The problems with Bitcoin

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Brendan Burgess

Brendan Burgess

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Philip Kinlen who works for AIB's Research and Innovation, presented a paper at this conference run by Hibernia Forum. It was entitled "Blockchains and Distributed Ledgers"

Conference 27 April 'Blockchain - a new frontier for freedom, tech and investment.'

It was a great summary of the problems facing Bitcoin

Here is the key slide

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It might be that some new crypto will emerge which will solve all these problems.
 
Where is the bit about it being bag of hot-air?

It seems that some are identifying problems with bitcoin. And that the challenge is to resolve those problems, or alternatively another crypto emerges with improved technology.

Im just wondering, when the Wright brothers flew the first aero flght, did anyone think it was all a bag of hot air because flights from London to New York were still a problem?
 
TheBigShort said:
another crypto emerges with improved technology.
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This could well happen. There is nothing special about Bitcoin except the extent of its problems. It doesn't have a patent or any other form of exclusivity. So anyone could develop a better crypto currency which resolves all those problems. Maybe that has to happen for you to realise that Bitcoin has no monetary value whatsoever.

While the idea of an alternative community of CypherPunks developing a universal currency is appealing to some, the reality is that the vast majority of people would prefer a Central Bank backed or state backed crypto currency without all the problems listed out by Philip.

Brendan
 
Brendan, these are not problems for bitcoin, they are problems for the banks that want to implement blockchain.

1) Have 1,000 times the number of transactions (resolved)

2) Delete old data (risible, history and immutability is one of the most important qualities of blockchains)

3) Give people privacy (this is outrageous, banks lose their customers data all the time and in bitcoin only with a private key you see data. Privacy perfected)

4) recover funds when private key is lost (with bitcoin we are our own bank, i have a system in place for that, the bank can’t)

5-6) block and revert ( this is exactly why bitcoin exists so that banks and governments cannot block, cannot freeze, cannot revert anything that is of a citizen’s possession)

7) regulate it (enjoy yourself in trying to do that, bitcoin lives with and without regulation)

8) reduce trans fee (done, orders of magnitude lower than banks fees)

9) get transaction conf within 1 sec (bch has zero conf instsnt transactions)

10) reduce power consumption (understand how non collaborative systems evolve, hint, Game Theory)

11) reduce price volatility (not sure i want that, for now)

This is the typical banker that adds blockchain to his title and knows zero about it.

10/11 nonsensical claims, this is real fun
 
Brendan Burgess said:
There is nothing special about Bitcoin except the extent of its problems
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care to discuss some with me? I hope you don't mean the fake ones in the slide.

Brendan Burgess said:
So anyone could develop a better crypto currency which resolves all those problems. Maybe that has to happen for you to realise that Bitcoin has no monetary value whatsoever.
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Do you still think that all this is about bitcoin and its price? The crypto ecosystem includes all the other coins, it is a revolution happening right now if you haven't noticed.
If you care about the future you don't care whether bitcoin or ethereum or brendancoin is the most valuable, you care about the problems that they resolve for humans.
All you seem to care is being right about your bet
 
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Boss I don't like that slide at all. The basic premise is that bitcoin is a valid competitor currency and then it proceeds to list its weaknesses. Some of these seem churlish like "we're much faster than you nananana". Others point out problems with its "bearer trustless" nature, but this is the essence of what the bitcoin community are craving. Others like data retention are problems for the regulator and whilst society as a whole should be on the side of the regulator, this is another key plus for the BC.

If I was making a presentation at that forum, I would have only one slide:

Bitcoin is Worthless​
 
Leo said:
Well, I won't but I'm not in law enforcement, but let's not pretend it's impossible or not happening regularly as your point suggested
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Let's not pretend it has to be possible. If you leave your house unlocked, anyone can walk in. If you store crypto on a centralised exchange or simply hand over the private key, then - and only then - your crypto can be accessed by another party.

With regard to volatility, I do agree that it's an issue and that its unlikely to be resolved in the short/medium term.

With regard to transaction volumes/scaling, I don't really care if it's off-chain so long as it solves the problem. You say that there are nevertheless problems with LN. I'm struggling to get a grasp on that. Can you expand on these flaws?
 
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Duke of Marmalade said:
If I was making a presentation at that forum, I would have only one slide:
Bitcoin is Worthless​
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Go right ahead. I'm sure there's a place on the speaking circuit for you. There must be if they can get a guy from a bricks n mortar bank to diss bitcoin. I mean it's not that he doesn't have a vested interest right?
 
Leo said:
And I didn't, that wasn't the assertion I was replying to.
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No problem Leo. However, relating it back to other posts above, bitcoin can only be seized by another party if the holder leaves it unsecured.
 
tecate said:
No problem Leo. However, relating it back to other posts above, bitcoin can only be seized by another party if the holder leaves it unsecured.
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In most cases yes, and I've stated as much in other threads. In addition to users leaving them exposed on on exchanges, there have been cases of court orders forcing users to hand over their keys so that their holdings can be taken over, usually forming part of plea deals.

I'm not sure the FBI ever released exactly how they seized Ulricht's holdings, but from reporting at the time he resisted handing them over, then challenged their authority to dispose of them only to drop his case later on. Again, not clear why he agreed to drop that claim when he wasn't able to secure a plea deal.
 
A blog post on cryptocurrencies

https://johnhcochrane.blogspot.ie/2018/04/basecoin.html


"Cryptocurrencies like bitcoin have to solve two and a half important problems if they are to become currencies: 1) Unstable values 2) High transactions costs 2.5) Anonymity............................

It is interesting to me how the cryptocurrency community seems to be painfully re-learning centuries-old lessons in monetary economics.................."
 
Leo said:
there have been cases of court orders forcing users to hand over their keys so that their holdings can be taken over, usually forming part of plea deal.
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No doubt such individuals felt pressured but at the end of the day, they were not forced but chose to hand over the keys.
 
Also, tecate, these same things have been said about bitcoin since 2010, bitcoin died over 140 times https://99bitcoins.com/bitcoinobituaries/

It is exhausting when somebody new jumps in after reading 1/2 a blog post on bitcoin written by some marketer and decides that he knows bitcoin will die because energy, because transactions, because anonymity, because scam, because tax, because regulation, because hot air, etc..
 
Gus1970 said:
It is exhausting when somebody new jumps in after reading 1/2 a blog post on bitcoin written by some marketer and decides that he knows bitcoin will die because energy, because transactions, because anonymity, because scam, because tax, because regulation, because hot air, etc..
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I am curious to get your opinion on why so many people think these things about Bitcoin? Given that Bitcoin is around for 7 years now surely if it was all fine and dandy people would know by now?
 
Firefly said:
Given that Bitcoin is around for 7 years now surely if it was all fine and dandy people would know by now?
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I don't think that's a correct assumption. Firstly, we are talking about one of the most fundamental cornerstones of human activity which has undergone little in the way of disruption.
Secondly, bitcoin (& crypto generally) is a tech solution/development. How long did it take for internet related technologies to mature?

It's quite clear that crypto is far from reaching maturity so you can't possibly say that the results are in on something that has not reached its final form.
 
Firefly said:
Not sure if this was directed at me, but feel free to answer the questions I have already asked you.
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Both of your questions asked and answered;

1. Why hasn't BTC reached mainstream usage already?
- Because it is being continuously improved/developed and has not reached maturity/it's final form.

2. Insufficient tx volume/throughput.
- Being addressed through LN, bigger block sizes and other ways.
Furthermore, Gus1970 makes the point that it will be brought on as needed.

How then have your questions not been answered?
 
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