Topic: Bitcoin Cannot Succeed (heres why) - page 4. (Read 7237 times)

I see what you mean. There are still a lot of questions to be answered but like you said, all at its own pace.

By the way, the link in your signature is broken.

"Decentralized" is the buzzword of the day, especially insofar as Bitcoin goes. In the real world, though, it losses it's applicability.

Sure, someone could build a decentralized crypto--to--crypto exchange. Maybe. Even then, I'd have lots of questions, but there's no point in rattling them off until someone actually creates one.

But a decentralized Bitcoin to fiat exchanges? Impossible. The global financial system won't accommodate that. There will need to be a bank account or many bank accounts. Cash balances held. Wires sent and received. Which means there needs to be a person or company that owns and manages those accounts.

Decentralized could work in theory for a fully virtual currency, but once you have to handle fiat currency, the decentralized idea falls apart.

The answer: decentralized exchanges. 

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[Imgur](http://i.imgur.com/iX9vlpv.jpg)

speak for yourself.

I don't agree with you.
For many people BTC is just another investment and if they see just falling prices of bitcoin for long time, they will give up from it and move to other ''big'' opportunities out there.
Without many users bitcoin will never become attractive for ''big'' merchants and eventually other virtual currencies will replace BTC.

Why don't banks run off with all the money they have? I think it is worth to them more in the long run to have something of that value and if you are reliable you will get more profit because more people will come to you.

If all exchanges ran off with the bitcoin people entrusted them with, then the value of bitcoin would plummet quickly and the thieves would be burning their own profits.

All of this can be avoided if you move your funds off of an exchange as soon as you receive them, which bitcoin allows you to do, and which you should be doing to cold store said funds.

The success of bitcoin do not depend on the price of bitcoin. It can be successful when price is $100 or $1000 per piece, the key element is price stability.

Biggest flaw with your example of $1million per BTC is that you keep stating trading 1BTC and having too much exposure for that $1million on an exchange or wherever.

If BTC go to the moon and reach $1million per BTC, people would simply revert to trading lower decimal satoshis to accompany their own risk exposure all the way down to 1 single satoshi if the price go so high as you hinted.

Cannot Succeed ? isn't it already succeeding ? the price doesn't need to keep increasing for it to succeed. Adoption is, which is very good right now.

and banks and companies that hold people's possessions can pull inside jobs as well, just like bitcoin exchanges.

This

By your logic, the large vaults would just run off with peoples valuable possessions.  "Hey, diamonds are valuable, we're going to run off with people's gems in the safe"

Thats not a bitcoin problem.. You need to expand your mind a bit.. All of those businesses will be phased out for decentralized exchanges such as the ones bitshares provides..

In short they cant run away because they wont exist

markets and thieves will go down.  the bitcoin they take will still exist and be redistributed again and again until people learn not to trust their coin to third party.  very simple.

Wow. If that's the thing that worries you, Bitcoin is fine...

Not to say that Exchanges won't be hacked, now or in the future...

But as Bitcoin continues its existance, companies handling other peoples Bitcoins will be more and more regulated.... Banking might not be the best model to name, so lets say Stock Brokerages... They typically hold billions and billions of other peoples cash and investments, and there isn't really a fear that they're going to close up shop and steal all of their customers assets...

That said; I am absolutely opposed to the idea of wallet services or storing ones coins on exhanges. Bitcoin seems like it's perfect to do away with that form of middle man, so I'm always surprised that so many people do, or that so many people expect that other would... Yes, if you need to buy or sell, by all means, transfer to an exchange, do your transaction, but then transfer the proceeds to a bank or wallet under your own control.

I do suppose that there is a problem that Bitcoin exchanges have that brokerages don't have - rogue employees; a rogue employee of a brokerage can transfer shares, yes, but as soon assomone notices that happened, they can be transferred back. Likewise for cash - bankers etc can wire their customers funds to outside accounts, but A) the transaction would be immediately linked to them or their login and B) the owner of the receiving account can be identified with relative ease.

Bitcoin does away with those protections... Supposing coins in a hot wallet aren't stored in multi-sig addresses, a rogue employee at a Bitcoin exchange could pretty easily step in and transfer the hot wallet elsewhere... Private keys and the blockchain don't require any identifiers from a user, so if someone happened to have access to the private key, coins could be sent without there being a direct link to who actually initiated the transaction. And figuring out the owner of the receiving address could be next to impossible.

But, these are all issues today, which is specifically why I don't think storing coins with another party is appropriate. And probably why the bitcoin exchanges, even in the future, could face a daunting challenge in trying to get affordable insurance coverage...

If you ever do have a million dollars in bitcoins, now or in the future, and needed to use an exchange... Or just wanted to leave them there, I'd hope you'd shop around and not leave them at a place like cryptsy... or even BTC-E, as solid as they seem, and having been responsible stewards of their users funds for years now, it's still difficult for me to feel comfortable leaving big balances there without knowing who the operators are. I'd end up opting for a U.S. based entity, where the ownerhsip is known and there is a strong rule of law... Not like that helps if coins get stolen and the exchange doesn't have enough reserved to repay, but one would think that a future scammer would realize the woes he could face here and would avoid setting up shop in the U.S. in the first place...

To circle back, though... Nothing you say doesn't already apply right now.  As more and more wealth is stored on the blockchain, though, hopefully those that acquire it will have the know how to secure their coins themselves... paper wallets, offline machines, etc, or at least will trust their fortunes to the exchanges whose operators are least likely to be malicious actors...

exactly. recently i have been seeing a lot of posts on bitcoin failing, it is doomed and shit like that. but in fact i think it is another wave of mass manipulation of price