Anything "big" causes me to pause and count the concerns. The bigger any entity is the more damage they can cause. I tend to support "small" things as best I can.
I have read FinCen guidelines and not being a lawyer its not clear to me. In one part it seems to say its fine but in another it appears to be able to fit into "exchanger"
I find it odd to have not found an easy clear answer to this at this point.
I would say much of the negativity is because certain very large institutions have a huge incentive to not want bitcoin to "succeed" and would paint it in a negative light any way they could.
While I am sure those reasons play a part I think thats not even close to all of what makes it valuable. Ease of use is a huge one. I can set up a wallet in less than a minute and someone from across the world can send me bitcoin in the time it takes for it to clear the block, other cryptos even faster.
One can post their wallet address and make jokes on social media and receive bitcoin just because people like the content and are happy to support it. (yes that works)
You can receive bitcoin without giving anyone your name,address,etc,same with sending it to someone and do so for legal purposes.
Try to do any of those 3 above with dollar bills and its just not even in the same realm. I see great value in that.
Bitcoin is very complicated to use, doubly so to use securely. I've lost count of the number of stories I've read of someone losing everything, and then being chided by the community because "you deserved it, you weren't doing it the ~right way~", and of course there are a thousand mutually incompatible explanations as to what the right way is. This happens so often there's an entire subreddit for it.
(EDIT: For example, 12 hours ago an Ethereum startup burned $13 million because of a typo: https://www.reddit.com/r/ethereum/comments/6ettq5/statement_.... The top comment, of course, is "you deserved it, validate your inputs". I'm not kidding when I say this happens every day)
> I can set up a wallet in less than a minute and someone from across the world can send me bitcoin in the time it takes for it to clear the block.
Which is anywhere from half an hour to days and days, depending on how much you're willing to pay in fees.
> One can post their wallet address and make jokes on social media and receive bitcoin just because people like the content and are happy to support it. (yes that works)
You can receive bitcoin without giving anyone your name,address,etc,same with sending it to someone and do so for legal purposes.
I can do all of this with a PayPal account, both more quickly and with lower fees than Bitcoin. I need a real name to cash out, but you need that with Bitcoin too unless you're using a service that's breaking the law and not doing KYC.
> Try to do any of those 3 above with dollar bills and its just not even in the same realm.
Yes, digital transactions are certainly faster and more convenient than physical ones, because that's an apples-to-oranges comparison. On all these metrics though Bitcoin loses to PayPal, and when you're losing to a company that is the embodiment of pure evil, that's not a good look.
Paypal has been found to have done a whole lot of shady crap. What comes to mind right now is that numerous individuals have had their money held for 6 months with no recourse. They are also famous for letting fraudsters reverse transactions after they already received your goods/services.
That is a UX problem, though. The comparable problem in the 'old' financial system is legislative and cultural. I have tremendous faith that the rough UX edges of cryptocurrencies will get smoothed out by designers and coders looking to make a buck on-boarding people. I don't have the same faith regarding the vested interests of the existing financial infrastructure.
1) Bitcoin isn't new, it has been around for years now, and millions in venture capital has been poured into it. It's still a pain in the ass to use at all and basically impossible to use securely. I'm starting to think that if it could be fixed, it would be by now.
2) Not all those problems are UX faults. A lot of us happen to consider transaction irreversibility to be a bug and not a feature, for example.
> 1) Bitcoin isn't new, it has been around for years now, and millions in venture capital has been poured into it. It's still a pain in the ass to use at all and basically impossible to use securely. I'm starting to think that if it could be fixed, it would be by now.
I think it's improved quite a bit in that time. Especially so if you consider some of the newer cryptos. Is it there yet? No. But these things take time. Computer interfaces took a long time to get where they are today. It takes a while to find the right abstractions, and people are constantly iterating on these things in the crypto space.
> 2) Not all those problems are UX faults. A lot of us happen to consider transaction irreversibility to be a bug and not a feature, for example.
Well, I respectfully disagree. You may want to build reversibility as a layer on top of Bitcoin. Perhaps something mediated by trusted third parties. But that should be opt in. You want the underlying financial infrastructure to have immutable, irreversible transactions. On top of that base, you can and likely should build support for reversibility in certain contexts.
> You may want to build reversibility as a layer on top of Bitcoin.
How is that supposed to work? Once the money has been sent to someone's private key, you rely on their cooperation to get it reversed.
To effectively force them to give it up, a trusted third party would have to hold an even larger amount in escrow. But then what if that third party refuses to cooperate? You would need a larger escrow service to hold the escrow service accountable ... or they would have to make their identity public and be personally liable for any losses, putting government regulation back in the loop.
And this is assuming the transaction was made voluntarily in the first place. If someone steals your money they are not going to make the transaction reversible if they can avoid it. Unless you have the clout to convince a majority of miners to do a hard fork, good luck getting your money back.
In Ethereum, reversibility could have strict constraints. For instance, you could devise a contract in which the funds are held in escrow for 90 days, during which time a neutral third party may reverse the transaction using their key.
The important point is that the actual parties to the transaction may choose how they want to mediate this, whether they want reversibility, what conditions they want it to have, and have it all enforced by code and cryptography.
Of course, this burden would only really take place on high value transactions. For most transactions, there'd be a standard configuration people and merchants would use.
> I can do all of this with a PayPal account, both more quickly and with lower fees than Bitcoin.
Thanks for pointing out that the fees of Bitcoin are actually currently higher than those of Paypal, for donations up to around $60. I'll add the details here in case someone else was skeptical about this.
Fees for Bitcoin transfers use an auction system based on the transaction size, but according to the current statistics and median donation size for https://bitcoinfees.21.co/ one arrives at a fee of 81,360 satoshis, i.e., $2.02.
None of those things necessitate bitcoin, though. If your bank let you setup a public deposit-only account with an anonymized alias, you'd get al the same benefits, except that it would not be viable for criminal enterprises. Electronic payments don't require anonymity to be convenient, which is where all the value you refer to comes from.
Bitcoin does much more than that though. It gives you sovereignty. If you've ever tried to get illegitimate bank fees refunded, you may recognize the value of this. When you and the bank disagree about whether or not a fee was appropriate, you have no recourse. Your account balance is what they say it is, and they may choose to deduct what they like from it. This is not possible in Bitcoin. In Bitcoin, nobody else can originate a transaction from your account. Only the holder of your private key may do that.
The existing money/payment ecosystem is pull. Vendors, merchants, and banks pull money from your account. Bitcoin and other cryptos are push. You push money to others. Push is obviously the right underlying architecture for a financial system. Pull architectures are singularly responsible for basically all credit card fraud, for instance.
Still, are those benefits really worth it? Seems pretty minor to me but maybe I fail to see the bigger picture. Sounds like these things can be achieved easily with traditional money as well (like how it works in South Korea, where the social tipping you speak of is very popular). How are states supposed to collect taxes if they can't see anything?
I would also add that there are many cryptos, that comes into play in a few ways. One major difference with traditional "money" right now is the wild price fluctuations. You can have $100 worth of a crypto one day and the next its worth $1000. In some ways that is bad, but in others it is very very good!
I am no bitcoin evangelist by any means, but I do try to see both the positive and negatives. With taxes I have a feeling in due time because of the "recorded" nature it will be even easier to track than cash. How is the government supposed to collect taxes if I sell someone a baseball card for $1000 cash? I personally would pay taxes on cash or crypto just to avoid any hassle.
What is missing from this picture is that whoever wants to send you bitcoins needs to get them. This is still a huge barrier especially with having no idea what your bitcoins are actually worth and also it's a given that your wallet will be stolen sooner or later so you want to buy only a little at a time but that has overhead so...
As for transferring money, Transferwise is leagues ahead in usability when you consider that the sender has some sort of currency and the receiver wants currency (and bitcoin is not a currency, no matter how hard these Ayn Rand types insist, not without a nation state backing it). All you need is a name and an account number and the UI is super friendly and the transfer is cheap.
Transferwise is stupidly expensive. Costs about $140 in fees to transfer $10k from US to Canada vs. ~$0 for BTC depending on how sophisticated you are in timing the trade.
No, I'm saying the market is illiquid enough (or it was a year ago when I was doing this) to write a bot and wait for the price difference across the US exchange and CA exchange to cancel out the 0.5% round trip trading fees.
Which, by the way, are already much cheaper than transferwise at 1.4%.
I can't understand what you are talking about. I am in Canada, sending EUR to my brother in Austria. With Transferwise this takes as much as entering the amount, my ebank username and password and it's done.
With bitcoin, hell, I dunno. https://www.quadrigacx.com/account-funding-withdrawal this wants me to do a bank wire to avoid fees which I can't do online, it's one of my major complaints how the simple transfers in Europe are missing in Canada but I digress. If I use interac online, ding, 1.5%. Then I get bitcoins which I need to store securely, send them and it seems https://cex.io/fee-schedule#/tab/trade there are fee schedules expressed in a language I sure never heard of and then my brother also needs to find an exchange to get EUR out of. Seems hell of a bother to me to save a little money. I am not sending 10K, good for you if you do, I am sending 1000 EUR a time or so, we are talking of saving a few EUR. No way.
Please post what he said is incorrect. I read the article and found he is mostly correct depending on models etc. Perhaps I missed something but there were no blatent lies etc from my reading.
Almost any ban can be said to be done to protect people.
Cant have them reading some books for their own good!