Think more interesting number would be total paid-in capital. That would be a better metric to gauge the baseline value. My guess is it’s closer to $10-20B.
Bitcoin is one of the most successful open source technologies of all time and the best decentralized network ever created, surpassing BitTorrent. This is a stunning achievement of pure computer science and economic game theory that enables strangers to act only in their self interest to secure and grow the network.
No matter what you think of bitcoin, you must admit this has been successful beyond anyone’s wildest expectations only 12 short years ago. It’s rise and acceptance into the deepest reaches of traditional finance and conservative institutions like BNY Mellon is absurd in its speed and their willingness to accept fundamental change. We are in the midst of a paradigm shift to open financial protocols and huge innovation in capital markets. On to the next decade of crypto!
I don't see anything successful about it:
1) Absurd levels of electricity consumed
2) Majority of BTC is not used as an asset,or even as currency,but purely as a tool for speculation
3) the surrounding ecosystem is worse than FX world, which is already as bad as it gets
4) No real anonymity either: any meaningful amount needs to be exchanged to Fiat sooner or later.
5) Adoption is still very very low and won't change with such volatility.
"it's harmful" and."I don't like it" doesn't make it unsucessful. Cigarettes are wildly successful. Thousands of people, from uninteresting individuals to billionaires and banks, are spending their resources to engage with it.
Define success. Are cigarettes successful for their manufacturers? Yes, absolutely,they are swimming in money. Is it a success to other stakeholders? No, it's not. Bitcoin is a huge success to the speculators riding the wave or early adopters who held it long enough. If smaller groups benefit from it, that doesn't necessarily mean it is universally successful.
This is like arguing the iPhone was not a "success" because walled garden appstores are bad, or because app addiction is bad. Either of those may be true, but the iPhone was still a sucess.
Bitcoin was a daring experiment in game theory, open-source protocol, and human incentives, and is a success by any common-sense measures:
It gives people locked out of the global financial system by the warrantless financial mass-surveillance regime, aka the global AML regime, a lifeline:
>>At a 2015 blockchain event, Nairobi-based bitcoin pioneer Elizabeth Rossiello answered an audience question about the impact on Somalians of a recent shutdown in remittance inflows after the U.S. government had labeled the country a “high-risk jurisdiction.” The AZA Group CEO’s answer was blunt: “They starve.”
Remember, under financial-mass-surveillance (AML) laws, you're guilty until proven innocent, and your nationality and residency can be considered as proof of guilt.
It’s been successful in obtaining usage, but I am still confused how it accomplished this beyond a bunch of people asking for it. What problems does Bitcoin solve for these traditional finance institutions that could give us a better barometer of its success?
You'll never get a straight answer. Cryptocurrency fans love huffing their own farts too much to actually give a salient explanation for this.
Proof of work does a good job contributing to increasing problems with global warming and wreaking havoc on the computer hardware market.
There's talk about major cryptocurrencies switching to proof of stake. Good luck on that, because the current powers that be would hate to see their cash cow affected.
Pay no attention to the man behind the curtain. A bunch of early adopters are getting VERY rich because everyone else is FOMOing hardcore. That's never a good reason to buy into this charade.
Our species is so greedy, we will do whatever it takes to fuck everyone else and get ours, I guess. We created a monster. I wish we could own up to it before it's too late.
That’s about 0.2% of global wealth allocation. I wonder when the people who normally recommend 30% of your portfolio in bonds will recommend bitcoin as the cash equivalent. That would leave a 150x potential from here.
Whenever a BTC article makes it on HN, I see a flood of negative comments on how it's a bubble, just for speculation, etc. Can someone provide a solid bull case for BTC?
My bull case is this: over the next few decades, cryptocurrency will find its use case. Even if it’s just another asset class like Gold or Silver that some people and institutions put their money in as part of diversifying investments.
That alone is a huge global market and it’s barely started.
I think a best case scenario is something like the Lightning Network grows in scale and popularity and becomes a defacto standard for online and mobile purchases.
The Lightning Network has no chance of gaining mass-adoption. It has high start up and capital lock-up costs, proportional to on-chain transaction fees, which only grow as Bitcoin/LN adoption ramps up.
It has high upkeep costs, requiring you to have your LN node online to receive payments, and for your node to have access to the LN funds via a connection to the private keys, which is a security liability.
To monitor for fraudulent channel closes in order to be able to react in time to challenge them, it also requires you to have an always on-line node, or a trusted third party delegated to do that on your behalf. And if you want rapid/automated reaction to fraudulent channel closes, that node needs to have access to the private keys to your LN funds.
Then there are routing issues when the topography of the network changes with every transaction, and where the existence of routes is dependent on sufficient capital being locked up in channels.
There's a reason why there's 100 times more BTC locked up for use in Ethereum dApps than for use in the LN. Ethereum-based scalability solutions could, ironically, provide BTC with the scalability needed to gain mass-adoption as an instrument for peer-to-peer payments.
Disagree. LN providers will exist, just as exchanges exist today. The most likely candidate is the payment card networks. While I dislike this future, they probably offer the best solution for consumers interacting with layer 2, and its always on requirements. LN isn't just a toy, its a new way of transferring value peer-to-peer. Payment/state channels are the best candidate to scale this tech. Anything else -- sidechains sharding or block size increases is just kicking the can. Not every transaction must be recorded on a blockchain forever. Layer 2 is how we will achieve this, while retaining the massive value that Layer 1 provides. I also find technologies like cut-through transactions in mimblewimble compelling for scaling without recording everything.
Currently 5x the price to transfer a fake bitcoin token on eth to a BTC L1 tx, whereas transferring a real bitcoin on lightning might cost a few satoshi.
I think some elements of eth are interesting, but are unlikely to actually achieve whatever it is they want to achieve. Proof of Stake isn't secure.
Lets see if they are able to retain consensus with EIP-1559. I suspect it will cause another schism.
These are not using the recently launched scaling technologies. For example zk-Rollups, which are now operational on Ethereum mainnet, can process 2500-3000 ERC20 transactions a second on-chain. Once these gain a critical mass of users, Bitcoin, in the form of WBTC, can be widely used in payments by way of Ethereum's zk-Rollups.
The LN's limitations are too many, and it has thus far failed to gain traction for that reason. Zk-Rollups have none of the limitations of off-chain payment-channel networks.
zkrollups, like all rollup technologies just kick the can down the road. Not every transaction needs to live on a blockchain! This is the fundamental point that folks miss. LN is about true 'off-chain' in that a blockchain is not needed to provide a probabilistic model to funds.
Do you see how this is similar to MW cut-through, in that a probabilistic model is used to store funds on chain? Imagine all the ZKrollup solutions and throw away the sidechain.
Rollup is just another name for sidechains. I agree, the sidechain model works today. The BTC Pegged liquid network also does zero knowledge (confidential transactions) exchanges of BTC between exchanges. But ultimately it is still kicking the can down to another blockchain.
Rollups are not 'off-chain', They are on another chain. We need to think beyond this for true scaling.
LN not having data on-chain imposes severe constraints that make LN inherently more centralized and less secure than zkRollups.
If you're really set on payment/state channel networks like the Lightning Network (Bitcoin), Raiden (Ethereum) or Connext (Ethereum), you can put them, ON A ZK-ROLLUP!
You get a 100X scalability boost, without increasing the block size, which makes payment/state channel opens/closes a couple orders magnitude lower, which massively increases a payment channel user's options and improves the functionality of the payment channel network. ZkRollups also reduce the cost of on-chain payments which lets a user switch to on-chain for an application that the zkRollup-based PCN is ill-suited.
All-in-all, reducing the cost of on-chain transactions, as zkRollups do, have significant advantages, so there is absolutely no reason to not adopt them.
And Liquid is a centralized sidechain dependent for its security on trusted third parties, and completely incomparable to zkRollups, which have 100% of the security of the mainnet and are only reliant on 51% of the hashrate being honest for security.
Yes, of course - this is not Reddit or MSM; we know the merits and pitfalls of Bitcoin. How can somebody put money into a crypt that has no utility (outside of speculation) and which has crypt that's not quantum-safe and which is so wasteful in terms of energy? Remember how people were ridiculing the energy needed for a credit card transaction and that Bitcoin was way more efficient? Well, how's laughing last?
How about no bull case is not a bear case because it doesn't fit any prior bear bull dichotomy. Choose your own adventure. Some people choose bitcoin. Simple.
Bitcoin working properly = tool to lock in your value with a limited and deflationary currency. Each individual is incentivized to do this (as early as possible). Society as a whole is not, because it will create inefficiencies. Governments are not, because it takes away their economic levers.
Idk where this will go, but I will ride the bubble/pyramid.
