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Comment by vectorpush | Hacker News Reader

It is only natural for centralized parties to emerge. I'd rather have centralized players with a decentralized back-end versus the banking system we rely on today.

What value does the decentralized back-end provide for your average consumer who only interacts with bitcoin through the front-end? It's true that cash-like digital transactions are still possible through bitcoin, but the utility of bitcoin as "money I can use in exchange for services" hinges on the fact that these centralized 3rd parties allow individuals at the company's discretion to spend their bitcoin.

anybody can verify that coin base acts as it should.

Tell that to those who were swindled by mt.gox and the long line of shady/incompetent bitcoin players that have screwed countless bitcoin users.

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The design of Bitcoin is such that no one, not even the "average consumer" is ever unable to operate directly in the decentralised backend. All that is required is some open source free-free software, of which there are already several versions.

About your second point. I was one of the people who had coins at Gox. Hundreds of them. I still think the parent is right and you are wrong.

The design of Bitcoin is such that no one, not even the "average consumer" is ever unable to operate directly in the decentralised backend.

Yes, and that's fine if the only place you shop is silkroad, but if you want to make purchases from real companies, these centralized 3rd parties are the only option.

About your second point. I was one of the people who had coins at Gox. Hundreds of them. I still think the parent is right and you are wrong.

Well, you're entitled to that opinion, but I think the catastrophic failure of mt.gox and myriad others pretty clearly demonstrates that the blockchain is not a sufficient defense against scams and incompetence.

Critiques of Bitcoin like this baffle me. First of all, the whole point of a decentralized protocol is such that whoever follows the rules can transact accordingly. Plain and simple.

People are going to scam, they are going to swindle, they are going to get hacked. Its not Bitcoin or it's blockchain's duty to do your due diligence. It simply can't. There will always be a need for trusted entities if someone doesn't want to store the coin themselves. It's a function of vetting those players.

But I agree with you: the level of professionalism needs to be upped in Bitcoin, there is no question about that. But somehow blaming the protocol for the bad actors in the space? Come on....

But somehow blaming the protocol for the bad actors in the space? Come on....

I didn't blame the protocol for anything.

Critiques of Bitcoin like this baffle me.

It's not a critique of bitcoin, it's a critique of the increasing reliance on centralized merchant services. All these companies accepting bitcoin payments only do so by the grace of a few centralized parties that will quickly become "too big to fail" as they continue to aggregate more and more clients. I shouldn't have to rely on coinbase to provide a path to actually spend my decentralized currency.

If Bitcoin becomes big and stable, there's no reason large companies couldn't open BTC accounts at Chase or Wells Fargo and accept them directly. Amazon doesn't convert your CAD into USD immediately when you shop on Amazon.ca.

At least with Bitcoin, anyone can compete as a payment processor because there's no central authority with onerous licensing requirements like Visa/Mastercard.

>there's no reason large companies couldn't open BTC accounts at Chase or Wells Fargo and accept them directly

That strikes me as a rather extraordinary claim.

> What value does the decentralized back-end provide for your average consumer who only interacts with bitcoin through the front-end?

The primary benefit to end users is indirect. Because Bitcoin is a decentralized network, the firms which build centralized services on top of Bitcoin are doing so in a much more competitive market, because it's much more difficult for government's to restrict competition in Bitcoin services than in their own fiat currency. That competitive market is likely to lead to better and cheaper products and services than the alternative.

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