Topic: BTC will never extend more - page 2. (Read 2907 times)
What a confused post you've made. If it's useful for illegal things, we can't assume that everyone who wants to do those things has already adopted Bitcoin. In fact a very small % of the world even knows about it currently (look at a map of the locations of Bitcoin users). You then compare the convenience of traditional money transfers used for legal purchases to the convenience of Bitcoin. I hope you can see how that doesn't make any sense.
As for confirmations, the 10-20 minutes waiting time is nothing for an online order. Most companies don't even ship the same day. There are also methods of searching the block chain for another spend attempt, making instant transactions possible.
I don't think that delay is the bigger problem on internet. But if you imagine a real life shop using bitcoins, do you imagine yourself waiting for 12 hours to get the confirmation before leaving the shop? Just with a bottle of coca-cola and some salt
From merchant point of view: accepting 0 confirmation payment and possible doublespend is as likely as accepting CC payment and possibe chargeback. In both cases neglibible.
With BTC you will know if doublespend within a hour, with CC you have to wait 180 days if chargeback occurs.
What is better?
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?
For the first one, you need to manage your risk, never send more than you can afford to lose. People used to rely on powerful third party to manage their risk, with bitcoin they must learn how to manage the risk, and that require that they first build up their reserve. But this is positive, since it will reduce the overall financial risk for the whole society thus we will never have a financial crisis when banks failed
With more and more transactions included in each block, each transaction need to pay less fees if the total fees for each block (miner's reward) is constant. Bitcoin will be mostly used as a medium of saving, fees only matter for day traders, that will reduce the amount of speculation on the market
You left out the third way to make bitcoins: by trading a good or service for them.
Yes, that might be a way to get some bitcoin free of charge, but you'll have to give something.
Online wallets, even if less secure, and plentiful now days. They take seconds to set up and are easy to use. (Easier than paypal.)
I said that it will be possible to do something more userfriendly. But it is 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 is not very good for money laundering. See here: http://www.wired.com/wiredenterprise/2013/08/bitocoin_anonymity/
Those guys are just plain stupid. You can use a mixing service
The fees are almost nonexistent, and you don't have to pay them.
If you don't pay them, the transaction are way too long.
I am still waiting for 3 days for a transaction without fees.
As for trust, you trust Amazon with your credit card, its no different trusting a website you buy things off of with bitcoin. Its only person to person transactions that can be a problem, but the same problem exists for cash. (You can get robbed.)
No.
If you pay with a credit card, you can cancel unauthorized transaction.
If you pay with btc, you can't cancel unauthorized transaction.
If you pay with credit card and do not receive your order, you can get refunded.
If you pay with btc and do not receive your order, you can only cry.
As for confirmations, the 10-20 minutes waiting time is nothing for an online order. Most companies don't even ship the same day. There are also methods of searching the block chain for another spend attempt, making instant transactions possible.
I don't think that delay is the bigger problem on internet. But if you imagine a real life shop using bitcoins, do you imagine yourself waiting for 12 hours to get the confirmation before leaving the shop? Just with a bottle of coca-cola and some salt
I believe I have addressed all your complaints. 
Not really.
Problems are that transactions can not be reverted, which is a problem for customers safety, and also that the fees will become higher and higher (and also compulsory for processing...).
You left out the third way to make bitcoins: by trading a good or service for them.
Online wallets, even if less secure, and plentiful now days. They take seconds to set up and are easy to use. (Easier than paypal.)
Bitcoin is not very good for money laundering. See here: http://www.wired.com/wiredenterprise/2013/08/bitocoin_anonymity/
The fees are almost nonexistent, and you don't have to pay them.
As for trust, you trust Amazon with your credit card, its no different trusting a website you buy things off of with bitcoin. Its only person to person transactions that can be a problem, but the same problem exists for cash. (You can get robbed.)
As for confirmations, the 10-20 minutes waiting time is nothing for an online order. Most companies don't even ship the same day. There are also methods of searching the block chain for another spend attempt, making instant transactions possible.
I believe I have addressed all your complaints.
Online wallets, even if less secure, and plentiful now days. They take seconds to set up and are easy to use. (Easier than paypal.)
Bitcoin is not very good for money laundering. See here: http://www.wired.com/wiredenterprise/2013/08/bitocoin_anonymity/
The fees are almost nonexistent, and you don't have to pay them.
As for trust, you trust Amazon with your credit card, its no different trusting a website you buy things off of with bitcoin. Its only person to person transactions that can be a problem, but the same problem exists for cash. (You can get robbed.)
As for confirmations, the 10-20 minutes waiting time is nothing for an online order. Most companies don't even ship the same day. There are also methods of searching the block chain for another spend attempt, making instant transactions possible.
I believe I have addressed all your complaints.
why sorry for bad english? Your English is better than most Americans, at least in writing.
Because English is not my native language, and I make a lot of grammar and spelling mistakes.
I also lack vocabulary.
I posted the same thread here (with more replies) as well:
https://bitcointalksearch.org/topic/btc-will-never-extend-more-288334
why sorry for bad english? Your English is better than most Americans, at least in writing.
- reserved for updates -
Sorry for my bad English.
Sorry for my bad English.
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 are4 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.
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
Bitcoin is a waste of time.
It is only good for turning $ into more $.
Nobody is really interested in Bitcoins, everybody is only interested in making more $ through Bitcoin.
It is only good for turning $ into more $.
Nobody is really interested in Bitcoins, everybody is only interested in making more $ through Bitcoin.
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
- 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
The current block size limit is 1 MB, about 2000 transactions maximum can be recorded in each block.
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.
Jump to: