Topic: BTC will never extend more - page 7. (Read 12683 times)

And bad for customers.
So why would customers choose to use it?
For normal, everyday, mundane transactions, Bitcoin doesn't really offer the normal consumer anything they don't already have with a combination of cash, debit cards, credit cards and PayPal.

Seems reasonable.
First drugs, then gambling, porn seems like a logical next growth market

OP missed a fundamental point. Bitcoin is scarce and powered by greed. Greed is part of human nature, that's why it will extend more and more no matter what.

The hole concept of banking has evolved to trap society into a endless and growing debt. So yes, banks as we know them today is pretty much evil.

I know that a lot of bitcoiners think that banks = evil, [/quote]


Are U the president of an EVIL Bank
  U Sound like one 
I don't think banks are evil, just the people that RUN the banks!

many of your points are right, but history never repeats itself.

Bitcoin is an experiment, its like you watch the genesis of a currency in fast motion. And in no field is more scam and greed as in a currency. Look at the ASIC-Madness, as you I don't have a background in IT, I had to learn all this things, and I was very disappointed to accept ASICs generate absolutey no Mehrwert (surplus), they just heat up a closed system wherein the greedful are trapped.

But Bitcoin is new, totally new, and if it won't be just Fiat 2.0 it has to find its own way of selfregulation. If it does, it actually could become important. Banks do a lot of thing to make money flow secure and feeless, and they do it very complicated and circumstantial. Bitcoin could achieve this much easier.

Absolutely agree with marcovaldo,

Communist propaganda always pictures bankers as fat and greedy, sitting on a bags of gold. What I know that to build any business and risk your money is much harder than just go every morning to local government work, be protected by union to degree that you can not be fired at all (you have to make really bad something to be fired), and  come every evening home and do not have any headache. Just try to call your bank to ask something. You will be answered day or night politely. Now try to call to some city agency. You will be transferred to answer machine and nobody will call you back. And if you will cam to agency, workers will be rude.
Don't think that I work for some bank or whatever. I work for local government. But for me owner of small business is a hero. He will be treated like shit with city inspectors trying to fine him for any small violation. Those inspectors got they salary paid by taxes all people pay, including this small business owner. And business owner does not have any protection and risking to lose whole his business.

Now, talking about bitcoins, sure, for a lot of people it was idea to get easy money via mining. But it looks like this time is almost gone and only profitable for those who has "free" electricity. A lot of these people, actually, stealing electricity from somebody who pays it, and in the same time blame bankers as "greedy" people. Also they want to be a bankers (they will not tell you that), but don't want to take a risk and put they money into business.

Now, some try to tell me that bitcoin transaction can be safe and cash transactions are irreversible. Well, even with cash transaction you can have some receipt or other document where you can find identity and complain to authorities. Yes, if you bought drug with cash you will not have it probably. And why use cash anyway? I don't remember when I used one. I buy everything, I mean EVERYTHING with my credit card. Yes, I pay balance in full every month.

Marco, you overlook some other actually or potentially important features of bitcoin::

1.  It offers a means of digital payment for people outside of the banking system (a lot of people outside of The West).

2.  It offers innovative payment / security mechanisms. For example, two of three party signing is far superior to traditional escrow because it avoids credit risk with the escrow and only requires the active involvement of the escrow  if the seller and buyer cannot agree. This is novel and potentially very powerful.

3. It offers a means of avoiding oppressive capital controls.

4. It offers an excellent means of storing wealth securely, flexibly and privately.

5. Subject to the confirmation point (see post above), it offers pure upside to vendors: lower fees, no fraud risk, no exchange risk (Bitpay etc).

I am sure there are other things I have forgotten or don't know about.


 

Although it is widely believed that acceptance of BTC without any confirmations is unsafe, a man who knows about these things told me as follows:

"I believe 0-confirmation transactions are very safe in most cases. Version 0.9 of bitcoin-qt should include functionality to verify with peers that no conflicting transaction exists; by waiting a few seconds and doing this verification, I believe the chances of double-spending for transactions in the sub-$100 range is negligible, especially for physical stores selling illiquid products."

If so, this would be a very significant development.

What makes you think that the speculators are trying to accumulate dollars?

Cash payments also are irreversible.

Blockchain.info online wallet is as easy to use as online banking systems.

You can accept micro-transactions without waiting any confirmations, it is not just worth for scammer to perform an attack.
Off-blockchain services like Inputs.io offer zero fee transfers.

P.S. I think next major adopter of Bitcoin will be porn industry because elimination of the chargebacks is great advantage for these companies.

That's not difficult to solve, you need an overlay of offchain transaction then you can have chargebacks easily.
But "no chargebacks" is great for merchants, if they focus on getting a good reputation.

You can open a dispute in Paypal. And ebay is not the only buyer out there.
Credit Card have insurance that bitcoin does not have.




Yes, which can be refunded within days by filing a complaint / police report in case of a problem.
But with bitcoin you can only cry here.

Well, people use online-banking, do they?
That's also just bits and bytes secured by other bits and bytes.

someone could scam you in ebay too and they use credit cards.
That's why they have a trust system.
In fact buyers can scam sellers with paypal by claiming they did not recieve the product.

Did you read my message?
I never said that the number of people using bitcoins will decrease. Or that new shops will not accept bitcoins. Or things won't change.
I said that bitcoin is never gonna replace fiat, and it will stick to his current uses.




Then, they won't use bitcoin, because it is not convenient and not safe:

Mt Gox account hacked!
Mtgox Account Hacked
bitstamp and mtgox accounts hacked at same time
Bitcoin wallet hacked!
Mt. Gox account hacked, 21.88 BTC stolen Have IP and BTC address..
...
[HACKED] while i was on holiday.
My account has been hacked.

Bitcoin, as it is now, exposes endusers to an inacceptable amount of risk.
That's why not all endusers will be using bitcoin directly in the future, but rather through online wallets, payment services like Paypal and even banks (there, I said it).

The level of inconvenience is already on the decline. Think of Email a few decades ago, it wasn't really that convenient to use it over uucp, with qwk readers and stuff. That's what technological progress is all about, difficult technology is going to become easier to use.

Fees are relatively low, especially compared to alternatives. In the end, the market will decide about the fees that will be paid, so it's going to be competitive at whatever fees there will be in the future.

For some uses, confirmations are too slow, but there is nothing from stopping endusers from using alternatives for those uses.
Obviously, a bank transfer is "too slow" today for many practical uses, but that doesn't stop people from using those.

- reserved for updates -

Sorry for my bad English.



september 6th.

Added 3 reasons:
- because the value is changing too quickly.
- because people don't trust it.
- block size.

Added a quote from Nigeria Prince.

Hello,

I have been thinking a lot about BTC, how nice and beautiful it can be, but I came to the conclusion that it reached its maximum spreading. Here is why.

Prelude

I know that a lot of bitcoiners think that banks = evil, and that they should not make money. I am not gonna discuss that matter here ; even if I do not understand why private companies (banks) are less legitimate to make profits than companies selling water when people can't stop drinking water, or companies that have to employ young children 12 hours per day in China to manufacture products. I will only focus about bitcoin and fiat currencies.

Why do people use bitcoins?

I can see only 5 main reasons that make people using bitcoins:
- for buying stuff online (but only occasionally).
- for buying illegal things online (drugs).
- money laundering.
- for investing, and making some profit.
- eventually, as a safe haven like gold.

1) Buying products online

The first use of bitcoins is to buy stuff online. You can go here, here for digital goods or here for computer hardware for example. You can also go to bitmit to buy some other stuff, or different online shops that accept bitcoins.

The number of shops that accepts bitcoin might increase in the future, but it will be used only occasionally.
The first reason is a trust matter. When you send bitcoins to a seller, you have no idea if he will ever deliver you the products (ask BFL). You can use an escrow but (1) it is a hassle and (2) you have no more clue that the escrow is more trustworthy that the seller. So basically you are sending money, hoping to receive the product, without any guaranty. When you pay with fiat money, you can easily charge back, or get refunded in case of a problem...
The second reason is about the price. What is the point of buying something, if you can have it cheaper somewhere else? There is 2 ways of getting bitcoins: mining or buying. Mining will be hardly profitable, and if you have to buy bitcoins with fiat, pay the exchanges fees, and then pay the bitcoins fees, you will end up with paying an higher price rather than paying with a Credit Card...

Therefore, it will mainly stay at a smaller scale, like now, with occasional transactions, and for cheap stuff, or when anonymity matters.

 2) Buying illegal stuff online

I will develop a lot this part, but if you want to buy drugs, you can go to silk road. Of course, it is only a small aspect of the bitcoin economy, but at least this part will remain.

 3) Money laundering

I am not gonna explain much about it as well... But bitcoin can be used to do that.

4) Investing

When media spoke about bitcoins earlier this year, a lot of people wanted to invest in bitcoins to make money. Still, some of them are using this sub-forum to speculate about bitcoin price and make some profit. At the end of the day, they do not care about bitcoins, and they only want to make some dollars.

https://bitcointalksearch.org/topic/m.3092674

 5) Asset?

I do not know if people are doing that, but eventually bitcoin can become like gold an asset that people buy thinking that the value will remain constant or increase in the future (hoarding? Not sure if that is the correct term).

Why bitcoin is popular for scammers?

Bitcoin transactions are irreversible. If you send 1 btc to an address, you can never get it back, if the owner does not want to. There is no regulation, no police ... That's why it is a scammer paradise. You can see people giving IDs (fake or not), and scamming for less than 10 dollars here.

If you manage to get some bitcoins, you are free to do anything with it. Nodoby knows who you are, and you can spend them as you like. That's why a lot of wallets got hacked, or mt.gox accounts. Even with SMS double authentification, you can find in the forum people crying and complaining about compromised accounts.

Bitcoin-central got hacked twice, and instawallet is still struggling to refund compromised accounts, 5 months later.

Why bitcoin can not extend more?

There are 4 6 7 main reasons:
- what I just said before (about scammers). Bitcoins is unsafe for customers, because transactions are irreversible.
- because it is not convenient to use.
- because the fees are too high
- because confirmations are too slow.
- because the value is changing too quickly.
- because people don't trust it.
- block size.

5 reasons to use bitcoins, but only the first one is interesting to increase the spread of bitcoins. Buying drugs, money laundering, investing and hoarding are just anecdotic. The main thing that could extend bitcoin is the ability to buy more legal things online (point 1)... But it should not be able to exceed current stage.

 1) Scams

Bitcoins is not safe for customers. If your wallet is hacked, noone will never give you back your fund. You can't file a complaint and upload evidence. You are fucked up. Therefore, it will never be reach a massive adoption, if it does not become safer. And it can not become safer because of what it is: irreversible transactions.

 2) Not convenient to use

When I first downloaded the client, I knew nothing about IT, computers, and crypto. I installed the software, and I read some stuff on internet. I found it really difficult to learn about, and I stopped reading quite quickly because I understood nothing.

It is not user friendly. When I use my phone, I am not Einstein, I know nothing about telecommunication, modulation, demodulation and so on, but it is really easy to use.

I tried to download the blockchain. It took ages. I gave up.
I searched more, and register on an online wallet (blockchain.info).

But who will do that? Any new user, will just give you and forget about it. If you open the software and find it difficult to use, lousy, you won't bother persevere.

 3) Fees are too high

Bitcoins fees will become higher and higher. Block rewards will decrease, so the miners will have to increase the fees if they want some incentive to keep the things running. For a customers point of view, Credit Card are free of charge, and can even make you save some money (cash back).

Anyway, you have to buy bitcoins one way or an other: by investing in a mining equipment, or buy buying it directly. So, you have to pay some fees in order to convert fiat -> btc. You can get paid by bitcoins, but it is unlikely to happen due to the high volatily of the price.

Then, when you make a bitcoin transaction you have to pay for the network fees, and often for the websites/sellers fees... So, at the end of the day, you pay more than if you did not buy bitcoin. You gain in anonymity, but you pay more. And for legal purposes, it is bad.

 4) Confirmations are too slow

An other problem is that confirmations are too slow.
Credit Cards take up to 180 days to proceed but they confirm within seconds.

Bitcoin transactions need at least 1 confirmation to proceed (because of double spent). And up to 2 - 6 confirmations to proceed. So, it is much faster to proceed but much longer to confirm. Problem is that only confirmation is important: it is the time you wait before leaving the supermarket.

And it won't be possible to wait a couple of hours or days with your bags at Walmart, before the transaction is confirmed...

 5) Price volatility

With 10k bitcoins in 2010 you could buy a pizza. Now, in 2013, you can buy a house, a car, and a kidney.
With 10k usd in 2010 you could buy a car. You still can buy a car now with the same amount of money.

It is compulsory for a merchant, to have a price stability. If you can buy 1 products or 3 with the same amount of money depending on the day of the month, you rely too much on the current price, and you can't run a decent business. Imagine that you get paid a car just before mt.gox lags and crash: you would have lost more than half of the price of the car....

Bitcoin price will always be volatile because of the tiny market, and it is not going to implement a stable economy out of it.

6) Trust

Did you ever try to speak to anyone who does not know anything about bitcoin? What did they say?

"- I don't trust it, it's a crap".

If people don't trust something, they will not use it. Why would they trust bitcoins if they can lose it all anytime?
Why would they trust bitcoins if the value can change so quickly?
Why would they trust bitcoins if it is not backed by any government in the world? By nothing at all? And can be attacked/abandonned/cracked anytime.

They simply won't. And they do.

7) Block size


Imagine that miners want 50 btc / block like before, it means that every transaction should have at least a 0.025 btc fee. Assuming that btc price rises and reach a value between 500$ and 1,000$ it will cost between 12 and 25$ per transaction.

The second problem is simple: 2 000 transactions / block means 200 transactions / min maximum. This is not enough for the whole world.

Conclusion

Some improvements can be make in order to create some tool more user-friendly.
It is also possible to fix some issues with the confirmations.

But some intrinsic aspects of bitcoins make it not possible to be used widely like USD or EUR:
- transaction are irreversible (good for scammers - trust problems with sellers).
- fees will grow higher and higher, and you can't do anything but buy btc. So, why not just buy it with fiat?


But it does not mean that bitcoin will disappear. It does not mean that it will be worth nothing in 2015.
It will be used, like it is now. Maybe by more people in the future. The price might increases if people thinks that it is a safe asset, and that its value might increase in the future. The number of shops accepting bitcoins might even increase. But we will never go to the next step.

BTC is not going to replace fiat.
BTC is not going to rule the world.
BTC was not intended to.