

The rise and... rise of Bitcoin - DiabloD3
http://www.wired.com/magazine/2011/11/mf_bitcoin/all/1

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3pt14159
The problem with bitcoin is technical, not economical.

It takes too long to make a transaction, there were no easy built in backups
built into the wallet, you needed to download the entire block chain, while
sometimes you couldn't even GET to the p2p network without hardwiring in a
fallback ip, which frankly goes against the whole point. There is also the
problem on non-continuous curves through out the whole thing. Every two weeks
miners would get onto irc and bitch about the newest hardness level. Why is it
every two weeks? That is crazy. Also, why are we running GPU cards for weeks
on end just to ensure distribution. That is stupid.

This is the internet with computers, it should take less than 500 ms to
confirm a transaction. It should take less than 10 seconds to install bitcoin
and accept a new transfer (ie, I shouldn't have to download the entire
blockchain). I shouldn't have to heat my house while ensuring the accuracy of
the block chain.

The next bitcoin will address these concerns, and will be widely adopted.

Disclaimer: I made a decent amount of money speculating on Bitcoins.

~~~
int3rnaut
Don't you think a bigger problem is that it's too much of a psychological
hurdle for non-technical adopters? Try explaining the concept of bitcoins to
most people and they'll become more hesitant, confused or even fearful than
interested. Even if the technical concerns are addressed I don't think this
gap can be overcome in our lifetime for such a concept to be widely adopted;
the current system is too far entrenched.

~~~
anarchotroll
Try explaining the concept of paper money (as it is currently used) to most
people and they'll be very confused. But they still use it.

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ggwicz
I love bitcoin. The concept is right up the alley of some of the anti-
inflation ideals of milton friedman, locke, keynes, and hayek. The only
problem I see is that many people are incentivized to invest in it and hoard
it, not to spend it.

Maybe something like a major global economic collapse would actually result in
adoption of something like bitcoin; maybe in the long run it'd be good....

~~~
nextparadigms
Hoarding may happen only in the growth phase. As soon as that becomes stagnant
(as a long term trend) people will stop hoarding them.

And isn't hoarding kind of a different word for saving money? The current
financial crisis came from huge loans that incentivized careless spending.
Maybe a currency that doesn't let you spend on impulse isn't such a bad thing.

~~~
ggwicz
_Hoarding may happen only in the growth phase. As soon as that becomes
stagnant...people will stop hoarding them._

Yeah, that seems to be the trend. It's opening up more and more (thankfully!).

 _And isn't hoarding kind of a different word for saving money?_

Well, I'm not saying the hoarding is necessarily a bad thing. I just mean that
hoarding, yes, like saving, limits the available quantity of bitcoins. That
raises the barrier to entry for many, many people, but as you pointed out that
will deflate over time, hopefully.

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jonathansizz
I think the article get across quite well the cult-like nature of the whole
bitcoin ecosystem, from the founder worship to the reflexive scorn its
adherents heap on non-believers. This point is tellingly reinforced by the HN
submitter changing the title of the article from 'The Rise and Fall of
Bitcoin' to 'The rise and... rise of Bitcoin'.

In a way, the sheer naivety of the bitcoin enterprise is quite endearing,
despite the currency having no more chance of success than the libertarian oil
rig city state ever did.

------
Jd
I'm sure there will be another Bitcoin. I'm also sure the founder is smart
enough to know (e.g. in his note about Wikileaks) that something like this
must be introduced in stages. In fact, the design of Bitcoin (e.g. the sharp
inflationary tendencies stemming from lack of supply) more or less guarentee
that it will be adopted by a few enthusiasts but not make it to mass
consumption. Frankly, I think Sir Nakamoto also knew this from the beginning
and considered this nothing more than a test run.

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RockyMcNuts
with bitcoin under $3 I'm not sure the 'rise and rise' spin is merited.

maybe this is the 'valley of sorrow' after the 'crunch of initiation'.

but without a sounder legal basis, trustworthy, transparent governance,
ability to evolve gracefully, bitcoin seems like an interesting experiment,
but not very likely to be a widespread medium of exchange, stable store of
value, unit of accounting.

