
Bill Gates: Bitcoin Is 'Better Than Currency' - outrightfree
http://www.entrepreneur.com/article/238103
======
danbruc
At the moment Bitcoin is not better than other currencies because it is a
layer on top of existing currencies and their related infrastructure. Because
almost nobody accepts Bitcoins there is a constant need to convert back and
forth between Bitcoins and other currencies. While I really liked the idea of
Bitcoin when it came into existence I now tend to believe that Bitcoin will
die slowly because it does not solve any important problem for the average
person. Anonymity is not important for almost all transactions. Relying on
banks is not an issue for most people. Transaction are executed fast enough
and are cheap enough in most cases. There is just not enough incentive to
adopt Bitcoin.

~~~
forthefuture
This is especially true for online purchases. Right now the entire ecosystem
of Amazon / Paypal with banking services directly linked or through credit /
debit cards, works pretty flawlessly. You can buy anything on the internet
immediately with real money linked to FDIC insured banks running through two
huge easily trusted middlemen, with little to no setup other than having bank
account.

~~~
brighton36
You are clearly an American :) Also, Amazon would approximately double its
profit if it were not forced to pay the 2% markup on credit card charges. And
before you criticize coinbase for their 1% conversion fee circle is here with
0% :)

~~~
notahacker
Amazon will accept your credit card payment and won't accept your Bitcoins,
which is a pretty good indication of which payment method they feel is more
hassle than it's worth.

~~~
imrehg
Fortunately Overstock does accept Bitcoin already[0], so it's a pretty good
indicator that there are other considerations too. Also, you can use Gyft[1]
to spend bitcoin on Amazon and even get a discount - if there's enough
business that another company can support itself on users you are not catering
for, then there's definitely a business case...

[0]: [http://www.overstock.com/bitcoin](http://www.overstock.com/bitcoin) [1]:
[http://www.gyft.com/](http://www.gyft.com/)

------
bobbyhotpockets
I feel like bitcoin supporters, in talking about things like the convenience
and simplicity of transactions, while not incorrect, are missing the critical
issues that are going to determine bitcoin's fate.

If we look at bitcoin vs. US banknotes, a paypal balance, a pile of gold bars
in a bunker, whatever, if we're looking at how bitcoin performs vs. all these
things at the moment in time when we're transferring them to someone else,
bitcoin is superior in every case. The problem is this window is brief. Non-
transactional moments in the life of bitcoin is where the problem lies.

Looking at historic pricing of bitcoin, and seeing a peak at a little over
$1k, what does the future price need to be for people to feel comfortable
receiving bitcoins and just holding onto and forgetting about them, in the
same way they could with, say, 100 bucks in their wallet? Being divisible down
to 8 decimal places might rationally address the issue of how to spend
something where the base unit costs as much as an Xbox. But even if bitcoin
could somehow split at something like 300 or 500:1, to make a bitcoin roughly
equal to a US dollar or a Euro, does that really solve the problem of
perception? The historical chart, with the accelerated volume and insane
swings in both directions, might never recede from the mind of the public.

I just have a hard time understanding what a path to acceptance as a
legitimate currency looks like. Years of price stability would be a great
start. But the beginning of that period hasn't even begun. In the past month
alone, the price has moved by 30%, and daily volatility regularly sees the
price change by 5%. I can sort of squint my eyes and imagine scenarios where
bitcoin, the currency, wins. What I can't see is how bitcoin, the speculative
investment, also does well. That these two things are at odds leads to other
issues, too, but this is already unnecessarily long.

~~~
vobios
> I can sort of squint my eyes and imagine scenarios where bitcoin, the
> currency, wins. What I can't see is how bitcoin, the speculative investment,
> also does well. That these two things are at odds leads to other issues,
> too, but this is already unnecessarily long.

I don't think those two things are are necessarily at odds. Many people trade
well-established currencies for investment purposes. Forex is bigger than
futures or equities markets with USD as the most popular currency.

~~~
bobbyhotpockets
The speculation and trading of bitcoin, if it succeeds as a currency is a
given, I think. But right now, some of its most vocal/visible supporters view
it as a long term, buy and hold investment, and not just as a hedge.

With equities, no matter how far a stock price declines, profit is still there
to be returned to shareholders. Other currencies don't provide the same kind
of guarantees, but the backing of governments and inertia might be more
valuable. Once people grow concerned that the only thing propping up the long
term value of bitcoin is the person next to them believing in it, a quick
reversal of sentiment, with ugly consequences, seems likely.

------
hnnewguy
_“Bitcoin is better than currency in that you don’t have to be physically in
the same place and, of course, for large transactions, currency can get pretty
inconvenient.”_

Yes, bitcoin has some specific traits that are superior to carrying wads of
cash. Much like many other forms of digital exchange. This is not really news.

~~~
vermontdevil
Another advantage if I understand correctly is no middleman to deal with. No
more banks and not beholden to their policies and procedures.

~~~
vobios
There is a middleman. Someone has to maintain the block chain where all the
transactions are written.

------
fdsary
I mean, anyone who ever used bitcoin will see how it's clearly superior than
going to a bank office, getting an account, waiting days for it all to work
out. And then transactions take a night (at least in the countries I've lived
in).

Bitcoin transactions show up instantly. There's no need to a trusted middle
man. Anyone I show it to is swooned, because it's simply really really cool.

~~~
aaron-lebo
Signing up for Coinbase isn't instant. Yes, you could find someone locally to
exchange cash for Bitcoin, but that's hoping for a lot in terms of security,
and isn't exactly convenient, either.

~~~
modeless
Signing up for Circle is instant.

~~~
aaron-lebo
When I said signing up, I meant the whole process of getting to where you can
actually exchange USD for Bitcoin. On Coinbase they ask for bank account
information, and that can take several days to verify.

There is no process of identity verification on Circle before you can actually
buy Bitcoin from them?

~~~
epaga
No there isn't. I have no idea how they pulled it off, but it really is
instant. In less than 5 minutes, I went from not having a Circle account to
having a Bitcoin transaction on the blockchain transferring BTC I bought with
a credit card to my own private wallet.

Circle is amazing.

~~~
aaron-lebo
The issue with this (as you probably know) has always been the danger of
chargebacks.

I ran across a reddit post [1] discussing it. I dunno if they've completely
dealt with the issue, but it is pretty fascinating to see they are even
trying.

[1]
[http://www.reddit.com/r/Bitcoin/comments/2hvld5/let_me_addre...](http://www.reddit.com/r/Bitcoin/comments/2hvld5/let_me_address_the_elephant_in_the_room_how/)

~~~
dwild
Is it possible to charge it as a cash advance to avoid that issue? It's
essentially a cash advance...

------
zwegner
I tend to shudder when people talk about bitcoin being "cheap". There's a
massive amount of energy wasted to maintain the public ledger. It became much
more clear to me how this impacts the cost of transacting bitcoins after
reading this article: [http://letstalkbitcoin.com/blog/post/how-many-bitcoins-
does-...](http://letstalkbitcoin.com/blog/post/how-many-bitcoins-does-it-cost-
to-maintain-the-bitcoin-network)

...and particularly after seeing this graph:
[https://blockchain.info/charts/cost-per-
transaction](https://blockchain.info/charts/cost-per-transaction)

I'm more excited about proof-of-stake, as there isn't this arms race to throw
more and more computing power to generate bitcoins. I'm not sure why it hasn't
seen more adoption, but I will admit that I don't pay a lot of attention to
the cryptocurrency space...

~~~
jamoes
Proof-of-stake isn't being adopted because it simply doesn't solve the
Byzayntine General's problem [1].

[1]
[http://download.wpsoftware.net/bitcoin/pos.pdf](http://download.wpsoftware.net/bitcoin/pos.pdf)

~~~
zwegner
Interesting, thanks. I see the problem, but this paper takes as a given that
individuals can introduce transactions that tilt the system in their favor. I
can't immediately see a solution to this, but I don't think it's necessarily
impossible.

An additional problem I just thought of, however, is that there will be some
number of stakeholders that leave the network, lose their keys, etc., and
there is a chance that they are the only ones chosen to sign a given history
extension. So there has to be some way to recover from this, while still being
resistant to denial-of-service attacks.

