> First, the resulting ecosystem is technologically open. Open ecosystems have a way of getting better much faster than their closed counterpart.
Unless you are specifically in the business of making financial institutions, it would seem that Stripe (and for that matter, nearly every payment provider that a computer can interact with) is open in all the ways that matter to a normal person.
> There are a number of cryptocurrencies which already have gateways baked in at a protocol level (such as Open Transactions and Ripple). However, there are huge network effects in any financial system, and to date these other systems have failed to win the necessary user support.
So you agree with the above—that as far as history is concerned, just being open doesn't get you adopted. :)
Bitcoin's crazy volatility and speculation drives "user support." It's ironic, because (1) the volatility is what makes Bitcoin unsuitable as a currency from the perspective of everything that matters economically (like your example, value storage) but (2) the volatility makes Bitcoin phenomenally successful as a currency from the perspective of user acquisition.
I don't know why it's so hard to promote transaction systems. Maybe there's some rule out there that no one competes on the basis of transaction fees, and those who do are shut out of the cabal. That's not a conspiracy that I subscribe to. Maybe the minimum transaction fee to make things economically viable is 2.9% of every transaction. So people do make platforms with lower transaction fees, but then they can't afford to tell you about it, or they don't manage to enrich themselves enough to make it worthwhile.
But Bitcoin, it managed to lie and tell us, "the lowest possible transaction fees;" while technically true, you just pay for the economic cost of promoting the platform and enriching its owners through its volatility.
In that sense, Bitcoin has been a terrific failure as a payment system. It's much worse to buy Bitcoin at the wrong time than to pay 2.9% on every transaction. But as a payment platform, as far as venture capitalists are concerned, it's fabulously successful. The early buyers of Bitcoin did enjoy a fabulous return.
User acquisition with negative cost to the platform's owners? Brilliant.
First, Bitcoin resembles MLM / network marketing more than any one traditional financial instrument.
Second, that the State would want to allow a free market currency of fixed supply to compete with their own digital currency that can be whimsically inflated and used to fund endless warfare and welfare just doesn't fit the historical record.
Never, in the past hundred some odd years, has any competing currency been adopted by the banking system because of innovative features.
Bitcoin is innovative because it gives people control over a form of globally accepted currency which cannot be debased or manipulated. Bitcoin can be sent and received by any person in the world, in any amount, at any time, for any reason. That's why Bitcoin is important. Bitcoin is _not_ important if it just compliments the existing banking system's functions, or makes it cheaper. It's important because it frees humanity from the arbitrary clutches of the State. It gives power back to the individual at least in matters of money and finance, and everything else can follow from that.
No it doesn't resemble MLM more than superficially, because there's no hierarchy or levels of anything of that kind. At worst it is like another bubble in that manner, like tech stock bubbles before it.
Everyone who holds Bitcoin has a vested interest in seeing the network gain value. Those who hold Bitcoin are incentivized to talk other people into holding it, which is very much in the spirit of network marketing.
While there aren't "multiple levels", there are certainly early adopters who bought coins for next to nothing, and those people stand to profit much more substantially than those who come later.
As for the difference between a tech stock and Bitcoin. Holding Bitcoin entitles you to nothing: no voting rights, no dividends. Bitcoin is backed purely by air.
One more aspect of Bitcoin that bears an uncanny resemblance to MLM is the "cliqueness" of the network. There are superstar early evangelists, many of whom are popular for selling the libertarian dream to people, which they buy into. Of course, many of those people have XXX,XXX BTC to their name and thusly stand to profit from their talking points taking root.
>Society can't make progress if progress hinges upon the diktates of a corruptible few.
Not being sarcastic here, but come again? Isn't that also the argument _against_ bitcoin? The extension of that argument being: would people rather they get to _elect_ the corruptible few, or that the select few be just that because they are rich (family, etc) (eg. VC's dumping their money into bitcoin).
It doesn't matter what some politician thinks, or even what a rich VC thinks: there will never be more than 21,000,000 bitcoins.
Once you invest in Bitcoin, you have a vested interest in the system maintaining and appreciating in value.
I'm not worried about Bitcoin being debased by VCs.
Politicians and bankers do concern me, however, because they can do whatever they want to my fiat currency: inflate it, deflate it, confiscate it, freeze it
and they can always hold those things over my head in order to compel me to take an action against my will.
Mainstream institutions have proven time after time to be more interested in accumulating and preserving their own power, than acting in the public's best interests.
I no longer trust this system, and I actively seek out ways in which to protect myself from its whims. I would never hold any more of its money than I absolutely had to, and I look forward to building a free economy on top of the blockchain.
That's what Bitcoin's about. It's not about being PayPal 2.0.
Unless you are specifically in the business of making financial institutions, it would seem that Stripe (and for that matter, nearly every payment provider that a computer can interact with) is open in all the ways that matter to a normal person.
> There are a number of cryptocurrencies which already have gateways baked in at a protocol level (such as Open Transactions and Ripple). However, there are huge network effects in any financial system, and to date these other systems have failed to win the necessary user support.
So you agree with the above—that as far as history is concerned, just being open doesn't get you adopted. :)
Bitcoin's crazy volatility and speculation drives "user support." It's ironic, because (1) the volatility is what makes Bitcoin unsuitable as a currency from the perspective of everything that matters economically (like your example, value storage) but (2) the volatility makes Bitcoin phenomenally successful as a currency from the perspective of user acquisition.
I don't know why it's so hard to promote transaction systems. Maybe there's some rule out there that no one competes on the basis of transaction fees, and those who do are shut out of the cabal. That's not a conspiracy that I subscribe to. Maybe the minimum transaction fee to make things economically viable is 2.9% of every transaction. So people do make platforms with lower transaction fees, but then they can't afford to tell you about it, or they don't manage to enrich themselves enough to make it worthwhile.
But Bitcoin, it managed to lie and tell us, "the lowest possible transaction fees;" while technically true, you just pay for the economic cost of promoting the platform and enriching its owners through its volatility.
In that sense, Bitcoin has been a terrific failure as a payment system. It's much worse to buy Bitcoin at the wrong time than to pay 2.9% on every transaction. But as a payment platform, as far as venture capitalists are concerned, it's fabulously successful. The early buyers of Bitcoin did enjoy a fabulous return.
User acquisition with negative cost to the platform's owners? Brilliant.