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Bitcoin is a disaster (metzdowd.com)
881 points by wyldfire 17 days ago | hide | past | favorite | 959 comments

I agree with most of the points raised by the author but as a Venezuelan Bitcoin is a godsend. If you live abroad and want to send remittances to your friends and family it can be pretty easy in a normal country , with wire transfers,western union and so on. If your family lives in Venezuela your options are extremely more limited.

These are some of the options Venezuelans have had to use:

1. Ask the money to be sent to Colombia with WU and then travel hundreds of kms to get what usually amounts to a few hundred dollars at most.

2. Use Zelle, send dollars in the US, and receive Bolivares in Venezuela. But for that you need to have an US bank account, and find a person you can trust also with an US bank account and plenty of highly volatile Bolivares in Venezuela willing to make the exchange.

3. Use paypal, same as above with way higher commissions and the risk that paypal (and the other person) will fuck you.

4. Buy Amazon gift cards and use the same schema above, be exposed to scams and high commisions fees.

Trading bitcoins in say localbitcoins.com, you have a very liquid market and somewhat secure transactions (Bitcoins are not liberated until you check the money is in the Venezuela account). There are risks of course, especially because of BTC volatility but at least is a fast,convenient,widespread option. I wish something like that, only more stable and with less of that Tulip-craze whiff BTC has.

Personal experience: not only bitcoin was the only practical way I was able to receive funds in Russia from an Indonesian client, it was cheaper than just one leg of converting Indonesian currency (to USD).

Think of it. Buying bitcoin, sending and selling resulted being cheaper than just buying USD. The spread was that much lower. (It was in a relatively static price period in summer 2016)

And regular banks just didn't do such transactions between Russia and Indonesia, like, nope. And PayPal was somehow banning the client for some reason.

>And PayPal was somehow banning the client for some reason.

Maybe the russian was on OFAC's sanctioned entities list? (only half joking)

The banned person was Indonesian. Something something his bank account. (One more reason for me why payment system of the future must be permissionless. Like, you know, bitcoin)

> One more reason for me why payment system of the future must be permissionless. Like, you know, bitcoin

That's not possible with a public ledger and current state of analysis - instead of proactive cancellation of the transaction on the legacy banking system, you'll get a delayed reaction from the authorities. When you file your tax return you'll get a notice to explain transaction ID 0x...34 to a certain banned individual. So it will be about as "permissionless" as tax-fraud: you will only be able to get away with it for a while, and I don't doubt there will be future analytical tools (and laws) that will make tracing payments even easier. It is politically untenable for bitcoin payments to be opaque when "Funding Terrorism" is a high-priority security issue.

Bitcoin payments might be traceable from wallet to wallet, but wallets don't have a name on them. Not even for governments. So if anyone takes basic precautions, you can't trace them.

Although I assure you a normal person can't read bitcoin transactions lists like they can a bank statement, and this goes for people working at the tax office too. And they can't forbid those transactions, either. It raises the bar significantly on Tax offices, and therefore means less enforcement.

And if need be, there are several anonymous cryptocurrencies that would love nothing more than to replace Bitcoin, and of course they will as soon as governments actually start tracing payments.


That's actually can be circumvented rather trivially. Wallets are anonymous, and you can just do some mixer transactions off chain. Wallet A pays to mixer M, mixer's address N sends funds to wallets B and C minus comission. In effect A paid B (and C), and nothing links them to each other. Schemes can get even less transparent with Lightning network.

Who owns the mixer?

> When you file your tax return you'll get a notice to explain transaction ID 0x...34 to a certain banned individual. S

We were talking about PayPal banning someone and you equate that to tax authorities banning someone?!

There are already ways to avoid that outcome today. You can use a fresh wallet and launder the money through a mixer like the other poster suggests, but you can also use shielded transactions like Zcash has (based on zero knowledge proofs) or coins where transactions are private if there is enough volume like Monero.

Or just had a similar name or used a “bad” word. The data quality for those lists is very poor.

Did you actually try multiple banks? Is the banking ststem really that broken in Indonesia?

My experience is that bank fees vary greatly.

My (limited) experience with US banks is that they have huge hidden fees and you get really bad currency exchange rates. I'm talking about 8% of funds miraculously disappearing during currency exchange. I don't understand why anybody would bother going via USD.

My Austrian bank on the other hand has much better rates and low fees. I think it was less than 1% for transfers of a few thousand USD last time I checked.

And finally, there are services like Transferwise; I just checked and they show rates of 1.5 - 2% for converting IDR to RUB.

> Did you actually try multiple banks? Is the banking ststem really that broken in Indonesia?

I like how you consider that opening an account on another bank was both cheaper and easier than using Bitcoin.

Opening bank accounts is pretty cheap and easy in Austria.

I don't know what it's like in Indonesia, hence my question.

> My (limited) experience with US banks is that they have huge hidden fees and you get really bad currency exchange rates. I'm talking about 8% of funds miraculously disappearing during currency exchange. I don't understand why anybody would bother going via USD.

You need to shop around for a better US bank account. This is not a common thing for us to do so if you pick up a random bank then you’ll be paying close to 10% in various conversion and fx fees. There are definitely US banks that charge 1%, some even 0%.

The problem in that case was with a partners bank, not my own. The solution was to request payments in USD rather than EUR and have my bank do the conversion.

> That broken

The crux of the issue. It’s tragic how the new woke fads exaggerate and even imagine plights for minorities near themselves, while completely ignoring big crises further away.

how much counterparty risk does the rapid price fluctuation result in? Can't imagine pricing a contract in bitcoin, as someone's getting screwed at payment if the BTC/fiat rate has changed during the lifetime of the contract

We just accepted the price of bitcoin in USD at the time the client bought BTC, and I accepted the risks of fluctuating price to myself. I actually gained somewhat, though, way less than if I'd just hold those coins till today. :)

You can peg the contract in USD (or better put, the original price was in USD) and just accept the bitcoins within a very small window, say 30 min/1h.

Don't you have a similar problem with Russian currency? From Jun 2014 to Jan 2015, it lost more than half of it's value relative to USD.

In the past 110 years Russian currency depreciated against USD at a something like trillion times.

It's a safe bet that it'll continue the trend (with some occasional and not too long lapses of stae slowish decline), and actually bitcoin is a rather safe bet against rouble. After all, it's not backed by Putin's government!

This is an utterly ridiculous statement. Not only is the trillion fold devaluation not at all a reasonable assessment of the situation, the exchange rate only matters at the time of the exchange, not after. That's the point.

I was answering to a person who said that RUB lost half of its value against USD in a span of a year. I just pointed that it is a part of a general trend, what do you find ridiculous about that?

Btw, 'a trillion times' is an understatement. Exact figure in 2014 was... 57 460 000 000 000 000 (fifty seven quadrillion four hundred and sixty trillion) times [1], and just add some more since that time. Still thinking that bitcoin is a risky currency, huh?

[1]: https://zhartun.me/2014/12/usd.html

Yes of course it's the risky investment. BTC has seen 3 drawdowns of -86% in the last couple of years, and also, what happened to XRP shows that the football can be deflated in seconds with the right SEC memo.

Currency isn't an investment. Currency has never been an investment. You're not supposed to hold currency. You're supposed to use currency to buy assets. A spot exchange rate means absolutely nothing. This is ECON-101.

Is gold an asset or a currency? Now it is definitely the former, but throughout history it was mostly an asset and a currency, with rather vague lines between them.

Bitcoin is not a USD replacement. It's more of a gold replacement: finite supply, great malleability, but with modern benefits regarding storage and transfer.

> Bitcoin is not a USD replacement. It's more of a gold replacement: finite supply, great malleability, but with modern benefits regarding storage and transfer.

This is an opinion that Bitcoin advocates throw out every time someone criticizes Bitcoin's ability to be a currency. As soon as someone criticizes its ability to be an asset, someone trots out that its actually been a currency this whole time. It's bad at both.

It's bad at both in no small part because it tries to bring back the asset-backed currency approach, which was dreadful last time around, and that's why it was ended.

> This is an opinion that Bitcoin advocates throw out every time someone criticizes Bitcoin's ability to be a currency.

This 'opinion' comparing Bitcoin properties to Gold appeared before Bitcoin antagonists appeared. It is part of a design.

The white paper is literally titled “A Peer-to-Peer Electronic Cash System” and the first line of the abstract states “ A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution.”

For this purpose it is abjectly poorly suited.

Neither the word “gold” nor “store of value” nor anything else of the sort appear in the abstract.

Well, I have read said whitepaper, but thanks for reciting it once again.

I have also read an extremely early mailing lists that appeared long before bitcoin started to get derided by critics like you, and guess what, it was those comparisson I'm referring to. And since you started reciting old texts, i'll go for it too.

Gold and Bitcoin are very similar in all their properties regarding use it as a wealth storage and transfer, with two stark differences: unlike Bitcoin, gold can be used to create physical objects. Like, a ring. Unlike gold, Bitcoin can be near-instantly transferred to another person. Everything else is irrelevant. Gold is valued not because it has some inherent value in it, the price depends only on belief that it has value. Same with bitcoin.

Well gold has intrinsic value (industrial processes for one) and Bitcoin doesn’t so there’s one difference :) not that intrinsic value dominates the price of gold of course.

Oh and Bitcoin wastes as much power as the entire country of Chile just sitting there existing and being speculated on at a rate of 7tx/sec, and not solving any real problems. I’d say that’s the only thing that matters.

I suppose time will tell.

every currency transaction creates this risk. Nothing to do with Bitcoin. I suppose you could say that this is a problem Bitcoin doesn't fix ... but judging by the Bitcoin market cap, it's not as much as a problem as normal banks.

> every currency transaction creates this risk.

This is a disingenuous straw man and a desperate attempt to brush away Bitcoin's failure as currency. The OP explicitly referred to cryptocurrencies' inherent high volatility, and volatility is not a mere transaction risk. Seeing your debt explode, because you either borrowed or deferred payments, due to cryotocurrency volatility is not a transaction risk. It's simply the fact that cryptocurrency fails as being money.

What's the easiest, cheapest and legal way to convert Bitcoin into rub?

Since “find a geeky massage therapist” is not helpful, my guess would be to convert BC -> USD -> RUB.

Is this from personal experience? And is there any data available to show that it's doing significant volume in Venezuela versus other options?

It is ironic because the economy in Venezuela is fucked, but almost every crypto-service or novel online pay modality is a huge hit in Venezuela.There are many FOREIGN apps where the customer base is +70% Venezuelan.

Some links:



Taking that first one and looking at current graphs, it looks like we're talking volumes of less than 500 BTC/week for the last year or so: https://coin.dance/volume/localbitcoins/VES/BTC

If we call it a rough average of $10k per BTC, that's $5m/week, or $250m/year. That sounds like a lot, but it's still only ~0.1% of GDP. In contrast, if we look at M-Pesa in Kenya, they report for 2017 doing $62.6 billion in transaction volume, or about 80% of GDP.

So it's not clear to me that Bitcoin is a major player even in Venezuela.

I'm not OP.

I looked and Chainalytics claim Venezuela is world number 3 in bitcoin use. But it's not clear what they're basing that on. My (very limited) understanding is that they can't directly see the country of origin of a bitcoin transaction. So they must be relying on figures from exchanges or apps?


Does anyone know if you can tell country of origin of a transaction request? Maybe the IP sending the request is public to the network?

Bitcoin adoption in venezuela is Absolutely fake/nonexistant

Bitcoin is only used as a bridge for exchange VES:USD a.k.a money laundering from corruption and drugs, with some remittances transactions caught in the middle of those laundry waves.

there is absolutely 0 adoption for bitcoin in Venezuela, Im a bitcoin enthusiast since 2011 and I hold bitcoin and I live in Caracas (capital) and move around all tech communities and yet to see a real crypto transaction. Some people used the “get rich quick” schemes from DASH and other silly alts and tried to make a big media (international media) about Venezuelans using bitcoin to try to money grab international money into their scams, they manage to convince some stores and local food chains to “accept” their silly cryptos but of course no one uses, yet they got the money from their international sponsors trying to force adoption in the country.. there is hillarious threads on DASH forums about it

You can read my other post on details on the only use for bitcoin in venezuela, that big money laundery called localbitcoins

>Bitcoin adoption in venezuela is Absolutely fake/nonexistant

This is completely and absolutely false. I personally know hundreds of (mostly very poor) Venezuelans who absolutely depend on bitcoin and other crypto currencies to survive. The people I'm personally familiar with eke out a few dollars creating content on platforms like Hive and Steemit, trade their alt crypto for bitcoin, pool it crypto together, and have it sent to Venezuela in small bundles where they collect it and use it to supplement their very meager incomes.



You personally know hundreds of people there? That seems like quite a lot. How did you meet them?

Also, I'm not sure I'd call that significant Bitcoin adoption if their only use for it is as an intermediary to exit a different cryptocurrency.

>You personally know hundreds of people there? That seems like quite a lot. How did you meet them?

As an active member for years I've chatted and interacted with them for years and gotten to know many of them quite well.

>Also, I'm not sure I'd call that significant Bitcoin adoption if their only use for it is as an intermediary to exit a different cryptocurrency.

Why is that so? As far as I'm concerned (as an early adopter of bitcoin and other crypto), Bitcoin's primary use has always been to fill the void when government-sanctioned currencies and financial systems fail. Without Bitcoin these poor people would be unable to cash out the fruits of their creative endeavors - its absolutely critical. Different people use Bitcoin for difference purposes, but none of these purposes is inherently less legitimate than another.

How do you deal with the ongoing devaluation of the bolivar currently?

Truthfully? There's no good answer, period.

The government needs to be replaced. This is the false promise of bitcoin. As long as the government needs to be replaced you have much bigger problems than the currency. As soon as the government is replaced, you no longer have to worry about the currency.

Bitcoin always has been, and always will be, a solution in search of a problem.

Forget Venezuela for a second and ask yourself how Bitcoin is helping the North Koreans.

How is the USD helping the North Koreans?

No one claimed that Bitcoin is useful in NK so I don't get the point of the question.

They print USD. And perhaps buying methamphetamine -base-products from China or whereever is more plausably deniable or less WONG or whatever than f around with chinese bills. Whatever they do, they're doing all kinds of shit. And they print USD, or has, and, everything else they do isn't really great, all the time. They counterfeit USD and probably tons of other shit. All the 'coinage' in paper-form from everywhere around the country or the world probably, bar the 3d and biometric and advanced shit probably. It's all shit over there man. In terms of the governance, governing, it's not good!

The point is that yes, an authoritarian government can definitely just shut down bitcoin, so authoritarian government resistance is not a feature of bitcoin.

Sorry for late answer.

The best way to deal with devaluation is just, spend the money instantly, is not really that hard, people barely get Venezuelan Bolivars (minimum wage is 3$ month equivalent) and like 90% of all transactions are already done in USD

So people really don't hold venezuelan bolivars for more than 1 day, savings in bolivars doesnt exist at all in this country.

In case you actually need to just save the money, you just trade it (it takes barely no time) for USD and hold the usd either in cash or in some usa bank (most people have access to them) or paypal.

So, the unofficial "forex" market is always there..

BTW this might sound funny but with only 450million USD you can buy the entire M2 in venezuela. So yeah, hyperinflation might be solved really easy whenever we actually get a new goverment

Thanks for this. Given the level of ungrounded Bitcoin hype that's always going on, I'm not surprised to hear it. Once again, Bitcoin turns out to be mainly useful for light financial crime.

Most Venezuela Bitcoin statistics are based on information published by localbitcoins.com

I wouldn't trust anything published by Chainalysis. Their accuracy is much lower than their reputation

Venezuela is often painted as a "Bitcoin solves this" poster child. Yes, Bitcoin is sent from the USA and other countries into Venezuela, mostly by Venezuelan expatriates to family. It's useful for buying USD in Venezuela. But USD liquidity in Venezuela is very weak, so Bitcoin doesn't really solve much at all there. You can't buy groceries in Venezuela with Bitcoin

>Does anyone know if you can tell country of origin of a transaction request?

You can not

> Maybe the IP sending the request is public to the network?

If the sender is using his own Bitcoin node, the sender's IP is known only to the other nodes the transaction was broadcast to. If the sender is using a third-party service, that service records the IP addresses of its customers in the same way as any Web site does, just as my IP is known to ycombinator when I submit this comment

> Does anyone know if you can tell country of origin of a transaction request? Maybe the IP sending the request is public to the network?

In this kind of setting, where the transaction is illicit, you wouldn't go through an exchange, you'd publish the transaction directly to the bitcoin network, and organizations like chainalytics do track the origin IP addresses.

That makes sense.

Not to criticise but... Isn't the IP of a transaction initiator being public a bit of a design flaw? Is it just assumed that users will obscure their own IPs (vpn, tor, etc)? Otherwise my isp/government can see my transactions and infer wallet ownership and I'm suddenly very un-anonymous...

Transactions are relayed to all the nodes in the network, not broadcast. That means when a node sees a transaction from another node, it's impossible to know whether the node was the originator of the transaction, or was merely relaying it from another node. AFAIK bitcoin core also has some mitigations such as delaying broadcast to a subset of the nodes, to make it look like your node wasn't the first node to learn about the transaction.

There are wallets that support schemes like Dandelion, intended to make it harder to deanonymize users: https://en.bitcoin.it/wiki/BIP_0156

Edit: apparently this has been delayed so you likely can't use it at this point https://bitcoin.stackexchange.com/questions/81503/what-is-th...

Last I looked, bitcoin p2p connections are not encrypted by default, so your ISP/government can see any transactions you initiate yourself. I implored the bitcoin developers to add this functionality about five or six years ago for this exact reason.

That said, someone who isn't in a position to monitor the L2 network can't know if you are initiating a transaction or simply rebroadcasting it.

Venezuela aside, a lot of these LatAm countries have some type of capital controls in place. (Girlfriend is Colombian)

Unless you have originally brought cash in the country and received some type of pre clearance from the government, it generally is not so easy to convert back to EUR/USD/etc and move meaningful amounts of cash out of the country.

Don't know what the adoption rate is in Argentina, but with inflation being 30 to 40% a year, why would you even bother holding local currency?

It’s a godsend to a small handful of Venezuelans, it’s not a general solution as of course a transaction fee is a few months minimum wage. It does literally nothing to solve the problem more broadly. You’d be better off holding value on their behalf stateside.

Of course the government could shut it off in a heartbeat. How many North Koreans does Bitcoin help?

read my answer, it's pretty well explained there

You are all missing the the trend over the last 7 years for bitcoin is to create a digital asset that is a store of wealth. To say bitcoin is a payments system in the sense of cash is to miss the executed tech roadmap where cheap one off transactions is a secondary concern (not bitcoin core's). Listen Saylor talk about MicroStrategy's investment in bitcoin. He is very clear that is a store of wealth and appreciating asset on the books, not a payment rail for MicroStrategy subscription base.

Currency has more than two functions. Transferring wealth is not the same as paying for goods, and storing wealth is not the same as holding a speculative asset class.

Bitcoin is volatile. Holding it is more like holding gold, not USD.

Bitcoin is very easy to move across borders. Moving it is much more like a bank transfer, than paying for a pizza.

They haven’t changed Bitcoin a single bit since 2008. Saylor sounds like he got taken by the Bitcoin euphoria.

The point is the commenters here on this thread listen to too many youtube crypto channels for an accurate analysis of what bitcoin is and wants to be.

Yeah but, why BTC specifically? Why not ETH or ETH tokens, or any of the hundreds of other cryptocurrencies that are faster and have lower fees?

Bitcoin has the most infrastructure surrounding it. And Bitcoin is the most careful to make life easy for infrastructure providers.

Eth is very challenging to operate securely. Breaking updates are frequent, often with little warning. Bitcoin hasn't changed in many years, and new software updates are optional, and don't require you to write any new code or change how you operate. Most other cryptos suffer from the same challenges.

Eth has more features and flexibility, but for the explicit use case of sovereign money, Bitcoin really stands in a class of its own.

> and don't require you to write any new code or change how you operate.

This one was fun, but I guess quadrigacx was always going to be insolvent anyway: https://old.reddit.com/r/ethereum/comments/6ettq5/statement_...

(I think the top ranked post can be ignored, it gets good here: https://old.reddit.com/r/ethereum/comments/6ettq5/statement_... )

Care to give some examples? I use eth on a regular basis for ~3yrs now and have never encountered any updates that broke basic functionality, or any updates at all for that mater that weren't broadcasted for months ahead of time.

Are you perhaps referring to some specific dapp built on Eth that you don't like?

Breaking updates are not frequent, there's never been a breaking update on the ethereum blockchain.

Bitcoin changes all the time (e.g., taproot)

Ethereum literally just had this issue a month ago https://www.coindesk.com/ethereums-hard-fork-disruption

Binance had to suspend wallets because of it

Lol well you should probably stop using binance and centralized exchanges generally.

You have actual permissionless dexs trading on Ethereum wallet to wallet. Literally, no bullshit in between where you don't have to worry about the CEO of the shitty CEX you're using taking a powder for 33 day's. There's nothing permissionless about bitcoin infrastructure, it requires custodial counterparties to trade hands. ETH and all the many tokens do not. Economics aside, that's probably the most bearish development for bitcoin

You can turn your nose and say ethereum dapps all have that admin key smell but things like uniswap, starks, the Dai stablecoin, yearn are dope as hell and I'd think worth a looksie

I’m not a bitcoin maxi. I love Ethereum and I am an industry professional. I’m just correcting lies to keep information accurate.

Remember the DAO?

Fire feeds on obstacles homie

lol, if code = law were any good, everyone would be on ETH classic.

The DAO was a classic example of crypto being trustless for thee but none for me thanks.

There's not a good reason. Of all the cryptocurrencies, BTC is one of the worst for this use case.

Of course there's a good reason. BTC is much, much easier for the Indonesian person on one side of the contract to purchase with their local currency, and much, much easier for the Russian person on the other side of the contract to liquidate into their local currency. Almost any country has a highly liquid market of local currency <-> BTC, and that's often not true for any other crypto.

Another fellow Venezuelan here, this guy points are actually wrong and he's just using the momentum to prove some point related to bitcoin that is not true

Before hand, I would like people to know that the current VES:USD rates are the following:

- Official rate: 1.107.198,58 per each USD [1]

- Unofficial rate: 1.027.812,89 per each USD [2]

So now, The way that remittances work in Venezuela is pretty simple, let’s say a person A, wants to send 100$ to his grandma in Venezuela, and Person B has Venezuelan Bolivars.

Person A gets in contact with person B (or viceversa), they agree on a rate based on the 2 rates i said before, person A sends the 100$ usd to person B and person B sends the Venezuelan Bolivars equivalent to person A grandmother. There is always a factor trust on said trade/ remittance where someone has to send the money 1st.

Now, this exchange for the USD side is USUALLY made using Zelle (in the case of USD remittances) but its also done a lot in actual cash USD, it can also be done in any other method such as Paypal, AirTM, Cashapp, Venmo, etc.. it could even be in hello kitty coins if person A and B agrees. It doesnt really matter.. As for the venezuelan bolivars parts, its always done in venezuelan banks.

What the poster here says in point (1) its wrong, you can use W.U, MoneyGram to send money to Venezuela, it uses the official exchange rate, thus, you don't have to go to colombia to send money to venezuela, remitances using those services are working online (they deposit to your bank), there is also fully operational exchanges like zoom casa de cambio, that will take remitances from different companies worldwide. [3]

So this is my point. As I say, venezuelans do not need bitcoin, they could trade even hello kitty online coins or whatever any other method that allows them to send some value worth. Directly, they just use Zelle or cash, some others use paypal or whatever they want.

So, bitcoin doesn't really benefits Venezuelans, the only thing that benefits venezuelans is the localbitcoins escrow service, but this is not because its cripto or because its bitcoin, it's just because noone else offers an escrow service to sucessfully exchange currency, that's pretty much it. Venezuelans just lack some place to properly exchange money it doesnt need bitcoin

In fact, if you go ahead and check localbitcoin prices for exchange between VES:USD, the rate is always worse, you can check this site that tracks the rate on real time [https://dolardeverdad.com/]

Adding to this, there is another layer to this, it's the fact that it's really hard for Venezuelans to convert bitcoin into USD, not only because we are not welcome on sites like coinbase.com

Now, you wonder right now, how come there is a lot of bitcoin being bought in venezuela's localbitcoin market, now I will answer you, it's plain and simple money laundering, that's it, there is drug dealers, corrupt goverment officials and a bunch of shady people who has TONS of venezuelans bolivars and they want to get them turned into something else. Using my example before, the person B would be the corrupt/drug dealer and the person A would be you trying to send money to your grandma

So no, don't come with the "bitcoin is saving venezuela" speech, it', Bitcoin its a workaround for corruption and dirty venezuelan money to find its way into USD.

[1] http://www.bcv.org.ve/

[2] https://www.instagram.com/p/CJbfgj3FLft/

[3] https://www.zoomcasadecambio.com/


Can you please make your substantive points without personal attack? We're trying to avoid flamewars here.

I realize this can be difficult when a topic is close to home, but it's an effort we all have to make on the topics that we feel strongest about.


Absolutely, go r/vzla so you can find everyone making fun of bitcoin usage in venezuela :), bitcoin is actually a meme there for this sole reason, people outside think bitcoin is used, when is not.

As for OP, had no other options to call me a "maduro bot", when Im clearly stating that localbitcoins is exactly the place where all the maduro corrupt officials clean their drug/stolen money. haha.

Let me remind you that, the venezuelan corrupt goverment LOVES crypto, because it allows them to clean their stolen money. Thats why they are even mining it themselves [1] with free power and stolen bitcoin mining machines [2]

And to finish, you can literally find the westerunion guidelines on how to send money to venezuela [3] where it clearly states that you can receive remittances in any office of "zoom cambios" in venezuelan territory.

[1] https://cointelegraph.com/news/venezuelan-army-starts-mining...

[2] https://news.bitcoin.com/venezuela-seizes-315-bitcoin-mining...

[3] https://www.westernunion.com/ve/en/send-money.html#:~:text=Y....

It would better if you addressed his arguments and not make dispersions against his person. Classic ad hominem attack.

> So, bitcoin doesn't really benefits Venezuelans, the only thing that benefits venezuelans is the localbitcoins escrow service, but this is not because its cripto or because its bitcoin, it's just because noone else offers an escrow service to sucessfully exchange currency, that's pretty much it.

This is the argument. I dont need to address anything. BTW, not that it matters but I dont hold bitcoins , I am not a trader and I dont have any association with localbitcoins, I even agreed with the points presented in the article (check my post history) now check OP's.

I don’t claim OP is a bot but you advise would not work if he/she is. The problem with bots is you cannot refute all the nonsense they generate. They are not interested in arguing with you, their job is to generate as much contradictory claims as possible so everybody reading the thread will be lost and confused. I’ve been watching this behavior in Russia for quite some time.

They could use hawala, a value exchange system which has been around for centuries. Fees are reasonable, the system is extremely trustworthy and use is not limited to Muslims.

TransferWise is the tech incarnation of it. I bet they don’t operate in Venezuela due to US trade sanctions.

The TransferWise model is the future of global banking imho (disclosure: I work in the financial infra space). One user account, the ability to hold a variety of currencies simultaneously, and banking info for each currency to plug into financial rails for said currency (routing/acct in US, IBAN in the EU, etc).

Turns out money is just rows in a database and ISO 20022 messages, queued and processed.

I had enormous problems trying to do anything with Transferwise from Cambodia. It's still plagued with problems left over from the conventional banking system.

This loops back to one of the few things cryptocurrencies do well: they're extrajudicial, so they're often used for illegal transactions (drugs, ransom, bypassing sanctions). Bitcoin just happens to be really bad for this since the blockchain is forever.

>western union

if you don't mind the usury-level fees

Western Union had, hands-down, the best rates and the least hassle for me sending money to my home country. The old reputation of WU just doesn't hold ground any more.

Their fees are surprisingly competitive, take another look. In places where fees are high it usually has to do with risks of doing business in the locale that they have to price in.

You could buy either a stablecoin or ETH (it tends to have more liquidity) and uniswap to a stablecoin like USDC (Owned by Circle and Coinbase, not sketchy, decent liquidity) or USDT (kinda sketchy, insane liquidity). Then you are only really exposed to the volitility for the time it takes to swap, with uniswap that can be literally seconds.

Why aren’t there any mention of highly popular alt-coins like Litecoin? It’s less volatile for real use as a fiat alternative and transaction speeds are a lot faster because of the low service fee to speed things up. I kinda regretted keeping funds in Litecoin but it was one of the first to fix Bitcoin’s shortcomings.

Litecoin is extremely similar to Bitcoin.

The fact that some of the currency's "fundamental constants" have been tweaked to make it slightly better for certain situations does not change the fundamentals.

It's kind of like the multiplicative constants in algorithm complexity theory.

And while there are many other alt-coins that claim to have solved the scalability problem while remaining truly decentralized, I have yet to see one actually deliver.

alt-coins don't have the market depth of Bitcoin. Moving money in LTC will move the market, BTC is approaching institutional market depth.

I still question the early bag-holders of Bitcoin. Where are they and what do they do now? I think Litecoin came at a time when more people had an awareness of cryptocurrency, it's more democratized during the initial phases because of Scrypt and GPU's being the dominant mining tool at the time. ASICs shifted that balance again but I still have my doubts about who owns the majority of Bitcoin.

I would bet a lot of folks have been selling it over time. My wallet once held ~10 BTC for a few transactions back in the early days. I ended up with 5 btc left over that I rode the bull market with, selling half the position post bull run each time.

I kick myself for loosing the BTC my friend and I mined back in '09 on CPU time when it truly was worthless. But I was a dumb college student at the time and was simply playing around with it for a few days. I wonder how many BTC were permanently lost in this period.

Oh man, I'm right there with you. I had the Bitcoin wallet app on my LG G3 years ago... I found a backup USB stick with the wallet backed up to it. Tried to restore the wallet, realize I've forgotten the password. It didn't have much on it, maybe 23 mBTC or so, but that's about $700 nowadays.

I would love to understand this in detail.

If you mined it once you get a hash. When you say you lost those coins you lost the hash to the account? When you mined in 2009 was the hash smaller than today? Is brute forcing possible?

They lost the private keys, and they are not brute forceable.


Bag-holder usually has the connotation of holding a worthless asset, bitcoin is currently at an all time high.

The underlying asset is utterly worthless, for all the reasons posited here in the article and more — that people are willing to pay you for it doesn’t change that.

>that people are willing to pay you for it doesn’t change that.

I dare to insist it most certainly does. Anything is economically wothless unless there are people willing to participate in exchanging it.

In the long term this definition is murkier, see the Dutch Tulip bulb bubble of the 1630s.

I'm not sure we have any definition here :-) But claim that anything is economically wothless unless there are people willing to participate in exchanging it is in fact supported (not denied as you seem to imply) by any example of speculative bubble, including of course Tulipmania.

People are using bitcoins price to justify its value. Price is not value, certainly not on a short timescale. Consider that in the short term a market is a popularity content but in the long term, it weighs actual value. This is another way of saying that the market can remain irrational longer than you can remain solvent.

If you actually attempt to assess fundamental value of Bitcoin based on anything comparable it’s value approaches zero. It’s pretty much worthless at anything it’s ever been positioned to achieve except crime and speculation.

Frankly it’s not even good at crime.

The value of a bitcoin is the rarity of owning a coin is limited and the way it works opens up transactions globally. The price is the market demand.

oooh the rarity of owning a some digital magic beans, right, thanks I'll pass.

Are they magic beans or just beans?

A bitcoin address gives you a unique global address decentralizated that funds can be sent to. There is utility to that function.

Using your description the internet is a magic place faeries built that provides no usefulness because it's virtual.

No, Bitcoin provides no value because it's bad at everything it tries to be. It's a bad store of value (-86% swings 3x in the last few years), it's a bad currency (7tx/sec) and it's bad for the environment (as much power consumption as Chile).

The internet provides utility. Bitcoin provides speculation and crime.

It's a bad store of value (-86% swings 3x in the last few years), it's a bad currency (7tx/sec)

Bitcoin is the best performing asset of the past years compared to stocks, gold, commodities, etc.

He maybe bad at what you believe it tries to be, and still be useful. And hence its price.

>Bitcoin provides speculation and crime.

Everything valuable can become a tool, or a reason for criminal activity.

"Magic beans" is something you can say about majority of payment tokens humanity has been using. However, once enough people agree they are good for exchange they become good for exchange.

Then you can say the exact same shit about American dollars.

The rarity of owning some paper with ink on it!

That's alright, there is no coercion to use BTC.

I have no idea what that statement is supposed to mean or prove lol.

Nothing, just a polite way of responding "nobody cares" to "thanks I'll pass."

Yes it does change that. If you can sell something for $29K you're not bag holding...

Depends how long you hold it for.

Well yeah, exactly, you're not a bag holder until it's a bag of something worthless.

Litecoin is extremely under the radar right now. With the upcoming MimbleWimble integration it could become a privacy alternative to Monero.

An unsuspecting onlooker would be easily convinced that this comment is random babble generated by a bot.

To be fair, neither of you are providing any tangible, verifiable fact one way or the other.

Is there a Mimblewimble / Litecoin integration effort? If so, I'd sure love to learn more about it.

And if there isn't can you offer something in the way of a proof?

You can see the progress of the MWEB (MimbleWimble Extension Block) project here [1], headed by Grin++ [2] developer David Burkett.

[1] https://litecoindotcom.medium.com/litecoin-mimblewimble-nove...

[2] https://grinplusplus.github.io/


Hey guys, y’all seem to know what y’all are talking about.

Please give me a min of yalls time.

My boss has been talking up Bitcoin SV to me for the past 2 years and he watches hours upon hours of podcast and YouTube videos (https://youtube.com/playlist?list=PLOqZWfHm-gzDyMoDGmPCJbBhg...) that playlist is what he showed me that he watched. Anyways, he sort has convinced me.. I’ve done a little research but I’m not familiar with it as y’all seem to be. Is there any hope in BSV? my avg is 169.xx and I just wonder if this thing he told me about BSV being the only one that can “scale up” or whatever that is.. anyway any comments/tips are appreciated. Happy New Year!

No, BSV is hopeless because nobody wants anything to do with Craig S. Wright (Good summary here: https://bitcoinmagazine.com/articles/op-ed-how-many-wrongs-m...).

Also, if BSV had enough users to ever experience scaling, its network would be so centralized it would be like a new PayPal but with Craig's employer running the show. Not surprisingly, after 2 years this idea has not caught on at all and the value of BSV as a fraction of BTC continues to plunge to new lows.

My suggestion is to get out of this scam immediately and stop listening to your gullible boss.

There are options like SureRemit that has extremely low fees built for this exact purpose (at least that’s what it’s being built for). Hope this purpose of blockchain tech pans out and improves compared to other existing options.

you are exactly arguing the authors point, just in a use-case not specifically addressed. the hassle involved in transfurring funds internationally exists for a reason, and as soon we rediscover the associated problems there will be an outcry for some manner of regulation bitcoin purposefully subverted in the first place.

Venezuela? come on , You mean only failed states use it. all these sites could be banned any day.

Not to downplay the shitty situation that Venezuela is in right now, it says something when that's the only situation a quasi-currency is good in. It's almost like for all of Bitcoin's problems, Venezuela has more.

Why are they using bitcoin rather than dollar stablecoins? Too new?

Of course! Every exchange and currency are as valuable and accepted as the group decides them to be. Same way you can pay anywhere with US dollars and not with South-African Rands.

> you can pay anywhere with US dollars

Huh? Maybe with a credit card that converts your usd to a local currency. I’d like to see you walk into a French or Japanese grocery store and offer them your freedom bucks

Localbitcoins doesnt exchange stables.

Binance does exchange USDT to VES but is not that popular

How do people use bitcoin effectively when it has $9 transaction fees from having its block size limited? Do you mean cryptocurrency in general?

The fee someone pays to get a transaction into a block is similar to what passengers pay to be on the same flight—everyone pays something different.

You could have paid $300 while the person sitting next to you could have significantly more or less, depending on a whole host of factors.

Same with bitcoin: someone could have paid $1.50 for a transaction in the same block as your $9 transaction, depending on its size and how quickly the sender needed to have it confirmed. Someone also paid $.50 to be in that block but they were okay with waiting for an hour before it would be confirmed.

A dashboard such as https://bitbo.io will show you fee estimates.

What you are saying is somewhere between a gross distortion and a lie.

I said $9 because the average transaction was $9, the median was over $5. If someone is paying $300 under those circumstances it is because they have a large, complex transaction. Transaction sizes vary, transactions costs aren't as random as you are implying.

> someone could have paid $1.50 for a transaction in the same block as your $9 transaction, depending on its size and how quickly the sender needed to have it confirmed.

That's not how it works. Most transactions are small, you can't somehow cut them down to a fraction of the size it takes for a basic transaction from one address to another.

> Someone also paid $.50 to be in that block

What transaction is what block are you talking about? I didn't mention a specific block, some have had even higher average transaction costs. Where did you see that?

> but they were okay with waiting for an hour before it would be confirmed.

Again, that isn't how it works. If you put a transaction fee that is too low, you wait until there are no higher value transactions for yours to be included into a block.

Check out Stellar, it’s been created for that, Faster than bitcoin and really lows fees.

>Check out Stellar

Great idea given that they're next on the SEC's list once they're done tearing Ripple a new one.

That stinks, given that their technology actually made crypto viable for everyday transactions.

Stop shilling, please.

The only reason BTC works in this scenario is that the authorities are not chasing it down. If they decide to, it will be just as unviable as the other options and authorities have many methods at their disposal to make bitcoin transfers difficult.

BTC is cool, but no amount of tech can solve what is essentially a policy issue: overseas remittances.

You can make the same argument about AirBNB or Uber. The bottom line is that when a technology becomes available that makes life much easier for its users, it's really hard for the government to then crack down on it.

There's not much reason for any government to want to crack down on BTC simply for the sake of cracking down on it. People talk about governments cracking down on BTC because it will undermine the local currency or banking system but I think that's mostly paranoia, there's not much of any evidence to substantiate the hypothesis that any government is fearful of cryptocurrencies.

There were some governments and regulatory agencies that were concerned that BTC is a scam, or needs to be subject to security regulations, and had legitimate concerns about it but for the most part governments don't care that much about BTC in terms of a danger or a threat to their legitimacy.

In fact, governments like New York have cracked down on Uber and AirBnb. I do think if BTC or another crypto were to be a problem for a country they would simply legislate away people’s right to hold or exchange it. US would pass a bill that makes the exchanges illegal. Sure, people would find ways around that, but it would be enough to deter your average citizen and to squash widespread adoption.

Whether BTC becomes a problem is a question, but if use in laundering or escaping taxes gets past a certain point, I do think it is a risk.

>>People talk about governments cracking down on BTC because it will undermine the local currency or banking system but I think that's mostly paranoia

Incorrect, the government has no concerns over undermining the local currency. The primary purpose of banking regulations is population control, it has nothing to do with currency perservation

Know your Customer laws, book keeping regulations, etc are all about control and intelligence. If they can get this intel and allow BTC to operate as is they will leave it alone, if however they can not get the intel they need on how money is moving well you can bet your life they will crack down hard

Governments, all governments even yours, are about Power, Control, and Authority not what people seem to naively think that the government is there to "help" or "protect" or any other just altruistic goals.

Government isn't a monolith. There are individuals within the government that have altruistic goals. It may be helpful for certain analyses to simplify and consider a government as an individual, but for other analyses that's counter-productive.

Government is a monolith, the goals of the individuals that make up the government are irrelevant.

The road to hell is paved with good intentions, and the most terrifying phrase in the English language is "We must do _____ for the greater good"

Government is not reason, it is not eloquence,it is force! Like fire, it is a dangerous servant, and a fearful master; never for a moment should it be left to irresponsible action.

You're spouting platitudes, which I enjoy sometimes for a dramatic turn of phrase, but they aren't helpful for rational discussion. They're best used for introducing a topic, but then we need a little more structure behind the facade.

Going back to the monolith question, the other day someone at the public utility helped me fix a mistake with my bill. That individual was not irrelevant to my experience with government power.

I’ve been noticing this sort of comment a lot in discussions of cryptocurrencies.

Take for instance the following response to the Ray Dillinger’s email:

Internet also became a disaster. We're very far from original ideas: Uncensored, decentralized ideals are forgotten.

I remember, in the beginning, governments were really afraid of people's reactions, even to make small regulations. Today, we don't even discuss before accepting any regulation about Internet. Infrastructure is almost completely controlled/owned by governments or cartels. [1]

That is so far beyond reality that it’s hard to believe this person was there “at the beginning”. The Internet, after all, started as a DARPA project...

1. https://www.metzdowd.com/pipermail/cryptography/2020-Decembe...

Why is it obvious that no amount of tech can solve it? Tech can also influence policy. If something is nearly impossible to stop, it likely won't be stopped. The policy will be changed instead.

This hasn’t proven true in countries with functioning govts: they very much have applied tax and securities law to bitcoin.

The rideshare industry had a clear impact on local laws in every first world country for one example.

Right, because it was hard to control and ridesharing was clearly better. My point was the experience in functioning countries has not shown this to be true of bitcoin.

It has been easy enough for govts to enforce tax and security laws where they’ve tried. What laws have been changed for bitcoin?

The IRS issued official guidance on it but there's no need for new laws around it.

That’s the point! Bitcoin didn’t bend the world to its will. Whereas ridesharing forced legalization of ridesharing.

I should note that I do not necessarily imply in my comment that it would be Bitcoin that would bend the world to its will. Bitcoin is just one member of a larger cluster of cryptocurrencies. There are certainly some cryptocurrencies for which it is not so obvious that governments will be able to enforce exactly the same laws as they enforce now.

That said, even with Bitcoin, I do think it shifted the world ever so slightly in a new direction of financial independence which just wasn't there before. There is something distinctly different about sending money to someone else in any part of the world just by typing their address, with no one being able to stop you. With traditional methods, governments could impose and have regularly interfered and imposed bureaucracy already on this sending step. With Bitcoin they do not do this because it isn't very practical.

You could argue its popularity has prevented governments from regulating against it as hard as they would have liked to.

> nearly impossible to stop

What's nearly impossible to stop? Can't the government simply shut down the internet to stop Bitcoin? Or insert itself as the man in the middle of all network traffic.

No, the government can't "just shut down the internet".

If any government did that, then the country would suffer extreme economic damages, if such a policy was maintained for a long time.

Your argument would be like if someone were to say "actually, the government can stop all theft, now and forever. All it has to do is launch 1 thousand nukes, start world war 3, and kill off 99% of the population".

Like, sure. The government could end the world, by launch a nuke at every major city in the world. And it is true that by doing this it would end all theft .. because everyone is dead.

But you are kinda missing the bigger picture if you are seriously suggesting this as a counter argument to anything.

My point was that the government has control of the internet, and thereby all activity on the internet.

> extreme economic damages

We're talking about Venezuela, which has had extreme economic damages caused by a government trying to maintain control over its population. It seems that they don't care about damage, only power domestically, not internationally. The comment we're replying to said that Bitcoin is valuable in transactions with Venezuelan counter-parties because of Venezuela's government's damage to the domestic economy.

> My point was that the government has control of the internet, and thereby all activity on the internet.

Yes, if you're a big enough bully, you have control over many things. However, sometimes the control would imply too much destruction so even the bully chooses not to proceed. This is essentially what is happening right now.


> In more recent years, even the state's hold on the country's financial system has been badly shaken, with the US dollar growing commonplace in day-to-day transactions. In March 2019, Venezuela's entire electric grid collapsed, leaving some regions without power for up to a week. Without electricity, electronic transactions including credit and debit card payments were impossible, and paying cash was futile with even the highest-denomination bolivar notes worth only pennies. So Venezuelans started using the option left: illegal foreign banknotes.

How would they use Bitcoin when electricity is out? Generators only last so long when fuel is rationed.

> the government for the first time allowed a private company to issue bonds in dollars, and by doing so, raise capital outside of government control.

They key word there is "allowed" because that emphasizes the ability to disallow at some point in the future.

People have this sci-fi imagining of megacorps and the collapse of government power. Instead, we have Jack Ma probably afraid for his life, because he insulted the wrong person.

> My point was that the government has control of the internet, and thereby all activity on the internet.

And yet, here we are, living in a world where such controls are pretty difficult to enact and simply aren't happening.

Even in places where there are government controls over the internet, such controls are apparently not even close to perfect, on many many people are successfully able to get around them.

So, the evidence shows, that despite any argument that you are making about how governments might control the internet and stop anyone from ever doing anything at all that they don't like, that is simply not happening right now to such a perfect degree that you suggest should happen, even in currently authoritarian countries.

> We're talking about Venezuela, which has had extreme economic damages caused by a government trying to maintain control over its population

And yet, despite all of that, it doesn't really seem to be enacting extreme/perfect control over the internet, despite many motivations to do so, that have nothing to do with crypto.

> The comment we're replying to said that Bitcoin is valuable in transactions with Venezuelan counter-parties because of Venezuela's government's damage to the domestic economy.

Ok, and Venezuela isn't at all successfully preventing this damage. They aren't doing that. So the evidence shows that, for some reason, Venezuela is unable or unwilling to put extreme controls on crypto, do the the consequences or difficulty of doing so.

Any hypothetical, or arguments that you can possibly think of, as for why Venezuela should put extreme controls on crypto or the internet, needs to deal with the fact that Venezuela simply isn't doing that right now, likely for a good reason. Because it is very difficult to do that.

Nope, I'm not familiar with how widespread cryptocurrency usage is for international exchange with Venezuela. I do know that they keep tight control over traditional foreign currency exchange via public markets.

> I do know that they keep tight control

I was talking about how much control they have over the internet.

The fact of the matter is, that even the most authoritarian countries out there, are simply are unable to have a 100% perfect authoritarian control over their internet, as of today.

Despite the many motivations that current authoritarian countries have for definitely wanting to control their internet, right now, the evidence is showing that they are failing to perfectly control everything over the internet.

I don't think the aim is to have 100% control, but just enough. I'll admit I didn't read closely, but I have read a few news articles about some government or another temporarily shutting down internet access during a protest. I'd expect Venezuela could do something similar if they felt like it. They seem perfectly happy letting their citizenry go without basic staples, I'm sure they'd be fine turning off internet for a while.

> I'd expect Venezuela could do something similar if they felt like it.

And yet, if you look at the real world, and how things exist already, you see that these types of efforts have failed.

This is not a hypothetical situation. This is not about stuff that may or may not happen in the future.

Instead, you can look at real world situations, that happen right now, in existing countries all around the world, and you will see that the efforts to control the internet, have mostly failed.

Ex: Just look at china, which is the most famous example of internet control. . Lots of people have VPNs and can get around these restrictions in china.

The evidence already proves you wrong. There are multiple countries who have attempted to enact strict controls, over the internet, already, and they have mostly failed.

On the contrary, I think China is a good example of how the government can have its cake and eat it, too.

When you say, "lots of people," how many are we talking about? The majority? If so, you'd think the government would just give up trying to have control, it wouldn't be worth the effort.

Remember, we're not talking about trying to have a technology that a few hobbyists can use. The goal is widespread usage, enough that it prevents governments from controlling currency.

> When you say, "lots of people," how many are we talking about?

Enough that this whole original idea that you stated which was "Can't the government simply shut down the internet", is obviously not true.

The real world examples of real world countries, show that places like china are not "shutting down the internet", and that such an idea is obviously stupid.

There are tons of stories that you could make up in your head, about why China would want to shut down the internet right now.

And yet, the fact of the matter is, that China is not "shutting down the internet". Thats the facts. Countries are simply not doing that. Despite many motivations to do so.

> you'd think the government would just give up trying to have control, it wouldn't be worth the effort

And yet we see that the governments of the world are not successfully cracking down on the internet enough to shut down crypto. Thats not happening. Despite the fact that crypto is often used for illegal purposes. And yet countries aren't enacting authoritarian control over all of the internet to shut it all down.

We do not need to consider hypotheticals here. Just look at the real world, right now, and all the illegal activity that happens using crypto, and yet we are seeing that the world governments are not willing to enact measures to shut it all down.

Apparently, it is not worth the effort to shut down that illegal activity, right now. That is already the state of the world.

I'll ignore the "obviously stupid" comment and let you Google for examples.

I agree that it's not worth the effort for governments to shut down Bitcoin, at the moment. The US just confiscated $1 billion in coin. They're pretty happy with the pseudonyms it seems.

What some people don't seem to understand here, is that I could make a bitcoin transaction, by make a phone call to someone, for example.

In order to truly prevent people from making bitcoin to transactions, a government would have to enact absolute authoritarian control over every single bit of information that goes into and out of the country.

If I could even send a text message to someone outside the country, then I can send my bitcoin. Governments are not going to shut down all methods of ever sending text information to everyone permanently.

> let you Google for examples.

There are no examples of governments having absolute authoritarian perfect control over the internet, for any extended lengths of time.

In every example of countries that have internet restrictions, there are many people who are still able to get information into and out of the country, through numerous methods.

The original statement was "What's nearly impossible to stop?". And I maintained that it absolutely is nearly impossible for a government to enact perfect authoritarian control over every single person in a country. That is just obviously false.

So no, governments cannot "simply shut down the internet to stop Bitcoin". Because no government in existence today, has enacted perfect authoritarian control, over the internet, or shut down their internet permanently and stopped every single VPN, satellite phone, ect.

> it's not worth the effort for governments to shut down Bitcoin

It will never be worth it for governments to permanently shut down all of the internet now and forever, as well as stop all of the vpns, satellite phone, ect.

This kind of a permanent shutdown is something that no government has ever done. Every single example of governments trying to control the internet, still has many ways of getting information in and out of the country.

I think we're talking past each other, because you're thinking of your own (and similar people's) ability, whereas I'm thinking of broad majority usage.

Have you met North Korea?

That bastion of great economic management and economic growth...

Indeed however Bitcoin is positioned as a way of fighting back against these administrations. However it helps literally nobody in North Korea because they just shut down their internet.

I think Bitcoin does help people in North Korea though. Just not the average citizen.

No citizen of North Korea whose not a party member gets to use Bitcoin. The only people who do are using it to finance the hermit kingdom's nuclear weapons program. That's not a good thing.

I see BTC as an immensely successful first try at making this kind of thing - and like any emerging tech it's slow, inefficient, sharp edges, mostly used by experts. It's a tech channeled towards an Ayn Randian utopian fantasy, and has run right into the limits of that fantasy as a working philosophy.

And yet, it still has practically useful properties.

The coins that win as a currency will have to loosen their grasp on the rentier-merchant aspects, become more energy efficient, more usable, more integrated into society(within and without its institutions).

Most of the problems of Bitcoin are solved by centralization. Reversibility, transaction speed, increasing and decreasing the supply. The problem is that centralization creates an investment contract. We already have a medium for exchanging those. It's called the stock market. Bitcoin operates out of the control of any government or regulation. Thus, the decentralization imposes limitations on its design.

XRP tried to make a centralized cryptocurrency that solved those problems and now the SEC is basically telling them they have to give all the money back because it's an investment contract.

> and like any emerging tech

The problem that everyone else sees is that Bitcoin has been "emerging tech" with all its rough edges for so many years.

Is that wrong? What other new asset class was developed this rapidly?

Think about what other technology is 12 years old you’d call “nascent” - 12 years is an eternity in tech. The iPhone is 12 years old and bears only a passing semblance to what was launched. Bitcoin is practically identical.

The first ETF launched in 1993, and 12 years later they had 400 billion in net asset value - 533 adjusted for inflation. Your argument that the growth is unprecedented is specious.

> Think about what other technology is 12 years old you’d call “nascent”

Cars, Steam engines, Airplanes, Trains, the Internet, Radio, Phones, Mobile phones, Smart phones, Cinema, TV's, basically anything that is actually new technology?

I actually can't think of any new technology that reached maturity within 12 years of it's original prototype.

> The first ETF launched in 1993,

ETF's are a contract, they're not technology. By the way, BTC currently has 450 billion in net asset value, so...

As I type this, bitcoin's market cap is a little over $554 billion.

What technology do you use from 2008 that hasn't changed at all since then, and is also considered nascent?

I don't know but Bitcoin is definitely not it, it's seen multiple large improvements over the years.

Oh cool! Does it exceed 7tx/sec now? That's great news.

Yeah, but I believe it's the economic side which is moving slowly, not the technological side. People have been working on improved technologies for cryptocurrencies for a while now but the problem is that none of them have gained the same trust as Bitcoin.

I suspect ETF cash inflows far, far outpace crypto cash inflows.

I suspect you could take a lot less cash out of crypto without collapsing the market.

lol that’s very much backwards, by crypto advocates own admission there’s zero liquidity in the space.

I bought my smartphone from Hong Kong, in part because I wanted a specific variant that would be more likely to work with open-source ROM's.

The seller initially requested payment via Transferwise, who sought crazy amounts of personal information and bullied me into a privacy-hostile customer agreement. Days went by and they still hadn't activated my account.

Growing frustrated, I convinced the seller to accept Bitcoin, which was comparatively instant. The phone arrived a few days later, meanwhile the Transferwise morons still had their heads up their arses with no movement and no good explanation. I'm not a financial risk; I'm a good little citizen with no red flags. Reading between the lines my sense was their staff were overloaded or their onboarding system was simply broken.

Bitcoin was incredibly helpful for me that day, and my favorite feature about the phone is the way I paid. In addition to a great story, I've got to admit there was something liberating and empowering about giving what felt like a big middle finger to the slow, decrepit, old-fashioned institution who couldn't even deliver on their core business proposition. Like saying "screw you, I don't need you and your crappy service anymore, come back when you can compete on merits".

Whatever else you criticize about Bitcoin, it's still "cash you can email", and even if that's all it ever amounts to I still find it a bloody useful innovation.

In payments the 99% case where everyone acts in good faith and no one makes a mistake is the easy part. It's when eg the seller refuses to send the phone that the extra overhead of the traditional payment system comes into play.

Establishing trust between seller and buyer is not a new problem. The same scenario that you described could be had with mailing checks, physical cash etc. wherever there is not a trusted escrow service.

Ironically, blockchain technology is the first technology that actually solves the age old problem of how to establish trust within a truestless system.

imho Bitcoin is a novel implementation of open-source technology, cryptography, and decentralized networks. I realize hackernews community has a disdain for greed and the avarice that is commonly connoted with "cryptocurrency" aka crypto-assets, but the reality is that bitcoin and crypto-assets are here to stay, and I for one am glad they are open-source.

My critique is not about greed. My critique is about crypto proponents claiming it does things it doesn’t do.

The GP complains about the overhead and data collection of traditional solutions, implying it’s a bunch of unnecessary cruft. In fact it’s to comply with local laws and protect the consumer and merchant from fraud. GP used Bitcoin to get around this hassle, renouncing any rights in the event of a dispute.

Now, maybe that’s a win, but it’s a much more nuanced and less generalized win than is put forth by crypto proponents.

Notice also the goalpost move of declaring Bitcoin a win over mailing cash. Ok, have you ever done that in your life? I have not been involved in mailed cash transactions aside from receiving $5 from my grandma in the mail 20 years ago.

actually yes, every month I pay my rent by mailing a check. Also, what is the acronym 'GP' ?

Mailing a check is not mailing cash. I'm sure you're familiar with the differences.

GP = grand parent. The topmost parent comment we’ve reply (or refer)to.

> The same scenario that you described could be had with mailing checks, physical cash etc. wherever there is not a trusted escrow service.

Isn't that exactly why this mailing cash/cheques fell out of favor compared to bank transfers, credit cards, PayPal, all these centralised systems that bitcoin posits are a problem

Can we have "cash you can email" that doesn't consume as much electricity as several nation states combined?

Here in Brazil, we have that since last month. The new money transfer system (Pix) allows anyone to send money to a key, which can be a person's CPF (the tax ID number nearly everyone has), a phone number, an email, or a randomly-generated number. These all map to a bank account (you can also use Pix to send directly to a bank account number); the directory with these mappings is kept by the Brazilian Central Bank, and the mappings are inserted by the participating financial institutions.

So assuming my email was something@example.com, and I had asked my bank to map the Pix key "something@example.com" to my bank account, anyone could "send cash" through Pix to my something@example.com email; the cash would arrive at my bank account nearly instantly (even during weekends and/or holidays).

From this description it sounds like just name resolution that still uses the regular banking system.

The name resolution is just part of it (though the most visible part); there's also a new message exchange protocol, over the national inter-bank network, which does the instant transfers (before this new protocol, inter-bank transfers were only instant during banking hours, not on nights/weekends/holidays).

Fascinating, this is the first time I've heard of Pix. Can you own the private key? Can you create an account without having a bank account?

Can't talk for Pix, but UPI, a similar system implemented by Indian banks, wouldn't accept "private keys" or not having a bank account. No international payments either.

UPI is more like venmo on steroids, but it is no crypto-currency replacement.


No, PIX is directly tied to your Bank Account. You need to have a bank account opened with an institution that connects your account to PIX.

Can you get banned from Pix?

Thats a good question. PIX is directly tied to your bank account, so I imagine if your bank decides to ban your account, you won't be able to use PIX through that account/bank anymore. But, I suppose you could open another account in another bank, move your previous PIX keys to it or create new ones.

Not how it works.. One banks bans you and you are screwed for life. That's the value proposition of bitcoin

Oh, didn't know that. Can you point out where it says that? From what I understand of PIX, it is tied to your transactional bank account. If you have multiple bank accounts and you are banned by one bank, your account on the other banks are not automatically banned and you can still transact with it, I would imagine PIX would still work.

Many coins are experimenting with alternative consensus algorithms, the most promising imo is proof of stake.

No wasted energy beyond the cost of running a normal computer.

Is this 2021 or 2015?

Sure, you just need to trust people.

You got Pos wrong there is no trust involved

Sure, not until some entity gets over 50% of the stake

Sorry you do not understand how the system works. You can't buy 50% because the price would be worth more than all world gdp since each order is incrementally how gher and the supply of coins is not unlimited. Good to dig into things before you mindlessly dismiss them. Did you actually believe that people are designing and talking about Pos as a breakthrough when the main idea is "nobody rich enough will want to buy 50%"?

For newer PoS protocols, they would need over 66% and they would lose money if they misbehaved making it likely uneconomical to do so. This is the big advantage of PoS over PoW. There are both positive incentives (e.g. block rewards) but also negative ones (e.g. getting slashed for trying to stage a double spend attack).

Polkadot, Cardano, Stellar, soon to be Ethereum 2.0. Proof of Stake is where it's at if you are concerned with the power consumption of Proof of Work.

Yes. Proof of stake coins like nano don't require any proof of work. Peercoin, too. Ethereum is considering PoS IIRC.

Ethereum has a proof of stake chain in production right now, in the sense that it is running with over a billion dollars worth of real ETH. But it won't run user transactions and contracts until the EVM migrates over, probably late 2021, and that's when PoW will go away.

What about cash that you can send like an SMS on a network that offsets its CO2?

Celo is proof of stake based and also issues part of its block rewards to Project Wren. It has a native stablecoin and a decentralized phone verification protocol that lets you send money to any phone number.

Check out celo.org and ValoraApp.com

Is this vulnerable to sim swap attacks?

No. Funds are still protected by a private key once you create an account, so stealing a phone number doesn't help you spend someone's money.

How much electricity do you think traditional money printing and transfers consume?

Much less? Bitcoin currently powers almost none of the world’s transactions, yet consumes all that energy.

The entire us consumes 75 twh in a year, the same as bitcoin’s global energy use.

Of that, the entire commercial sector is about 12 twh. That’s not just banks. That’s every company. Banks alone are surely far less. Maybe 2-3 twh? And the us is 15% of global gdp. So, global finance might consume about 14-32 twh.

Again, that is while doing all of global finance. Bitcoin powers a rounding error of transactions yet consumes 75 twh.

There’s just no comparison energy wise. My math could be off by several orders of magnitude and bitcoin would still consume more if it were actually powering the world’s transactions.



The US consumes about 4 PWh/year, so bitcoin isn't comparable with the nation as a whole. However, that is more power consumption than many individual states, so your overall point remains completely valid.

Your units are funny. Using W-hr (energy) and then making it a rate by making it per year which gets you back to power. You could have just said, “the US consumes energy at a rate of 450 GW”.

There’s no need to introduce hrs and years to the mix. Watts describe precisely what you’re attempting to quantify.


Whoops yeah that should have been 9.4 quadrillion BTU. The online calculator I used for TWH conversion was very wrong. Looks like the correct value is about 2,000 twh for the us commercial sector?

If we assume banks are 10% of that, then it’s 200 twh. 3x bitcoin. But also, handling literally all finance and banking in the US. Vs essentially nothing for bitcoin, compared to the scale of the us economy.

It'd be really nice if I could find a study on this, but just because bitcoin doesn't power the majority of the transactions doesn't mean it couldn't do so without the energy needs scaling linearly with transactions. If anything I'd imagine it could become more efficient as more transactions were taking place. I see people argue this a lot and I think it's too narrow of a view on the situation.

Of course it'd be much better for us to adopt a crypto currency that uses a different algorithm that has even less energy usage. Even without that though I think it could prove to be more efficient than existing financial systems.

Your numbers are totally wrong. The fact your own link suggests that bitcoin uses as much electrical energy as Chile should tell you it's not close to the USA. Recheck?

Bitcoin transacted way more money that PayPal etc

People actually buy stuff on paypal. They processed 2.5 billion transactions in 2020. Bitcoin processed about 250 million transactions.

The total amount of reported money transacted might be higher for bitcoin but that doesn’t come from contact with the real economy. So that depends on the valuation of bitcoin rather than economic impact.



When confronted with relatively concrete studies on Bitcoin's wasteful energy use, are you going to point to the fact that physical money printer energy use has not been studied to muddy the waters? The reason it hasn't been studied is that it doesn't use a huge amount of electricity.

Anyway, as another way of answering your question, physical money printing and transfers require no electricity at all, predating the invention of electric power by thousands of years.

Pretty sure the modern machines that

1. Print the money

2. Harvest the Cotton and other raw materials

3. Transport the money

4. Secure the money (even in electronic form)

5. and about 100 other things

All use "energy" the point of the OP's comment was about "wasted energy" which i would image is tied to climate change

The idea that "printed money uses no energy because it is old tech" is just ignorant

Zero bitcoiners going "BUT WHAT ABOUT CONVENTIONAL MONEY HUH" provide numbers.

Since you're too lazy to, I will:

* Bitcoin: 0.1% of all electricity in the world, 7tps.

* THE ENTIRE REST OF HUMAN CIVILISATION, EVERYONE IN IT AND EVERYTHING THEY DO: 99.9% of electricity, a hell of a lot more than 6,993tps.

Bitcoin is the most inefficient payment system in history.

Bitcoiners' usual objection at this point is to claim that transactions per second is a bad measure, for some reason - though if you're comparing how much each system achieves for the resources it uses, it's precisely the obvious and correct measure.

But if tps doesn't matter, then the entire bitcoin ecosystem should be replaced with a small rock. A whole country's less electricity use, and only 7tps less! Also, it'd be hard currency.

> * Bitcoin: 0.1% of all electricity in the world, 7tps

And? Who are you to tell anyone how they should use their electricity? Do you want my advice on what you should be doing in your home?

> Bitcoin is the most inefficient payment system in history.

I think the "hauling big rocks between islands" currency was probably less efficient, at least on a per capita basis.

> then the entire bitcoin ecosystem should be replaced with a small rock

Then go ahead and do that. If people have trust in your rock then that will work fine.

You appear to have written two books about money. Do you not understand how it works yet?

> Bitcoiners' usual objection at this point is to claim that transactions per second is a bad measure, for some reason

You've probably been told before but I'll tell you the why again. Bitcoin's energy consumption is not proportional to the number of transactions it's processing.

The energy used is proportional to the block reward, the reward that miners get from mining a new block roughly every 10 minutes. They won't spend more money on energy than they get from mining, or they would go out of business. That mining reward goes up with price, (because it's paid out as a fixed amount of BTC) and goes down with each halving event (every ~4 years the block reward is cut in half in BTC terms).

The network can be doing 7tps or 7 million tps, doesn’t really matter for energy use, although higher usage can have indirect effects on price or other things.

The vast majority of dollars in circulation exist only in accounting records and do not exist as actual physical tokens. Printed money uses no energy because we do not print money anymore, we write it in a SQL database (or, god forbid, an Excel spreadsheet).

A lot less per transaction than Bitcoin?

But I'm no expert.

Looking solely at that criterial, ACH transfers work.

ACH is US Banking only. You can not do Direct person to person transfers, you must go through a US Bank for ACH

ACH is also SLOW and painfully insecure relaying on the banking institutions to stop gap the security and its built in slowness to allow for reversals of fraud or error transfers

ACH is not a model people should be promoting as good method to do money transfer

Thanks, I didn't know ACH was US only. As for slow, I've had things go through literally instantly, where I make the transaction, login to my bank account, and see it posted. When it's been slow, that always seems to be a factor with the sending entity (like PayPal) not my receiving bank. (Could be bank specific though)

Might be something else going on (wire transfer, maybe?); ACH payments are batch-processed a couple times a day, and so can't be instant.

Bank transfers don't have to be slow. Within the UK they are almost always instant.


Does it work internationally though?

Edit: Or I should say, “Could it work internationally?” Because afaik it does not currently.

Not across countries.

Western Union is also very useful, but the vast majority of transactions are not made by Western Union because it has tradeoffs that make other things like credit/debit cards and checks a better option.

Bitcoin Evangelists are trying to pump up the price by advocating that bitcoin will be the best method of making payments for a huge variety of use cases.

I'm not going to call it a pump and dump scam because I think that a lot of these people truly think that it is going to 500k and beyond and that they will never need to dump it all.

WU is very expensive though; btc, if you know what you are doing, does not come close. WU is a horrible but unavoidable evil for millions of workers worldwide. This is one of the cases that should be disrupted.

I just checked, it seems that WU charges approximately 1% for transfers relative to the nominal exchange rate.

I don't transfer money much, but superficially that doesn't seem too expensive considering the volatility risk to WU due to fluctuating exchange rates combined with the overheads of regulatory requirements.

It seems to me that Bitcoin is only as cheap as it is because it sidesteps those regulatory overheads. So it's great, I suppose, as long as everyone is fine with it being used to launder money from human trafficking, the drug trade, corruption, or whatever...

I am not a big btc fan, I made some money with it and I like the concept somewhat for the purpose it is meant for.

But this btc is used for drugs, human trafficking etc is getting somewhat weird: sure it is, but normal money is far more. So you do not use that either? That is in fact regulated and more expensive and still human traffickers use it all the time. So I do not see the point: in the end btc is easier to follow than a suitcase of dollars coming from Medellin where it was taken from children in the sex trade. So not sure what you mean there besides parotting this point. Private groups and govs have advanced systems for doxxing Btc accounts: they were a bit late to start but now that mining is basically impossible, it is far easier to follow than dollar bills.

Also WU cash point to point money is quite well known for being off the taxes radar in most countries (for some reason): the remittance to the homeland of (illegally) earned money via WU and evade taxes back home is probably it's biggest usecase which is why they can use these depressingly bad rates.

IME, the real fees charged by WU often add up to 10-20%.

How? The pricing calculator literally says $0.00 fees for me, the only charge is the 1% spread on the exchange rate.

I know WU from the dropoff points where cheap labour bring their money to send home; they use an extremely bad conversion rate. Like paypal but even worse. Sources: official WU dropoff points in HK, SG, TH, NL and ES. The exchange rates + fees are indeed 10-20% removed from what they really are. Maybe if you send online it is 1%, but most use it to bring cash (from cleaning houses etc) to families abroad.


> The pricing calculator literally says

Please go to a meatspace WU point and compare the conversion rates with the inter bank rates.

I don't think you'd be able to convert some weak currency from cash to cash in another weak currency efficiently with Bitcoin either. Last time I checked, its API didn't extend to collecting wads of bills!

I know a lot of immigrants that send money home, they all use bank-to-bank transfers. Whether they use WU or not, the overheads seem to be in the 1% range...

Bank to bank sure, WU is much higher in all cases I have seen. But he, we are just some people on the internet. I can send you pics of conversion tables in WU cash points in HK which are off by 5-20% from the inter bank rate. Banks can do this cheaply (and you still get screwed with most banks but indeed 1-2%, not 5+) so WU definitely does something bad there.

Yeah, I had to transfer a few hundred dollars between Australia and Eurpoe last year and both bank transfer and WU would have cost a lot more and taken longer than using btc. With bitcoin, the transfer was complete in about 30 minutes and due to price volatility, I was able to cash out when the price was up enough to cover all fees. It was definitely very helpful.

bitcoin has beaten western union, international wire transfers for years now and will continue to do so as notoriety and adoption of crypto-asset grows. However, that in no way justifies its marketcap, which is just over 500 billions. However overvalued it is, and however many times the price crashes dramatically, it is likely that the blockchain will continue to exist in 50-100 years. As long as computers and the internet still exist that is.

Interesting story.

Question: was there any possibility of escrow here? What if the phone never showed up?

I took on the counterparty risk. To be honest, the sellers I've dealt with with the last few years have turned out to have head-and-shoulders better customer service than their intermediaries like PayPal etc. I think escrow (and other risk mitigation techniques, e.g. reputational ratings) are definitely opportunities for enhancing the crypto ecosystem.

Long term I suspect some sort of arbitration mechanism may play a role in crypto realizing its full potential (law and commerce are deeply intertwined, and the proliferation of hacks suggest a potential thirst for more effective justice) but I don't yet know what that would look like and many hard core enthusiasts would balk at the suggestion.

That must have been one expensive phone.

It wasn't so much Bitcoin that saved the day, but a choice of payment processor by the seller that caused the problem to begin with. Heck, PayPal works in HongKong. Ultimately bitcoin made your transaction much smoother, but it was a sufficient, not a necessary condition in making it smoother.

Being deeply rooted in financial system payment processors often compete not with service quality but with how they can deal with various stupid or intentional government requirements and restrictions. Bitcoin and crypto is an ultimate alternative which (I hope) triggering change in this industry.

You can find lots of stories about PayPal freezing accounts for random reasons. With well-known projects this usually resolves by public shaming, but I guess this can be impossible to solve for a small seller in a non-US/non-West-Europe country.

Example: https://neo900.org/news/paypal-trouble-delays-project

Fair point, for sure! Though I've gained a lot of frustration toward PayPal the last few years, as both a buyer and seller. Their platform has really gone downhill from my perspective and I wish there were enough alternatives in use out there that I could sever the business relationship (particularly for eBay transactions). Non-crypto competitors are just as welcome.

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