't understand why certain people prefer to keep their money in online wallet where they don't have control of their private keys.
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arvindr
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January 10, 2015, 12:24:32 PM |
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Somehow I agree that despite we are already in the 6th year, the fact is that bitcoin's influence is not that outreached. It will definitely take time.
And concerning your statement on The ability to securely STORE money without the help of a 3rd party (such as a bank) and without physical plant (safes/warehouses)
I still don't understand why certain people prefer to keep their money in online wallet where they don't have control of their private keys.
People having small amounts of bitcoins don't mind storing their coins in an online wallet as it gives them access on the go .
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botany
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Merit: 1064
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January 11, 2015, 06:32:57 PM |
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The single largest issue facing Bitcoin is it's constant inflation
The inflation built into Bitcoin is known and will decrease gradually. This to my mind is an advantage. Businesses hate uncertainty. The price of Gold in btc has doubled in the last six months. That is more then a little inflation. Inflation defined as increase in money supply.
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BreathOfZen
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January 11, 2015, 08:19:59 PM |
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The single largest issue facing Bitcoin is it's constant inflation
The inflation built into Bitcoin is known and will decrease gradually. This to my mind is an advantage. Businesses hate uncertainty. The price of Gold in btc has doubled in the last six months. That is more then a little inflation. Inflation defined as increase in money supply. Money supply change isn't inflation. Inflation is the change in prices for good over time, and over the last year Bitcoin has had a whole lot of that.
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Aoeui Artifacts
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