So you can take the Gov't control out of the equation, but I still have yet to hear a scenario that crypto-currrency itself makes better than fiat - it's always about the cost, complexity, and regulation of the services on top. Eventually, those will reappear because people and business want them.
Citibank is, well, a bank. Coinbase is a currency exchange, and more analogous to those Forex booths you see in airports.
There are Bitcoin banks, but putting your Bitcoin into a bank loses the decentralization benefits. Admittedly holding onto your own BTC requires more security than many people are capable of implementing, but better and better solutions are being created to solve this problem.
See also: taxis
People do enjoy complaining but I quite like being able to fly cheap without paying for stuff I don't need. Admittedly it was more appalling when you couldn't even pay for your ticket without paying a fee (unless you had one particular laser card) but the most onerous ones have been phased out.
one other thing - with regards to fiat, BTC does have one theoretical advantage - the ability to limit government spending because it cannot be created out of thin air to be created as credit and spent as debt. and that is why no government will ever use it. but we wouldn't want this anyway because we actually DO want government to be able to create money as needed. the reason is that because the stated goal of the fed is "stable prices and full employment" stable prices are simple - your monetary supply expands AND CONTRACTS with GDP, pure and simple. 100 bushels of wheat in your economy and $200 in money? that's $2 per bushel. if your economy doubles due to additional population or technological/productivity improvements and starts producing 150 bushels, you need to have $300 in your economy for stable prices. the issue is that our government increases its spending at a rate that far exceeds the growth of GDP.
want a great idea for a far superior monetary system? read this: https://market-ticker.org/akcs-www?post=209282
This is historically and factually inaccurate. Currencies typically originated as highly marketable commodities that are naturally scarce and fungible - salt, gold, silver, cigarettes in jail, etc.
Bitcoin has the advantage over fiat of having been designed with incentives of participants aligned so as to make the likelyhood of inflation extremely small over the long term. So the scenario that Bitcoin makes better is the one in which money printing would have occurred, but now can't because of recourse to Bitcoin.
It's a big world out there, most of which has no easy way of integrating with modern systems of credit, lending and other financial instruments. I see blockchain technology as a promising way for distributed groups to organize, create operating agreements, and execute contracts for market rate on a global setting.
Erm... BTC is less stable than USD by every conceivable measure.
http://www.orchardplatform.com/wp-content/uploads/2015/05/bt...
Tell me: would you be surprised if BTC changed in price by 50% by the end of this month? I wouldn't be, I simply don't trust BTC to retain its value in any way. BTC goes up or down, and that's bad for "currencies"
Sure, it's easier and cheaper to wire USD to another country than it is to exchange USD for BTC, send BTC, and then exchange BTC to USD. Just like it's cheaper to wire USD to another country than it is to exchange USD for literally anything, send that literally anything, and then exchange that literally anything to USD.
If you insist on using BTC as a transfer mechanism for USD, you're going to incur most of the fees and risk you would if you used GBP, CAD, AUD, Yen, or any other currency as a transfer mechanism for USD. I'm not sure why anyone would expect anything different.
However, if you compare apples to apples, transferring BTC which is denominated in BTC throughout the transaction is much easier and cheaper than transferring USD which started is denominated in USD throughout the transaction.
Why do you even need to know about Bitcoin at all? Why isn't it just a cheap(ish) financial resolution layer?
In other words, their fee is really 1.01%. If the author can be bothered he should explain this to them and ask for his 55 cents back.
If you need to buy some groceries in the US, you wouldn't trade your USD for CAD (Canada money), then bring CAD to a grocery store that also accepts USD. You would only bring CAD if you already had CAD.
(but then again, it ended up not being very decentralized, either)
OP is either an idiot who thinks he can day trade but can't plan ahead and calculate fees or (more likely) he has an agenda against Bitcoin.
if he already owned BTC he would have avoided the first two steps and saved himself $180.
and still ended up paying $20 more as for using a wire.
If I really was converting from USD to CAD and back, would the experience be better? Would the fees be lower? I suspect they would. Would it take as long?
But you can't send cash over the internet.
I don't think Bitcoin is made at will out of thin air like flat currency routinely is. You can still argue that this is not a problem with flat currency itself, but the problem is, unlike Bitcoin, the laws regarding printing and production of flat currency are not governed by hard-to-break math.
2) USD to BTC can suck depending on the company (1-2%) fees
3) Yes most of these first gen companies are expensive due to lack of large volumes and high risk
He's also bitching about an overall 4% fee, which isn't a whole lot.
No seriously, though. Who knew that the libertarian cyberpunk dystopian future would be full of people trying to scam a nickel off you every couple of seconds...oh wait, everyone ever. That's the market, man. Don't taunt the market. Don't even look at it funny. It's sentient and can hear your insults.
[1] https://medium.com/@sondre.kolaautomat/how-to-pay-freelancer...
Even so, I still think bitcoin is a brilliant tech and valuable experiment.
It is wrong to think of bitcoin as a direct competitor to fiat.
Just like mp3 / bittorent did not destroy the music / movie industry, bitcoin isn't going to replace fiat currency. Not now and not in it's current form.
But it's going to be around as an alternative to the centralised banking system and as a very interesting social experiment and self-governance technology.
In time, both techs are going to merge - meaning that banks will implement all kinds of 'blockchain technologies', while virtual currencies will implement all kinds of services which the banks currently provide.
As a counter-anecdote I saved hundreds of dollars transferring USD10,000 in the US to THB cash in Thailand via Bitcoin.
Of course, fees for converting USD -> BTC -> USD are not that cheap, but neither are the fees for converting USD -> YEN -> USD.
"Blockchain" initiatives at banks are just about implementing cryptography as part of solving larger technical challenges they have. Using Bitcoin as "rails" isn't there yet. Using Bitcoin in places where only Bitcoin makes sense will make it a cockroach, and open protocols that survive tend to become important.
* Blocks are now so full that transactions have stopped flowing and there's no solutions that will address any of this without forcing any of the thousands of systems already built on top of Bitcoin to migrate = slow confirmations = massively higher fees
* Slow confirmations for every day payments = credit card use-case somewhat ruled out
* Double-spending is now a feature of Bitcoin = 0 confirms are now less secure (I understand the logic but its black and white. Instant payments should be possible but obviously zero confirms aren’t the way to do it.)
* Horrible black and white thinking for seemingly everything in Bitcoin -- especially security -- whereby nobody can imagine a fail-safe system and the community blames anyone who loses their coins even though the Bitcoin protocol is inherently unsuitable for building fail-safe wallets.
* Terrible user-experience on the protocol, infrastructure, and application levels. So much so that Bitcoin will likely never experience mainstream adoption for this reason.
* Community has become a toxic circle jerk of investors who ignore any of Bitcoin's problems in favor of its myopic benefits in the hope that they can still ride the blockchain to the bank (somewhat literally.)
* A hostile dev community that is so utterly clueless when it comes to real world business that their choices have managed to cripple the entire system.
* Community is an echo chamber of ignorance that blindly believes that all advances outside of Bitcoin are traitorous, incorrect, and not worth knowing about; Outright hostile towards new users with an air of technology snobbery that makes the Linux community seem like a welcoming party at an Apple store.
* The technology is inherently unscalable -- in fact, the only currently good plans for scaling Bitcoin involve not using it (No, I'm really not joking, that's literally what “off-chain” means) But the real problem here is really the fact that the development team have refused to increase the block size even though this was always intended in the design of Bitcoin by Satoashi and even though there are plenty of resources to do it.
* Bitcoin is now more centralized than any dictatorship -- the development team have become controlled largely by a single corporation (meaning a single CEO -- we all know who) and mining pools have become so large that at any time the miners can collude to reverse recent transactions.
Bitcoin has failed at every goal that it set for itself and the biggest issue out of all of this is the fact that the system can be so easily controlled by standard social engineering. If a decentralized system can be circumvented through moronic human and political means then it loses any advantage that it might have had by being decentralized. So philosophically and practically – Bitcoin has failed as both a consensus system and as an idea.
In fact -- probably the biggest advance that Bitcoin made was in the use of smart contracts to enforce agreements which actually already existed prior to Bitcoin. So I think going forward banks will end up using Bitcoin-inspired technology but they will ignore its consensus system completely (which frankly sucks) and instead use what is now being referred to as "smart signatures" (or programmable signatures) as a way of enforcing complex agreements between institutions.
Tl; dr; Bitcoin was an experiment that proved that certain things could be done better but it failed at a lot of things. It turns out that Bitcoin probably won't be the next Internet but it did make for quite an interesting ARPANET ...
You understand that there's more data in the world than is practical for all of us to store... The solution is to pick and choose which pieces need to be globally visible (ie, on-chain) and which do not. When I play poker I don't wire-transfer the result of each hand, that's what the chips are for.
> Blocks are now so full that transactions have stopped flowing
You mean, near-zero fee transactions... Because blocks are being published, and they're full of transactions.
Nobody ever said it was going to be free, it's just been small enough to tolerate the odd free-rider. That phase is coming to an end.
> But the real problem here is really the fact that the development team have refused to increase the block size even though this was always intended in the design of Bitcoin by Satoashi and even though there are plenty of resources to do it.
If transactions were free why wouldn't I backup my photos into the blockchain?
If we expand the blocks now we'll just end up with the same amount of waste and the same whining. If we let the fee rise first, then expand the blocks to balance both fee and network cost, we'll end up with something stable.
Also, Satoshi was wrong about some things. Why are you trying to treat "him" like a god?
> A hostile dev community that is so utterly clueless when it comes to real world business that their choices have managed to cripple the entire system.
No, that's exactly backwards. Bitcoin is an open system, not a startup incubator. It's not bitcoin's responsibility to support your business, it's your business' responsibility to function on the infrastructure available. Going to large blocks would benefit some companies who don't like paying for infrastructure. It'd keep their free-ride going longer, but at the cost of all the other players.
> Community is an echo chamber of ignorance that blindly believes that all advances outside of Bitcoin are traitorous, incorrect, and not worth knowing about; Outright hostile towards new users with an air of technology snobbery that makes the Linux community seem like a welcoming party at an Apple store.
Well, if you're judging by the response you've gotten, there may be confounding factors your analysis has missed... What reaction should an anti-vaxxer receive at a medical-policy conference when they stand up and declare that science has failed, etc?
If, on the other hand, he already had $5-6k worth of Bitcoin somewhere, he could have eliminated one of those conversions and it would have cost about the same. Alternatively, he may have been able to find an exchange that accepts Bitcoin directly rather than through some intermediary with a conversion fee, in which case his total deposit fee would have been < $1.
I have a GNU/Linux server. Which service providers can I eliminate?
Using my own server, suppose my neighbor has a bunch of BTC and I have a bunch of cash. If I want to buy BTC from her (by physically handing over the cash), what service providers do we need to use? Suppose my neighbor uses the same providers (or some subset) the author of this article uses.
Not very excellent if you ever need to get money to/from the States and a foreign country.
If you have to exchange BTC to USD to pay for your costs, then sure, it's going to cost more than PayPal.
Don't like Paypal? Use Dwolla. Don't like Dwolla? Use Bank of America for direct transfers. Don't like BoA? Use Venmo.
Bitcoin has been around for 8 years, and general awareness has really only kicked in over the last 4. These Bitcoin companies are the first generation. I think it's reasonable that in the next 10 years the tasks you performed will be more seamlessly orchestrated, and greater competition will drive the price down. It would take an order-of-magnitude improvement to undercut the wire fee ($35) which may well happen.
To make matters worse crypto currencies like bitcoin appear to incentivize early adopters to act in bad faith like a pyramid scheme. That they are open to monopolization by those who have disproportionate access to cheap electricty and resources can't help build trust.
So the early adopters have every incentive to spin it and on cue they talk it up deceptively on decentralization, anonymity and control as if the protocol develops itself and is not under the control of an inner cotorie.
Aren't governments and financial systems supposed to work for us and if they aren't is the solution to make sure they do, or a flawed technology workaround that benefits early adopters and concentrates power and influence in the hands of a few? The cure seems worse than the disease.
Or sponsored articles. I would love the author to mention where he works, and if that article was sponsored.
Consequently, nobody really cares about the fees as it's all about the ability to move your money around while avoiding government scrutiny. And these fees are what they are willing to pay to accomplish that.
Yeah, cooperative/reversible financial fund transfer systems that interoperate with bitcoin are at enormous risk during these transactions, so they charge large fees and create red tape to avoid/mitigate fraud. It's probably been bitcoin's biggest stumbling point since forever. I don't think that it's a disaster though.
> The Bitpay invoice has a 15 minute timer. So I wait and wait ... last few minutes on that timer so I start to get a bit nervous.
This problem could've actually been one to blame on bitcoin. It might be due to bitcoin's low transaction throughput. I haven't followed the blocksize debate but IIRC there have been lots of talk about slow transactions.
I doubt it ever will become mainstream, but one path to "mainstream" is when merchants, banks, companies, and payment providers just accept Bitcoin rather than:
1) Pretend to accept bitcoin 2) Pay a sub-par service with high fees to convert any received BTC into USD immediately 3) Encourage customers that don't already hold BTC to pay in BTC, adding another conversion step from USD -> BTC
If 90% of the people I give money to just accept Bitcoin as payment, then it makes sense for me to have a "Bitcoin account", as payment fees could be lower.
There is however, valid criticism of the various middlemen that have propped up to take advantage of the hype surrounding Bitcoin.
I think in the Bitcoin lifecycle a number of these early services exist at the pleasure of serving pioneering Bitcoin users / miners who have a lot of digital currency already.
It costs me $7 to change my stocks into cash and vice versa. Frankly, turning BTC -> USD -> BTC is harder than turning Apple stock -> USD -> Apple stock.
I have had people from across the globe send me BTC in minutes with a few button clicks and no additional parties involved.
I'm guessing this also makes me a "Bitcoin defender."
Wire transfers are $35.
You'd think that BTC would be able to be cheaper than that.
If you do an international wire and change currencies you'll pay much more than $35.
Bitcoin is still an emerging technology. You can do things with it you can do with _anything_ else. You can create 100 wallets right now and start receiving bitcoin to them. Please show me how to do that without interacting with anyone with traditional bank accounts.
Bitcoin is here to stay and we're going to continue to discover interesting use cases for it. Sorry this guy is bailing before he learns what it's all about.
I don't have any affiliation with them. I just always thought trading stocks was schleppily difficult, and was delighted to discover it was not so. I believe some company will do well; I'm not interested in understanding spreadsheets or hiring anyone; here's my money; how do I buy shares? What is the Uber-like, magic-button product here? Robinhood, it turns out.
If you don't know enough to stock pick, buy the index.
While I am in general agreement with your position, I see statements like this frequently when stock trading comes up. References to the market or the index. There isn't one, monolithic tradable "market". Rather there are dozens of different index views of the broader market, some of which are better than others. If you know so little about stock trading that you think a service like Robinhood is a good idea you probably don't know enough to choose a good index either.
