What's your views on Bitcoin and why?
Discussion
Afternoon all,
I'm quite involved in the Bitcoin space and have been for years now. It's been a rocky road but an incredibly exciting one!
The last time bitcoin was properly discussed on these forums it was when there was a huge uptick in price. Now that the Bitcoin community and market has matured considerably over the last 18 months I'm curious to find out if peoples perceptions on PH have changed much over this period?
So, price aside, what's your views on Bitcoin and why?
Michael.
I'm quite involved in the Bitcoin space and have been for years now. It's been a rocky road but an incredibly exciting one!
The last time bitcoin was properly discussed on these forums it was when there was a huge uptick in price. Now that the Bitcoin community and market has matured considerably over the last 18 months I'm curious to find out if peoples perceptions on PH have changed much over this period?
So, price aside, what's your views on Bitcoin and why?
Michael.
Ozzie Osmond said:
Before MtGox went tits-up I swore that I would avoid Bitcoin like the plague.
Why use fictional money when you can use real money?
Haha, I can understand that view. But at the root, what makes money real? Gov backing? Fed backing? Bank of england ltd backing? debt backing? Or simply because someone will exchange it for goods / services?Why use fictional money when you can use real money?
Fittster said:
Where can you spend them?
Hey Fittster, Various stores globally now accept bitcoin, over 90,000 in fact, including Microsoft & Dell.
For merchants it makes perfect sense, zero risk of charge backs as it's digital cash and you can tap into an audience you may / may not of had exposure to.
Also, with companies such as bitpay you don't even need to hold bitcoin, they will instantly exchange it into your local currency. So, zero volatility risk and you can serve a wider audience of customers.
HTP99 said:
Funny as I was chatting to a geeky collegue about this very subject yesterday, he had already tried to explain it me a few months ago, he tried again yesterday but still I don't get it.
To be fair to your friend, it's not the easiest subject to explain all at once. I'm very technically minded and I had to lock myself away for months to fully grasp what it is :P rog007 said:
What's a bitcoin?
Afternoon Rog007,Bitcoin is digital money, it's money just like sterling and dollars only its not owned by a government and you can send it from any point in the world, to any point in the world and it can be transmitted instantly and securely (without needing permission) for minimal or no fees at all.
What makes bitcoin unique and special is that money is merely an application of the Bitcoin technology.
Here's what I mean, Bitcoin is a technology, it's a currency and its an international network of payments and exchange.
Bitcoin is not a company, it is not an organisation. Bitcoin is a protocol just like TCP/IP is for the internet. it's completely decentralised, meaning that there is no single point of control / failure.
It doesn't rely on / require banks
it doesn't rely on / require governments
The invention truly is revolutionary and a historic moment in the evolution of computer science, in fact i'd argue Bitcoin is the most significant advancement since the internet itself. And the catalyst of a social, financial & political revolution.
in short, Bitcoin is the internet of money.
Michael.
R11ysf said:
Michael this sounds like you are massively talking your own book. Then a quick look at your profile sees you've posted less than once a month over 6 years and that you have a bitcoin related company..
The "revolutionary" and "historic" stuff is just geek rubbish.
The most interesting bit is the bit I have put in bold. Bitcoin doesn't have the backing of banks or governments. One of the reasons that we use GBP or USD and it is accepted worldwide is because or stable governments and stable banks. That means they guarantee your deposits and keep your money safe.
"it's completely decentralised, meaning that there is no single point of control / failure." this is the main point why bit coin will never be a world currency. There isn't a single point of failure there are multiple. You are keeping a digital currency which can be hacked, as has been proven. Or keep it in the bitcoin bank for the biggest exchange to collapse. The points I put in bold you list as negatives whereas the rest of the world see as positives.
Walm makes an interesting point about inflation and QE. However, as a result of the inflationary nature of fiduciary issue it means all prices go up, not only our costs but our assets too. And we get paid interest which I presume as everyone would be keeping their coins on stand alone hard drives to stop them being hacked then they wouldn't.
In short as a balanced portfolio it is worth a 1% punt of your assets but as a realistic world wide currency; at the moment no chance, and if they can prove 100% safety in the future then in may catch on for a small percentage of people. Then the governments won't like it and they'll regulate the crap out of it.....
Edit: bold wasn't bold
Hmmm, I'll do my best to not be offended by your first paragraph, i'll just put that down to you not having your coffee this morning. However I'd just like to point out that i've been a member of PH since 2009, throughout this time I probably check in at least a few times a week to keep up to date with one of my core passions, cars. The whole idea of public forums / communities is to be amongst individuals who share a common set of values & beliefs. I think it's pretty safe to say that 99.9% of PH members (including myself) are here for the cars, this is clearly evident if you go through my "short" posting history. The "revolutionary" and "historic" stuff is just geek rubbish.
The most interesting bit is the bit I have put in bold. Bitcoin doesn't have the backing of banks or governments. One of the reasons that we use GBP or USD and it is accepted worldwide is because or stable governments and stable banks. That means they guarantee your deposits and keep your money safe.
"it's completely decentralised, meaning that there is no single point of control / failure." this is the main point why bit coin will never be a world currency. There isn't a single point of failure there are multiple. You are keeping a digital currency which can be hacked, as has been proven. Or keep it in the bitcoin bank for the biggest exchange to collapse. The points I put in bold you list as negatives whereas the rest of the world see as positives.
Walm makes an interesting point about inflation and QE. However, as a result of the inflationary nature of fiduciary issue it means all prices go up, not only our costs but our assets too. And we get paid interest which I presume as everyone would be keeping their coins on stand alone hard drives to stop them being hacked then they wouldn't.
In short as a balanced portfolio it is worth a 1% punt of your assets but as a realistic world wide currency; at the moment no chance, and if they can prove 100% safety in the future then in may catch on for a small percentage of people. Then the governments won't like it and they'll regulate the crap out of it.....
Edit: bold wasn't bold
Edited by R11ysf on Wednesday 5th August 11:48
Edited by R11ysf on Wednesday 5th August 11:48
Bitcoin is a passion of mine, you do not need to share it with me. I fully appreciate opinions will be split, i'm not here to argue or twist anyones arm. I will happily answer any questions to provide clarity on what is a very difficult subject to grasp first time around. Also my firm is an investment company who specialises in this area, I did not want this thread to be investment based, hence why I said "price aside" in my op so there is not any conflict with my intentions. Will I gain some insight into how the general populations views have / haven't advanced over the years, sure... but this will not influence my business in any way shape or form. If you feel i've come across this way and these where my intentions then I hope this explanation has now made you see otherwise.
Right so, that out of the way.
"The "revolutionary" and "historic" stuff is just geek rubbish."
Answer: completely your opinion, however I do admit I am a serial geek
"The most interesting bit is the bit I have put in bold. Bitcoin doesn't have the backing of banks or governments. One of the reasons that we use GBP or USD and it is accepted worldwide is because or stable governments and stable banks. That means they guarantee your deposits and keep your money safe"
Answer: It wouldn't be a good alternative system if it approached the same issue with the same thinking. Paypal's original goal was to create a digital currency, they failed. and the reason why they failed was due to:
1. being a company, meaning if you try to compete against the banks they have a target to attack / shut down. Paypal very quickly dropped this idea and where quickly conformed into a traditional bank.
2. How do you create digital cash without fixing a double spend? the way traditional models get around this is by having intermediaries who do reconciliation to determine what transactions are right or wrong / fraudulent. This creates encumbrance and expense. 40% of merchant fees are to cover fraud.
3. Who do you believe banks guarantee your deposits from? investments aside, why do you need guarantee / protection from yourself? People tend to get the intentions of regulation a bit mixed up. We can go into this subject in more depth if you like. But to get a quick idea of what I mean, just have a look into the Greece situation as an example of how well protected we are by banks and gov.
"this is the main point why bit coin will never be a world currency. There isn't a single point of failure there are multiple. You are keeping a digital currency which can be hacked, as has been proven. Or keep it in the bitcoin bank for the biggest exchange to collapse. The points I put in bold you list as negatives whereas the rest of the world see as positives."
Answer: I completely agree with some of your points here, apart from the fact that bitcoin is already a transnational currency, in fact its the first transnational currency (admittedly a small one right now). However, where you are bang on is right now the general population are not ready to be in control of their own digital wealth and bitcoin is not ready to allow people to be in control of their own wealth. Here's what I mean, as you've pointed out "hacking" is a big thing surrounding bitcoin, however not bitcoin itself or the Bitcoin network... this has never been hacked as you would need 1000x of all the computational power google has to offer to even attempt it. Bitcoin is the most powerful computing network in the world by some magnitude.
However, the issue is that digital security has been around for 30 - 40 years and the average individual suck at it! hell... even most professionals suck at it! what needs to be built is methods / tools where the average individual can feel comfortable securing their digital wealth in a stable non geeky fashion, and Bitcoin is simply not there... yet. This is why individuals and ill equipped companies are being hacked. Also it is worth noting the system we use today is to store millions of customers financial data in a central server, creating a honeypot of financial information. ID theft is the largest financial concern today as companies globally are being hacked and millions of customers credit / debit card details being stolen. As credit / debit cards work on pull mechanism, funds can be directly taken from your account without your authority, you are handing over the right for any company (and their chain of intermediaries) the ability to do this. Bitcoin is a push mechanism it literally works like a digital version of cash, therefore can not be frozen, pulled from or confiscated without your authorisation. Companies do not need to secure your sensitive data, they do not need to worry about charge backs, once you receive a payment, you've received a payment.
"Walm makes an interesting point about inflation and QE. However, as a result of the inflationary nature of fiduciary issue it means all prices go up, not only our costs but our assets too. And we get paid interest which I presume as everyone would be keeping their coins on stand alone hard drives to stop them being hacked then they wouldn't."
Answer: Not quite sure why you've mentioned fiduciaries? please elaborate?. Inflation is the effect of the increase of the money supply, as the value of our currency depletes, naturally so does its purchasing power. Attaching interest is a whole different subject, as this links back to the debt based system we have today, every single £, $ Yen (don't have the currency symbol :P ) in circulation is owed to somebody by somebody, if all debts are paid off we have no currency. Bitcoin by design is deflationary, the point Walm is making is that by having a fixed money supply as the value of that money supply increases so does the purchasing power of the money itself.
As it stands right now, 25 bitcoins come in to existence every 10 minutes. This is halved roughly every 4 years creating a pre determined predictable rate of money supply.
Break down is as follows:
3,600 bitcoins come into existence every day, and these (along with transaction fees generated) are paid directly to the miners who's job is to secure the network and process transactions.
Current price of 1 bitcoin is $282, therefore just over $1m is paid out to miners on a daily basis. These miners, just like any other business have expenses (mostly electricity cost) they need to satisfy, so a large bulk of these coins are sold in the open market / otc channels, bringing new currency into the system and naturally with it, creating selling pressure.
By the back end of 2016 this will be halved to 12.5 bitcoins paid out every 10 mins. This formula can not be changed or manipulated. This is why bitcoin is commonly is referred to as digital gold / gold 2.0
It's premature to decide if this is a better system or not, logistically it makes sense (to me at least), however we tend to frown on the term deflation when applied to our existing monetary system as it's always associated to catastrophic collapse in demand (nigeria anyone?)
Michael.
Edited by shigs on Wednesday 5th August 16:03
Edited by shigs on Wednesday 5th August 16:37
Oakey said:
I like how people keep touting 'chargeback risk' as a benefit...
Because clearly having a route to getting my money back if a retailer f
ks me over is a bad thing!
Hi Oakey,Because clearly having a route to getting my money back if a retailer f
ks me over is a bad thing!Bitcoin is programmable money, meaning you can very easily create escrow transactions of any value at no cost to the buyer or seller. Therefore you can simulate scenarios to provide the "consumer protection" traditional chargebacks offer.
These can be done on a time lock basis, meaning the funds are inaccessible to the vendor for a set period of time. once this period has lapsed the bitcoins will be accessible to the vender. Or a mediator can be introduced into a transaction.
Bitcoin transactions can very easily simulate perks traditional payments may provide. Traditional payments including apple pay can not simulate the unique qualities of a Bitcoin transaction.
However, making these comparisons is really missing the point. A better questions is, can Bitcoin create new forms of business never before possible due to it's infrastructure, the answer is absolutely. Micro transactions, smart contracts and online tipping on the internet are now some of infinite possibilities never before possible (yes as well as online drug markets).
Here's my main issue with the argument that bitcoin is not relevant, it comes from people who are fortunate enough to be born in nations who can serve up the creme de la creme of what the banking world has to offer. It's difficult to zoom out the corridor of our own lives to stop and think how lucky we are (assuming the majority here are UK based) to inherit the GBP. It was not a choice, we where born here therefore we inherit the GBP. Along with a pretty stable gov and the ability to trade global markets from our iPhone.
The shocking reality is that roughly only 20 countries out of 190ish (depending on how you count them) can boast the same privilege. In fact it's less than 1.5b of us who can freely trade without many restrictions on a global scale. So what about the other 6 billion?
Unbanked or underbanked
Limited to cash based societies
Have no real hope of getting a bank account because they don't have ID let alone a physical address to do proper AML / KYC on.
Mobile phones are helping with localised systems such as M PESA but there are still incredible restrictions.
Example:
The internet revolutionised how we do business, refined / replaced encumbered industries and created completely new ones never before possible (which btw, back in 1995 everyone said why would you need to use the internet when you can send a fax... but I won't go into this :P ) However as amazing as the internet is, it hasn't effected the above.
Let's say your a computer wizz kid who lives in Uganda, a country's whos political history is one of instability and, despite reforms, still faces restrictive government controls. With the application of the internet, you can create a website selling eBooks on 'how to code like a pro' so you have:
1. a completely internet based business
2. a completely virtual product
You can get your idea out to the world, you can even deliver your product to the world..... how do you get paid? Paypal or any other merchant provider won't touch you because you don't have the required AML / KYC credentials, does this make you a criminal? ... course not! but it's the very real restrictions billions of people around the world must face.
Now, combine the native currency of the internet (bitcoin) into this mix and you now have a viable business where you can receive payment from any corner of the global and never have to worry about asking for permission.
Bitcoin and bitcoin based technology hold with it the ability to directly impact global poverty by empowering individuals with the tools require to effect their own bottom line instead of being reliant on aid, this will not happen overnight, these are not airy fairy libertarian ideals, it's simple evolution. The ability to innovate without permission is exactly what has made the internet what it is today, Bitcoin takes this concept and applies it to the world of finance. Unfortunately most see Bitcoin as a "FAX machine".... hell, I know i did at the start!
R11ysf said:
Shigs
Did you want an answer to the question on what WE thought of bitcoin or did you want to use this post as a marketing exercise? Hence my point about your lack of posts. You work with a bitcoin related business and now you are preaching about its ability to end world poverty.
Please stop.
R11ysf, i've updated my profile just for you buddy Did you want an answer to the question on what WE thought of bitcoin or did you want to use this post as a marketing exercise? Hence my point about your lack of posts. You work with a bitcoin related business and now you are preaching about its ability to end world poverty.
Please stop.
I actually won't bother answering another one of your post seriously, so i'll just urge you to re read my last response
Some Gump said:
Not only is the OP's last post overly long and complicated, i suspect it is wrong.
He says that it opens new transactions (online tipping, or microtransactions on the internet without charge".
First one - really? I mean really? If tou're giving a waitor a tip, leave coins in local currency. As if you're going to end the meal with "give me your bank account, i'll send you a top". Sounds daft? Now replace bank account with bitcoin wallet. Still daft.
Second one - microtransactions without charge. Currently, transactions are all payable. Miners are doing the computation for transactions in return for mining bitcoins (as payment). Once the total 22m coins are out there, who does the computation? They'll still be wanting paid, or they'll turn off their pc's and save a wedge in their leccy bill. Moreover, because the blockchain has records of everything in it, it will get exponentially larger, and need more resource to transact. At this point, where is the concept of free transaction? Pipe dream imo.
Every time i see bitcoin propaganda, i just see a really interesting technical concept, surrounded by this woo that it'll change the world. It really won't imo.
Transaction fees are not mandatory. Miners are predominately mining for the bitcoin reward, however they also get the transaction fees. once all 21m bitcoins are mined ( by 2140) transaction fees will take over as the incentive. He says that it opens new transactions (online tipping, or microtransactions on the internet without charge".
First one - really? I mean really? If tou're giving a waitor a tip, leave coins in local currency. As if you're going to end the meal with "give me your bank account, i'll send you a top". Sounds daft? Now replace bank account with bitcoin wallet. Still daft.
Second one - microtransactions without charge. Currently, transactions are all payable. Miners are doing the computation for transactions in return for mining bitcoins (as payment). Once the total 22m coins are out there, who does the computation? They'll still be wanting paid, or they'll turn off their pc's and save a wedge in their leccy bill. Moreover, because the blockchain has records of everything in it, it will get exponentially larger, and need more resource to transact. At this point, where is the concept of free transaction? Pipe dream imo.
Every time i see bitcoin propaganda, i just see a really interesting technical concept, surrounded by this woo that it'll change the world. It really won't imo.
You're right about the blockchain increasing in size, there are many potential solutions to address this, but right now you're right it is one of the more important challenges surrounding the network.
Gassing Station | Finance | Top of Page | What's New | My Stuff