There was a very small percentage of the market using it to buy online goods that wasn't speculating, but it's small representation is the reason the price is so unstable.

Mining companies are closing left, right, and centre, and bitcoin exchanges are shutting down for more profitable ventures.

I don't think Bitcoin is dead or even close to dead but I'm pretty sure we've seen its peak.

Unlike the previous bubbles this one was in full sight of the general public with constant media coverage. It's gone to $1000 had most people(in western nations) learn about it and respond almost unanimously with 'Meh'.

Look at the services built too. Mining companies and exchanges. Tell me how those are going to draw in new users?

Not really. Often, it is merchant solutions like BitPay or consumer services like Blockchain.info or Xapo that are funded. Most interesting in my opinion is blockstream. Mining tends to be privately funded outside the VC-ecosystem.

Blockchain raised a silly amount of money for a platform that most people in the community have lost faith in due to repeated security failings.

That's a remarkably bold claim. Citation definitely needed.

You will need to define the "community", and then provide a source for "most". I don't see how you can possibly do that, since both data points are lost in the murky fog that is the world of Bitcoin

"source" the few weeks a month or so back where every second post was about how evil or bad or stupid blockchain.info was and no one should use them anymore. It was around the time the problem was discovered with their keygen and when someone was regularly sweeping coins from wallets on the service.

You haven't even counted them. You're providing no real data.

There's no way that it justifies your stark claim that "most people in the community have lost faith in Blockchain.info".

Why do you feel the need to enhance your argument with exaggeration and unsupported assertions?

Almost 10% of the comments in this thread are by you, and they're filled with numerous bold claims of fact.

Are all those statements "observations of sentiment", too, or was it only this one?

If I use exact numbers they tend to be facts I can source you. If I use vague terms it is because I don't have the numbers or it is a sentiment claim.

I've had a look through my comments here and don't really see too many bold claims at all. Do you have any specific ones you want an answer for?

So you're boldly claiming that the company has lost over 50% of its community support. That's an incredibly damaging statement. And you're basing it on shamefully weak evidence.

If you really wanted to be vague, then the appropriate word might have been "some". So you could have said "Some people in the community have lost faith in Blockchain.info". But that wouldn't have sounded as impressive, would it? It would sound like you don't know what you're talking about and you don't have any real proof. So you went with the bold and confident "most".

> Do you have any specific ones you want an answer for?

Frankly, after this discussion, absolutely all of them, because you seem to be prone to exaggeration, to put it mildly.

>Frankly, after this discussion, absolutely all of them, because you seem to be prone to exaggeration, to put it mildly.

Well go ahead and copy any paste any of the ones you are unsure of here and I'll reply.

I said "all of them", but who has time for that? Just take another statement of yours as an example:

>"2014 Was meant to be the year of Bitcoin" based on the claims of all the leading people in the bitcoin world outside of Gavin.[1]

"All" the leading figures in the Bitcoin world, except one, said 2014 would be the year of Bitcoin? Really?

I'm sure "some" of them said that, or some kind of bullish statement of that sort, but even if you'd claimed that, you'd still run into an argument about who are "the leading figures" anyway.

It's the way you frequently employ these sweeping generalizations and broad exaggerations to support your arguments that makes me more and more inclined to discount any statement you make.

Probably some of what you say is true. But basically you seem to spew out assertions without checking them. You have a terrible habit of stating your opinions as facts. I suspect you may even be twisting the facts to better support your claims, in the heat of an argument. So how can I trust you? I don't have time to sort out the truth from the half-truths and exaggerations.

[1]https://news.ycombinator.com/item?id=8884950

All of who except for Gavin(and almost never Garzik) have at points claimed it would be the big break out year. That it was going to the moon this year, $XX,XXX coins, that big investors were arriving any day now, etc.

The problem you seem to have is that you are a literalist and are unable to understand when someone uses broad words in conversational English to imply meaning instead of specifics.

I'm confident most people can understand that when I say "all the leading people" that I mean "the majority of the most well known influencers".

>So how can I trust you? I don't have time to sort out the truth from the half-truths and exaggerations.

How can you trust me? I think its clear that you cannot as you seem to want to take everything I say literally.

http://wondermark.com/1k62/

people throw at money at anything.

Yes, Bitcoin was probably hurt by the mania surrounding $1000. Had it gone to $180 from $30, without the spike, there would be calls of tulip mania instead.

Is it too early to build applications on top of Bitcoin? No, I don't think so, some wants to be in early. But to call "the year of" on what amounts to beta software and VC backed startups is a bit much.

No one cares what version the software is and that you would think anyone does is one of the problems with the Bitcoin community. Bitcoin had its chance to impress the general public and get them on board when it had all its media attention this past year and it failed.

Neither is node.js, yet tons of successful startups run on it.

For years, Gmail was still "beta". If it had a major security leak, "it's beta" would mean little. It would still qualify as a failure.

It will get them off the ground. Then they will need to start rewriting a backend pipeline in something fast and predictable.

I have very mundane needs, and I've never figured out a compelling case for me to use bitcoin. In general, it's always been more trouble than convenience.

I know there are people with exotic needs, but I think the majority of people are more like me.

Now, imagine you're poor, your family lives abroad, and a $20 fee on a $500 transfer is indeed a big issue.

There are usability concerns (a bitcoin ATM to deposit money and have it sent to an address would be nice) but the use case of near-zero, same-day money transfers is enormous. In the affluent western world it's strange to imagine that someone could depend on your speedy transfers and that even an extra $20 would go a long way.

Bitcoin isn't better for remittance. Actually moving the money has never been the expensive parts of remittance it is giving people a way to receive money on the other side and compliance. The current bitcoin remittance companies advertising lower fees are doing it entirely by ignoring compliance and that will work great until they have any volume and then they will be shut down.

I've heard people say "BTMs save money on not needing a store" but do you think if an automated machine was doable WU wouldn't have replaced most of their partner branches by now?

I'm American and have lived overseas for several years and the currency exchange rates in combination with the 10-20 USD fees are a constant annoyance. And an annoyance for my startup which operates in USD but does business in several countries. It badly affects margin for smaller payments.

I'm a big Amazon Prime customer and I do a lot of purchase for family and friends for delivery in the US. I don't dare use my overseas credit card to pay for it, but if Amazon were to accept BTC I could pay from where I live. That would be very valuable to me personally.

I'm interested in bitcoin because it takes control away from traditional choke point exchange bank and also could serve as a 'world currency' of sorts. I also think that it would make possible a lot of cross-border sales that currently face real practical impediments.

Wouldn't the incredibly volatile currency exchange rate of Bitcoin also cause problems? It is not immune to this as it is free floating against other currencies.

I'd love to see a world-currency which does away with existing credit card companies and transfer fees worldwide, but Bitcoin is not suitable, and I suspect if we see one emerge it will quickly be regulated and taxed by governments like all other means of storing wealth.

Is it being used presently by lots of people on low incomes to transfer money? What if they do and it drops 10% on the day? How would they acquire it easily? How would they exchange it easily and quickly for their local currency?

I'd love to see a digital currency which actually competes in a meaningful way with the convenience of digital cash, but Bitcoin is nowhere close. It has serious issues with volatility, speculation, acquisition, storage and lack of regulation/insurance, all of which mean I wouldn't touch it in its current form.

I needed to send some money overseas and I looked at bitcoin for exactly the same reasons that you described. However, I found that sending the money via bit coin would take longer and wind up costing me more in transaction fees than just using transferwise. While the actual bitcoin transfer itself was free and instantaneous, there were multiple days of waiting and percentage fees to convert from or to fiat currency at each end of the transaction.

This is why bitcoin is doomed to fail.

It might not be bitcoin, but in 20 years do you think no cryptocurrency will be in widespread use?

$5M USD in Bitcoin sales is pretty astonishing, actually.

EDIT: 1/5 of $15M is still pretty astonishing. I expected something around 250K in BTC-denominated sales.

Even worse, it's not counting the loss of the value of bitcoins. Lots of people dumped bitcoins on overstock when it was worth much more than $200. They need to convert those bitcoins into cash to pay taxes, rent, etc.

Overstock lucked out by not doing more business in bitcoins because they would have lost even more due to the drop in bitcoin price...

"as far as the general public was concerned" :) Yeah, they were too busy watching the big bottom Kim and losing their home.

"(Overstock the poster child which at one point was claiming serious expectations of $15-20m in bitcoin sales ended up with a 5th of the lower end of their claim)."

Did you see how poorly Amazon did? They're a much larger and better store. No coins on Amazon.

"Mining companies are closing left, right, and centre, and bitcoin exchanges are shutting down for more profitable ventures."

As are oil companies. So goes the world. Isn't linear let alone vertical. Two steps forward...

What would those, 'more profitable ventures' be? You of course don't say because those miners aren't good for anything else.

"I don't think Bitcoin is dead or even close to dead but I'm pretty sure we've seen its peak."

If you're pretty sure, you would say why, but you don't. Apparently cirucular logic is big on the HH. That and or Tourette's.

They are the ones that matter when you're trying to promote a new currency. And yes they don't care.

>Did you see how poorly Amazon did? They're a much larger and better store. No coins on Amazon.

I don't understand what you're trying to say here?

>What would those, 'more profitable ventures' be? You of course don't say because those miners aren't good for anything else.

For Vault of Satoshi it was apparently streaming video.

>If you're pretty sure, you would say why, but you don't. Apparently cirucular logic is big on the HH. That and or Tourette's.

I've said why. You are throwing out a lot of personal insults here to cover up the fact that in all your posts you've added zero content. You've attacked things that people have said without providing counter points and insulted them to mask your lack of content.

> 2014 was meant to be the year of bitcoin

You obviously base this off price alone. If you look at startups based around bitcoin or the blockchain, if you consider that regulatory clarity has or is being provided by most major economies, if you look at transaction volume, feature developement etc then 2014 was a good year for bitcoin.

>Mining companies are closing left, right, and centre, and bitcoin exchanges are shutting down for more profitable ventures.

One cloud mining service (CEX.io) has suspened cloud mining operations. What other mining companies have closed? The hashrate has fallen recently but if lots of mining companies(as you suggest) have closed we would have expected a much larger drop.

As for exchanges shutting to pursue other more profitable ventures, this is 1 exchange (Vault of Satoshi) not a huge exchange by anyones metrics. You said exchanges (plural) which others?

>Unlike the previous bubbles this one was in full sight of the general public with constant media coverage. It's gone to $1000 had most people(in western nations) learn about it and respond almost unanimously with 'Meh'.

The general public may have, investors and people that understand tech have not responded in that way at all. If you asked the general public about the internet in 1990 they would have said meh!, those same people now bank online, shop online and communicate online. Do they care about the internet? No, but at the same time could they bare to be parted from facebook?

Bitcoin will become widely used and adopted, whether consumers know they are using it or not is another matter.

Transaction volume is a ridiculously bad metric to judge growth. You want to prove growth get coinbase and blockchain.info to release MAU figures. They won't of course for obvious reasons.

>One cloud mining service (CEX.io) has suspened cloud mining operations.

HASH profit, PETAmine, Hashie, Coins-miner are the first few I found after a quick look for more names for you.

Also Cointerra for mining equipment.

>As for exchanges shutting to pursue other more profitable ventures, this is 1 exchange (Vault of Satoshi) not a huge exchange by anyones metrics. You said exchanges (plural) which others?

The other company I was thinking of was Delta Financial. Not an exchange.

>The general public may have, investors and people that understand tech have not responded in that way at all.

Except they have. Look outside of bitcoin forums for the general feelings towards bitcoin some time. It is almost universally negative especially in tech and finance circles.

?If you asked the general public about the internet in 1990 they would have said meh!, those same people now bank online, shop online and communicate online. Do they care about the internet? No, but at the same time could they bare to be parted from facebook?

Luckily though we have the internet now which has accelerated the spread of new ideas and products on it. We're not dealing with a pre-internet world anymore so comparing them is silly.

>Bitcoin will become widely used and adopted, whether consumers know they are using it or not is another matter.

If consumers don't know they are using it then there is no reason for it to be used. You think banks can't speed up their transfers to be instant if there is any pressure without using bitcoin?

I think you don't understand. People had no need of the Internet until applications such as online banking, online shopping etc were available to them. They didn't come pre installed on the Internet and whilst they wrre being developed most Internet users were people who got involved with it because it was cool new technology. Your mum and dad only got it when it had already become a mature technology.

Bitcoin doesn't have that because most people don't care about what it does better and do care about what it does worse.

6 years into the experiment including an entire year regularly in the news and still almost no one cares and the userbase appears to have actually shrunk this year from an estimated peak of ~1-2m to an estimated 500k. And even that 500k is considered generous.

>Your mum and dad only got it when it had already become a mature technology.

I appreciate your condescending tone and trying to imply that I'm a child. But I've been on the internet and programming since 95 and while far from the earliest user I was a lot closer to them than most people. I'm well aware of days when online banking wasn't a common thing. And the fact that the idea of it and online shopping didn't spread fast because we were largely in the pre-internet(it existed but had limited adoption) world then.

No interest rate, and you have to secure it yourself? No thanks. My "big bad bank" guarantees me at least a small interest in saving money, and if my card is stolen, I get a new one in 24 hours and all transactions are cancelled. I'm happy to pay some transaction fees ("extortion!") to get that kind of insurance.

Bitcoin is the electronic version of "let's buy a lot of gold and stash it somewhere".

EDIT: Burn karma, burn. Ah well.

It's even worse than that because normal people at least have a decent idea of when their gold is secure. A non-techie just has to trust that the online bitcoin provider or author of the wallet is doing what he/she really says and in a secure fashion.

You have to trust the hardware (open source hardware/firmware will be an improvement), and verify addresses out of band (see https://medium.com/@octskyward/why-you-think-the-pki-sucks-b... for solutions), but otherwise you can safely use it on even a malware infested computer.

As a bonus, it can be protected by a pin (with firmware-enforced rate limits). And backups of the seed can be made in case the hardware wallet is stolen/lost/destroyed. They can even be split up using Shamir's Secret Sharing.

(Eventually mobile devices will be able to accomplish the same thing. You could imagine a more advanced version of Apple's "Secure Enclave" that presents the user with a UI (rendered by the Secure Enclave coprocessor) to authorize transactions)

Hiding it at home seems risky because of burglaries.

I haven't found a solution yet, that's why I don't own any gold.

With bitcoin, at least I can spread the risk, like putting a part of the "secret" into a bank vault, hide part at home, at a friends house, whatever. The risk of a simultaneous burglary in two unrelated houses seems low.

For the truly paranoid you could even generate your seed using coin flips or dice rolls... http://www.swansontec.com/bitcoin-dice.html

The benefits of bitcoin are outweight by having to secure your private key(s) yourself.

If one safe deposit box full of gold is stolen, that portion of the gold is gone. If a safe deposit box containing 1/5th of a Shamir's Secret Sharing secret is stolen, the secret can't be reconstructed by the thief, but can be reconstructed by the owner if they still have access to 3 of the 5 pieces (for example).

[1] http://en.wikipedia.org/wiki/Shamir's_Secret_Sharing

It also seems weird to hide a piece of gold at a friends house. Now you expose them to the risk of burglary, as well as to the temptation (in a crisis).

Bitcoin keys are much easier to hide, too.

This, and plus the fact that in almost every country on Earth now, buying Gold needs an ID of some sort so that governments know exactly where to look for Gold the day they want to seize it. I think one of the last places where you can buy Gold anonymously is Switzerland.

EDIT: and you have to trust that the Gold you buy is real. There's always the risk it's gold plated tungsten or something.

I haven't bought a lot of gold, but I've never been asked for ID here in East Europe. Go to kiosk, buy coins with cash and that's it.

Same thing, how do you ensure the Gold is authentic ?

> jewelry stores

That is true, but you won't buy Gold at a good price in this way, there is a premium on jewelry versus gold coins in weight, for example.

You can also buy gold futures on the futures/commodity exchange which is a contract that specifies the other party has to deliver gold to you in the future. The risk is that the financial system collapses and the broker/clearing broker cannot uphold the contract anymore.

So it depends on your intention for buying gold, if it's to hedge against inflation or market crashes, buy a gold tracking security will be fine. If it's to be used as a doomsday currency, then I think you're better off hoarding canned tuna, vodka and guns; things that you can either barter with, or use to force other human beings to do your wish.

Epic :)

In general I agree. Only storing guns seems even more difficult than gold. I live in a country where it is not a normal thing, and statistics seem to point out that gun ownership increases risk of being shot. But in a doomsday scenario, I suppose having a gun would be a good idea :-/

Anyway. Turning "hoarding" into a dirty word is one of the last signs an economy is about to tear itself to pieces, just before the baseball bats come out and shop windows start getting smashed. Stay classy though!

> That's a) impossible

Well, that's prima facie not true. It can indeed be possible for theft and violation of private property to be a net good for the economy as a whole.

Again, I stress, I have no idea about this case per se. It's an interesting thought experiment though, as to when the government taking something away from private citizens like that can be good on the whole for an economy.

For example recently in Greece the exact thing happened that people always worry about: home ownership was suddenly being heavily taxed, because those house owners have little way to hide their assets.

In general governments try to prevent the population from using alternative currencies (usually it is illegal). So if in an economic crisis gold would become too much of a live currency, countermeasures by the government seem very likely.

Put it in your teeth, facepalm, your teeth!

You've got bigger issues at that point.

Again, I don't see what the innovation here is, except the technical aspects (the blockchain as a distributed system is very clever).

Sure, but it doesn't matter what benefits Bitcoin offers to banks (although I do think you are overlooking a few). If banks ever were to support BTC denominated accounts, it would be because of consumer demand, not because Bitcoin is more efficient for them to store/transfer. So, what really matters is what benefits Bitcoin offers to consumers versus other currencies.

I'd say the two main benefits some people see in Bitcoin are: 1) it gives you the option to bypass the banking system when you want to or have to (e.g. if you have limited access to the banking system). Of course it's also possible with cash but a lot more inconvenient. 2) its predictable monetary supply.

I will give you that today, the price fluctuation and immature ecosystem makes USD and other national currencies a more viable choice for the average consumer.

In the best case scenario, Bitcoin will continue to experience unstable boom-bust cycles as prices will rise when people start hoarding their coins, then crash again when people dump their Bitcoin en masse once prices hit a high enough peak. This is great for speculators, terrible for everyone else.

In the worst case scenario, Bitcoin prices drop to $0 when everyone gives up using it. Which leads to the second problem: Bitcoin never really solved the chicken-and-egg problem. Not enough merchants accept Bitcoin for customers to bother with yet another currency, and not enough customers use bitcoins for merchants to deal with yet another currency. Services like Coinbase are merely abstractions over the USD - too few merchants deal solely in Bitcoin, and for good reason.

Pure bitcoins dealing will start getting adopted by the average folk first once the availability and ease of use problem is solved.

Sorry but you're backwards there chief.

"Specifically, Bitcoin's deflationary nature."

Of course you don't elaborate. That's ok because another guy will say inflationary then another guy will point out how all fiat is always in a state of either or.

"In the best case scenario, Bitcoin will continue to experience unstable boom-bust cycles "

No, that's the US dollar. As it's economy experiences a crash every six years on average. Little overdue at the moment.

"prices will rise when people start hoarding their coins"

That's always been what's going on.

"then crash again when people dump their Bitcoin en masse once prices hit a high enough peak."

Oh so there's a collective price point where everyone sells is there? That would be a first for any object in the history of the world. You realize that right?

"This is great for speculators, terrible for everyone else."

Yes that is what we saw in 2014 with the introduction of futures markets and are continuing to see. Watch the Chinese exchange. All gamblers with it at the moment making money on the downside.

"In the worst case scenario, Bitcoin prices drop to $0" yes captain obvious, that would be, but people won't give up using it because of it's utility.

"Bitcoin never really solved the chicken-and-egg problem. Not enough merchants accept Bitcoin for customers to bother with yet another currency, and not enough customers use bitcoins for merchants to deal with yet another currency."

Brawker, Purse etc for those that don't. But THOUSANDS now do. Newegg, tigerdirect, anything you need or want can now be had with btc. Bitpay makes it super easy for stores to accept coins.

Lots of talking out your butt. You have no data on how many people use it and for a merchant to accept it, like say Paypal, it's nothing but a good thing because of almost nonexistent transactions costs and elimination of chargebacks.

It may not be much of a currency at the moment since banks are attempting hard to prevent its use but the freedom it gives you outweighs the risk of it being stolen if you are not careful.

Bitcoin would hurt Visa and Master Card very badly if it were adopted since it obsoletes their entire business practice.

It would also be potentially beneficial for the user since if you could purchase things with bitcoin at your local store the owner wouldn't have to pay the bank or Visa a small fee to make a transaction. That saving could be passed along to you as a reduction in price.

Now if there were any decently run services out there that could secure the average users wallets the market would pick up very fast. The biggest problem bitcoin has at the moment is all the hackers stealing the bitcoins and giving it a bad reputation in the news.

How do I do a chargeback on a purchase paid for via Bitcoin?

1) You can choose your arbitrage provider independent of your payment channel (whereas with Visa/Mastercard you are locked into the arbitrage facility of the payment channel) -> splitting off a feature into a modular component -> more competition among providers -> better products.

2) The arbitrage provider only holds a m-of-n key to confirm your transaction, so they don't hold your funds, so they cannot steal them (directly, obviously they could collude with the intended recipient of the funds, but that's by and by).

3) You can set arbitrary values for how many m-of-n signatures you want and for checklocktime. So you can customise the arbitrage arrangement to suit the transaction far more than any offering from V/MC.

Finally, let's not forget that if you really are desperate to keep that classic chargeback commerce experience, there is nothing to stop V/MC rebuilding their system on top of BTC and offering the same package. The current "chargeback" system isn't really a "chargeback" anyway, it's more of a "failure to pay funds that your bank provider agreed to display as pending."

What's the problem?

Cases where they just don't want to refund you.

Cases where they are scammers/criminals.

Cases where your coins are stolen and spent at a store(the equivalent of having your card stolen to buy a tv at walmart).

Um, and with VISA they will just happily ignore you taking back what they consider their money and wish you a good day?

Cases where they just don't want to refund you.

Same as above?

Cases where they are scammers/criminals.

Why would you send money to those? Since you know there is no Chargeback mechanism wouldn't it be wise to demand product/service first or use an escrow service?

Cases where your coins are stolen and spent at a store(the equivalent of having your card stolen to buy a tv at walmart).

Oh, I think there we are getting to the point. You are mistaking Bitcoin for a credit card. Well... It is not.

It works very differently and if you treat it like "just another CC" you're in for quite a bad time.

VISA doesn't consider it their money. So ya they will do that. You not knowing that suggests a huge gap in your knowledge of how credit cards work/how charge backs work.

>Why would you send money to those? Since you know there is no Chargeback mechanism wouldn't it be wise to demand product/service first or use an escrow service?

How would I know? A company can seem fine and turn into a scam quickly. I could use an escrow service but then I'd have to arrange that for every purchase when currently I can have it handled for me automatically.

>Oh, I think there we are getting to the point. You are mistaking Bitcoin for a credit card. Well... It is not. It works very differently and if you treat it like "just another CC" you're in for quite a bad time.

I'm not confusing it at all. I was giving an example that closely maps to the security concern with a credit card.

So if you agree that Bitcoin is not a credit card then what relevance does an example have that maps to the security concerns of a credit card?

If you want to ignore that is fine with me. But there is still a lot of my comment left up there.

I'm not confusing it [Bitcoin vs CC] at all. I was giving an example that closely maps to the security concern with a credit card.

First you say you agree that Bitcoin and Credit Cards are not the same - and then you proceed to complain about problems that only occur if you treat Bitcoin like a Credit Card.

You said that you can not worry about charge backs because you can just ask for the money back. Problem solved.

I gave you a list of occasions where no you couldn't just ask for the money back. You have ignored this and focused on this irrelevant argument to avoid having to face the main discussion.

Just because you're avoiding looking at the problem doesn't mean it doesn't exist.

Since you know there is no Chargeback mechanism wouldn't it be wise to demand product/service first or use an escrow service?

What part of "Bitcoin is not a credit card, do not treat it like a credit card" is so hard to understand?

Yes, if you send coins to some address which might belong to a scammer then those coins might be lost. Duh.

You can now complain all day about Bitcoin not having a chargeback mechanism. Or you can just accept it as fact and refrain from sending your coins to random bitcoin addresses...

"How would I know? A company can seem fine and turn into a scam quickly. I could use an escrow service but then I'd have to arrange that for every purchase when currently I can have it handled for me automatically."

>You can now complain all day about Bitcoin not having a chargeback mechanism. Or you can just accept it as fact and refrain from sending your coins to random bitcoin addresses...

The point is though you either reimplement the security manually for each transaction or you only shop at a handful of companies and hope there isn't a mistake that they can't track on their side. Look at all the complaints about Tiger direct not refunding bitcoin payments early on for an example of a non-scamming company screwing people over not by maliciousness but by incompetence.

So yes. I could just hope I won't run into one of those problems while shopping or I could manually setup escrow for every purchase and hope the escrow solution I choose is legitimate. Or I could just keep using my credit card and not have to worry.

And people wonder why bitcoin isn't gaining traction?

It's starting to get hilarious...

Yes. If you want to use a credit card then please, by all means, use a credit card.

And in addition you may use Bitcoin in scenarios where it works well (e.g. to transfer money to people you know), for ecommerce through services like Bitpay, or just retain it as your favorite strawman... ;-)

Offloading the issue of converting it to something usable to them? This only makes sense if you already have a bunch of bitcoin and makes no sense for the receiver.

>for ecommerce through services like Bitpay

Which doesn't fix the charge back or scam problems. Scammers can use Bitpay too.

Have a nice day! :-)

Someone said the Bitcoin obsoletes the entire business practice of Visa and MC. I pointed out chargebacks as something Visa and MC do that is not reasonably supported by Bitcoin, with the implication that chargeback support is a feature of Visa and MC that consumers find attractive, and hence Bitcoin does not obsolete credit cards.

So yes, you are right...Bitcoin is not a credit card. And that means those who want credit card features will continue using Visa and MC, and hence they are not going to be obsoleted by Bitcoin.

http://www.icanbarelydraw.com/comic/comics/2014-01-27-40-mil...

>It would also be potentially beneficial for the user since if you could purchase things with bitcoin at your local store the owner wouldn't have to pay the bank or Visa a small fee to make a transaction.

I don't pay them when I make a purchase the store does. That saving could be passed along but it wouldn't be.

>The biggest problem bitcoin has at the moment is all the hackers stealing the bitcoins and giving it a bad reputation in the news.

The biggest problem bitcoin has at the moment is that it isn't really better than existing systems for 99% of the people in the world with money. And with that comes complexity, security risks and volatility.

If Bitcoin ever gets to a stage where it even looks like it has a chance to hurt Visa or Mastercards current business model then they will simply change their business model and use their massive current infrastructure and global network to become the biggest players in the new bitcoin market. I would be extremely surprised if Visa and Mastercard didn't have people wargaming these scenarios as we speak.

Now if there were any decently run services out there that could secure the average users wallets the market would pick up very fast.

A service provided by Visa or Mastercard perhaps...

If you go to a third world country, it's even less convenient to pay for stuff. For example, you can't get a hotel room last-minute with a credit card in Vietnam, where I checked, because they need to verify your ownership/control of your credit card with a pair of small debits, probably because of the fraud/chargeback situation.

Another example, you want to donate to Wikileaks from the US. Not so easy.

Sometimes you really want digital cash you can take and spend anywhere for any reason, and US credit cards or debit cards or other mainstream bank accounts can't do that.

(There still is the problem of needing to use much more secure computers/devices to manage your digital cash than consumers are accustomed to having and using today.)

[1] An opportunity made possible by the ability (created by Bitcoin) to profitably and efficiently collect micropayments in poor regions of the world

As far as cash, try collecting cash payments for your grid of micro-generators recharging cellphones in the Amazon, see how well that works out for you. Let me guess, you're gunna fly some drones in to pick up the payments...

>As far as cash, try collecting cash payments for your grid of micro-generators recharging cellphones in the Amazon, see how well that works out for you. Let me guess, you're gunna fly some drones in to pick up the payments...

Try removing your micro generator from the community after you've installed it when they stop paying your rent. See how that works out for you.

I'd collect the payments when I delivered the fuel btw.

Maybe the "entrepreneurs" will in fact "smell the opportunity" and move in and save the day, but for what? What's the gain? Why design critical infrastructure so that its survival is based on a hypothetical market scenario, when it can be done right in the first place?

Anyway, start here, read diligently. It's not too hard, mostly just straightforward application of basic logic. http://en.wikipedia.org/wiki/Adam_Smith

But hell, we're dealing with incentive structures here, and people change those only when they're incentivized to do so. So maybe we really need to wait for Bitcoin or something similar to throw us back into XVII century (only dirtier) for people to realize that maybe, just maybe, they shouldn't have been treating feedback loops as benevolent deities.

You also have to give your name and address to the recipient bank to somehow prove you're not laundering money or funding terrorism.

The quick-transfer system is only available for certain transactions. Most payments still take a while, and anything that involves a paper cheque still takes at least a week.

As for money laundering and terrorism - it's been proven over and over that it's easier to get a bank account for both than it is to get a bank account as an average Joe.

Not a few banks are knowingly involved in illegal transactions of one kind or another. So giving Bitcoin a hard time for the same thing is hypocritical.

Banks are certainly going to be killed by a global digital currency sooner or later, but it's going to need some kind of independent OpenMoney initiative.

BC is not that initiative, because the creators seemed to believe that starting a digital goldrush was more important than creating a rock-solid and secure peer to peer infrastructure for all transactions.

I doubt banks will still be around fifty years from now. In an all-digital economy they're not just parasitic, they're irrelevant.

This problem is soluble (as sibling points out, it's been solved in the UK). Conversely Bitcoin always takes about half an hour to settle transfers, for fundamental design reasons. Bitcoin qua Bitcoin is never going to be an effective way to pay for your shopping, and if you're using "Bitcoin" via a Visa-like entity, the benefits over just using Visa are questionable.

> Another example, you want to donate to Wikileaks from the US. Not so easy.

I suspect for most people (that is, non-anarchists) that's actually an advantage. Bitcoin is the equivalent of paying in used notes; it inherently carries a whiff of, at minimum, tax avoidance or socially-disapproved earning sources, because the big places where Bitcoin is more useful than conventional currency are tax evasion and socially unpopular activity. Whereas someone paying with amex likely has a proper job.

It's even worse than that because gold is palpable can be used to make things.

Bitcoin has or will have its niche, perhaps it will not be for your savings but sharing money with friends using a bitcoin wallet app is by far the most frictionless paying experience I ever had. I think you opinion is on the spot though... for now.

It would be more stable with more wide spread adoption, I'd guess if shops were to use it they'd en masse refuse to fluctuate/change prices every day, dampening the trade induced fluctuations.

inflation 2.3% [1]

my interest rate : 4.02% [2]

[1]: http://www.rba.gov.au [2]: https://www.ubank.com.au

Well the value of the whole blockchain is over $2.5Bn, so it's more than anecdotal. http://coinmarketcap.com/

The value of BTC speaks more about people prepared to jump into anything that seems to be the next fast way of making money than the long term viability of it.

For example, in the stock market, if there are rumours of hostile take over, the price of the particular stock rises. Think about e.g. Yahoo/Microsoft acquisition rumours.

There is approximately 1.3 Trillion Dollars in paper/coin form, according to the Federal Reserve Bank of New York: http://www.newyorkfed.org/aboutthefed/fedpoint/fed01.html, and that's just USD.

So yeah, anecdotal.

b) you're comparing apples and oranges - the market cap for USD is not the total value of printed currency

c) btc transaction volume currently averages about $65M per day, which is $23.7B p.a - about 4x the size of the Apple App Store and about one-eighth of PayPal's $180B p.a and larger than all but the top 3-4 online payment providers

d) it is still very, very early days for btc. it's goal is to not replace PayPal, but to have these payment gateways build on top of it.

e) there are dozens of blockchain based applications currently in design, draft, development, beta test etc.

f) the current implementation of btc for payments is horrible yet despite that it has established itself as a viable payment backend with a non-insignificant portion of the market

g) comparing bitcoin with any fiat currency, let alone the worlds major reserve currency, is very flattering

For adoption, you'd want to look more at data like transaction numbers, transaction value, merchants accepting it and order statistics from retailers. There's not much data, though.

As for no investment in the bitcoin system... just something in the news about that everyday.

And I thought the previous guy with his savings account paying 2% above inflation was funny.

Whatever shreds of interest your bank gives you will be way, way less than the inflation you're experiencing. In other words, your money's purchasing power keeps decreasing even if you're getting some interest on it, ie. you're losing your wealth.

Bitcoin doesn't experience inflation like that, so it should be a better store of value than your fiat currency. I said "should" because bitcoin has been in a speculative bubble, and just came down even more. Right now it's still just a speculative asset, but it could serve as a stable currency.

Your card is irrelevant.

Transaction fees are not extortion. They're a massive skimming operation inflicted on the masses, because the masses have no choice but to eat them. Thank your state-maintained bank cartel for that.

My card is very relevant.

If someone steals it, they can use it but it doesn't impact me in any way except having to wait for the new card to come.

If someone steals my bitcoins, it means they have a copy of my private key, and there is nothing I can do about it. Zich. Nada.

Transaction fees pay for this insurance (among other things, but still).

I don't think the benefits of bitcoin outweight having to maintain (multiple) private key's security.

For the really secure wallet you program two (or more) cards with the same key in case one of them is lost or craps itself (then throw away the private key). They are protected by a PIN code so they brick themselves after 3 subsequent wrong tries. If you lose one of the cards then you get two new cards, program them with identical private keys (clearly it is different than the previous one) then transfer all of your money to the new wallet.

It's really hard to be your own bank, but it is possible. The beauty of bitcoin that you don't have to trust any third party, but it's really hard manage properly.

I would be surprised if anybody used this scheme, I don't have any bitcoins either. If I jump into the bitcoin business I'm sure I will adopt this scheme.

...and that's how you get a bank.

Unfortunately this is no longer the case in Europe with cards activated under 'Verified by Visa' ( and presumably the Mastercard equivalent ).

If an VbV card is used and passes authentication then it is assumed that the cardholder authorised the transaction and they are liable.

Bitcoin inflation is at 10% per year right now not even considering the dropping price.

Bitcoin's sole value as a currency lies in its ease of use as a back-end for transactions. It's not a bad intermediary for transactions between people using different currencies, provided the third party transaction service has legal, fast, and cheap ways to convert to and from fiat in both countries. But then, it's not so much a currency as a transport layer with added uncertainty.

I've yet to see a compelling case for BTC as anything but TCP/IP for dollars or a wayback machine for anything you want. It's bad for savings, god-awful for investment, and useless for [legal] commerce.

But in a long-term sense—an imagined future where all the speculative value has gone out of Bitcoin and it is now just "worth what it is worth"—it would make a fairly good store of value, in exactly the same way gold would if we knew exactly how much of it there was to mine out of the earth, if some property of the (never-changing) extraction process meant that it was only able to be mined out at an exactly inverse-exponential rate, and if it were very easy to handle the resulting gold in 0.00000000001g pieces.

Similarly, talking about imagined futures is not a convincing way to defend a currency as a store of value. If you have to posit that your money will still be there iff A, B, and C are true, then you're not going to park your money in that particular stall.

What I'm saying is that there's no reason to assume that you won't see Bitcoin's value stabilize e.g. ten years from now, and Bitcoin become a useful store of value from that point forward.

Or, to put it another way, just because the Bitcoin that exists today is a bad store of value, doesn't mean that "Bitcoin is a bad store of value" is an immutable fact about Bitcoin. It could just be a fact about today.

No grounds... what hole did you emerge from? How about! The over 1800 currencies that have completely disappeared over the past several hundred years? hahahah. Or like, MATH.

"it also has no central bank tending its value"

Oh sweet Jesus... are you running fever? I don't think a central bank does what you think it does xD. and you probably work for one.

"which is what gives fiat currencies value in forex markets."

.... Just WOW.

"It sucks at commerce and it sucks at investment."

Instant, no fees, yep it sucks, you're right... Who said anything about investment? Oh you did, so should be look at the S&P500 today? History of the USD?

So if a guy bought at $10, his investment is just terrible huh? No, you're thinking of the ones you buy at $1000 right? Sure, you can cherry pick like that. Got Enron stock then? Or tens of thousands of others?

"I've yet to see a compelling case for BTC"

I wouldn't wager any sort of coin, psychical or virtual that you've looked very hard. But that's ok because you can experience the joys of hyperinflation in the coming years.

You're talking about something different now. Namely the effects of all the speculation, and for example governments figuring out if Bitcoin poses enough of a threat to them that they need to make it illegal, and so on. Will they shut it down? Will they not? Will they first make some money with it, and then shut it down?

The point is that the wild fluctuations in Bitcoin's price you see are not proof that it's not a good store of value. It could well be, after stabilizing, if it ever does.

A good store of value is something that could serve as a good medium of exchange too, like gold for example. Gold was used as money for ages, exactly because its characteristics made it suitable for that. It can't be printed by pressing a button somewhere, it's divisible, durable, and so on.

Bitcoin has some of the same characteristics, and that's why it might well become a widely used medium of exchange. I bet something like it will.

Central banks are not actually helping you. If you have a sound currency, it can't be printed, and central banks can't meddle with it.

You see, printing a currency devalues it. If the pool of currency in circulation grows faster than the pool of wealth it can be exchanged for, then the currency loses some of its value relative to the wealth available.

>> Bitcoin's sole value as a currency lies in its ease of use as a back-end for transactions.

Fiat currencies' sole value lies in the fact that governments force us to pay taxes in them. Otherwise we'd all be using a sound currency instead, because it would be in our self-interest to do so.

Not a lot of that going around the developed world at this point in time, though, is there?

It costs a certain (very high!) amount of real electricity to process a block. This plus an incentive has to be paid to miners. Miners have to pay for their electricity in real local currency. Therefore for every transaction block processed either someone "buys in" ~$10 worth of bitcoin or the outstanding value of all bitcoin drops by that amount.

That's arguably the definition of money.

In Europe a 2013 law is now in effect which basically states no more bank bail-outs, from now on it will be bail-ins. In other words if a bank fails it will use its customer's deposits to cover its debt.

What if your bank is not a member of FDIC ?

It's sort of what the European Union has with those bail ins, deposits are guaranteed up to 100k but this comes from inside the bank, first from shareholders and creditors then larger accounts. Makes sense that the public should not have to pay for the failure of a private banking entity.

Then don't do business with that bank. The vast majority of banks and credit unions in the US offer insured accounts. If yours doesn't you should move your money elsewhere.

The FDIC insurance is $250k per insured-account-type per institution. That is, if I have a checking and a retirement account with one bank I'm insured for a total of up to $500k. Anything exceeding that needs to be in another account type or another bank to be insured. Most investment accounts aren't insured, but some brokerage accounts are (you'll get that info when you talk to your bank) but the investments themselves (naturally) are not, just the value of any non-invested cash.

The cost (in the US) is put upon the banks to pay for this insurance. It's just a federally created insurance agency. Barring a major collapse across many (most?) banks, it should have enough stored up over the years to cover the cost without requiring financing from the federal government. In theory, you can have private insurance (I believe these do exist) for your bank, but I'm not sure how common this is in the US.

Like most insurance schemes, the more participants the more affordable it is. It'd be a tough market for someone else to break into.

The US, EU and many other countries have deopsit insurance* schemes that limit risk to depositors. You may not get all your money back if you have large deposits, but for example in the EU you're generaly guaranteed to get at least the first 50,000 Euros.

* http://en.wikipedia.org/wiki/Deposit_insurance

There is no way not to be the potential victim of this, because bank customers do not have enough information to determine whether a bank is sound or not. Worse, soundness is dependent on what everyone else is doing; a bank can be fine one day then destroyed due to a bank run. Risk is hard to deaggregate in the mortgage business because house prices all move together.

You're onto something with "profits of risky loans are privatised while the losses are socialised", but bitcoin really isn't a good solution to that.

any benefit is on average far, far outweighed by the costs

A cost-benefit analysis with no numbers! Convincing!

Bullshit. Customer reviews, third party audits, history and reputation, secondary signals (quality of website, customer support, advertising, quality of investors). The list goes on [1] Your only limit is your imagination and your confidence in the intelligence of your species my friend. You've been tricked by the miserable current state of banking (a product of socialist intervention) into thinking that this is the way banks are and must be. You'd see how quickly things will change when a) banks live and die by their reputation b) anyone can build a bank from anywhere to service the world (enabled by Bitcoin.)

bitcoin really isn't a good solution to that.

Why not? Bitcoin supersedes political violence. No government can order more of it to be created at gunpoint. Therefore there is no way to enact "backdoor" taxes (inflation) to support inherently-broken schemes such as socialised deposit insurance. The only way is frontdoor taxation, which people are far better at measuring and disliking. The success of Bitcoin would cut off the last life support tube for dysfunctional government

[1] Yes, I know you'll have point by point reasons why each one of those techniques is somehow uniquely impossible to work with the 100% success rate uniquely required by this and all other regulated industries (health, inter-city transport et al), which for some reason work just fine in the industries which escape regulation (online commerce for instance) which for some reason are much more forgiving.

We despise existing solution thinking that we could and should disrupt everything. Tear down everything and build everything from scratch; Our way or the high way attitude.

Bitcoin definitely have some innovations here and regardless of what happen in the future, it's impact will be felt. It was a great experiment, probably the greatest social experiment of the 21st century. The best is that it's self contained and sandboxed. Allowing it too roam freely in unchartered water.

But the financial industry is not as un-innovative as we hope they are. To innovate means you have to experiments, to experiment mean there will be failures. Over the years we seen financial industry fail and fail again. In fact, the incentive to "innovate" is so high, you constantly see the cat and mouse game between the regulators and the industry players, and the revolving doors of the prison cells never really stop.

While the greed and failure of the financial industry has irked us and certainly bred a level of mistrust. Trust in the financial system is at the highest level in human history. You have to understand that they are no stranger to mistrust and throughout human history it is a recurring problem they have to solve over and over again.

The current floating currency and central banks structure which provides deposit insurance among many other things are the result of many iterations over thousands of years. This system run the global economy, it scale is unimaginable large in human scale. There's a lot to appreciates.

Sure there's room for improvements. Many people treats Bitcoin like it must replace the financial system but the problems it facing now is exactly what the financial system had solved. What I'm pretty sure is that Bitcoin's will definitely had an impact on the next iteration of the ever evolving financial system.

The Bitcoin community I have seen fails to recognized the important of trust in finance. Not just trust between computers, but trust between humans. Like the 90's and 00's software industry fails to recognize the important of simplicity and good user experience. The next Steve Jobs of the cryptocurrency is in my believe one who understand these ideas to heart.

There's a lot to celebrate about Bitcoin and what we had done, as I always like take a contrary position. Bitcoin is not a replacement of the existing financial system, it is, or will be if it haven't, part of the system. Thus, the rise and fall of its price is part and parcel. It's kinda exciting to see this great experiment in the running, although I'll dread experiencing it first hand.

As Bruce Lee once said, "In great attempts it is glorious even to fail." I wouldn't consider this a failure but it's definitely glorious.

Over time the amount of energy wasted by bitcoin could become stupendously dumb. We could be using our spare processor cycles to fold proteins or aid in numerous other research, and yet we're using it to allow people to send bits of data to each other without a need for centralized trust.

Compare that to the centralized bank where you have a single centralized trusted source which allows transferring money from one person to another to take no more energy than a modest server and some backups -- far less than the power consumption of a single GPU miner.

The above problem also won't get better. Even after you're no longer mining for new coins, you must keep up the mining volume to protect existing coins and allow transactions to occur at all. I personally find the above to be a fundamental problem with the "proof of work" solution. Sure, on paper you've solved the General's problem, but the reality is that you're throwing massive amounts of energy out the window. Because of that, I think this proof's place should have been to remain on paper.

Even if scaled up to global usage, I very much doubt Bitcoin mining would be worse.

the hash rate doesn't grow on trees.

why the hell would you doubt it would be worse? it does 7 transactions per second.

http://www.forbes.com/sites/timworstall/2013/12/03/fascinati...

here's on estimate: Bitcoin Mining Uses $15 Million's Worth Of Electricity Every Day

Those stats assumed CPU/GPU and FPGA, not ASIC, miners.

For instance, the 5-to-500-gigahash-per-second rigs would have to be running at over 300k watts of electricity using those statistics. :)

So in reality, the network is much more efficient -- the high-end miners are using more than 100x less electricity (which would still be 3000 watts for high-end rigs per those numbers), and probably closer to 1000x less, than those estimates.

GH/s/w: 4.6 // http://www.coindesk.com/a-look-inside-kncminer/

watts to provite current hash rate: 300,000,000/4.6 = 65,217,391.30 w

kw to provide 1s: 65,217.39

an hour of that: 65,217.39*3600

234,782,604 kwh

10c per kwh => $23,478,260.4 per hour

24 hours => $563,478,249.60

my own figures are even more wacky so I would welcome some better statistics.

65,217kW is the energy usage. Providing that for an hour takes 65,217kWh - not multiplied by anything.

So that's $6,521 per hour, $156,521 per day.

ps it wasn't obvious at all, that's why i wrote "even more wacky" as mark of how solid i thought the figures were.

3600*7 = 25200 transactions for $6521.

they'd really want to see about increasing the block size.

Cost per transaction would go down drastically with increased usage.

As computers get better, traditional applications, like databases, perform better and you can either serve more customers, use cheaper (and often more efficient hardware), or do nothing and use your outdated hardware.

With bitcoin, your enemy is not the performance of the raw work you are doing (you can hash better), but the fact that everyone else also has these increases. Because of that, the limiting factor is not performance, but cost, and so over time the average cost of the bitcoin network will not go down like the cost of centralized systems do.

Let's do a thought experiment: Let's imagine that instantly all computers get 100 times faster but it costs 10 times the energy to run these faster machines (not actually that unrealistic) and the cost becomes 10 times cheaper.

Traditional centralized banks can simply use a 10th of their existing hardware to have no energy-cost increase but a 10 times increase in customers they can serve. Sure, it's a bureaucracy, so it'll roll out slowly, but they're saving money too so maybe a little faster.

Bitcoin, everyone will simply buy 10 times as much hardware since it's cheaper and they want to get a bigger bit of the pie (mining reward) before everyone else manages to buy all their hardware. You now have an equilibrium in terms of equipment cost reached again, but suddenly the hash-rate is 1000 times more and the energy consumption is 100 times more.

The above might sound a little too theoretical, but if you look at the increase in hash rate and estimates for power usage of cpus, then gpus, and then asics, you'll see that in general power consumption for bitcoin constantly increases.

You're arguing that the existing cost of banks / the existing system is high because it's legacy. Your argument doesn't say "and it's constantly, and provably, going to waste more energy as hardware gets more cost-efficient". Even if you want to claim that banks are currently less efficient (which I doubt they are), I hope the above convinces you that bitcoin over time will constantly use more energy thus resulting in an obviously more wasteful result, while banks and other centralized systems can take advantage of improvements and thus become more cost and power efficient over time.

... and exponentially worse as time goes on (by design).

Only for people who don't understand the design.

Google "bitcoin difficulty".

> Only for people who don't understand the design.

Personal attacks all the way because your pet golden hammer was attacked. Always the same result.

Neither is Bitcoin my pet golden hammer (I don't even know that metaphor), nor is my statement a personal attack.

It's merely pointing out that your claim is so fundamentally wrong that you can't have a good understanding of the design.

If you don't want to learn the protocol then maybe think about it this way: Energy consumption is not an exponential factor in bitcoin simply because miners have to pay for their energy, too. And the number of miners does not grow exponentially.

Your thought experiment misses an important point: the cost of energy. AFAIK that's already dominating hardware costs for miners.

That means: since the cost of bitcoin mining will tend to scale up (or down) linearly with the total value of bitcoin, so will energy usage (barring changes in energy price). It will not keep going up when the bitcoin value has reached a plateau (for whatever reason).

Physical security also scales well. The volume of secure space you have increases to the 3rd power with only an approximately 2nd order increase in the costs of creating it (your basic area/space tradeoff working for you in this case).

The argument that payroll doesn't scale is also absurd: who are all these Bitcoin entrepreneurs trying to run exchanges, if not payrolled staff?

Finally and most importantly: the difficulty factor of Bitcoin does not reduce the computational power required to mine it. It is the exact mechanism of the provably increasing cost: the difficulty goes up, so more and more power is required to preserve the status quo.

Any changes in energy cost are thus ignorable, since in a Bitcoin-only world they're constantly eaten up by changes in difficulty factor, whereas in the non-Bitcoin world they become real-wealth for everyone.

Except... The difficulty also goes down.

But don't let facts get in the way of your flaming argument...

A decline in hashing power can only happen from people looking at real energy consumption and saying "to hell with this". At which point the network compensates to keep hashing difficulty the same, but does not reduce energy consumption for any of the remaining participants.

But correspondingly, the mean difficulty does go up continuously - that's the fixed number of coins. So even when the block to block difficulty is adjusted, the net trend is less coins per unit hash, which means the marginal energy cost of the coins approaches infinity.

Miners optimise for USD$/kWh, not for coins/hash. The latter is entirely virtual and largely unrelated to the network power consumption.

which means the marginal energy cost of the coins approaches infinity

You seem to ignore that Miners, too, have to pay for their energy.

So, in your model, either the market price of the coins must also approach infinity, or the miners will just stop mining.

No. the difficulty goes up so more hashing power is required, whether this means more actual power usage will depend on the machines being used and their efficiency.

Dollar price of electricity doesn't matter. You can't magically print out more coal by signing a document, nor you can clear your "kWh used" counter by going to war with someone else. We have something like 50 years to cut down on our energy use and switch to better sources if we want to have a technological civilization alive on this planet; setting up our economy to run on an exponentially-growing resource waster might not be the smartest idea now.

Your premise is wrong. Bitcoin has a mechanism called "difficulty". It's very much at the core of the protocol, google it and ponder how it affects your argument.

Furthermore, the current economics of mining have a fixed expiration date set to 2140, that's roughly when the last coin would be mined.

The protocol will need to be changed fundamentally long before that date. Since we don't know what that change will look like, we also don't know how it will affect the network's power consumption.

Any "thought experiments" that naively extrapolate from the current power consumption are as pointless as trying to guess your car's mileage based on its fuel consumption during ignition.

The protocol is still in the bootstrap phase. If it prevails then the bitcoin in 10 years will be very different from the bitcoin of today.

That does not tell the whole story though, power usage per gigahash is a more accurate measure, because the higher the GH the more secure the network. From CPU, to GPU to ASIC the power use per gighash has fallen significantly.

If you really want to compare it to the banking sector then you need to include the full and real costs of that banking system, power alone is not the only cost. One bail out, as seen in the last few years, dwarfs the power cost of bitcoin. That is without considering the knock on effects of the banking meltdown on the overall economy.

And bitcoin can take advantage of improvements to reduce power consumption of ASICs (as there is no next step tech that will provide an increase in gigahash as ASICs did, so now it goes to refining the power usage. Additionally larger farms are looking at renewable alternatives and uses for the excess heat being produced. It is still a very young sector so there is a lot of working out to do, but it is being done.