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Marc Andreessen On Why Bitcoin Matters (And A Critique)

Unknown Lamer posted about 10 months ago | from the hop-on-the-bandwagon dept.

Bitcoin 332

New submitter Ramtek writes "Marc Andreessen writes an interesting editorial on how he how he believes Bitcoin is the first practical solution to the Byzantine Generals Problem and why that is important. He also addresses many of arguments against its future by its critics such as its current limited use by ordinary consumers, its current volatility, its potential lack of acceptance by merchants, and many other issues. While politically agnostic the piece is squarely in support of Bitcoin but presents a more mature perspective than many current Bitcoin editorials." eggboard wrote in with a rebuttal: "Marc Andreessen wrote an essay in the New York Times in which he tried to make the case for Bitcoin going mainstream for payments, if not as a currency. After comparing Bitcoin to the rise of personal computers and the Internet, he tries to explain how it eliminates fraud and will solve global money transfers and the plight of the unbanked. I wrote a critique of these and other points in his essay."

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Here is why it doesn't (1)

Anonymous Coward | about 10 months ago | (#46035745)

We don't need another currency. We already have too many, worldwide, as it is.

Re:Here is why it doesn't (1)

Anonymous Coward | about 10 months ago | (#46035837)

So why not have one more that can be used universally, free from regional and political constraint ?

Re:Here is why it doesn't (3, Interesting)

bondsbw (888959) | about 10 months ago | (#46036119)

Oblig: http://xkcd.com/927/ [xkcd.com]

Re:Here is why it doesn't (1)

Chas (5144) | about 10 months ago | (#46036201)

Because it can't be used universally.
Nor will it ever be free from regional or political constraint.

Anyone who thinks this is living in Fantasy Land.

Re:Here is why it doesn't (-1)

Anonymous Coward | about 10 months ago | (#46035859)

Then eliminate some of the OTHER currencies, doofus.

Re:Here is why it doesn't (0)

Anonymous Coward | about 10 months ago | (#46035875)

So let's drop the corrupt dollar to start with then. You with me on that one?

Beware of "We" (3, Insightful)

Anonymous Coward | about 10 months ago | (#46036723)

The wealthy elite don't need another currency.

Those of us living paycheck-to-paycheck need a currency whose value doesn't decay while stored in cash/checking (or the modern equivalent).
Those of us in the middle class need something that won't fall victim to another anti-Wikileaks financial blockade.

So when you say "we", it goes to show which group you identify most with, and how unaware you are of people's needs outside that space.

another bitcoin story (-1)

Anonymous Coward | about 10 months ago | (#46035777)

Probably gonna be justly modded down for offtopic, but I'm tired of these speculative bitcoin stories.

Re:another bitcoin story (1)

Infiniti2000 (1720222) | about 10 months ago | (#46036405)

No, you're going to be modded down for reading and posting in another of these speculative bitcoin stories when it obviously disinterests you.

Assmunch.

good film (-1, Offtopic)

Saci Mi (3504835) | about 10 months ago | (#46035821)

Stop to figure out a place where you can watch the film for free, because there are only going to find the information that is misleading you, they will only provide a link that contains a virus, and when you click on the link then you will be exposed to computer viruses that can damage your computer, if you really want to watch this film you please click on the link below, http://goo.gl/w2cTHq [goo.gl] there you can see it without having to download Vilem so you do not have to be afraid if your computer is infected with a virus, I hope this information helps you

The Problem (3, Insightful)

The Cat (19816) | about 10 months ago | (#46035833)

The problem with Bitcoin is once a Bitcoin is lost, it's gone forever and can never be replaced. There's no provision in the system to void a coin and then mine a new one.

Therefore if bitcoins are lost at a rate > 0 the probability there will be zero bitcoins is 100% over time.

Re:The Problem (2, Insightful)

serviscope_minor (664417) | about 10 months ago | (#46035891)

Therefore if bitcoins are lost at a rate > 0 the probability there will be zero bitcoins is 100% over time.

Nope. That's not true. Limiting series can tend to any value. Let's say stuff is lost once per hour. If the first unit lost is 1/4 a coin, then 1/8, then 1/16 and so, then a total of 0.5 bitcoins will be lost once t->infinity. Thankfully there are millions of bitcoins, so losing half of one won't matter.

Re:The Problem (4, Insightful)

Henrik Gullaksen (2878597) | about 10 months ago | (#46035965)

I would say "The Cat" is right.

The more persons that uses Bitcoin the more coin's will be lost.

The time between finding new Bitcoins is getting longer and longer. And they do not replace the lost ones they are just generated.
So if Bitcoins becomes a every man/woman thing. Then the value of a single Bitcoin will raise to something insane before it will just die because the number of persons actually having coins will be to small to function as a currency.

Re:The Problem (5, Insightful)

serviscope_minor (664417) | about 10 months ago | (#46036013)

I would say "The Cat" is right.

No, the cat is wrong. He claimed there will be zero, merely because they are being lost. That is mathematically incorrect.

On a more practical note, as they are lost, they will slowly increase in value. However they are divisible. People will be losing small fractions of a coin rather than whole coins. The more spread out they get, the smaller fractions people will be losing.

Re:The Problem (0)

Anonymous Coward | about 10 months ago | (#46036163)

No, the cat is wrong. He claimed there will be zero, merely because they are being lost. That is mathematically incorrect.

BitCoin precision is to 10^-8 Coin. Even if somehow the loss from human error would to mimic your series, it would not go to infinity without either summing to infinity or the loss becoming zero.

Re:The Problem (0)

Anonymous Coward | about 10 months ago | (#46036207)

I would say "The Cat" is right.

No, the cat is wrong. He claimed there will be zero, merely because they are being lost. That is mathematically incorrect.

On a more practical note, as they are lost, they will slowly increase in value. However they are divisible. People will be losing small fractions of a coin rather than whole coins. The more spread out they get, the smaller fractions people will be losing.

Then bitcoins will be removed by the insane numbers used. Buy a block of cheese for 1/4294967296 of a bitcoin and see how troublesome managing them will become when trying to sell stuff. A replacement currency backed by a corporation or more likely a bank would be a better bet as a replacement for a global currency.

It would be kinda funny to see a world with only 1 bitcoin left, spread among billions of users.

Re:The Problem (3, Insightful)

serviscope_minor (664417) | about 10 months ago | (#46036317)

It would be kinda funny to see a world with only 1 bitcoin left, spread among billions of users.

Not really. A decent chunk of change would be called a Satoshi and afterthe protocol's updated, I'm sure a new name would spring up for whatever 10^-15 BTC is called. There's nothing special about 1 bitcoin.

Bitcoin drinking game (0, Funny)

Anonymous Coward | about 10 months ago | (#46036297)

Every time a Bitcoin fanatic brings up the "oh but they're divisible, deflation really doesn't hurt bitcoin" as an actual defense against deflation, take a shot.

Re:The Problem (1)

alexhs (877055) | about 10 months ago | (#46036387)

No, the cat is wrong. He claimed there will be zero, merely because they are being lost. That is mathematically incorrect.

No, you're wrong.

Your math is only correct if the considered quantity is a real number. However bitcoins are a fixed-point number (an integer number of satoshis). Therefore, at some point the last satoshi will be lost.

Re:The Problem (1)

serviscope_minor (664417) | about 10 months ago | (#46036565)


Your math is only correct if the considered quantity is a real number. However bitcoins are a fixed-point number (an integer number of satoshis). Therefore, at some point the last satoshi will be lost.

But assuming protocol updates, bitcoin is infinitely divisible. Sure that requires infinite storage, but we're talkiing about infinite time here, so I don't see that as a problem.

Besides, for any finite amount of time, the storage requirements need be no more than finite.

Re:The Problem (1)

TheCarp (96830) | about 10 months ago | (#46036583)

Sure but, just because you can expoect something to eventually happen doesn't mean it will be soon. We can expect lots of things will eventually happen. All this one means is that bitcoin will likely need to be replaced at some indeterminate point in the future too far out to really even contemplate realistically at the moment.

That isn't really a huge problem.

Re:The Problem (5, Informative)

Jostein Johansen (2928005) | about 10 months ago | (#46036113)

Losing coins are not a problem as they are infinitely divisible. Currently only to 8 decimal places, but that can be increased if needed. One bitcoin or even a fraction of a bitcoin is enough to run the whole world economy.

Re:The Problem (0)

Anonymous Coward | about 10 months ago | (#46036397)

Losing coins are not a problem as they are infinitely divisible. Currently only to 8 decimal places, but that can be increased if needed. One bitcoin or even a fraction of a bitcoin is enough to run the whole world economy.

This only doesn't sound absurd to you because you quite clearly never deal with actual human beings (sneering with contempt over the obvious mental and moral inferiority of anyone who disagrees with you does not count as "dealing with actual human beings"). I can assure you that there are very, very few people on the planet who are eager for the days when they require scientific notation to buy a dozen eggs, much in the same way it was considered a joke that it literally took trillions and trillions of Zimbabwe dollars to purchase that same dozen eggs.

Re:The Problem (0)

Anonymous Coward | about 10 months ago | (#46036571)

You mean you couldn't just sell eggs for 1mbc?

Which represents millionth of a bitcoin, by the way.

Re:The Problem (1)

compro01 (777531) | about 10 months ago | (#46036693)

Can't you use SI prefixes like the rest of the world does for large/small quantities of units?

Re:The Problem (0)

Anonymous Coward | about 10 months ago | (#46036233)

We'll just rename those 100th or 1000th of a coin something different as the value of bitcoins go up over time much in the same way we discuss doing away with the penny in American currency because the dollar has been devalued so much over time. One billionth of a bitcoin could just be called a bitfoo and products and services can be sold in bitfoo denominations.

Re:The Problem (0)

Anonymous Coward | about 10 months ago | (#46036705)

The more persons that uses Bitcoin the more coin's will be lost.

Shouldn't you be tending your store, Mr Greengrocer?

Re:The Problem (5, Insightful)

bre_dnd (686663) | about 10 months ago | (#46035961)

I'd say that that works in favour. As bitcoin get more valuable / scarce the tendency to protect them increases. So as more of them get lost the rate of them getting lost will decrease. Note that "gold" also has a finite amount available that gets progressively harder/more expensive to mine.

Re:The Problem (1)

doom (14564) | about 10 months ago | (#46036043)

Yes, one of the arguments against Bitcoin is that it's a deflationary currency, and a certain lossage rate might help offset that effect slightly. But I wouldn't count on it.

Re:The Problem (1)

kellymcdonald78 (2654789) | about 10 months ago | (#46036081)

Actually this would exacerbate the problem as the loss of Bitcoins will drive up the value of those remaining

Re:The Problem (2)

ShanghaiBill (739463) | about 10 months ago | (#46036481)

Yes, one of the arguments against Bitcoin is that it's a deflationary currency

From a Macroeconomic viewpoint, deflation is bad. From an individual viewpoint, it is good. I bought 100 bitcoins when they were at $7. They are now worth enough to pay off my mortgage. That might not be good for the overall economy, but it is good for me.

Re:The Problem (0)

Anonymous Coward | about 10 months ago | (#46036521)

From a Macroeconomic viewpoint, deflation is bad. From an individual viewpoint, it is good.

Which would mean Bitcoin is a socialist's wet dream. Your individual well being is irrelevant, citizen, THE ECONOMY at large is at stake!

Re:The Problem (1)

Anonymous Coward | about 10 months ago | (#46036327)

The difference is that when you "lose" gold it still exists. If your hard drive crashes and you don't have your bitcoin wallet backed up your bitcoins cease to exist.

Re:The Problem (1)

ender- (42944) | about 10 months ago | (#46036641)

The difference is that when you "lose" gold it still exists. If your hard drive crashes and you don't have your bitcoin wallet backed up your bitcoins cease to exist.

Actually no, they still exist, you just can't access them without the private key.
In theory, given enough computational power [unlikely] one could manage to find/re-generate the same private key and would thus have access to those bitcoins.
Of course, if anyone ever had that much computation power available to them it would probably make the rest of bitcoin unviable.

So from a practical standpoint the bitcoin are lost, but they still technically exist.

Pedantic I know. Perhaps one could compare it more to that gold being 'lost' by being converted into some other compound [ie. auric chloride]. The gold is unusable as a currency in that form and thus is 'lost' from that standpoint. But, given the technical know how and resources, you could presumably recover the gold from the compound but it would be difficult and expensive.

Re:The Problem (1, Insightful)

Anonymous Coward | about 10 months ago | (#46035969)

The second problem is that Bitcoin is unstable. Yes, it is worth $816 right now, but if I'm going to make a payment, and some exchange gets hacked, my coins will be worth half that. If another version of CryptoLocker comes out, then my coins will double or treble in value. For an investment, or just a gamble, maybe.

The third is no regulation. Nothing prevents exchanges from making off with whatever they have and coins stored with them. In fact, it may not even be considered theft, and good luck getting a government to actually bother prosecuting the exchange owners.

BitCoins are a solution in search of a problem:

They don't have anonymity, unless one does shell games with wallets. Might as use PayPal and have some added protection.

There are better investments. I'd rather invest in a crowd-funding site so a geek can get his latest app to market. If it fails, at least someone had a chance at a dream.

They have no intrinsic value. Dogecoin can be stated to be far more valuable. Why? Because I said so.

Re:The Problem (0)

sureshot007 (1406703) | about 10 months ago | (#46036247)

Of all of the days to be without mod points!

Since Bitcoins have no intrinsic value, and no government is willing to go to war over their value, then they are worth about as much as Beanie Babies. At one time, Beanie Babies fetched a premium, but now people are just stuck with a room full of toys they spent thousands on.

So every time I hear someone talk about Bitcoins, I immediately think to that episode of South Park where Cartman thinks that pubes have value. "So, how much is that in pubes?"

Re:The Problem (1)

serviscope_minor (664417) | about 10 months ago | (#46036685)

The second problem is that Bitcoin is unstable. Yes, it is worth $816 right now, but if I'm going to make a

So go via some payment processor and the vendor can do the same. You'll only hold BTC for a short enough time for it not to matter.


The third is no regulation. Nothing prevents exchanges from making off with whatever they have and coins stored with them.

Just like cash. I don't see the dollar bill dying out any time soon. In fact it is exactly like cash in many regards.


BitCoins are a solution in search of a problem:

You're off in la-la land if you think problems like transferring money incurring high fees or microtransactions aren't actual problems.

They don't have anonymity, unless one does shell games with wallets. Might as use PayPal and have some added protection.

So your complaint about bitcoin is someone "might" make off with the money and that payment fees are a non problem and you instead recommend a company with non-trivial payment fees that regularly locks accounts and stops people getting their money. If anything Paypal is an argument for BTC, not against.

There are better investments.

The use it as cash and stop pretending that because you don't see it as an investment that it is useless for the task of being cash rather than an investment.

They have no intrinsic value.

Nothing, but nothing has intrinsic value. Not gold, diamonds, dollar bills, land or anything else. The only reason anything has value is because people want it. The only reason people ever want anything is because it has useful properties. Value is an entirely arbitrary property applied by humans.

Dogecoin can be stated to be far more valuable. Why? Because I said so.

Good luck with that. Merely declaring something to have value is meaningless. It only has value when someone is prepared to part with something to acquire them from you.

Bitcoins fit the bill, dogecoins do not.

Re:The Problem (4, Insightful)

Anonymous Coward | about 10 months ago | (#46035977)

I lost a $100 bill at the casino. Can you void that and issue me a new one please?

Re:The Problem (3, Insightful)

GlennC (96879) | about 10 months ago | (#46036325)

I lost a $100 bill at the casino. Can you void that and issue me a new one please?

YOU lost the $100 bill....but SOMEONE ELSE found it and used it.

If you lose a Bitcoin, it's gone forever, and NOBODY can use it.

Whether or not this is a problem is left as an exercise for the reader.

Re:The Problem (1)

larry bagina (561269) | about 10 months ago | (#46036331)

You can get a replacement if your dollars are partially destroyed.

Re:The Problem (0)

UnknownSoldier (67820) | about 10 months ago | (#46036451)

Fallacy.

You traded your $100 for an experience.

In this case it is your perception is that you didn't get a fair trade. That's why they call it gambling. You are not guaranteed that. In other services, like a hair-cut, a movie, etc, it is a fair trade.

Re:The Problem (0)

Anonymous Coward | about 10 months ago | (#46036505)

No, because someone else now has it. That's a genuinely ridiculous analogy and completely missing the point.

Unless, of course, it was actually destroyed. Then, yes, it has been effectively voided and the government can mint a new one to replace it. This cannot happen with Bitcoin.

Re:The Problem (1)

Cro Magnon (467622) | about 10 months ago | (#46036527)

Not a good example, since the casino coincidentally gained a $100 bill. :)

It is possible to really lose money (a $100 bill blows out of your hands into a bonfire), but even then the Fed is constantly printing more.

Re:The Problem (1)

MozeeToby (1163751) | about 10 months ago | (#46036063)

As the supply of bitcoin drops, the value increases. As the value increases, the number of bitcoins any given individual holds will decrease. As the number of bitcoins in any given wallet decreases, so also decreases the number of coins lost in any given incident.

It is inherently deflationary (which is, IMO, the real problem), but that doesn't mean the supply will eventually fall to zero.

Showing value (5, Insightful)

Okian Warrior (537106) | about 10 months ago | (#46036371)

The problem with Bitcoin is once a Bitcoin is lost, it's gone forever and can never be replaced. There's no provision in the system to void a coin and then mine a new one.

Therefore if bitcoins are lost at a rate > 0 the probability there will be zero bitcoins is 100% over time.

Is that the problem?

I thought it was volatility. No, wait... it was a pyramid scheme. Or rather, because the US won't accept it for taxes. Or was it because it's deflationary? Heck, I just don't know any more.

Economists will demonstrate something by telling stories, let's demonstrate something by showing value.

1) BitCoin has very small per-transaction fees. There are a whopping-big number of credit card transactions each day, each with fees of about 5%. Bitcoin will eliminate most of these, for a whopping-big cost savings.

2) BitCoin increases the market to people who don't have a bank account. That essentially doubles the potential customer base.

3) BitCoin allows for micro-payments. This increases the number and type of sales possible.

4) BitCoin almost eliminates counter-party risk [investopedia.com] . No authority in the financial chain (PayPal, payment clearing center, credit card company, bank, US government) can affect the transfer. No one can be "banned" (like Wikileaks), no one can be threatened with bad credit.

Assign value to each of these points and total them up (there's some subjectivity), then compare that value with the negative utility from losing coins over time.

Which is worth more?

All the other potential problems are just that - potential problems, and appeals to these problems are merely guesswork and rhetoric.

BitCoin will bring enormous cost savings, and that's why people will use it.,

Re:Showing value (0)

Anonymous Coward | about 10 months ago | (#46036443)

BitCoin is vulnerable to whomever is near the 51% mark... and yes, a mining group is there.

Even if that group promises to do no evil, some bad guys who coerce/hack/compromise or otherwise subvert that group can compromise the entire currency.

So, even though BitCoin has a few currency problems licked, it still can be manipulated.

Re:The Problem (1)

Okian Warrior (537106) | about 10 months ago | (#46036421)

BTW, your sig: would that be "Thomas Hewitt Edward Cat"?

I loved that series...

Re:The Problem (1)

hodet (620484) | about 10 months ago | (#46036449)

This is where theory and real life collide. While technically correct, the amount of time it will take to lose 21 million bitcoin will far surpass the need for bitcoin. Also the ones that are left are infinitely divisible. A bitcoin is just a whole unit.

Re:The Problem (2)

lazlo (15906) | about 10 months ago | (#46036493)

So what the system really needs now is digital couch cushions?

Run for the hills! (4, Funny)

wonkey_monkey (2592601) | about 10 months ago | (#46035853)

Bitcoin is the first practical solution to the Byzantine Generals Problem

Why is this the first we're hearing about this? These Byzantine Generals must be stopped at all costs! Inform the TSA! Harvest the metadata! And will someone please get me a burger!

Bitcoin is not going to last... (0)

Anonymous Coward | about 10 months ago | (#46035881)

Governments don't like untraceable transactions and will do everything in their power to shut it down. Untraceable transactions allows for the transfer of money for illegal activities like terrorism, drugs, prostitution, & other crimes. The recent case where hackers encrypted hard drives and demanded payment in Bitcoins will only aid their cause. It is only a matter of time before governments swoop in and strike the death blow to Bitcoin.

Re:Bitcoin is not going to last... (3, Insightful)

RaceProUK (1137575) | about 10 months ago | (#46036051)

You're conveniently forgetting all the untraceable cash transactions that happen daily, by the billion, worldwide. By your logic, that means every single currency in circulation needs to be shut down.

Re:Bitcoin is not going to last... (0)

Anonymous Coward | about 10 months ago | (#46036365)

I'm not talking traceable through the system. I'm talking traceable back to an individual. Bitcoins are anonymous. Governments crack down on cash as much as they can. It isn't as easy to move $20 million in cash as it is sending $20 million worth of Bitcoins. Cash deposits into a US bank above $10k are flagged. Specifically splitting your transactions into smaller amounts to avoid flagging is actually illegal in the US and is called "structuring". If you travel with lots of cash you're going to get stopped at airport checkpoints worldwide and if you get caught your cash will most likely get confiscated first and it will take you months to get back, even if you weren't doing anything illegal. Bitcoins are completely anonymous. This is why governments will stop it.

Re:Bitcoin is not going to last... (1)

TWiTfan (2887093) | about 10 months ago | (#46036603)

Try taking more than a couple of thousand $ through an airport or across a border sometime without declaring it and see what happens.

Re:Bitcoin is not going to last... (1)

Anonymous Coward | about 10 months ago | (#46036077)

cough, drugs, terrorism my ass, it is the avoidance of taxes, period.

Re:Bitcoin is not going to last... (4, Informative)

Linsaran (728833) | about 10 months ago | (#46036093)

Bitcoin is pretty much the opposite of untraceable. For a bitcoin transaction to be valid it has to be reported in a giant public ledger where everyone agrees on it. If you send bitcoins to someone there is a permanent record of you doing so. Sure the ledger might not associate a wallet address with a particular person, it doesn't for example record 'John Q. sent Bill W.' 100 BTC, but it does record that wallet '1785' sent 100 btc to wallet '1863'. There are a variety of ways to link a particular wallet address to a physical person, especially if that person is attempting to cash out to any Fiat currency (either the transaction has to be done 'in person' or virtually every exchange that allows deposit or withdrawal of fiat currency requires some sort of identity verification, not to mention it's likely being withdrawn to a bank account, which also likely has a name associated with it). The long and short of it is, that if you want to transact business without a paper trail, cold hard, unmarked cash is still the best way to do it.

Re:Bitcoin is not going to last... (1)

HellYeahAutomaton (815542) | about 10 months ago | (#46036239)

This is the downfall of these current generation of digital currencies, they aren't anonymous and untraceable enough yet.

Sadly, Glenn Fleishman suggests to resort to the use of violence (recourse in a court system, based on government theft and coercion) in order to seek a "remedy" to these problems, whereas many would rather see people be more careful with their transactions and keeping the government out of them (wherever possible).

Re:Bitcoin is not going to last... (1)

Kjella (173770) | about 10 months ago | (#46036713)

True, but there's really no telling when money truly changes hands. Okay, so we have account A buying Bitcoins and account Z cashing it and a chain of transactions A->B, B->C, C->D and so on, where M->N is known to be a drug transaction. Is A = M and N = Z or are they ten steps removed? A bought something from B, who spend them on hosting at C, which hired some freelance work D, who gave them to friend E for a bottle of scotch.... you get the general idea. The less old currencies is involved the harder it is, even with data mining.

E-wallets and tumblers make it even harder, true maybe it's hard to make people put clean money in but all the dirty money gets whirled around. Whoever is cashing it has no clue or relation to any crime the money is linked to, which makes for a pretty poor case. I think tax laws are far more dangerous to most, the IRS really don't like it when people cheat them on income tax. If you work for bitcoins and keeps cashing them out, flags are going to be raised.

Re:Bitcoin is not going to last... (0)

Anonymous Coward | about 10 months ago | (#46036121)

Bit coin is more traceable than cash.

The (US) government doesn't care about bit coin (except the FCC and IRS who need to decide how to regulate/tax it).

Bit coins problems are it's own making not the act of some nefarious actor trying to kill it.

Here's one good thing, though (0)

Anonymous Coward | about 10 months ago | (#46035883)

At least they're no longer pretending it's not political.

Slashdot obsession (-1)

Anonymous Coward | about 10 months ago | (#46035885)

Why is it there is at least one bitcoin article every single fucking day? Don't you have something better to discuss, like, you know, real geek news? Stuff that matters my ass

Re:Slashdot obsession (2)

almitydave (2452422) | about 10 months ago | (#46035991)

Hello, I'm a nerd, and thoughtful analysis of bitcoin (cryptocurrencies being inherently nerdy) matters to me.

Re:Slashdot obsession (3, Informative)

dmbasso (1052166) | about 10 months ago | (#46036069)

Please, stfu already. What I'm tired of is reading these complaints. Bitcoin is an interesting technology, with huge potential (regardless of the drawbacks). If you don't like it, just skip over, you don't have to spend the time complaining.

Not quite the same thing, yo (5, Insightful)

Anonymous Coward | about 10 months ago | (#46035981)

"Critics of Bitcoin point to limited usage by ordinary consumers and merchants, but that same criticism was leveled against PCs and the Internet at the same stage."

Sure, but "at this stage" people who owned PCs weren't mostly buying them to hoard them for their future value.

Pyramid schemes and such (4, Funny)

TWiTfan (2887093) | about 10 months ago | (#46036015)

I just hope enough people keep this potential scam in perspective enough not to overextend themselves to the point that they're jumping out of windows when it collapses. I have to get to work and I don't need too many dead bodies in the street blocking traffic.

Re:Pyramid schemes and such (0)

Anonymous Coward | about 10 months ago | (#46036273)

God, I know. It'll be neckbeards raining from the sky.

Byzantine Generals Problem (1)

rossdee (243626) | about 10 months ago | (#46036019)

I haven't yet read the Belisarius series (By Eric Flint and David Drake)
I take it this is something to do with those stories.

but what about... (1)

doom (14564) | about 10 months ago | (#46036021)

But what does Leonard di Caprio say about it? And how about Justin Beiber?

Criticisms Are Largely Off The Mark (4, Insightful)

Jane Q. Public (1010737) | about 10 months ago | (#46036035)

The "criticisms" leveled by OP are largely moot:

A) "Fees" are generally not charged... most transactions have essentially zero cost.

B) The criticism that development of the Internet was "open" but Bitcoin was not is also moot: Bitcoin is open-source, and anybody can examine the code for secrets or flaws.

There are other subtleties as well which I will not get into.

take a plane to college drive my telsa to town (0)

Anonymous Coward | about 10 months ago | (#46036037)

no (0) dollars. being free has it's privileges...

Verification Time (4, Insightful)

Talennor (612270) | about 10 months ago | (#46036085)

I'm still concerned with the verification time required to show that double spending hasn't happened. It's simple to double spend bitcoins, though within 20 minutes or so the blockchain will show which transaction went through. This means bitcoins can be used for online orders (as long as the seller is trusted because no chargebacks), but waiting around at the Target checkout for 20 minutes can't happen, at least with only direct bitcoin transfers. You could have a processor guarantee with more information to save time, but that's more like an already existing debit account and less like the bitcoin transfers people are excited about.

20 whole minutes? (0)

Anonymous Coward | about 10 months ago | (#46036147)

many of us can still resist clicking for that long a time? seems like hurrying may be going away soon enough?

not going to HFT them (1)

peter303 (12292) | about 10 months ago | (#46036149)

In fact any sort of arbitrage or derivatives could be a problem with long trade times and different values on different exchanges.

Re:Verification Time (0)

Anonymous Coward | about 10 months ago | (#46036159)

Que financial intermediaries to take this "risk/role" which will end up operating exactly the same as banks do today. Illegal activity will happen outside the banks just like it does with paper money. Wait... what is the point again?

Re:Verification Time (0)

Anonymous Coward | about 10 months ago | (#46036175)

I assume you are required to wait for 6 months at the Target checkout when you purchase with VISA, right? Because otherwise you could do a chargeback and scam Target in the exact same manner.

Re:Verification Time (1)

SleazyRidr (1563649) | about 10 months ago | (#46036303)

Target are willing to take the risk of chargebacks because they trust Visa not to do chargebacks without a good reason. They are not willing to trust bitcoin because they have no experience with most of the people coming through the store and believe that there is a higher likelihood of getting scammed.

Re:Verification Time (2)

femtobyte (710429) | about 10 months ago | (#46036423)

Try maxing out your spending limit for six months, then asking for chargebacks on every single purchase made. You can only scam a couple of minor chargebacks before the credit card companies catch on and side against you (and make sure you never get credit again); try and pull anything big and systematic, and you'll wind up with fraud charges against your real identity. An ephemeral pseudonymous bitcoin wallet ID doesn't carry the same assurances against large-scale repeated fraud.

Re: Verification Time (0)

Anonymous Coward | about 10 months ago | (#46036377)

Yeah, good luck double-spending in person when it's fairly trivial for a payment processor to be on the bitcoin p2p network in several places (optimally, peers with each major mining pool) with a near certainty of seeing both proposed transactions against the same input. People talk about the blockchain and forget the p2p network exists.

Re:Verification Time (4, Insightful)

bondsbw (888959) | about 10 months ago | (#46036431)

If I swipe my debit card today, the payment processor doesn't transmit actual dollar bills and coins on the spot. Over simplifying, the transaction is logged and my bank will guarantee to pay the seller at some point in the future.

For many transactions, I expect that Bitcoin will be used the same way. You deposit Bitcoins at your bank. When you use a debit card, you aren't transmitting actual Bitcoins, but rather setting up a transaction that will be settled later by the bank and the seller... just like cash today.

When you deposit your Bitcoin, that will be a true Bitcoin transaction in which your bank will probably merge that value in with other Bitcoins it has obtained. Your account will contain a record of the deposit so the bank can keep track of how much of its total Bitcoin allotment is yours. When you withdraw or debit your account, the bank will perform the Bitcoin transaction and record it on your account. In all of the above, substitute "Bitcoin" for "cash" and it is, for most practical purposes, the same as it is today.

Re:Verification Time (1)

plover (150551) | about 10 months ago | (#46036435)

And double spending is going to be a huge problem. A year ago (around New Years) there was a large gang of thieves who used fraudulent cards in hundreds of ATMs in a coordinated attack, where a hacker had removed the withdrawal limits from the bank's computers. The collective of smurfs withdrew millions of dollars in a few hours.

Now place a hundred of those thieves into physical world stores, tell them all to use the time according to their cell phone, and have them put 10 BTC worth of stuff in their carts by 10:30AM. At 10:35AM you will post a copy of a 10BTC number on the gang's Facebook page, and the clock is counting. They need to be paid and gone as soon as possible, because by 10:40AM they will get caught.

The value of the attack increases by each smurf you add. And you're not bounded by geography: you can have your smurfs steal from shops around the globe. The only risk is of discovery before the attack, and even then the only defense is to validate the transaction as quickly as possible.

"cryptocurrency sort of works" (3, Insightful)

peter303 (12292) | about 10 months ago | (#46036161)

Bitcoin shows it can. But bitcoin itself is probably not the best implementation of this concept due to its flaws like currency lost and glacial trading times.

No fraud recourse for the recipients (1)

ADRA (37398) | about 10 months ago | (#46036213)

But if you're the sender, you're fucked.

Re: No fraud recourse for the recipients (0)

Anonymous Coward | about 10 months ago | (#46036411)

Even silk road had a low rate of fraud. Anonymity and reputation are not necesarily mutually exclusive.

Bitcoin inequality (3, Interesting)

bhlowe (1803290) | about 10 months ago | (#46036241)

With BitCoin, the wealth of the entire system has already been largely distributed to a handful of early adopters. For a global currency, BitCoin is hoarded by a large, mostly geek community. The government doesn't have any, which is why the government will do its best to take it down.. and its easy to "take it down" by auditing any company that advertises on the web that they accept bitcoin. (Accepting BitCoin for merchandise has pretty much meant that the transaction(s) will go unreported, including taxes.)

Re:Bitcoin inequality (2)

DerekLyons (302214) | about 10 months ago | (#46036513)

The government doesn't have any, which is why the government will do its best to take it down.. and its easy to "take it down" by auditing any company that advertises on the web that they accept bitcoin.

People keep claiming this - but don't seem to have any reason for the government to do so other than "protected by my tinfoil hat, only I can see the truth".
 
And even so, it's pretty easy to survive such an audit as there are widespread best practices and procedures, acceptable to the IRS, for dealing in currencies other than dollars and in trade tokens like Bitcoin. So long as the appropriate taxes are paid in dollars the goverment has no reason to 'take down' Bitcoin.
 

Accepting BitCoin for merchandise has pretty much meant that the transaction(s) will go unreported, including taxes.

It may have meant so in the past, for transactions between individuals, but for corporations like Overstock etc... not a chance.

Re:Bitcoin inequality (1)

Krneki (1192201) | about 10 months ago | (#46036593)

Because prohibition has worked so well in the past, right?

It does NOT matter for the cryptocurrency if it is legal or not. If you can buy drugs and porn with it, it has already has a bilion market. Actually if it becomes legal another cryptocurrency will take over the black market.

Re:Bitcoin inequality (0)

Anonymous Coward | about 10 months ago | (#46036605)

the government will do its best to take it down.. and its easy to "take it down"

I agree, but I think it will come in a different form - as someone who recently moved and is having to deal with the local telecommunication monopoly, I can tell you, all they have to do to stop bitcoin is shut off our internet. Sad really. My dream is to have all of our routers form a mesh network outside of the telcos control.

Oh yay! Another bitcoin slashvertisment! (1)

Chas (5144) | about 10 months ago | (#46036251)

Since when did "news for nerds" become "news for shysterism"?

Bitcoin is a sham (0, Troll)

sl4shd0rk (755837) | about 10 months ago | (#46036253)

If you wanted to make money on Bitcoin, you needed to be into it 10 years ago Now, The only people making money on Bitcoin from here on out will be:

- People who mined early and gleaned many easy coins
- People with deep pockets for expensive gear (US Gov)
- People selling gear with the promise of striking it rich

Re:Bitcoin is a sham (0)

Anonymous Coward | about 10 months ago | (#46036347)

Bitcoin was introduced in 2009. Today is 2014-01-22. Ten years ago Bitcoin did not exist. Your point?

Re:Bitcoin is a sham (1)

Cro Magnon (467622) | about 10 months ago | (#46036581)

Weren't bitcoins worth about 10 bucks a year ago? If I had bought some then, I would have made some big profits. The question is, will they continue to go up, or will they crash and burn. If the former, one could still make big bucks.

No political support (0)

Anonymous Coward | about 10 months ago | (#46036259)

One issue Bitcoin does not address is that no country in the world will ever support it.

To gain broad general acceptance, it must be allowed to be exchanged for goods required by people in a broad way. Which means for individuals it must be able to be exchanged for basic goods and services and to pay taxes. For countries and corporations, it must be able to be used to procure large scale procurements of goods and to pay taxes. Bitcoin does none of this.

If a country were to allow you to pay taxes with it, you'd see an overnight acceptance of the currency, but that will never happen. Currency is a diplomatic and policy tool for States; following World War 2 the US through the Breton-Woods Accords was able to establish the dollar as the single global currency, leading to global economic hegemony. Allowing US citizens to use Bitcoins to pay taxes would legitimize the Bitcoin relative to the dollar, which would weaken the dollar's usefulness as the basis for global economic hegemony. Other countries would also not use it because devaluing their currencies is one way countries are able to help them out of a recession; it makes their exports more attractive in comparison to other goods, in fact watching the struggles of Spain, Portugal, Italy, and Greece in dealing with the European financial crisis, a large part of it is exacerbated by the fact that those countries do not have control over their currency, the Euro. Bitcoin would result in the same problem, and therefore no country would ever support it.

The Volatility Argument is Crazy Talk (2)

medv4380 (1604309) | about 10 months ago | (#46036275)

The criticism that merchants will not accept Bitcoin because of its volatility is also incorrect. Bitcoin can be used entirely as a payment system; merchants do not need to hold any Bitcoin currency or be exposed to Bitcoin volatility at any time. Any consumer or merchant can trade in and out of Bitcoin and other currencies any time they want.

So merchants will accept bitcoin by not accepting any bitcoin. Sounds like a circular, contradictory, argument.

How is said company supposed to pay it's employees in bitcoin if it doesn't hold any bitcoin? If said company doesn't pay it's employees in bitcoin, why does it expect common people to be able to pay in bitcoin? Ether you have to be naive enough to think that the Volatility will go away and will be viable to hold, or you have to be stupid enough to think that you can do business in a currency and never "hold" it. Daily stability is what makes currencies work, and volatility has always made them worthless. Why is Bitcoin different then any other currency that the price of the same good Hour to Hour changes in. A deliberate deflationary spiral, a la the Great Depression, doesn't make it any better than the hyperinflation of Brazil in the 90's. Constantly changing prices make it not worth using outside of fanatics.

Shit /r/Bitcoin Says (0)

Anonymous Coward | about 10 months ago | (#46036277)

It's the bestest and funniest thing on Twitter since the ST:TNG Season 8 account:

https://twitter.com/shit_rbtc_says

Carbon Footprint? (1)

Shakrai (717556) | about 10 months ago | (#46036335)

One has to marvel at the absurdity:

Bitcoin’s worldwide computational output is currently nearing 200 exaflops—200,000 petaflops—or 800 times the combined capacity of the top 500 supercomputers in the world.

Let's translate that into kilowatt hours and contemplate the wisdom of throwing a tangible resource (energy) into this enterprise, which exists at the sufferance of Planet Earth's nation-states. Please don't play the "Iceland! Hydroelectricity!" card either, because electricity is still a tangible resource even when it has low/zero carbon footprint, a resource that could be allocated to more productive pursuits.

Re:Carbon Footprint? (0)

Anonymous Coward | about 10 months ago | (#46036691)

Uh huh. And how much carbon does it take to dig some metal out of the ground, shape it into a coin and then have it travel all over the world / country in a thousand pockets and handbags? What about paper notes, which aren't nearly so durable as coins and must be reissued regularly?

How much carbon is used by all the banking systems talking holding everyone's money and manipulating it?

TANSTAAFL - If you want a currency of any type, it will have an energy cost.

Currency Sovereignty (0)

Anonymous Coward | about 10 months ago | (#46036363)

Doesn't the main problem become that as bitcoin gains traction in the US, it increasingly impinges upon the government's claim on currency sovereignty and run the risk of being banned? I don't see the US government allowing for a viable domestic alternative to dollars.

Payments good, speculation bad (1)

jason8 (917879) | about 10 months ago | (#46036561)

I'm in favor of a fast, cheap, reliable payment system, and that aspect of bitcoin is certainly appealing. But I'm totally against the speculative aspect of bitcoin (which is what I believe 99% of its proponents are *really* interested in). 80% of bitcoins are held by 1% of wallets, and the holders of these wallets are dearly hoping that the general public will buy into the idea of bitcoin with "real" money. Sorry, it ain't gonna be my real money.

Bias (5, Informative)

bradgoodman (964302) | about 10 months ago | (#46036625)

FWIW, the article starts with:

"Marc Andreessen’s venture capital firm, Andreessen Horowitz, has invested just under $50 million in Bitcoin-related start-ups."

i.e. Even if he doesn't believe a damn word he's saying - he's heavily invested enough to need to make it work.

Helping the poor Yea right (1)

jmd (14060) | about 10 months ago | (#46036669)

While I agree with most of this article, whenever I see helping the developing world or poor people I cringe. Bill Gates said the PC would end poverty as well. It's bullshit. Money changers move in and exploit the system. What started out with good intentions ends up in the hands of powerful people who exploit it.

Somewhere around the summer of 2000 I read an article in Wired magazine that addressed this wishful thinking. As of the writing of the article the author claimed that half of the world population had yet to make or receive a telephone call. I was staggared. With cell phone technology my guess is things have changed a bit.

As with telephones.... it will be adopted on a large scale only when venture capitalists and the money changer have arranged their cuts.

disclaimer: I mine BTC

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