What do you think about bitcoin?

[outlandish]

@Average Investor lol Model T is a good way to describe bitcoin! So many people think it's going to change the world and is the currency of the future, but there's just no way it can in its current incarnation, it doesn't scale the way many of its fans imagine.

Yeah I really hope the lightning network takes off, for the sake of the earth and just having better tech. I do think it feels a bit kludgey, although I don't really know much details about it. Seems like it still has a ways to go even though it's been "nearly there" for a long time now.

I also really hope that Proof-of-stake and other consensus methods prove to be secure and scalable. It should use vastly less energy than POW. I doubt bitcoin would ever switch to POS, but one can hope, and there are many others that might go that direction and take the lead. I think there are other consensus algorithms that are being explored on other cryptos, and even more sensible ways to do POW, but I'm pretty out of the loop on all that.

[Average Investor]

@outlandish Like 3 years ago I use to do youtube videos on all of it and keep up with all of the news and stuff. I was using in it in 2014 as money and it seemed pretty cool then. The main person to follow in the space is Andreas Antonopoulos for sure. While I don't usually keep up with him, he is a systems thinker from what I have got out of his books. Anymore though, I just check the price every now and then, but I don't care too much about it.

I realize I have a bit of bias on the tech because I own it, but I don't currently add more money to any crypto investments. In my opinion bitcoin would be fantastic if it were just limited to large transactions. It is much more efficient to move millions of dollars in bitcoin, than any other currency,  if the network is not under load it is pretty fast and cheap (For that size of transaction). I think it is a good alternative to gold (big polluter too) and it will probably pave the way for some amazing tech. 

22 minutes ago, outlandish said:

I also really hope that Proof-of-stake and other consensus methods prove to be secure and scalable. It should use vastly less energy than POW. I doubt bitcoin would ever switch to POS, but one can hope, and there are many others that might go that direction and take the lead. I think there are other consensus algorithms that are being explored on other cryptos, and even more sensible ways to do POW, but I'm pretty out of the loop on all that.

Really it is just the speed at which it really evolves. It is pretty slow compared to how we see things change in the world. It could use proof of stake if 80% of the network or so agreed to it and there was a great second layer solution for it. That is also why you see things like Bitcoin Cash for example is a disagreement on stuff like the block size for example. There is a lot of tribalism and politics that are involved with getting users and merchants to want to adapt to changes in the network. The people who work on Bitcoin are not paid either, so it isn't like everyone is jumping at the chance to work on it. There are other alternatives to the second layer solutions and I bet stuff that has not been invested yet. I can agree with the concern on the pollution though. All it is doing right now it working as a "money" storage. Granted I know a guy that lives on just bitcoin, but finding anyone like that is typically highly unlikely. 

[snowyowl]

I can see how Bitcoin and other blockchain technology has potential, it may provide some added value compared with regular currencies. But I think there's some risks (at the moment):  
- Who provides the guarantees and governance if anything goes wrong? Regular banks & currencies are as good as the governments which regulate them (eg they bailed them out in the credit crunch) but who can you turn to if Bitcoin crashes or gets hacked?
- Bitcoin may be useful to some people, but they are trading at about £10,500 ($13,750) each today. They don't give that much extra value vs traditional money surely? This looks like bubble territory to me, if it's based on people buying them speculatively just hoping for rising prices, rather than actually using them for their own unique functionality. How many places accept payment in Bitcoin or other cryptos? 

Maybe I'm being too cautious and can't see the value long-term. Dotcom shares went through a huge boom, bust, then boom again 20 years ago so I'm not writing Bitcoin off altogether. 

[The0Self]

Not owning bitcoin is like not owning gold or silver, at this point. Every country has no meaningfully positive interest rate - the peg on currency is nonexistent. Buckle up, lol.

[Average Investor]

@snowyowl

3 hours ago, snowyowl said:

- Who provides the guarantees and governance if anything goes wrong? Regular banks & currencies are as good as the governments which regulate them (eg they bailed them out in the credit crunch) but who can you turn to if Bitcoin crashes or gets hacked?

No one person or entity is and that is the point of it. https://en.wikipedia.org/wiki/List_of_banking_crises

"Regular banks & currencies are as good as the governments which regulate them"

The creation of bitcoin came from the 2008 crisis. 

The miners to a degree do this for validity of transactions, which protects it from double spending and 51% attacks. There is a system of governance, but is is spread out to all of the users. So if a change is being made a majority of the users would have to accept and use it. BTC has not successfully been hacked ever since it's creation. Individual users are. It is a lot of responsibility to be your own bank. 

3 hours ago, snowyowl said:

How many places accept payment in Bitcoin or other cryptos? 

You can spend bitcoin anywhere just like a visa. There are cards that offer that service. It is actually easier to travel the world and exchange BTC to the currency of the country you went to, than USD to the other. Faster and cheaper. 

3 hours ago, snowyowl said:

- Bitcoin may be useful to some people, but they are trading at about £10,500 ($13,750) each today. They don't give that much extra value vs traditional money surely? This looks like bubble territory to me, if it's based on people buying them speculatively just hoping for rising prices, rather than actually using them for their own unique functionality.

It simply functions as more sound form of money. There is not enough people using it for there to be a lot of price stability. I believe a lot of banks purchasing it at the moment is one of the main drivers for the price. You would have to research that though. 

3 hours ago, snowyowl said:

unique functionality

I mean it's unique functionality is that it is not the dollar that deflates. 

https://www.investopedia.com/bitcoin-halving-4843769

This will give you a good overview of what drives the price from a more fundamental stand point. If we were just mathematically speaking this would make me rich. 

I should say my point here is not to persuade you one way or the other.  I would not say it is a good or a bad price. I am just sharing the information to your questions. Bitcoin is quite complex. It is an interesting technology to explore and learn about. I would say you would need a better fundamental understanding of how the US dollar actually works to see the point of it. It is much more complex of a system than it seems on the surface. Bitcoin itself is quite complex as well. 

 

 

Edited November 4, 2020 by Average Investor

[Leo Gura]

4 hours ago, outlandish said:

They consume a shocking amount of electrical energy,

But you're not counting how much energy is used to maintain the normal fiat currency system. Those banks use energy. Printing money and coins ain't free. And all the people who must work to maintain that system. Just for a bank teller to drive to the bank every day is a lot of energy.

[integral]

Global community owned decentralized self replicating value producing viruses are coming soon.

Imagine systems that produce goods that are cheaper to buy decentralized. It could have properties that make it automatically expand its production across the world. Growing indefinitely, the profits are then used by the system to buy out competing systems. 

Add General Ai and we have a virus that buys out all systems and uses profits to mass manufacture fuck you stickers.

General AI + decentralized makes capitalism impossible to sustain. 

Invest now to get 10% off the last purchase you'll ever make. 

Edited November 4, 2020 by integral

[Grateful Dead]

When I was at the Ozora Festival last year Kilindi iyi gave a talk which was called: Mushrooms: the Mycelium Crypto Wallet and Bitcoin as Psychedelic.

His theory was that bitcoin wasn't created by an individual ego but instead by consciousness directly. He basically told us to get as many bitcoins possible so you can choose better stuff after death for your next live or whatever.

 

[outlandish]

6 hours ago, Leo Gura said:

But you're not counting how much energy is used to maintain the normal fiat currency system. Those banks use energy. Printing money and coins ain't free. And all the people who must work to maintain that system. Just for a bank teller to drive to the bank every day is a lot of energy.

It's a couple of orders magnitude difference with bitcoin. We're not talking about the amount of energy to drive to the bank. Bitcoin is currently burning 77.33 TWh per year, as much as Chile's entire energy needs - and it's hardly processing a fraction of a percent of the total value transactions on the planet today. Check this out: https://digiconomist.net/bitcoin-energy-consumption/ 

Imagine if this scales x10 or x100 like its enthusiasts hope? It's just not compatible with the planet.

[Tanz]

Bitcoin philosophically is a good idea but  it won't save humanity. Only elevating conscious will. Bitcoin will only bring out what's inside of people. 

From a technical level. Bitcoin is way too slow of a means of exchange. The transfer speeds can't scale to support enough people.

[Leo Gura]

8 hours ago, acidgoofy said:

He basically told us to get as many bitcoins possible so you can choose better stuff after death for your next live or whatever.

Ahahahahaha....

How do people make this shit up?

[snowyowl]

11 hours ago, Average Investor said:

You can spend bitcoin anywhere just like a visa. There are cards that offer that service. It is actually easier to travel the world and exchange BTC to the currency of the country you went to, than USD to the other. Faster and cheaper. 

Hi thanks for this info. 

11 hours ago, Average Investor said:

The miners to a degree do this for validity of transactions, which protects it from double spending and 51% attacks. There is a system of governance, but is is spread out to all of the users. So if a change is being made a majority of the users would have to accept and use it. BTC has not successfully been hacked ever since it's creation. Individual users are. It is a lot of responsibility to be your own bank. 

I suppose if it costs money (electricity) and time to mine your new Bitcoins, then there needs to be a reward to make a profit so that people do it. Perhaps I should invest in a super quantum computer to get them more efficiently   

 Also if it is faster & easier than using national currencies then there's a "cost leadership" business model to undercut the traditional banks (like discount supermarkets) - all we need next is a lending industry too so you could take out a mortgage (for example) in cryptocurrency, if you dare!  Perhaps the big banks will copycat and get on the bandwagon if this starts to disrupt the system too much. 

[Average Investor]

2 hours ago, snowyowl said:

Perhaps I should invest in a super quantum computer to get them more efficiently

It can be profitable no doubt, but it really depends on where you live. Someone in china is getting the power super cheap and there is a lot of illegal mining operations. I am not sure what a landlord would do if they were offering you free electricity. To be fair a good gaming pc could mine well, but if you built something specifically for it you could definitely make some income. There is quite a bit to it I know on the last big price drop it caused a lot of businesses to go out of business over the coin price because they were losing money by mining it. Of course it all depends on your costs. 

2 hours ago, snowyowl said:

all we need next is a lending industry too so you could take out a mortgage (for example) in cryptocurrency, if you dare!

There was a platform trying to do that. I think it was going to use smart contracts to lock up collateral. Lets say you would lock up one BTC and you could get a loan of so much. Only issue is that if BTC price crashes the person who got lent the money could bail on it. 

2 hours ago, snowyowl said:

Perhaps the big banks will copycat and get on the bandwagon if this starts to disrupt the system too much. 

They will potentially use some of the cheaper and faster tech as time goes on. It really just depends how money is. The government could potentially issue a crypto currency of their own in the future. It would likely be so strict compared to actually dollars. A lot of people don't realize how much criminals love USD. 

[Average Investor]

@Tanz It already can be instantly confirmed for small transactions faster than any visa. Each trans action has so many confirmations though. No one is going to not wait for a big transaction to be fully confirmed, but for a $6 cup of coffee no one is going to try to double spend. Look into second layer solutions. All the scaling stuff you mentioned has already been pretty much taken care of. It's only getting faster and cheaper as time goes on. 

[Leo Gura]

7 hours ago, outlandish said:

It's a couple of orders magnitude difference with bitcoin. We're not talking about the amount of energy to drive to the bank. Bitcoin is currently burning 77.33 TWh per year, as much as Chile's entire energy needs - and it's hardly processing a fraction of a percent of the total value transactions on the planet today. Check this out: https://digiconomist.net/bitcoin-energy-consumption/ 

Imagine if this scales x10 or x100 like its enthusiasts hope? It's just not compatible with the planet.

I don't think you're seriously thinking about how much energy is used by banks.

How many banking employees are in the world? How many gallons of gas do they burn per day of work? How many cows do they eat per day collectively? It all adds up.

[Average Investor]

6 hours ago, Tanz said:

Bitcoin philosophically is a good idea but  it won't save humanity. Only elevating conscious will. Bitcoin will only bring out what's inside of people. 

It's just technology that can enhance the world. There are so many people without a bank account or suffering from an unstable currency and high inflation. Of course you are not going to become a saint by owning a bitcoin. Means of transacting value will likely be needed in even very high conscious societies. It's like making EV cars, but this is the money form of it. 

 

Edited November 4, 2020 by Average Investor

[Yarco]

Many people whose opinions I value on the subject (PhDs in cryptography, etc) are predicting a $100,000 Bitcoin in 3 - 4 years. Personally I think it's too risky not to hold some. That doesn't mean you have to go crazy with it. The average person who doesn't understand how it works probably shouldn't invest more than 1-5% of their net worth into it.

RE: Bitcoin's energy usage -- For most other coins like Ethereum, Cardano, Vechain, Polkadot, Chainlink, etc it's a non-issue. These coins operate on a proof-of-stake model as opposed to proof-of-work like Bitcoin. If it's a big issue to you, just do some research and choose one of those other coins that makes sense and appeals to you. But I think not having any exposure to crypto will prove to be a mistake.

[outlandish]

2 hours ago, Leo Gura said:

I don't think you're seriously thinking about how much energy is used by banks.

How many banking employees are in the world? How many gallons of gas do they burn per day of work? How many cows do they eat per day collectively? It all adds up.

Found the hodler! 

This could easily turn into a long-winded debate because it's a topic I've dug very deeply into over the years, I'll try to be terse. I used to hold bitcoin since 2014, but sold it all in 2017 when I realized what an energy pig it really is. I can't ethically support bitcoin because of its extremely intensive use of energy.

The energy that bitcoin alone uses is nearly 1% of the earths total energy usage, as of 2018. This isn't 1% of the financial sector's energy usage, it's 1% of the entire planet's usage. The problem is that as the adoption value of bitcoin goes up, its energy usage goes up in proportion, because of the way mining works. So right now, we're in a situation where BTC accounts for some tiny fragment of the world's financial transactions - but it's already using 1% of the total energy. If BTC continues to be supported and shilled, and climbs up to 20k, or 100k, it's footprint goes up with it at roughly that same ratio.

This is a completely different scale from the energy usage of the bank employees driving around and eating meat. And banks won't go away because of bitcoin anyways.

Bitcoin won't replace banks, for a bunch of reasons. The simplest is just that it's not up to the task of being a good currency because of transaction times (~10 minutes currently), and transaction fees (always up and down, anywhere from $2-$15). These don't improve as bitcoin scales; they get worse. The more transactions there are on the network, the slower they run and the higher the fees go.

There's a whole host of other services that banks provide that bitcoin simply isn't up to the task for - mortgages, loans, investments, whatever else they do. Fintech will disrupt every last service that banks currently provide, but it bitcoin won't be the one tech that does this.

The one thing bitcoin is very good at is being a portable store of value. There's probably no better way to move a billion dollars around.

The crazy thing is that we can have our cake and eat it too. There are many cryptos out there that can do everything bitcoin does, but better - faster transaction times, lower fees, and more, and are much much more efficient, sometimes by orders of magnitude. Bitcoin was simply the first generation of the technology.

tl;dr - bitcoin is an energy pig, put your money in something cleaner. 

[outlandish]

3 hours ago, Yarco said:

RE: Bitcoin's energy usage -- For most other coins like Ethereum, Cardano, Vechain, Polkadot, Chainlink, etc it's a non-issue. These coins operate on a proof-of-stake model as opposed to proof-of-work like Bitcoin. If it's a big issue to you, just do some research and choose one of those other coins that makes sense and appeals to you. But I think not having any exposure to crypto will prove to be a mistake.

Ethereum is actually not on POS yet, it's still POW and is nearly as inefficient as BTC. I know they're working towards POS, and I deeply hope they make it work, because it means ETH will use about 1% of the energy that it currently does.

I haven't followed the other projects you mentioned, but I believe they are POS like you said, which is ridiculously more efficient than the POW that bitcoin uses, and a far better approach if you care about our planet at all.

[Leo Gura]

Why can't they make a BitCoin 2.0 that uses less energy?