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Comment by kobeya | Hacker News Reader

> I wonder if there's a similar overlooked-but-universal problem that someone in a garage is working on now, that'll spark a new wave similar to the dot-com boom.

Bitcoin.

Seriously, it exactly matches your requirements. Typically dismissed by everyone on their first encounter, it nevertheless solves universal problems related to something everyone uses -- money. And it's only just barely viable enough to solve that problem in limited cases right now, so I predict there will be a torrent of people responding to me with all the reasons why it can't be bitcoin because X, Y, Z. Just as any technical person would have said about the web in '96.

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> Typically dismissed by everyone

Yes, there's no bitcoin hype at all.

> it nevertheless solves universal problems related to something everyone uses -- money.

You know what is a simpler, more energy efficient, universally accepted, easier to use, time-tested, fungible, stable, and better in almost every way form of money is?

Money.

All the tulip mania or dotcom stocks or Florida swampland or whatever bubble fueled by something valueless without any underlying guarantees will never supplant actual money.

I work on bitcoin, and am very involved in the community. Every single person I have interacted with, core developers included, dismissed bitcoin on first exposure, at least in the early days.

And I suggest that you sometime look into how national currencies work and the systemic risks involved. Bitcoin solves a real problem of trust and institutional moral corruption.

> Every single person I have interacted with, core developers included, dismissed bitcoin on first exposure, at least in the early days.

I was exactly the opposite. I was entranced by how cleverly the blockchain solved the n-party Byzantine Generals problem.

Then I realized the while bitcoin is a neat technical solution, it doesn't solve any real-world problems except committing crimes and fueling a bubble.

> Bitcoin solves a real problem of trust.

No, it doesn't.

For the vast majority of people on the planet, a stable fiat currency is more trusted and stable than e-tulips. Rational people trust banks more than they trust Mt. Gox.

Can you give me an example of a common situation where trust is lacking, where normal people would have been better off using bitcoin than say... VISA or Mastercard?

> Can you give me an example of a common situation where trust is lacking, where normal people would have been better off using bitcoin than say... VISA or Mastercard?

I guess that depends on whether you consider the 2+ billion people worldwide without access to payment networks like Visa or MasterCard "normal"...

I think the better question is whether cryptocurrencies are a better fit than existing options for those people.

> I guess that depends on whether you consider the 2+ billion people worldwide without access to payment networks like Visa or MasterCard "normal"...

how is bitcoin, a "currency" that fluctuates wildly in value, requires a decent computer (or modern smartphone) to hold a wallet, has very high transaction costs, and is incredibly easy to lose (though corrupted wallet, hacking, fraud, etc.) better than say... M-Pesa (https://en.wikipedia.org/wiki/M-Pesa) or PayTM (https://en.wikipedia.org/wiki/Paytm) which are widely accepted, runs on a cheap phone, has significantly lower transaction costs, and is significantly better at protecting individuals against fraud and hackers.

> I think the better question is whether cryptocurrencies are a better fit than existing options for those people.

Are they? Seriously, are they? I'm pretty sure the answer is no, (at least not the Bitcoin that exists today) but people who are bullish about the Bitcoin bubble keep trying to force that square peg of crypto-currencies in that round hole of micro-payments.

Sorry, I wasn't referring to Bitcoin in particular, I'm only referring to the underlying decentralized blockchain technologies themselves.

> consider the 2+ billion people worldwide without access to payment networks

Why is a blockchain a good solution for this problem? Operators like M-Pesa have made digital payments mainstream in underbanked Kenya, without any crypto. Seems like the hard problems involve cash-to-bit conversion, building up a network of users, and building trust. None of these are fixed by Bitcoin.

Venezuela.

> Venezuela.

Great example, if bitcoin suddenly developed magic powers that could unseat a dictator, write a new constitution, educate the electorate, and protect the rule of law.

Seriously though, two things.

One, Venezuela has significant problems that magically giving everyone a bitcoin wallet isn't going to solve.

And two, currently the biggest use of Bitcoin in Venezuela is to evade currency controls. Which is criminal activity. Which is one of the only two things Bitcoin has a usecase for (the other being speculation)

So yeah, while a lot of people might be better off if they engaged in criminal activity, you can't use Venezuela as an example of a legitimate use-case for bitcoin.

> currently the biggest use of Bitcoin in Venezuela is to evade currency controls

False, it's actually to mine bitcoin using some of the world's cheapest electricity, thanks to local subsidies.

Empirically, bitcoin hasn't reached anything close to mainstream adoption in Venezuela. Why do you think this is?

Have you seen the price of real estate in Florida? I'd say they did a pretty good job of making all that worthless swamp land pretty valuable.

This is Aladdin City, a heavily hyped and over-sold new city that fueled a real-estate bubble in the 1920s in Florida.

https://goo.gl/maps/Xe3ns9Cd2tv

You'd probably be hard pressed to find a home for less than $250K even there today. And I've seen more than a few wetlands filled in with dirt to build apartment complexes and neighborhoods on in Florida. To be fair, there are several huge over-sold neighborhoods in Florida that never met the hype, but for every one of them there are real success stories too.

My point is the majority of speculators lost most of their money in the short-term, and didn't live long enough to see the value of their investment appreciate, and for most people that would qualify as a failed investment.

I don't think the problem with bitcoin is the tech (although I do think the protocol isn't perfect, as hashing times continue to increase). The problem with bitcoin is actually fundamental - once it becomes as big as you say it will, it will be regulated. And once it's regulated, what real advantages does it offer compared to the competition? The reason money works is because people trust that the governments printing it will honor it - otherwise you have people living on communes trading pieces of silver (Planet Money Podcast #777 has an interesting take on this, and later finds out the people were swindling him).

Bitcoin is solving a problem, but not a massive one. It's for people that want minimal government interference like people that live on communes, it's just catered towards a more tech-savvy demographic. I guess you could also argue it's used as currency for illegal activities, so I guess that's a use case for it (hard to imagine The Silk Road could have worked without bitcoin).

Of course I could be wrong, and I don't think bitcoin will disappear any time soon - I just think it's going to become irrelevant.

> I guess you could also argue it's used as currency for illegal activities, so I guess that's a use case for it

Except, from my understanding, it's becoming less and less useful for that - high fixed fees, and not really anonymous. Aren't these illegal activities moving to Monero?

> once it becomes as big as you say it will, it will be regulated.

How? You can regulate the borders of the system, and indeed most jurisdictions do. But how do you anticipate government controlling who can or cannot make transactions on the chain?

Bitcoin is definitely hyped, though. Sure, on this site it gets a healthy dose of skepticism (as it should, I would argue, but that's a separate point), but cryptocurrency in general is currently increasing in hype, not decreasing. Just look at the number of articles written about crypto over the last year (a rough proxy, but still) - it's only gone up. Also, ICOs regularly garnering $20+ million worth of crypto.

I think the OP was referring to something that gets little hype in general (not just on HN) but could have unforeseen disruptive effects. Like that boring thing that no one really discusses much but a small group of committed people are working on.

Bitcoin 3-4 years ago got ridicule, not hype.

A fair point. But if it's been 3-4 years since then (and 8 years since inception), how much longer until bitcoin/crypto become the revolutionary technology that was promised?

No it didn't. I've been actively reading/commenting on HN for 5 years. Bitcoin got a lot of hype 3-4 years ago. The only difference is it gets massive amounts today.

Bitcoin gets compared to gold and has even been described as an "anticurrency" [0] but I think there is an important distinction between bitcoin and gold -- the underlying asset is intrinsically worthless, unlike a gold bar which can be melted into jewelry which can then be sold for instance.

[0] https://www.bloomberg.com/news/articles/2017-08-09/here-s-wh...

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