Freedom is a terrifying thing to people who have a naturally authoritarian mindset.
I don't personally believe that Bitcoin is the road to some techno-utopia. Frankly, I expect that ultimately it will just be a blip on the radar; but there's no reason to get so angry about it unless its fundamentally a scary idea. Its a direct challenge to the authoritarian worldview and that's frightening.
I've noticed this, too. There's often a violent rejection of bitcoin at an intensity that doesn't correlate to how much it's hurt them. In fact, the nastiest remarks about bitcoin come from people that own zero bitcoins.
My theory is that the more something challenges your world view, the more violently against something you will be.
When you're confronted with people getting rich off of other's unfettered optimism with zero grounding in reality while you see the truth of the matter, it can drive you batty.
It's like trying to explain to an 8 year old why Justin Beiber is just a fad. They have their hopes and dreams tied up in something you can't battle no matter how hard you argue.
Most people who are not interested or excited about bitcoin are also not threatened or offended by it. They don't write articles about it because they just think it is a silly fad.
Only people who really care one way or the other are going to be bothered to write about their feelings towards it.
(I own no bitcoin, but am not threatened by it either. It is fun to watch and read about, and I'm not getting hurt so I don't see any reason to be angry at it.)
> There are interesting conversations to have around bitcoins but I can't quite put my finger on why they tend to get so intense.
It's because it's more a religious discussion than a rational debate. You see the exact same pattern of phrasing used by proponents of Bitcoin, by American fundamentalists and spinoffs, and by atheists who are actively pushing for the complete removal of religion.
I've given up learning anything useful about Bitcoin since I don't find any of the people talking about it trustworthy.
The blogger has an incredibly malicious attitude towards individual people.
Everyone is ruining everything, everybody is bad, and we ought to regulate everything to fix it. Because somehow bureaucrats are immune from whatever ails people that are seeking the pursuit of happiness.
The blog post is disconnected from reality in so many places that I couldn't even begin to respond.
Somebody who kept their thinking connected to reality would have a pretty hard time getting to those kinds of views in the first place.
It's because Bitcoin is truly a massive political issue, with the potential to completely overhaul existing power dynamics. It is Establishment Leftism vs everyone else, and the battle lines are being drawn.
If there's anyone more irrational and emotional that a Bitcoin fan, it's someone who dislikes Bitcoin. I'm not sure where all the vitriol comes from, and I'm not sure where the straw man arguments come from.
I suppose the intensity is interesting, but I'm not crazy about focusing fully on the tone of an argument. You didn't set aside the contents of the article for a moment, you completely set them aside to make a point about tone.
I felt it was a little hard to follow honestly. To me it felt more like a piece of creative writing than really trying to get at anything, politically/economically/philosophically/whatever. Nice writing, but it hasn't change how I think or feel about bitcoins.
Though, even the recent events that have caused the price to crash hasn't changed my views. I still think bitcoins show a huge amount of potential and 2014 is going to be a big year for crytocurrencies.
Thank you. I have been waiting for this article since I first heard about Bitcoin years ago. I think it's a great experiment, and it's been fun to watch, but when I hear non-tech friends talk about "investing in Bitcoin" it makes me cringe.
I think it's a very interesting question to ask how a community as smart as the SV hacker crowd can be so fundamentally blind about basic economics that we have known for centuries. I think our markets desperately need new technology and I'm glad we're thinking about it, but throwing away the economics playbook of the last 500 years seems like a step backward in financial technology rather than a step forward.
I think it's a great experiment, and it's been fun to watch, but when I hear non-tech friends talk about "investing in Bitcoin" it makes me cringe.
Agreed. I've been following bitcoin for a couple of years, and this year when my friends/family started talking like that I was a bit disheartened. To be fair, If I heard something along the lines of "using bitcoin to obtain resources that are hard/ more insecure using traditional means/trust models", my eyes would have lit up.
It seems like all the voices around speculating price points in fiat have been drowning out those of utility (of course, this is not limited to just bitcoins), though those who find it's utility still trudge on.
Right now, I'm interested in the interactions around the exchange process because I think that's where the trust model applauded by many (myself included), is at its weakest. It would be pretty cool if there were some kind of platform built into/on top of a bitcoin client that allowed for a peer to peer exchange where maybe using the current banking system in some way, users could escrow/deposit/withdraw fiat into the network (using the network as a ledger that associates fiat amounts with addresses maybe with something like prepaid debit cards). I guess if I were to simplify that rambling a bit, I would like to see the exchange process built into a protocol and not a service it is today.
I think it's a very interesting question to ask how a community as smart as the SV hacker crowd can be so fundamentally blind about basic economics that we have known for centuries
Oh, it happens all the time. Smart people are blinded by ego & overconfidence in their own intelligence. It's sort of like Dunning-Kruger for smart people.
To be fair, the Bitcoin folks are trying to throw away the economics playbook of the last 50 years, which is itself a result of the economics playbook of the previous 500 years having been thrown away in the first place. Fiat currencies haven't worked out; whether Bitcoin is the right thing to replace them is an open question, but there seems little doubt that there needs to be something to replace a short-lived status quo which never worked properly from the outset.
"The gradual dismantling of much of the US and international financial regulatory safety net is now regarded as a major catalyst for the Great Recession."
That's the traditional narrative, coming from the regulators themselves. "we messed up, so you need us even more". It also totally ignores the state's role through policy in pumping up several running bubbles - tech bubble, housing bubble, higher education bubble. Why are people encouraged into top-0.1%-enriching investment vehicles, like 401ks or mutual funds or pension funds? Why, because they need to protect themselves from inflation. And who do you suppose creates the inflation? It's not a law of nature; it's the state and its "Regulators". The reason why those peddling the traditional narrative are terrified that we will see by example that inflation is not natural. It is in their interest to pooh-pooh it.
At least bitcoin bubbles are short and only sweep under people who are accepting the risk. Without prejudice to either position on the regulation good/bad issue, the VERY LAST thing we need is more of THESE regulators.
I think this take ignores the history. After the Great Depression, a number of laws were put in place, in particular the Glass-Steagall act ( http://en.wikipedia.org/wiki/Glass%E2%80%93Steagall_Legislat... ) that led to 50 years of relative financial stability. In the 80s and 90s these laws were dismantled, leading as you point out to a series of bubbles.
The point is that we have data: we know what happened with regulation, and with less regulation, and with less regulation things were worse. Suggesting that the solution is to remove even more regulation seems a very strange conclusion to draw from this experience.
(As an aside, I'm not sure why bitcoin bubbles being "short" is helpful. What is the advantage of high volatility?)
Er...sorry, what? Alan Greenspan was probably the biggest proponent of deregulating finanical markets and he held the most powerful title in international finance for decades. And...he admitted he was wrong.
Sorry, but this whole "let's ignore vast swaths of economic history because I really like libertarianism" thing needs to stop.
Don't blame the government. There is only one cause for market irrationality and inflation: human greed.
The government has the job of trying to shape society. Deciding that home ownership is a good thing and giving people tax breaks isn't the same as telling people to buy houses that cost more than they can afford. Encouraging people to go to college doesn't mean that harvard should charge 100X what they charged fifty years ago. It's the role of government to provide incentives and penalties. It's the unfortunate role of the market to pervert and distort those things to maximize profit at the expense of society.
It's easy to think of regulators as some Other that has come in and destroyed our economic eden. The fact of the matter is that things were significantly worse for everyone before we had government regulation. Inflation [1] and economic bubbles [2] existed before the modern financial system. Price gouging, monopolies, child labor exploitation...all reduced by government regulation.
We may not agree on the role of government, but it doesn't make a lot of sense to use them as a boogeyman that is responsible for all of society's economic ills. The idea that mankind was in a perfect state of nature before modern government borders on being religious. The system isn't perfect, but I hope we all can agree that there is plenty of blame to go around.
Sigh... the same old political arguments rehashed for the nth time, but with links to Krugman blog posts and some class warfare for taste this time around!
> I’ve enjoyed the thought experiment of Bitcoin as much as the next nerd, but it’s time to dispense with the opportunism and adolescent fantasies of a crypto-powered stateless future and return to the work of building technology and social services that meaningfully and accountably improve our collective quality of life.
So... because you feel that this is what we should be expending resources on, the full coercive power of the state should be brought to bear in order to force others to do it. Neat!
The thing I can't get past with Bitcoin is that it privileges the people who bought into it early, or who bought into it large: the only folks making real money on it now seem to be the speculators now that mining is too difficult for anyone not running a custom FPGA warehouse cooled with Fluorinert.
Worse, the traditional droves of biz and finance folks are noticing it enough to start the normal games, except without any meaningful oversight or regulation--and if we as cryptopunks think that our presumably vast experience in libertarianism and software is a competitive advantage over those fuckers, we're delusional.
I can't buy bread with it, I can't pay rent with it, I can't be payed in it, and the market is so volatile and unregulated that I'd be hesitant to try and convert any USD into BTC.
There's no middle class in the bitconomy, it seems; only vultures and fools.
This reads like a big rant against libertarians. Also, the myth that the 2008 crash was caused by a lack of regulations is tiring. What lead to the 2008 crash was that the government kept printing money and lending it for close to nothing to banks and many financial institutions that knew they'd just be bailed out in case things would go wrong as they'd be too big to fail. This is one of the reasons why these financials institutions behaved irresponsibly (an other reason was that they were forced by law to give loans to people who couldn't afford to pay them back), not because of the lack of regulation (or at least not only) but because they didn't have any responsibilities as they knew if push came to shove, they'd just be bailed out.
wow. easy money certainly didn't help, but wow. banks that are too big too fail are a natural outcome of the free-market. It takes government regulation to prevent their formation, or that failing, to at least limit their risk-taking behavior once they become vital to the world economy. you twice cite the moral hazard that allowed them to over-leverage, but completely ignore that regulations were removed or relaxed that prevented this, and then state lack of regulation as a minor part of the problem.
It's interested that he talks about the unbanked, but doesn't mention what I see as the biggest problem with the unbanked or people in poverty using Bitcoin. If you don't have much money, you can't afford any volatility. I see people on here making or losing thousands and yet someone in poverty might be screwed by losing 20 bucks.
If you are living in a country where the currency is already going crazy, then maybe Bitcoin gives you a good option. Otherwise, you need for your currency to be somewhat stable.
> If Bitcoin’s strength comes from decentralization, why pour millions into a single company?
Just like git and GitHub. One of the useful features of git is that it is decentralized; GitHub lowers the barrier to entry to nearly 0. One of the useful features of bitcoin is that it is decentralized; coinbase lowers the barrier to entry to nearly 0.
Wow. This is a very thorough argument. Many of the people I know (I'm studying at Wharton right now) that see bitcoin as nonsense don't think it deserves the time it would take to produce an essay like this (which is fair). I'm glad someone wrote it.
Bitcoin is the most promising of derivatives to come into the market in recent years. And as far as derivatives go, something that has no formal structure controlling or regulating is a godsend for actors who can move the markets. And considering the entire size of the Bitcoin world, it is one of the most juicy derivatives out there.
Does that mean it is not innovative? No. It is certainly innovative, especially in how it has been marketed. Alternative currencies are a dime-a-dozen in communities that are interested in currencies and communities that want to subvert existing currencies. But none of the others have gotten as far as Bitcoin has, in terms of both usage and how seriously it is taken.
Does that mean you cannot make money off it. No. You can certainly make money off it. That said, you can make money off how a bunch of horses are going to run on a given day too.
Does that mean you cannot pay for things with it? No. You can certainly pay for many things using it. Does that mean it is as good as the USD. No, it is not.
The true genius in Bitcoins lie in tapping into the Matrix-esque narrative that you are empowering every wannabe-Neo out there; which almost every nerd secretly aspires to be.
What that narrative misses out on is that, at a global level, any abstraction (currency, political boundaries, taxation) is already mainstream. By the time you make something niche acceptable by everyone, you have already inherited all the good and bad of something that is mainstream.
There are lots of problems with Bitcoin, but to my thinking by far the biggest is that widespread use would actually remove the few purported value propositions.
There are basically four value propositions for Bitcoin, that I've been able to discern:
1) It has "no" (really: fixed) monetary policy; I view this as a weakness, but I will treat it as a strength for the purpose of this post.
2) It does something of an end-run around banking systems, at least democratizing transaction fees
3) There are ways of obtaining bitcoin that are largely untraceable (mining), which make it usable for black-market activities
4) Novelty
#4 obviously goes away with time, but nobody is suggesting that as a serious long-term value proposition so that's not a big deal.
It's well-documented that #2 goes away when the transaction volume gets high enough: the solution to the protocol-inherent transaction volume limit is to move most transactions off the blockchain, which means using something that at least parallels the modern banking system.
Arguably, this also defeats #3, but #3 has the greater problem that it is actively undesirable to most people.
#1 thus remains as the only value proposition, but this value proposition is fundamentally based on a lie. The monetary policy of Bitcoin is not set in stone; it is in fact controlled by a quorum of the existing mining capacity.
If Bitcoin becomes popular with the general populace, however, at some point a large enough coalition of actors will emerge who can adjust monetary policy to their advantage -- specifically, by increasing block rewards, making their hardware more valuable. The incentives actively encourage this manipulation in the long term, and the group to which the incentives apply (mining hardware owners) are precisely the group empowered to do the manipulation.
There are only two things preventing this from happening right now: first, many hardware owners are either in it for the ideology or have substantial speculative positions in Bitcoin that would be endangered by manipulation of monetary policy, and second, that such a shift in monetary policy would discourage adoption (after all, this is one of the purported benefits of Bitcoin). Both of these impediments go away with widespread adoption.
Government central banks may do this now, sure, but they generally have a little more accountability than an anonymous coalition of hardware owners.
I just.. how does one get the gall to write like that?
> one that has unfortunately attracted outsized attention and investment before correcting any number of glaring security issues.
[links to bitcoin's own wiki about issues of which a small subset are security]
bitcoin has fixed many, many security issues over the years. most, if not all, of the remaining security issues are the same that any other tcp/ip talking protocol has and are based around DOS. straw man.
> Far from a “breakthrough”, Bitcoin is viewed by many technologists as an intellectual sinkhole.
bitcoin solves a previously 'unsolvable' problem. bootstraps multibillion dollar, zero trust, decentralized value transfer system and economy.
> A person’s sincere interest in Bitcoin is evidence that they are disconnected from the financial problems most people face while lacking a fundamental understanding of the role and function of central banking.
> If the broader Bitcoin experiment doesn’t implode, the currency will be regulated just as any other. In this best-case scenario for Bitcoin, what of the benefits Dixon claims?
Then it will be doomed, just like bit-torrent.. drat!
> If Bitcoin’s strength comes from decentralization, why pour millions into a single company? Ah, because Coinbase provides an “accessible interface to the Bitcoin protocol”, we’re told. We must centralize to decentralize, you see; such is the perverse logic of capital co-opting power. In order for Bitcoin to grow a thriving ecosystem, it apparently needs a US-based, VC-backed company that has “worked closely with banks and regulators to ensure that the service is safe and compliant”.
This quote right here is the tell that tips the hand. This has absolutely nothing to do with bitcoin and everything to do with outrageous barriers to entry into the payment market. Many have tried and been shut down.. coinbase is becoming successful because they are able to get over the arbitrary barrier of entry.
The author is saying "oh bitcoin will never succeed because real technologists think it's dumb and regulation will happen.. and even looky here they are centralizing anyway because they are hypocrites"
This is, from the most casual observation, asinine. a) bitcoin was bootstrapping itself well before coinbase came along. b) coinbase is succeeding because they are able to successfully battle the very regulations that many in the bitcoin community find burdensome in the first place.
> What’s unclear is the role that Bitcoin or a similar cryptocurrency could play in rectifying this dire situation [under and unbanked peoples].
What is clear is that the author is clearly removed from reality with regard to the unbanked who have access to cellphones but not banks; and insurmountable friction between local economies and more profitable ones. Many, many, many people have already used cryptocurrency in this regard and there is zero evidence that people are doing it less today than they were yesterday.
> I’ve enjoyed the thought experiment of Bitcoin as much as the next nerd, but it’s time to dispense with the opportunism and adolescent fantasies of a crypto-powered stateless future and return to the work of building technology and social services that meaningfully and accountably improve our collective quality of life.
So.. what does the author think here? Bitcoin is a fad and will have a similar fate to beanie-babies? It is over valued at the moment? Does the author really want to stake his reputation on the fact that cryptocurrencies are nothing more than 'an intellectual sinkhole?'
All the recent politically oriented attacks on Bitcoin are completely devoid of logical analysis and steeped in establishment dogma. They use name calling tactics like "play money" and "beenie babies fad" and scare tactics like "bubble" and "cesspool of criminal activity".
What none of these arguments ever address is the massive gains in economic efficiency that Bitcoin can clearly provide. It cuts out parasitic elements of the financial system that have grown like a giant parasite over the entire society.
The author claims that Bitcoin is steeped in nerd paternalism, but what about the epic paternalism of banks and regulators? Paternalism is their entire argument against Bitcoin, which basically amounts to "if people gain economic freedom, they will hurt themselves".
If you're going to write a long, highly critical rant about a post containing dozens of outbound links to sources, you probably shouldn't end it with 'tl;dr; citation needed'. It implies that you didn't read the whole post before ranting about it, which isn't exactly an appropriate approach to discourse on Hacker News.
When did he ever even claim that Bitcoin will never succeed? It's certainly not in the article.
'clearly removed from reality' is strong criticism to direct at the author of a piece you seem not to have read to completion.
You respond to the author's uncited claims and rhetorical flourishes with much of the same.
To pick at a few things:
* I'm not sure about you, but I'd think that a bittorrent-like outcome is not a successful one. Bittorrent is certainly ubiquitous but its major use is still an illegal one; the analogous outcome for bitcoin would be one where its primary transactional value is on SilkRoad-like sites. Can you elaborate more on your analogy?
* You strongly imply that you have some sort of argument (and maybe evidence?) about how cryptocurrency will/could impact the unbanked in a positive way. Can you elaborate?
* Your last point seems to take it as a foregone conclusion that bitcoin is going to a high valuation and is here to stay. Do you really believe it's an inevitability at this point?
As far as regulations is concerned, it's actually too much and too little.
Too little in that overnight exchange operations are prone to shutdowns due to hacking, but too much in that regulations put up needless barrier to entry such that more exchanges exist outside the US than exist inside.
Bitcoin is a fad and will have a similar fate to beanie-babies? It is over valued at the moment? Does the author really want to stake his reputation on the fact that cryptocurrencies are nothing more than 'an intellectual sinkhole?'
I'm really starting to get suspicious that these types of commentary on Bitcoin are not intellectually honest. Rather, they're used as a way to induce some kind of desired market condition. Want to trigger a massive selloff? Start generating a manufactured "consensus" that Bitcoin is not viable. And vice versa. Seems like Bitcoin isn't immune to good old fashioned pump and dump.
It's obvious that the internet should have an analog to cash. Bitcoin fits that bill perfectly. If it fails something else will become the cash of the internet. The vision of how to make that happen is now very well known, so it's uncontrollable and inevitable. All this hand wringing is just the noise of the early days.
I own no bitcoin, and I don't feel like I understand it well enough to make a judgement either way, but I know a bit about writing. The people who write "anti-bitcoin" posts, like this one, generally adopt a patronizing, propagandizing tone, with shallow arguments and an almost technophobic cynicism.
One typical example is how often people write that bitcoin will not be widely adopted because it is so widely used for criminal activity. A journalist on the FT blog, discussing this, told the story of how he had asked the head of a major company in an interview how he could consider moving the business to the web when so much of the internet (at the time, 20 years ago) was devoted to criminal activity. It seems like a stupid question now.
Is it just me, or are both the pro-Bitcoin and anti-Bitcoin crowds broadly guilty of religion-esque levels of "critical thinking"? Way too many people in these discussions are defending their existing viewpoints, not debating the issues.
I'm firmly convinced Bitcoin is a lunacy of greed, and they're firmly convinced that they are rich. What's to debate?
The discussion has reached a place of little common ground--a sign, perhaps, that maybe soon the universe will actually hand down a ruling and we can put down our HN accounts and go home.
All of the debates on this issue have happened already. There's nothing left but vitriol and broken dreams.
If I were to step aside and look at the current ground in context, I think we're seeing the effects of China's rebuff, and I think we're seeing Bitcoin fail on the global stage.
There's only so much cheap faith in the world, and every time Bitcoin lets people down that rich resource is depleted. We've seen Bitcoin build up attention in the tech world (initial crash way back in the day), in the financial world (the most ludicrous crash, back in the spring), and now in China.
This is basically a political article, and as such I would flag it.
Beyond that, as someone who does not set much stock by bitcoin, I do wonder about “roughly a 2.5% tax on all transactions” cited. That's maybe right for CC transactions or something like that in western countries, but when you start moving money around between countries, possibly including some less developed places, that % climbs quickly. I'm not much of a bitcoin fan, but perhaps some niche (and it's not a small niche - look at Western Union) like that would be a good place for it, and I'm willing to keep an open mind even if I wouldn't spend a cent of real money on the things until they calm the hell down.
Is the dire political judgement of the people voluntarily involved in Bitcoin really necessary? Bitcoin may very well be a complete failure, or a flawed idea, or practically against its own goals, or whatever you want. And that would actually be an interesting article to read. But why must it be necessary to then further portray those honestly interested in it as delusional or perhaps downright malicious?
The idea that macro economics is "figured out" has been debunked countless times. Both sides can cherry-pick examples ad-infinitum and call the other side ridiculous. Anyone who thinks they firmly know "why" a certain recession happened is suffering from ignorance of their own ignorance in my opinion. Clearly something isn't working right today if 2008 happened, and not to mention how the very economic policies we consider so great for us here domestically often have incredibly ill effects on third world countries. It's a hard, complex problem, and I've frankly given up on solutions that require as a premise that everyone else shut up and do exactly what you say.
Perhaps you believe that social problems can't be solved through technology. That is an acceptable and even admirable belief, but why should that stop me from having a different belief? One of the nice things about our society is that different people can try different strategies. Some people think that the way to reduce car deaths or prevent drunk driving (a clear social problem) is through education and stricter laws. Honest and valuable social strategy. However, others think you can accomplish it technologically by making cars that drive themselves and avoiding the problem altogether. There's no reason we can't try both and not politically demonize the other side (I'd remind you that suggesting a car that drives itself in the 50s as a solution to drunk driving would have probably had you labeled a nut -- that doesn't mean we should have hung any AI researchers out to dry for working on the beginnings of such a system).
The worst part about this is how he immediately considers anyone who believes in this as removed from reality. Why assume the worst of people you clearly have not met all of. I don't know OP's past, but I can tell you that my parents are from foreign country that has experienced hyperinflation in a very real way. Many of my feelings are a result of this: precisely because I feel hyperinflation is more real to me (and obviously more real to my parents) than someone whose entire family is from the United States and has only ever heard about it as a curiosity from Zimbabwe that they can refer to at a cocktail party. I see hyperinflation as a real problem -- just because it doesn't happen in the US doesn't mean it doesn't exist or is a fantasy. I very much believe that BTC offers the first real alternative for people trapped in countries where they can't get USD in or out during these events. And yes, this may mean it would circumvent that country's regulations: but even if you think the US government is doing things for the betterment of its population, I can guarantee you that's not the case everywhere else. Now you may disagree and think the right strategy is a different one involving the UN or the World Bank perhaps. That's fine, but please don't extrapolate that into a personal judgement of my character.
> If Bitcoin’s strength comes from decentralization, why pour millions into a single company? Ah, because Coinbase provides an “accessible interface to the Bitcoin protocol”, we’re told. We must centralize to decentralize...
This article is filled with hyperbolic nonsense like this, parading as real arguments. A 25M investment is not "pouring millions". And Coinbase is but one service in the Bitcoin ecosystem. There are and will be more competitors. Coinbase changes nothing about the decentralized nature of Bitcoin.
[+] [-] te_platt|12 years ago|reply
"everything wrong with Silicon Valley"
"crypto-libertarian political agenda that smacks of nerds-do-it-better paternalism"
"intellectual sinkhole"
"near-total obliviousness to reality"
"alarmingly magical thinking"
"unchecked predatory capitalism"
"short-sighted hypercapitalism"
There are interesting conversations to have around bitcoins but I can't quite put my finger on why they tend to get so intense.
[+] [-] thecoffman|12 years ago|reply
I don't personally believe that Bitcoin is the road to some techno-utopia. Frankly, I expect that ultimately it will just be a blip on the radar; but there's no reason to get so angry about it unless its fundamentally a scary idea. Its a direct challenge to the authoritarian worldview and that's frightening.
[+] [-] altoz|12 years ago|reply
My theory is that the more something challenges your world view, the more violently against something you will be.
[+] [-] seiji|12 years ago|reply
It's like trying to explain to an 8 year old why Justin Beiber is just a fad. They have their hopes and dreams tied up in something you can't battle no matter how hard you argue.
[+] [-] Crito|12 years ago|reply
Only people who really care one way or the other are going to be bothered to write about their feelings towards it.
(I own no bitcoin, but am not threatened by it either. It is fun to watch and read about, and I'm not getting hurt so I don't see any reason to be angry at it.)
[+] [-] saraid216|12 years ago|reply
It's because it's more a religious discussion than a rational debate. You see the exact same pattern of phrasing used by proponents of Bitcoin, by American fundamentalists and spinoffs, and by atheists who are actively pushing for the complete removal of religion.
I've given up learning anything useful about Bitcoin since I don't find any of the people talking about it trustworthy.
[+] [-] javert|12 years ago|reply
Everyone is ruining everything, everybody is bad, and we ought to regulate everything to fix it. Because somehow bureaucrats are immune from whatever ails people that are seeking the pursuit of happiness.
The blog post is disconnected from reality in so many places that I couldn't even begin to respond.
Somebody who kept their thinking connected to reality would have a pretty hard time getting to those kinds of views in the first place.
[+] [-] jwesley|12 years ago|reply
[+] [-] baddox|12 years ago|reply
[+] [-] badman_ting|12 years ago|reply
[+] [-] gelutu|12 years ago|reply
:)
[+] [-] alphonse23|12 years ago|reply
Though, even the recent events that have caused the price to crash hasn't changed my views. I still think bitcoins show a huge amount of potential and 2014 is going to be a big year for crytocurrencies.
[+] [-] hack_edu|12 years ago|reply
[+] [-] natural219|12 years ago|reply
I think it's a very interesting question to ask how a community as smart as the SV hacker crowd can be so fundamentally blind about basic economics that we have known for centuries. I think our markets desperately need new technology and I'm glad we're thinking about it, but throwing away the economics playbook of the last 500 years seems like a step backward in financial technology rather than a step forward.
[+] [-] cinquemb|12 years ago|reply
Agreed. I've been following bitcoin for a couple of years, and this year when my friends/family started talking like that I was a bit disheartened. To be fair, If I heard something along the lines of "using bitcoin to obtain resources that are hard/ more insecure using traditional means/trust models", my eyes would have lit up.
It seems like all the voices around speculating price points in fiat have been drowning out those of utility (of course, this is not limited to just bitcoins), though those who find it's utility still trudge on.
Right now, I'm interested in the interactions around the exchange process because I think that's where the trust model applauded by many (myself included), is at its weakest. It would be pretty cool if there were some kind of platform built into/on top of a bitcoin client that allowed for a peer to peer exchange where maybe using the current banking system in some way, users could escrow/deposit/withdraw fiat into the network (using the network as a ledger that associates fiat amounts with addresses maybe with something like prepaid debit cards). I guess if I were to simplify that rambling a bit, I would like to see the exchange process built into a protocol and not a service it is today.
[+] [-] sliverstorm|12 years ago|reply
Oh, it happens all the time. Smart people are blinded by ego & overconfidence in their own intelligence. It's sort of like Dunning-Kruger for smart people.
[+] [-] Gormo|12 years ago|reply
[+] [-] dnautics|12 years ago|reply
That's the traditional narrative, coming from the regulators themselves. "we messed up, so you need us even more". It also totally ignores the state's role through policy in pumping up several running bubbles - tech bubble, housing bubble, higher education bubble. Why are people encouraged into top-0.1%-enriching investment vehicles, like 401ks or mutual funds or pension funds? Why, because they need to protect themselves from inflation. And who do you suppose creates the inflation? It's not a law of nature; it's the state and its "Regulators". The reason why those peddling the traditional narrative are terrified that we will see by example that inflation is not natural. It is in their interest to pooh-pooh it.
At least bitcoin bubbles are short and only sweep under people who are accepting the risk. Without prejudice to either position on the regulation good/bad issue, the VERY LAST thing we need is more of THESE regulators.
[+] [-] seldo|12 years ago|reply
The point is that we have data: we know what happened with regulation, and with less regulation, and with less regulation things were worse. Suggesting that the solution is to remove even more regulation seems a very strange conclusion to draw from this experience.
(As an aside, I'm not sure why bitcoin bubbles being "short" is helpful. What is the advantage of high volatility?)
[+] [-] natural219|12 years ago|reply
Sorry, but this whole "let's ignore vast swaths of economic history because I really like libertarianism" thing needs to stop.
[+] [-] hooande|12 years ago|reply
The government has the job of trying to shape society. Deciding that home ownership is a good thing and giving people tax breaks isn't the same as telling people to buy houses that cost more than they can afford. Encouraging people to go to college doesn't mean that harvard should charge 100X what they charged fifty years ago. It's the role of government to provide incentives and penalties. It's the unfortunate role of the market to pervert and distort those things to maximize profit at the expense of society.
It's easy to think of regulators as some Other that has come in and destroyed our economic eden. The fact of the matter is that things were significantly worse for everyone before we had government regulation. Inflation [1] and economic bubbles [2] existed before the modern financial system. Price gouging, monopolies, child labor exploitation...all reduced by government regulation.
We may not agree on the role of government, but it doesn't make a lot of sense to use them as a boogeyman that is responsible for all of society's economic ills. The idea that mankind was in a perfect state of nature before modern government borders on being religious. The system isn't perfect, but I hope we all can agree that there is plenty of blame to go around.
[1] http://ancienthistory.about.com/od/fallromeeconomic/a/econof...
[2] http://en.wikipedia.org/wiki/Tulip_mania
[+] [-] peregrine|12 years ago|reply
[+] [-] thecoffman|12 years ago|reply
> I’ve enjoyed the thought experiment of Bitcoin as much as the next nerd, but it’s time to dispense with the opportunism and adolescent fantasies of a crypto-powered stateless future and return to the work of building technology and social services that meaningfully and accountably improve our collective quality of life.
So... because you feel that this is what we should be expending resources on, the full coercive power of the state should be brought to bear in order to force others to do it. Neat!
[+] [-] kevingadd|12 years ago|reply
[+] [-] angersock|12 years ago|reply
Worse, the traditional droves of biz and finance folks are noticing it enough to start the normal games, except without any meaningful oversight or regulation--and if we as cryptopunks think that our presumably vast experience in libertarianism and software is a competitive advantage over those fuckers, we're delusional.
I can't buy bread with it, I can't pay rent with it, I can't be payed in it, and the market is so volatile and unregulated that I'd be hesitant to try and convert any USD into BTC.
There's no middle class in the bitconomy, it seems; only vultures and fools.
[+] [-] nickbauman|12 years ago|reply
[+] [-] patrickaljord|12 years ago|reply
[+] [-] craigyk|12 years ago|reply
[+] [-] gexla|12 years ago|reply
If you are living in a country where the currency is already going crazy, then maybe Bitcoin gives you a good option. Otherwise, you need for your currency to be somewhat stable.
[+] [-] wmf|12 years ago|reply
[+] [-] rguzman|12 years ago|reply
Just like git and GitHub. One of the useful features of git is that it is decentralized; GitHub lowers the barrier to entry to nearly 0. One of the useful features of bitcoin is that it is decentralized; coinbase lowers the barrier to entry to nearly 0.
[+] [-] hhorsley|12 years ago|reply
[+] [-] codelust|12 years ago|reply
Does that mean it is not innovative? No. It is certainly innovative, especially in how it has been marketed. Alternative currencies are a dime-a-dozen in communities that are interested in currencies and communities that want to subvert existing currencies. But none of the others have gotten as far as Bitcoin has, in terms of both usage and how seriously it is taken.
Does that mean you cannot make money off it. No. You can certainly make money off it. That said, you can make money off how a bunch of horses are going to run on a given day too.
Does that mean you cannot pay for things with it? No. You can certainly pay for many things using it. Does that mean it is as good as the USD. No, it is not.
The true genius in Bitcoins lie in tapping into the Matrix-esque narrative that you are empowering every wannabe-Neo out there; which almost every nerd secretly aspires to be.
What that narrative misses out on is that, at a global level, any abstraction (currency, political boundaries, taxation) is already mainstream. By the time you make something niche acceptable by everyone, you have already inherited all the good and bad of something that is mainstream.
[+] [-] amalcon|12 years ago|reply
There are basically four value propositions for Bitcoin, that I've been able to discern:
1) It has "no" (really: fixed) monetary policy; I view this as a weakness, but I will treat it as a strength for the purpose of this post.
2) It does something of an end-run around banking systems, at least democratizing transaction fees
3) There are ways of obtaining bitcoin that are largely untraceable (mining), which make it usable for black-market activities
4) Novelty
#4 obviously goes away with time, but nobody is suggesting that as a serious long-term value proposition so that's not a big deal.
It's well-documented that #2 goes away when the transaction volume gets high enough: the solution to the protocol-inherent transaction volume limit is to move most transactions off the blockchain, which means using something that at least parallels the modern banking system.
Arguably, this also defeats #3, but #3 has the greater problem that it is actively undesirable to most people.
#1 thus remains as the only value proposition, but this value proposition is fundamentally based on a lie. The monetary policy of Bitcoin is not set in stone; it is in fact controlled by a quorum of the existing mining capacity.
If Bitcoin becomes popular with the general populace, however, at some point a large enough coalition of actors will emerge who can adjust monetary policy to their advantage -- specifically, by increasing block rewards, making their hardware more valuable. The incentives actively encourage this manipulation in the long term, and the group to which the incentives apply (mining hardware owners) are precisely the group empowered to do the manipulation.
There are only two things preventing this from happening right now: first, many hardware owners are either in it for the ideology or have substantial speculative positions in Bitcoin that would be endangered by manipulation of monetary policy, and second, that such a shift in monetary policy would discourage adoption (after all, this is one of the purported benefits of Bitcoin). Both of these impediments go away with widespread adoption.
Government central banks may do this now, sure, but they generally have a little more accountability than an anonymous coalition of hardware owners.
[+] [-] eof|12 years ago|reply
> one that has unfortunately attracted outsized attention and investment before correcting any number of glaring security issues.
[links to bitcoin's own wiki about issues of which a small subset are security]
bitcoin has fixed many, many security issues over the years. most, if not all, of the remaining security issues are the same that any other tcp/ip talking protocol has and are based around DOS. straw man.
> Far from a “breakthrough”, Bitcoin is viewed by many technologists as an intellectual sinkhole.
bitcoin solves a previously 'unsolvable' problem. bootstraps multibillion dollar, zero trust, decentralized value transfer system and economy.
> A person’s sincere interest in Bitcoin is evidence that they are disconnected from the financial problems most people face while lacking a fundamental understanding of the role and function of central banking.
Or perhaps they are amateur historians: http://en.wikipedia.org/wiki/Hyperinflation#Examples_of_hype...
> If the broader Bitcoin experiment doesn’t implode, the currency will be regulated just as any other. In this best-case scenario for Bitcoin, what of the benefits Dixon claims?
Then it will be doomed, just like bit-torrent.. drat!
> If Bitcoin’s strength comes from decentralization, why pour millions into a single company? Ah, because Coinbase provides an “accessible interface to the Bitcoin protocol”, we’re told. We must centralize to decentralize, you see; such is the perverse logic of capital co-opting power. In order for Bitcoin to grow a thriving ecosystem, it apparently needs a US-based, VC-backed company that has “worked closely with banks and regulators to ensure that the service is safe and compliant”.
This quote right here is the tell that tips the hand. This has absolutely nothing to do with bitcoin and everything to do with outrageous barriers to entry into the payment market. Many have tried and been shut down.. coinbase is becoming successful because they are able to get over the arbitrary barrier of entry.
The author is saying "oh bitcoin will never succeed because real technologists think it's dumb and regulation will happen.. and even looky here they are centralizing anyway because they are hypocrites"
This is, from the most casual observation, asinine. a) bitcoin was bootstrapping itself well before coinbase came along. b) coinbase is succeeding because they are able to successfully battle the very regulations that many in the bitcoin community find burdensome in the first place.
> What’s unclear is the role that Bitcoin or a similar cryptocurrency could play in rectifying this dire situation [under and unbanked peoples].
What is clear is that the author is clearly removed from reality with regard to the unbanked who have access to cellphones but not banks; and insurmountable friction between local economies and more profitable ones. Many, many, many people have already used cryptocurrency in this regard and there is zero evidence that people are doing it less today than they were yesterday.
> I’ve enjoyed the thought experiment of Bitcoin as much as the next nerd, but it’s time to dispense with the opportunism and adolescent fantasies of a crypto-powered stateless future and return to the work of building technology and social services that meaningfully and accountably improve our collective quality of life.
So.. what does the author think here? Bitcoin is a fad and will have a similar fate to beanie-babies? It is over valued at the moment? Does the author really want to stake his reputation on the fact that cryptocurrencies are nothing more than 'an intellectual sinkhole?'
tl;dr; citation needed
[+] [-] jwesley|12 years ago|reply
What none of these arguments ever address is the massive gains in economic efficiency that Bitcoin can clearly provide. It cuts out parasitic elements of the financial system that have grown like a giant parasite over the entire society.
The author claims that Bitcoin is steeped in nerd paternalism, but what about the epic paternalism of banks and regulators? Paternalism is their entire argument against Bitcoin, which basically amounts to "if people gain economic freedom, they will hurt themselves".
[+] [-] kevingadd|12 years ago|reply
When did he ever even claim that Bitcoin will never succeed? It's certainly not in the article.
'clearly removed from reality' is strong criticism to direct at the author of a piece you seem not to have read to completion.
[+] [-] hammerzeit|12 years ago|reply
To pick at a few things: * I'm not sure about you, but I'd think that a bittorrent-like outcome is not a successful one. Bittorrent is certainly ubiquitous but its major use is still an illegal one; the analogous outcome for bitcoin would be one where its primary transactional value is on SilkRoad-like sites. Can you elaborate more on your analogy?
* You strongly imply that you have some sort of argument (and maybe evidence?) about how cryptocurrency will/could impact the unbanked in a positive way. Can you elaborate?
* Your last point seems to take it as a foregone conclusion that bitcoin is going to a high valuation and is here to stay. Do you really believe it's an inevitability at this point?
[+] [-] kiba|12 years ago|reply
Too little in that overnight exchange operations are prone to shutdowns due to hacking, but too much in that regulations put up needless barrier to entry such that more exchanges exist outside the US than exist inside.
[+] [-] craigyk|12 years ago|reply
yes yes and yes
[+] [-] hammerzeit|12 years ago|reply
[deleted]
[+] [-] yarou|12 years ago|reply
[+] [-] staunch|12 years ago|reply
[+] [-] ppod|12 years ago|reply
One typical example is how often people write that bitcoin will not be widely adopted because it is so widely used for criminal activity. A journalist on the FT blog, discussing this, told the story of how he had asked the head of a major company in an interview how he could consider moving the business to the web when so much of the internet (at the time, 20 years ago) was devoted to criminal activity. It seems like a stupid question now.
[+] [-] rosser|12 years ago|reply
[+] [-] Helianthus|12 years ago|reply
The discussion has reached a place of little common ground--a sign, perhaps, that maybe soon the universe will actually hand down a ruling and we can put down our HN accounts and go home.
All of the debates on this issue have happened already. There's nothing left but vitriol and broken dreams.
If I were to step aside and look at the current ground in context, I think we're seeing the effects of China's rebuff, and I think we're seeing Bitcoin fail on the global stage.
There's only so much cheap faith in the world, and every time Bitcoin lets people down that rich resource is depleted. We've seen Bitcoin build up attention in the tech world (initial crash way back in the day), in the financial world (the most ludicrous crash, back in the spring), and now in China.
What's left?
[+] [-] davidw|12 years ago|reply
Beyond that, as someone who does not set much stock by bitcoin, I do wonder about “roughly a 2.5% tax on all transactions” cited. That's maybe right for CC transactions or something like that in western countries, but when you start moving money around between countries, possibly including some less developed places, that % climbs quickly. I'm not much of a bitcoin fan, but perhaps some niche (and it's not a small niche - look at Western Union) like that would be a good place for it, and I'm willing to keep an open mind even if I wouldn't spend a cent of real money on the things until they calm the hell down.
[+] [-] tolmasky|12 years ago|reply
The idea that macro economics is "figured out" has been debunked countless times. Both sides can cherry-pick examples ad-infinitum and call the other side ridiculous. Anyone who thinks they firmly know "why" a certain recession happened is suffering from ignorance of their own ignorance in my opinion. Clearly something isn't working right today if 2008 happened, and not to mention how the very economic policies we consider so great for us here domestically often have incredibly ill effects on third world countries. It's a hard, complex problem, and I've frankly given up on solutions that require as a premise that everyone else shut up and do exactly what you say.
Perhaps you believe that social problems can't be solved through technology. That is an acceptable and even admirable belief, but why should that stop me from having a different belief? One of the nice things about our society is that different people can try different strategies. Some people think that the way to reduce car deaths or prevent drunk driving (a clear social problem) is through education and stricter laws. Honest and valuable social strategy. However, others think you can accomplish it technologically by making cars that drive themselves and avoiding the problem altogether. There's no reason we can't try both and not politically demonize the other side (I'd remind you that suggesting a car that drives itself in the 50s as a solution to drunk driving would have probably had you labeled a nut -- that doesn't mean we should have hung any AI researchers out to dry for working on the beginnings of such a system).
The worst part about this is how he immediately considers anyone who believes in this as removed from reality. Why assume the worst of people you clearly have not met all of. I don't know OP's past, but I can tell you that my parents are from foreign country that has experienced hyperinflation in a very real way. Many of my feelings are a result of this: precisely because I feel hyperinflation is more real to me (and obviously more real to my parents) than someone whose entire family is from the United States and has only ever heard about it as a curiosity from Zimbabwe that they can refer to at a cocktail party. I see hyperinflation as a real problem -- just because it doesn't happen in the US doesn't mean it doesn't exist or is a fantasy. I very much believe that BTC offers the first real alternative for people trapped in countries where they can't get USD in or out during these events. And yes, this may mean it would circumvent that country's regulations: but even if you think the US government is doing things for the betterment of its population, I can guarantee you that's not the case everywhere else. Now you may disagree and think the right strategy is a different one involving the UN or the World Bank perhaps. That's fine, but please don't extrapolate that into a personal judgement of my character.
[+] [-] alainmeier|12 years ago|reply
I believe no one ever said this; it has been misreported by Gawker and others.
If you're curious, the original talk is here with no mention of secession: www.youtube.com/watch?v=cOubCHLXT6A
[+] [-] ahallock|12 years ago|reply
This article is filled with hyperbolic nonsense like this, parading as real arguments. A 25M investment is not "pouring millions". And Coinbase is but one service in the Bitcoin ecosystem. There are and will be more competitors. Coinbase changes nothing about the decentralized nature of Bitcoin.