I would like to present an argument and request the most pointed criticisms you can muster. This is a philosophical argument moreso than an academic or mathematical one, so I think discussing the ideas will be more interesting than the citations and numerals I reference to develop scope and perspective. They were retrieved from simple internet searches.

Most of the salient bearish arguments against massive growth in the cryptocurrency space involve comparisons between the market cap of crypto currencies and other metrics of sheer economic scale, like the valuation of a massive company or the GDP of the world. "Bitcoin can never be worth "X" because that would make its market cap "Y" which is "Z%" of the GDP of the entire world and that's not possible." Or, "Ethereum can never be worth "X" because that would give it a larger market cap than Pepsi." While seemingly rational, I never quite bought that reasoning. Here's why:

The global GDP is limited not so much by how many people there are on earth, but rather by how much these people can produce and consume. Any inefficiencies, therefore, create massive barriers to GDP growth. Consider the world economies prior 1861. All commerce had to be conducted either in person or by courier. So what happened in 1861 that shattered the physical barrier of communication? The telegraph replaced the Pony Express. In 1860 the world GDP was approximately $360 billion and the US accounted for about 5% (in 1990 USD, according to estimates footnoted in World Bank and IMF graphs and cited on wiki. Also from Angus Madison's Controls of the World Economy, 2007.) By the turn of the century, the world GDP had skyrocketed to over a trillion dollars, with the US accounting for over 20%. While there are clearly many, many other factors involved; I believe that it was the dawn of electronic telecommunications that had the single largest impact on this rapid growth in world commerce.

After the beginning of the industrial revolution, the world's GDP enjoyed a fairly linear and continuous growth (excepting a few years during the Great Depression) from a few trillion to around 30 trillion in 1997. From 1997 through 2007, the world again experienced the accelerated economic growth seen around the turn of the century with the GDP ballooning to over $60 trillion (If growth had continued along its post-industrial revolution rate, the world GDP should have been closer to $40 trillion.) It seems likely that the internet and the barriers in commerce that it broke may have been largely responsible.

This brings me to the potential that blockchain technology has to shatter many of the remaining barriers to world wide commerce. In addition to the most obvious improvements in efficiency that a world wide distributed ledger of activity provides, there are a few potential use cases that may also offer significant reductions in friction and inefficiency.

1. Smart contracts (automatically executionable contracts.) The single most inefficient, costly, and cumbersome barrier to smooth commerce may be the management of contract law. Smart contracts have the potential to massively reduce friction and improve speed in virtually all contracted transactions.

2. Remittances (both literally and colloquially.) Sending money to somebody across borders, barriers, or just boulders, is a space with a lot of room for improvement.

3. Data storage, computing, and the utilization of spare capacity. This is the use case that has me most excited. World wide commerce results in the generation of massive amounts of data. This problem will get worse forever, or at least until quantum computing. Additionally, the benefits that computational power provide to the conduct of commerce is immeasurable. Part of the cause and consequence of all this need for computing is the development of the portable personal computer (iPhone/Android.) To paraphrase Pied Piper's Richard Hendricks... what if we used all that computing power in all of those phones in everyone's pocket to build a massive network?

The idea that all of the world's spare computing capacity can be utilized to conduct and store all of the econimic world's computing and storage needs is the cornerstone of my argument. I believe that such a distributed, decentralized, secure, and efficient system is possible using blockchain science. The reduction in transaction friction that results is best measured in the most important unit there is: time.

The personal time savings that crytptocurrencices can provide create the potential for enormous, exponential growth in the amount of financial transactions we can all engage in. Imagine the difference between your parents going to the store to buy a light bulb and your accountant ordering one from Amazon on her iPhone in the back of an Uber on the way to work while she's taking a conference call. Now imagine if your accountant doesn't need a lightbulb because her LED light that was installed 25 years prior was automatically ordered and paid for and shipped the instant it burned out. And her Uber driver is out producing and buying because her car is autonomous. And there's no conference call because all of the contracts being discussed were automatically executed. And she's getting paid during her commute for her phone's spare capacity while she meditates. Oh yeah, and she's getting paid interest for the ether she has deposited for her proof of staking. But she's having trouble meditating because she can't stop thinking about all of the stuff she's going to buy with all of this money.

In this future that I envision, we are capable of much more commerce than we can even imagine right now. I don't mean five or ten times as much commerce... I mean much more.

I don't know if the world GDP will be $500 trillion in 10 years or not, but I think it could be for the reasons I suggest above. If this occurs, blockchain technology must be responsible for the improvements in efficiency required to create enough free time for everyone. If the blockchain is the lubricant of our future's commerce, the tokens floating in solution will be valuable. How valuable? About one hundred trillion US dollars valuable. If you ask me.

lol dude, just lol.
What the actual ****? Blockchain is going to do jack **** for the economy, let alone be the thing that's responsible for growing it exponentially. Robotics, new engineering practices, including nanoengineering, basic medical reaserch, moore's law, AI, and breakthroughs in low level research (such as battery storage) are what will move forward the economy. You know, guys in labs doing the same hard stuff they do with or without bitcoin.

Bitcoin and blockchains are vastly inferior to what we have now, for most purposes. For the few purposes you imagine, other solutions would have been invented anyway; the lightbulb ordering for example, non-blockchain Amazon + credit cards is managing just fine.

This post has to be a sign of peak bitcoin/altcoin.

I'm still not sold on cryptocurrency being capable of creating all kinds of amazing things that conventional currency isn't. Other than reducing transaction fees and the hassle of converting currencies of different countries. Right now I could get into an uber, pull out my smartphone, order an LED ligtbulb on amazon etc. without even knowing what crytpocurrency is. The development of those technologies had nothing to do with cryptocurrency.

If you can show me some really significant technological advancements that are not possible with conventional currency, then maybe I'll get on board with the hype.

I admit I'm not at all familiar with smart contracts, but that sounds like something that doesn't require cryptocurrency either.

Yeah that's called a botnet. Most people don't want their devices involved in one.

I read the title, was on the edge of clicking / not clicking. Curiosity got the best of me and now all I have to say is: TL DR.

I think, OP, if you are really serious about generating conversation, you can't make a post that looks like that and expect many people to read it. It's just ****ing dense text. But at least you have paragraphs

You should probably try to present an argument then.

ONE HUNDRED TRILLION DOLLARS

This is a pretty good list of alternative explanations for future abundance that don't require blockchain technology.

But how will Bob's robot in New Mexico remit with Alicia's in regular Mexico? PayPal? What if Alicia thinks their fees are too high and wants to use PayAmigo? Will you trust them for a lot of money? Can you imagine a trustless alternative?

New engineering practices is a little vague to specifically offer a reason why that plus blockchain is better than that alone. But examples aren't hard to imagine.

Basic medical research is the only topic in this whole discussion where I'm actually qualified to comment, since I've participated as either a subject, researcher, or author regularly for the past 25 years. It does and will affect an enormous portion of the world economy but it is unlikely to be a singular catalyst for exponential growth. The polio vaccine might be the single greatest invention in medical science and its consumer base is everyone who is ever born. Yet it accounts for an immeasurably small portion of the world GDP.

I think Moore's law supports my argument. If the growth of produceable computing capacity is functionally limited then exploring the use of spare capacity can have a dramatic effect on the economics of computing.

AI presents an interesting case. AI and machine learning are particularly good at game theory (negotiations.) Imagine a smart contract with machine learning solving the negotiations. That could free up some time.

Battery storage is also a great use case. What if a distributed system could offer an architectural improvement more significant than any current material or technological improvement?

With regard to the need for a blockchain in my example of the future I provided, I could have worded that better. Of course you don't need a blockchain to auto-order something from Amazon. But as we progress from LEDs (90s) to Amazon purchases (2000s) to automaticity generated orders from your smart appliances (2010s) to smart contracts, renting of your spare capacity, and interest earnings from proof of stake, I was trying to illustrate how block chains could become progressively more influential.

People not dying by the millions in mass epidemics does nothing for GDP?

Problem is getting the value of the blockchain into crypto market cap.

Blockchain technology brings efficiency to banking, healthcare, etc. It can also relieve the average person of many common frustrations around privacy, data sharing and so on. It also allows any average guy to create an autonomous organisation, any of which could become the next big thing and generate massive returns for the owners.

No-one 'owns' blockchain though. There are many competing and promising players, sure. But fundamentally, if the security of your network is sufficient for the use case the future may not involve value in tokens per se (beyond platforms where the token has a useage component within itself) but value in the underlying standard.

And no-one makes much money off, for example, the SSL standard, it just is.

It is possibly the most intriguing question in international business / investment at the moment and yeah too much text .. threadworthy all the same.

Isn't the main driver/backing of cryptocurrency money laundering, and other illegal stuff? Not the only use by any means, but the insulator against shock crashes

this pretty sums up the improvements to the world blockchain can provide, providing instant financial exchanges and settlements. But then the entire GDP boost is from disintermediating the financial middle man. This saves us what, 5? One time? So its helpful and could have big impacts on the financial industry but its not going to usher in a new era of GDP growth

I don't see how that's an improvement. I can instantly send money to Bob. It's called a credit card.

The problem of trust that blockchains solve are an illusion. Visa has never stolen anything from me in 15 years of having an account. I'm 99.999% sure they never will.

On the other, sending money to a merchant or untrusted/unknowable party without the fraud protection visa offers is a terrible deal. I'm maybe 95% certain they won't not send the goods. Visa solves that problem far better than the blockchain ever will. You can't put the real world items or human verification in the blockchain. There's always a trusted party to verify for any non-trivial problem.

Similarly for my deed of title to something. I trust the government WAY more that my deed will still be valid than I do complex blockchain application code with potential bugs - a theft from such flaws already happened and had a central authority hard forking the coin in the case of Ethereum (lol)

Blockchain solves precisely nothing. It's a joke. It's good for trustless gambling transactions and trivial payout mechanisms, and it solves the illegal payment problem, but the rest is worthless.

People (including people who should know better) are getting high as a kite on the shiny new thing, and greed. It's happened in every bubble ever since the dawn of time.

With
- Bob paying merchant fees
- Bob risking chargebacks
- Bob increasing prices to compensate for merchant fees and chargeback risk
- You paying forex fees
- You limited to credit limit
- You dependent on approval for a CC
- You subject to the bank's willingness to transact with Bob
- You risking your card getting lost/stolen/carded
- You vulnerable to identity theft
- And much more

If you like, I can list the inefficiencies for wire payments too.

Bob pays transaction fees when he spends his bitcoin (the banking system is zero cost). Bob holds bitcoin with zero interest. Bob waits 10 minutes to 10 hours for confirmation.
Yes, in this sense Bitcoin is better for merchants. However, it is consumers who drive adoption, and the other side of this is that consumers have no fraud protection. This is net negative overall for blockcoin.
Yep, the system is antiquated and expensive in that way. It will improve with competition though. There is no technological advantage here.
Bitcoin doesn't even give you credit, so I fail to see how this is an improvement??????? Debit cards let you spend your whole balance. This is just a nothing.
Debit cards? Again, a nothing
Banks and visa, etc transact with all legal entities. Bitcoin is superior for illegal activity, no question. It's one of the ways in which it is superior, and the only reason it ever got off the ground. However, this is irrelevant for "blockchain becomes THE economic driver that is valued at $100 trillion *cough* in 10 years"
This is a net negative for Bitcoin, and positive for CCs. Between fraud protection/reimbursal, and the rate of irreversible loss or theft of bitcoin (not to mention the effort required for safety), CCs win out handily.
By giving your CC number and address to a merchant? How are you going to buy the stuff without a name and shipping address?
There really is nothing more. Looked at objectively, current blockchain tech is hugely inferior to the banking/credit card system from the perspective of the end user. It's not even close.
Why don't you list the issues with blockchain coins, since this is what the thread is about? I don't believe they make anything easier except illegal payments, and perhaps cheaper non-merchant p2p payments (but things like FourSquare and ApplePay will fill those gaps as consumer tech continues to improve).

Toothsayer, the title says CRYPTOCURRENCIES-- not just Bitcoin. Bitcoin is absolute **** because of political reasons. When/if a Bitcoin like currency gets the necessary second layer technical upgrades (lightning network), your point about transaction fees and wait times become moot.

Banks and Visa transact with all legal entities? You're seriously arguing that on a POKER forum of all places? Furthermore, are you American? Go try opening a bank in Argentina or a host of other countries and see what happens. Hint: they won't open you an account, and by your logic, that makes you an illegal business? Also, what is illegal about Coinbase, a licensed domestic company, and why do many banks prohibit transactions?

LOL, are you seriously that unaware of credit card fraud and identity theft? Maybe you ought to visit a darknet forum and see what 99% of the transactions involve-- CC & SSN data dumps at pennies on the dollar for illegal carding.

Perhaps true. Why has this not been done after nearly a decade? Seems like a clown show to me. The problems here are a lot harder than you're making out, or they would have been solved. PoS has serious issues. PoW has serious issues. Is there a PoWoW in the works? Because you're making out like this is a solved problem, and it seems that it isn't at all, and may never be solvable without a trusted centralized party.
Again, these are niche and illegal use cases. They're completely irrelevant for a trillion, let alone $100 trillion, market cap. How many people want to set up a business in Argentina and can't get a bank account or mechant card services going? This is all just nonsense.

I've opened bank accounts in several countries. Piece of cake. And somehow, millions of completely illegal immigrants in the US manage to remit money back to their own country using banks. How on Earth did they ever manage that without DogeCoin to save them?

You can't do identity theft from a card number. You can't even steal someone's money. That requires all the other stuff that merchants grab.

No disagreement about PoW or PoS. I do believe however that a solution will be found within the next 10 years.

Edit: Btw I mostly agree with everything you say about Bitcoin specifically. Especially now witnessing this UASF absurdity

Niche? yes. Illegal? No. Obviously $100trln is a ridiculous valuation. But I disagree with your assessment that cryptocurrencies does not have $blns or $trlns worth of legal advantages to the current global banking system.


A quick google search indicates that last year in the USA alone there were 15 million reported cases of identity theft. That is a massive cost to businesses and consumers which is mostly avoidable with crypto transactions because sensitive personal information (and private keys) are not vulnerable to theft.

I've only used crypto for sports betting, so I may be missing something. But plz explain how purchasing something in crypto will somehow protect my identity info. If I buy a pair of shoes on amazon with crypto, does amazon not need to know my name and shipping address, and then obv store that data somewhere?

I think your getting cc fraud confused with identity theft. They are not the same thing.

TS hates crypto because he has missed out on 100x returns because it's a bubble so he'll never invest and just hate on it from the sidelines.

TS is significantly closer to correct than almost everyone else.

ETH has already robbed a user by consensus. So I guess some take backsies are fine. The other problem is expecting some normie to utilize a protocol that requires extensive competence in storing your own private keys. (or a password that effectively supplants the private key, basically the same problem)

It is ridiculous to think that people would give up the discounts CCs provide along with the fraud protection for an esoteric and potentially disastrous protocol.

This video doesn't even attempt to answer any of my questions. It's just a commercial with lots of tech nerd buzzwords and positive vibes. I'm looking for more of a breakdown of the mechanics of how it works.

Maybe I'll rephrase my questions.

1. How is customer identity data from a crypto transaction communicated between customer, merchant, and courier?

2. When someone buys something from an online retailer using cryptocurrency, how does the customer's identity data become immune from a security breech?

3. How would that immunity from security breech not be possible with conventional currency?

you dont need people to be sophisticated. enterprise alone is worth all the trillions. and i dont see why enterprises would not take time to learn how to use it

Grunching


To reach 100 trillion within 12 years there would need to be a currency that supplants all of the fiat and then imf (although not combined necessarily)

Ok, I guess that's possible if some massive black swan occurs.

What's not possible is the technology to support this 100trillion valuation. Raw txn throughput would have to 1000x today's current limits on a "blockchain". No one has a framework for 1000x throughput.

two questions for the bulls.

1. Why would I use crypto currency instead of normal currency for 99% of transactions? I cannot invest in stocks and bonds. If I lose my password I lose all the money in my account (lost it twice in past 10 years for my regular bank account). You can bruteforce my bitcoin wallet, which is much much harder with my bank account. And it doesn't really solve a problem that fiat currency cannot solve. Inflation has been low despite massive printing. And transaction costs aren't really lower. Same with transaction time (due to limitation of technology).

The only real use I see is for illegal transactions. Or for gambling. Which would imply bitcoin is probably already fairly valued (given the probable short holding period after a transaction). And total market value for that is probably a couple hundred billion $ tops.

It is also typical that most bulls are not using it much for transactions themselves. They are hoping that others will for reasons they cannot articulate.

2. How exactly is that contract stuff going to result in huge gains? If you have to make a transaction you can just transact a tiny fraction of a bitcoin right? It should not really result in much more demand for bitcoins?

Finally I see a fatal flaw in bitcoin. It's security is the huge dollar value of ASIC chips mining it currently. But when there are very few coins mined in 20 years or so, and those chips need to be replaced, there will not be much money in it. Unless it is widely used.

Because let's say that they take 2% from every transaction. Let's also say that total annual transaction volume in Bitcoin is $100 billion (for mostly grey and black markets). income from transactions would only be about $2 billion a year. Let's say that miners demand a 5% return, that would mean only $40 billion worth of equipment would be mining bitcoin. Which would make it not all that secure. So unless there is huge adoption (if you don't think $100 billion is huge adoption) within the useful life of all the current bitcoin ASIC chips, then bitcoin will probably become vurnerable to a 51% attack within a few decades?

On top of that if most of the income comes from transactions, miners are not very incentivized to lower transaction costs. ANd that would also make the system more vulnerable. You can already see that with the lack of segwit support from miners. Which would lower transaction costs.