What's the use for Bitcoin? - <AUTHOR> https://scottyli.com/whats-the-use-for-bitcoin/ <comment><USER2> I would tend to agree with the author here. I can't see Bitcoin ever emerging as something legal and useful to the average person.

>Bitcoin enthusiasts disagree, claiming illicit activity is practically non- existent. Instead, they preach decentralization, trustlessness and smart contracts - none of which are benefits but merely features.

Bitcoin enthusiasts preach an awful lot of things, particularly preaching about how others should adopt Bitcoin as a currency while they themselves sit on their stacks of it hoping to see its price rise and cash in.

Indeed, it is these Bitcoin "enthusiasts", or more accurately lay speculators, that are likely one of Bitcoin's largest issue. They've turned what was designed to be a currency into an investment/speculation instrument and it's not transcending beyond that because of it, with the exception of people using it for illegal purposes.

So you've two sides to Bitcoin in reality - speculators praying other people adopt it as a currency and those using it for nefarious purposes - both of which are off-putting to any normal person who'd consider using Bitcoin for purchases.

I see no real future for Bitcoin personally. Gambling, perhaps, but even Bitcoin poker at the moment is mainly already skilled, dedicated players using Bitcoin Poker to play since they can't in the US, and that's not going to attract many casual players in itself to create a sustainable ecosystem, nevermind the Bitcoin barriers to getting on to the site in the first place.

<comment><USER3> _So you 've two sides to Bitcoin in reality - speculators praying other people adopt it as a currency and those using it for nefarious purposes - both of which are off-putting to any normal person who'd consider using Bitcoin for purchases._

Don't forget the anarchists.

</comment></comment><comment><USER4> > Bitcoin is great for illegal goods/services

> Tax evasion and escaping capital controls are also possible with Bitcoin

Bitcoin is about as useful as lucky sunglasses for illegal transactions. Just ask Ross William Ulbricht.

I don't engage in illegal transactions. But if I did, I wouldn't use a mechanism that leaves a permanent, publicly available record just waiting to be de-anonymized.

> Bitcoin is powerful because it allows people to circumvent regulations, as > it does not rely on the traditional banking system.

False. Regulations do not limit themselves to the traditional banking system. Bitcoin is about as useful as lucky sunglasses for avoiding regulation. Sure you can get away with it a few times,....

<comment><USER5> > Just ask Ross William Ulbricht.

Ross William Ulbricht wasn't caught because of Bitcoin. I read the FBI report and there was absolutely no mention of the blockchain if I recall correctly.

<comment><USER4> Shouldn't Bitcoin have given him magic immunity?

All the people who transacted on Silk Road, do you think they should sleep well at night? Or do they all nervously await the statute of limitations expiration?

You don't think the FBI has the blockchain loaded into Palantir where they can map all those transactions against all the other data they have? The more traces you leave behind the greater the chance for that one slip up that links it all together.

Maybe the seller slips up and orders a pizza from the wrong wallet. Now they have him, and using the post office scan data they got you. Add as much complexity as you like, there's a way to unravel it. And you can't go back and take it out of the blockchain.

<comment><USER5> > Shouldn't Bitcoin have given him magic immunity?

No, why do you think that'd be the case?

> All the people who transacted on Silk Road, do you think they should sleep > well at night?

Probably not. But certainly not because the FBI will track them through the blockchain, that's just ridiculous. There's absolutely no way to prove someone owns Bitcoins unless you get access to their wallet.

</comment></comment></comment></comment><comment><USER6> Bitcoin has many benefits for the average man, provided it is in wide use. Currently it isn't, so the advantages are not yet substantive.

For one thing, the government doesn't control the inflation of bitcoin like it does with dollars. The fed aims for ~2.5-3% "inflation" every year, however this is inflation beyond the massive deflation that occurs year over year due to technology and efficiency increases... The supercomputer that cost millions in 1970 dollars cost you a couple hundred (and fits in your pocket to boot.) The inflated 1970's million USD is gigantic in today's dollars, but only because of the inflation created by the fed because they believe it is the only way to keep the fiat money system working. If people realized the deflationary power by simply not spending, the consumer driven economy would crash and burn quickly.

What bitcoin offers is an escape from that inflationary cycle. If it's use spreads, it will allow people to protect their money in banks (although, they will be more like safety deposit boxes.) Banks can still offer loans, but it will be at a real rate in the market place. Fractional reserve banking will be a thing of the past. Federal (debt-backed) subsidies will no longer apply.

The inflationary spiral that keeps reducing wealth for anyone who wants to save without participating in the inflated stock market will end.

I see bitcoin as the cure to the woes of today. We have a real problem with the environment, and I believe much of it would be better if the money supply were not manipulated to support the consumer-driven economy. We would still have smart phones, but we probably wouldn't have throw away cases that we changed out with every outfit..

<comment><USER7> "the government doesn't control the inflation of bitcoin like it does with dollars"\--

This is exactly the thing about Bitcoin that concerns me most; it has economic implications baked into its design and operation, but We, the People, have no voice in deciding those implications.

What if We, the People, want to change the inflationary/deflationary properties of the money? If we're on bitcoin, someone else made that choice for you, and you have no recourse.

I'm not at all comfortable giving away that kind of agency; after such a long arc toward greater democracy, it's hard to see bitcoin as anything but a substantial step away from democratic governance.

<comment><USER6> You assume that We, the People, have a say in current US economic policy. We don't.

If Ee, the People, are on bitcoin, we have already made the decision to use a gold-like limited resource as a currency that will absolutely become deflationary at some point.

You have no agency in government; no matter how great your use of punctuation.

<comment><USER7> Of course you have agency in government.

You do vote, don't you? You go and meet your politicians, right? You talk to your fellow citizens and organize among them, right?

I, as an individual, have put policy bugs in local politicians' ears just by showing up, shaking hands, making a persuasive case.

And that's just from a few years off-and-on involvement, no money changing hands, no campaign funding, etc.

I guess if you stay home and do nothing, then yeah, you have no agency.

<comment><USER8> Go ahead and vote for the next FED chairman!

<comment><USER9> There is a big excluded middle between "all government officials are directly elected" and "the general public has no agency in government policy".

<comment><USER8> So are you going to vote for the guy who opened Guantanamo and started illegal wars that cost thousands of innocent lives of the guy who won't close Guantanamo and uses robots to kill thousands of people with no oversight who end up being classified as enemy combatants as long as they are male, Arab, and of fighting age? Or maybe the leader who illegally spies on all the citizens of his country or the other guy who will do exactly the same thing. Decisions decisions...

<comment><USER7> I voted for the guy who pushed a lousy healthcare bill through the system, because if the other guy had won, I _still_ wouldn't be able to afford health insurance as a freelancer.

I also voted for the guy who's been pushing, feebly, for better conditions for workers, rather than the guy who joked, "I like to be able to fire people. Hey, nice ponchos, you garbage-bag-wearing peasants!"

Did I get everything I wanted? No, of course not. Is any politician perfect? No, of course not. Is there a difference between the two major US parties? Oh yes.

<comment><USER10> I love your perspectives here. Very reasonable. I voted for that guy too, but I lost a ton of respect for him (never had _full_ respect anyway) when he refused to recognize the absolutely clear fact that Ed Snowden is a whistleblower and not a traitor.

Anyway, the real answer to electoral issues is Score voting (see [http://rangevoting.org/](http://rangevoting.org/) ).

Also, since you're interested in _economic democracy_ , have you seen the in- progress stuff at Snowdrift.coop ?

</comment></comment></comment></comment></comment></comment></comment></comment></comment><comment><USER11> There really is no use for it. Banks have made transactions dirt simple and convenient (especially those outside the US), as well as safe.

The only real use for Bitcoin is for anonymous, difficult to trace transactions (ie. black markets), and speculation.

With my regular bank account and credit card, I can buy products from China to NA to Europe and just about anywhere, can change my funds into a myriad of currencies, and since I have an investment account, can also invest in 19(? have to check with my broker) different countries' stock markets.

The problems Bitcoin claims to be trying to solve were already solved by the banks a while back. Plus banks will insure a fairly large amount of cash (more than most of us will have at any given time).

<comment><USER12> > The problems Bitcoin claims to be trying to solve were already solved by the > banks a while back.

Bitcoin (according to its website) claims to provide instant P2P transactions and very low processing fees. International bank transactions take days or weeks and have very high fees.

But even more importantly, bitcoins do not require a bank account. All it requires is internet or text messaging access. This is very important for the developing world where many people do not have bank accounts.

<comment><USER13> It still requires a bank account, just a difference sense of the word. If someone only has a phone, they need to store their bitcoin somewhere, and its unlikely to be their phone. So whoever is holding their bitcoin is acting as their bank.

<comment><USER12> I don't think that's true.

> If someone only has a phone, they need to store their bitcoin somewhere, and > its unlikely to be their phone.

Why? Bitcoins do not exist somewhere, bitcoin transactions do, and they are stored in the blockchain. Bitcoins that you own are essentially unspent transactions to your address which is only a few bytes long.

A bitcoin wallet/address is not a bank account by any sense of the world.

<comment><USER13> You are right, they could store their actual wallet addresses on their phone. But would that actually be a good idea?

I would sure hate to loose all my money because it rained hard while walking home. And all the other dangers that haunt phones.

A counter here of they should be backing up is unacceptable. Many people who are otherwise very knowledgeable don't make backups.

Sure, if they have all their money under a mattress then they are venerable to house fire, theft, and the like. But storing all their money on a cheaply made but affordable electronic device has the same problems, while opening up a ton more possibilities of chronic money loss.

</comment></comment></comment></comment></comment><comment><USER12> According to this half the world's population is unable to get a bank account: [http://mckinseyonsociety.com/half-the-world-is- unbanked/](http://mckinseyonsociety.com/half-the-world-is-unbanked/)

Bitcoin allows for anyone with internet or even text-messaging access to hold, receive and send money. To me, this seems revolutionary. I don't know how the author can ignore this.

<comment><USER9> I suspect that the half of the word's population that is unable to get a bank account has a sizable overlap with the fraction that doesn't have internet or even text-messaging access.

<comment><USER12> Even if that's true bringing internet or text messaging to the third world is easier than expanding bank coverage.

<comment><USER14> > Even if that's true bringing internet or text messaging to the third world > is easier than expanding bank coverage.

Bringing internet or text messaging to the third world has the net effect of expanding bank coverage.

</comment></comment></comment></comment><comment><USER15> I'm a big fan of both Sidney and Scott and the great work they did building Helloblock, one of the better Bitcoin API providers. It's a shame that they couldn't find a market for their product.

What's a bigger shame is that they've both written articles disparaging Bitcoin technology now that they've decided to move on to other challenges.

We have a brand new data storage technology that allows for equal access read and write privileges on data that is permanent and shared equally across all nodes. It acts as a decentralized single point-of-truth. There has never been anything like this.

A simple ledger that operates as a type of currency is most basic thing that can be built.

Blockchain tech will disrupt almost every part of our industry. We won't need centralized identity providers like Facebook. We can start to treat digital media as property and build up a viable economic system. We can actually account for people's data use and the value of their contributions instead of this blind air gap between advertising and operation costs. We can create and transfer digital assets that represent all sorts of things.

Writers, photographers, musicians and anyone else who makes the content that fuels the advertising engines of Silicon Valley are becoming increasingly dissatisfied with how they publish work on the Internet. Putting something on a web page isn't publishing. Posting something on Facebook or Twitter isn't publishing. The act of publishing needs to be public and it needs to be permanent. Can you reliably quote from a blog or a tweet? No, you can't, because the content could change. You can reliably quote from the second printing of a physical text because it would be almost impossible for someone to go through and change every copy.

All of this on a unified platform that isn't controlled by anyone meaning there's no danger of a private entity limiting access to APIs and destroying the hard work of developers, which Twitter has been doing for years.

I really hate to call them out because they've been very nice and incredibly helpful over the last year, but guys, come on, there's no need to burn bridges. Just because you can't see the possibilities doesn't mean that they aren't there.

</comment><comment><USER16> I don't understand why we even need to discuss the usefulness of Bitcoin beyond the fact that it's decentralized. Its decentralized nature, alone, is its most important attribute. Bitcoin cannot be stopped. Period.

As long as multiple people can run a program on a set of computers that can connect to each other, Bitcoin can exist. If you want to receive it anonymously, you can perform services anonymously and take payment in Bitcoin. After that, yes your transactions are on the blockchain, but if nobody knows you provided the services to receive the original Bitcoin, then they cannot trace your subsequent transactions back to you without relying on outside variables.

Yes, the regulatory environment and legal status of Bitcoin will affect its adoption as a mainstream currency. If large online merchants begin accepting it, and the price stabilizes to encourage spending, we will naturally see Bitcoin emerge as a useful payment platform. However, neither regulation nor legal status has any impact on the resiliency of the Bitcoin network. Bitcoin is decentralized and mathematical. It cannot be stopped or regulated with any real promise of enforcement.

Bitcoin, by its very nature, is here to stay. Either we can adopt it into the mainstream and build tooling around it to make criminal activity inadvisable, or we can regulate it, discourage innovation, and let the criminals take over the network. Either way, the network remains. Bitcoin is decentralized! It only requires software and network connections.

<comment><USER14> > Its decentralized nature, alone, is its most important attribute. Bitcoin > cannot be stopped. Period.

It's just as decentralized as tulip bulbs ([http://en.wikipedia.org/wiki/Tulip_mania](http://en.wikipedia.org/wiki/Tulip_mania)), and Bitcoin will be "stopped" when a) it is illegal to transmit or receive a blockchain (unlikely), or b) when people realize the only value Bitcoin has is in the belief that Bitcoin has value.

All it takes for Bitcoin to be worthless is the belief that Bitcoin is worthless. Therefore, if you hold any Bitcoin, you are incentivized to be a Bitcoin evangelist. Bitcoin isn't a currency, it's a religion; you need to create "converts" to make your investment of time and belief worthwhile.

<comment><USER17> > _All it takes for Bitcoin to be worthless is the belief that Bitcoin is > worthless._

Isn't this true for every currency that isn't literally a physically scarce and useful resource (gold, grain, uranium, gold-pressed latinum?)

<comment><USER18> No, it's not necessarily true for a currency backed by a state, since the state can force you to pay taxes in that currency, thus creating demand for the currency and underpinning its value.

<comment><USER19> Tell that to Zimbabwe, who _still_ doesn't have a national currency because of exactly this:

[http://en.wikipedia.org/wiki/Hyperinflation_in_Zimbabwe](http://en.wikipedia.org/wiki/Hyperinflation_in_Zimbabwe)

</comment></comment></comment></comment></comment><comment><USER20> Bitcoin tries to be two things:

A currency.

And a way to reliably account for who owns what, with no central authority.

As a currency, it has the problem that there's no natural demand for it. Nobody needs it to pay their taxes, and it's not widespread enough to be worth having for the common person. Naturally this could change, but until then you've got a game theory problem.

The protocol side is what makes it interesting. The protocol is basically a way for us to collectively scribble on a giant wall that grows every 10 minutes. And that wall cannot be changed, thanks to the clever incentive system that makes the primary use to account for who owns which bitcoins. The technology would still work if you used it to scribble love letters, but nobody would have an interest in keeping the system going.

So is this protocol useful? It very well could be. For instance, any number of currency-like things could be (and are) accounted for. You could put the whole land registry on the blockchain, and then you'd always be able to verify some person owned a parcel. You can put documents (or hashes of documents) in it and prove it existed at some time. The list goes on.

The big question is whether this protocol is economical and convenient enough to actually displace what's there already. We already have a land registry. We already have notaries.

There also needs to be some thought put in about how the infrastructure will be paid for. If the currency is useless, why do miners want to keep mining? Sure, there's the potential it won't be useless in the future, but how long can you string along an operation like that for? How do you plan if the price is so volatile it might be zero or a million in five years? Each price implies a very different level of investment.

One strategy might be a slightly different altcoin system (many, many altcoins have been invented) that tries to share the cost evenly, so no one economic actor has a special position. Another thing you could do is pass real money instead of BTCs.

But I think the protocol core is here to stay.

</comment><comment><USER21> To me the trick about Bitcoin is to think about it as a protocol before you think about it as a currency or a ledger. Then think about how the TCP/IP protocol have managed to move way beyond it's original purpose.

Bitcoin/Cryptocurrency might very well be a way to get around the issue we currently have where technology is moving faster than legislation. And so by using cryptotechnology we will be able to circumvent the political process but still maintain accountability.

We are still some way from that but to be critical about it's future at this point is not just unwarranted IMHO it's also counterproductive.

Just from the top of my heads here are a couple of ideas I had with regards to bitcoin/crypto:

Digital Pokemón Cards. Basically the ability to create digital collectors items.

E-books and other digital assets that could gain value. You could sell ebooks at a premium and allow people to re-sell them. Because the history of their ownership is recorded you could even see them gaining value if they had been owned by a celebrity.

Private but public healthcare records. For research and usage. Store the health-records publicly as personas but allow individuals people to link it with their identity. This would help with research in completely new ways.

Voting made public but anonymous Make it impossible to fake voting results by making the results available for everyone.

Artificial Intelligence Using the protocol to create automated consensus models for how prioritize.

Companies without owners Build a company with a political purpose without any owner.

It doesn't need to be 100% fool proof it just needs to be good enough for a majority of people just like everything else and I don't see anything that stands in the way of it being good enough.

</comment><comment><USER22> Bitcoin is all about the underlying PROTOCOL, not the currency itself. Note that the currency only has value because the protocol is sound.

What is the protocol? Basically it allows you to trust a network in which you don't have to trust any participants. Think about that for a minute - THIS IS A PHENOMENAL ACHIEVEMENT.

Use cases for bitcoin? Who cares. Use cases for the protocol? Countless. Just give it time. Its existed only for ~6 years people!

<comment><USER23> Yes, the protocol is revolutionary. I can put data into the blockchain that nobody can censor: [http://bitcoin.stackexchange.com/questions/4315/how-can-i- in...](http://bitcoin.stackexchange.com/questions/4315/how-can-i-insert-an- arbitrary-sha256-hash-into-the-blockchain/4316#4316) It would be possible to create an image service free of Instagram's tyranny via the blockchain.

</comment></comment><comment><USER24> This is a miss-guided question. We can't predict the future, therefor we can't imagine the uses for new tech/thing. In fact disruptive new tech creates it's own uses. Asking what the use of Arpanet back in the day totally misses what the Internet has become.

<comment><USER25> How can you be optimistic about the future if no one thinks about it or builds for it?

This guy has obviously thought about it and listed it in the "Internet of things protocol" using the blockchain. I don't agree necessarily though because IEEE already working on something.

</comment></comment><comment><USER26> The conclusion ("It's incorrect to say Bitcoin doesn't have a use case. It does. It's just illegal in the US.") seems strange given that there is a big section of the article on semi-illegal things - basically things that are legal but traditional financial companies don't want to touch. The article says "mostly gambling, marijuana, and porn" but I'd also add politically controversial things, like when all the payment processors decided they didn't want to handle donations to Wikileaks after the US government asked them to make that change. These are real and legal use cases.

<comment><USER14> > when all the payment processors decided they didn't want to handle donations > to Wikileaks after the US government asked them to make that change.

On the face of it, this seems like the one _legal_ use of Bitcoin, to circumvent situations where the government uses influence to block certain economic activity through words (a request to payment processors) instead of the threat of force (new laws).

However, the only reason that Bitcoin has any value to Wikileaks is because it can be exchanged for dollars to fund Wikileaks activity, and the only reason Bitcoin can be exchanged for dollars is because it is a medium of exchange for drugs. Without the drug market, Bitcoin would have little value, making it pointless to donate to Wikileaks.

<comment><USER27> If I want to, I can buy my next motherboard from Newegg using Bitcoin.

There are TONS of websites that accept Bitcoin, and a growing number of brick and mortar stores accept it also.

You assert that black markets are the only factor that drive value in Cryptocurrencies, how about you back up that assertion with some evidence.

<comment><USER14> > If I want to, I can buy my next motherboard from Newegg using Bitcoin.

Close. You can pay for your motherboard in bitcoin, which is then converted to dollars and remitted to Newegg. Newegg eats the conversion costs as a transaction fee, and handles the transaction like any other dollar-denominated sale.

However, you aren't going to pay for your next motherboard with bitcoin. You're going to pay for web hosting for your drug sales or copyright infringement site with bitcoin, which is then sold for dollars by the shady web hosting company to people who want to buy drugs.

Just because Coinbase paid Newegg a marketing fee to run a bunch of promotions doesn't mean people execute everyday transactions in bitcoin. Bitcoin is still (statistically) only for criminal activity and speculation.

</comment></comment></comment></comment><comment><USER28> A globally distributed trusted timestamp.

Applications: identification / existence, copyright, trademark, notary, escrow and proof of service.

</comment><comment><USER29> This is a broad generalization that it's used for illegal purposes.

My (very legal) business accepts Bitcoin. I don't have many customers using that form of payment, but chances are I may not have them if I didn't accept it.

I don't really care what form of payment you want to use.

</comment><comment><USER30> Bitcoin's killer app is its function as a store of value. It's hard to see this when there are plenty of things that are storing value better at the moment, like traditional currencies and assets. But I don't think that will hold indefinitely (especially given our asset bubble), and that will lead people to look for ledgers with predictable supply, like gold and Bitcoin.

Then again, maybe I'm crazy.

<comment><USER31> Isn't extreme volatility a very bad attribute for a store of value?

<comment><USER30> Buy low, sell high. For now, at least.

Play out the end of an asset bubble in your head. Lots of people sell their assets, and now have dollars. The job of our policy makers is to make sure dollars don't increase in value at all, and don't decrease in value too quickly. But if lots of people are exchanging assets for dollars, the demand for dollars makes the value go up. Our policy makers will take a variety of actions to make their value go down by up to 2% a year. If we're lucky, they'll be able to stave off deflation.

So if you've sold your assets and want to store your value, you really want some sort of ledger with a predictable supply so your value can go up, not stay the same or decrease by 2%. Gold is traditional the ledger that people seek when these sorts of things happen. But enough people will choose Bitcoin to raise the price significantly, which will make others choose it as well.

Gold might be the right bet, but Bitcoin is a more functional ledger (easy to store, easy to transfer, etc.), and the upside is higher. But again, maybe I'm crazy.

<comment><USER31> That's a description of a speculative asset, which is a concept that's orthogonal to a store of value. For instance, a speculative asset that plummets in value can be valuable (to short sellers and put option holders).

In particular: the effectiveness of a store of value is based on its ability to retain its value over time. The effectiveness of a speculative asset is based on its users ability to transact based on predictions (up or down) of its future value, _regardless of its true value_.

<comment><USER30> That's a good point; perhaps I was a bit loose with words. Its killer app is that it's a great speculative asset.

<comment><USER31> Okay, but that is also (not being snarky) the killer app of a deck of cards.

<comment><USER30> Do you have any thoughts on the scenario I described?

<comment><USER31> Bitcoin is an especially bad store of value. It is subject to stark and unpredictable devaluation, followed by manic upswings that increase its volatility and harm its utility to normal business, which selects out the boring currency users that would be the backbone of a sane valuation and selects in toxic speculators that amplify its volatility in the next iteration of the cycle.

</comment></comment></comment></comment></comment></comment></comment></comment><comment><USER32> I think bitcoin will be incredibly useful in the digital goods economy. Global digital marketplaces need payment solutions that transcend nationalities. If you create an album of music and want to sell digital copies online you should be able to accept payments from customers anywhere in the world using any currency. Bitcoin allows that to happen. If you want to create a video content channel and let people pay a monthly subscription there should not be any type of restriction because of what country the viewer lives in. All of these borders and constraints are artificial and unnecessary in a digital economy. If you want to create a digital service that operates entirely on the internet, why should you be restricted to using a subset of currencies? Bitcoin can be the transaction layer that makes all the human constraints irrelevant. Digital goods also offer essentially no cost of replication so the only real limitation on the size of the digital economy is the number of agents participating in it, which increases daily. The tools needed to create and consume digital products are becoming cheaper every year and more people are gaining access to them globally. IMO the future of the world economy is going to be increasingly digital, and increasingly created by independent producers. Games, books, education, movies, short format shows, PC and mobile applications, web services, photography, art, comics, all will be available to anyone in the world at very low cost and with no necessity for restriction. As I see it the only thing holding back this digital revolution is that consumers are largely ignorant as to it's existence and continue to support antiquated development and delivery systems. I do not think that the rising young generations have this impediment in their habits. What really seems to be missing is a global system for independent content discovery. I'd like to see a universal amazon style digital product aggregation and distribution system that only uses digital currency. The store would provide discovery and distribution (maybe digital currency exchange as well) to a global audience for a transaction fee that beats traditional payment methods. A wiki style product information page that allows users to provide additional product details and translations for localization would be interesting to see (while difficult to moderate).

tl;dr with bitcoin anyone in the world can create a digital product with nearly zero replication or distribution costs and sell it to anyone else in the world basically instantly. That infrastructure exists today but is underutilized.

</comment><comment><USER33> Useful but not on his list:

* Bitcoin is excellent as a charity funding mechanism. Often I may wish to give to a charity, but don't want to give out my credit card number. I give up my tax credit, but for small handouts that's quite alright.

* Micropayments. There is simply no other infrastructure that does this as well as Bitcoin does, because processing fees dominate.

<comment><USER14> > Micropayments. There is simply no other infrastructure that does this as > well as Bitcoin does, because processing fees dominate.

You mean aside from currency conversion fees, the transaction fees ([https://blockchain.info/charts/transaction- fees](https://blockchain.info/charts/transaction-fees)) and the massive $6,000 to $25,000 block reward?

If you do the math, bitcoin is _easily_ the most expensive currency to transact in, and least economically efficient currency relative to _legitimate_ economic activity generated.

<comment><USER34> The costs of bitcoin you describe are systemic costs, not transaction fees. At 0 or 1 trillion transactions, the block rewards would be the same, which means they're not marginal costs, i.e. fees per transaction. They're unrelated.

They pertain to money supply, a necessary force to get a currency out into the world. That causes inflation, which is not a direct price people pay (the transaction fees are a direct price, and those are a few pennies). Inflation is an indirect price. But if you look at bitcoin's history, its price is thousands of percent higher than just a few years ago, meaning that the cost is not actually incurred by those who use and transact or receive bitcoin.

In the long-run, this inflation will stop, and part of the fees will be covered by a larger amount of transactions that each cost pennies. If 50 million people used bitcoin in a decade, you can still pay pennies per transaction but cut block rewards without a drop in security.

If you do the math, bitcoin is easily the cheapest currency to transact in, which is why companies like Bitpesa exist undercutting remittance, and why Bitpay offers a 0% Saas payment processing fee, and why other merchant processors like Coinbase all undercut any creditcard, or Stripe, or Square, or Paypal, and why Paypal, Stripe and Square all have implemented bitcoin options into their services, and why companies like Microsoft accept bitcoin and keep more profits than they otherwise would if they had accepted the payment through e.g. a CC or Paypal.

<comment><USER14> > Bitpesa exist undercutting remittance

Bitpesa takes 3%, significantly more than a credit card transaction, and much more than many established low-risk remittance corridors (e.g. Arabian Peninsula -> India/Pakistan, Europe -> Central America, are all under 1%). True, many remittance flows can be 9% or more, but that's because they have significant levels of fraud, and the overhead of KYC regulation. Ignoring fraud and regulations means you can reduce fees, obviously.

> merchant processors like Coinbase all undercut any creditcard

Coinbase charges 1% to buy, and another 1% to sell, and users are responsible for all bitcoin transaction fees. This revenue means that it can charge nothing for coinbase -> coinbase transfers; however nearly all financial institutions charge nothing for intra-bank transfers.

> companies like Microsoft accept bitcoin and keep more profits

About 0% of Microsoft's revenues are in Bitcoin, this increases Microsoft profits by about 0%. Accepting Bitcoin is a marketing expense, not about increasing profits.

<comment><USER34> > Bitpesa takes 3%

Here's an example of remitting money to Kenya between various services:

[http://remittanceprices.worldbank.org/en/corridor/Canada/Ken...](http://remittanceprices.worldbank.org/en/corridor/Canada/Kenya)

Bitpesa is a Kenyan remittance company after all.

> Coinbase charges 1% to buy, and another 1% to sell

Coinbase costs 1% to process, period. It's cheaper for a merchant than the 3% of a CC, Stripe, Paypal, Square etc.

If you want to look at the consumer side, that's a different story. You tend to conflate things in your arguments. It's not required to buy from Coinbase to spend at a Coinbase merchant. I've been paid in bitcoin at 0% fees, and I've bought bitcoin at Circle at 0% fees.

> About 0% of Microsoft's revenues are in Bitcoin, this increases Microsoft > profits by about 0%. Accepting Bitcoin is a marketing expense, not about > increasing profits.

Stupid. First of all, quote my entire sentence. Secondly, it's easy to show you a ton of examples that were once small, but became significant. The internet was 0% of revenue for many companies once, where it's now extremely significant. It's not an argument to say something is small, therefore lacking any potential to be or become meaningful. One of its core characteristics is that it's cheaper. If you can cut costs as a merchant by 3% by using Bitpay (0% Saas) versus say Stripe (3% ish), that's massive when you have 3% profit margins like most supermarkets, airlines, a lot of retail etc. You can double profits on any sale. Does that mean bitcoin is a massive game changer today? Of course not, but again to ridicule it is as silly as to say the Internet is shit in 1995 because barely any calls, mail, ecommerce, education etc ran on it. Fact is, any sale Microsoft makes with Bitcoin is more profitable than otherwise, and that's not an insignificant fact despite the small scale of bitcoin sales.

<comment><USER35> Microsoft does not accept Bitcoin -- BitPay accepts bitcoin and Microsoft accepts dollars.

<comment><USER34> Irrelevant for the point that was made on cheaper transactions. If Microsoft had accepted the payment in any other way it'd have left them with less profits on that particular transaction.

It's relevant when talking about e.g. bitcoin as a store of value, but that topic wasn't raised. On that topic you could say that accepting bitcoin and buying a derivative to hedge, a bit like Bitreserve or Coinapult locks, would allow you to transact and store bitcoin, immune to bitcoin's volatility, yet cheaper than your average 3% Paypal, Stripe, Square or Creditcard transaction.

Beyond that, it's merely semantics.

</comment></comment></comment></comment></comment></comment></comment><comment><USER36> Surely people here are not so short sited that they actually think these 'not useful' cases are really not useful or that these are the only use cases.

Right now you could travel around Thailand and bring only your phone and passport. There is a service that allows you to give btc and get a code that can be used at any ATM of a major bank and get cash. You can cut down the 8% spread of changing money at the airport to 1/3rd of that at least. That is something you can do right this second.

Not only that but paying for something online is fantastic. No excessive information, no transactions cancelled because of a companies' opaque fraud protection system, no chance of your card number being stolen, no need to generate a temporary card number, no need to worry about your bank's opaque fraud protection...

Seriously, if you think bitcoin isn't useful, try using it.

<comment><USER37> With your Thailand example, the author made the point that it's actually cheaper through P2P model (like Hawala) without the need to eat the exchange spread/fees by changing BTC.

And yeah, fraud is still a huge problem for e-commerce, but how does Bitcoin solve that? As stated in the article, it just pushes more responsibility to the user. Multi-sig doesn't solve that either, you still need a 3rd party escrow provider, who will charge a fee.

<comment><USER36> P2P? Meaning you have to go find people also on a service that I've never heard of until seeing is plugged in this thread? And why would people in Thailand want to buy a specific currency someone is selling anyway. Even USD or Euros would be rare, but every other currency would be hugely exotic. The service right now allows you to take out cash from bank ATMs that are everywhere.

How does Bitcoin solve fraud? It is devoid of fraud. It doesn't 'just push responsibility to the user' it avoids the broken concept of giving someone all the information necessary to charge money to you at will. The fraud you are describing would be fraud from a business not delivering which isn't on the same level as credit card fraud that is happening on a massive scale.

</comment></comment></comment><comment><USER38> I just wrote a post at lunch about this. Right now for most people Bitcoin is the only way to leave your wallet at home and pay for things with your mobile phone.

[http://alexmuir.com/bitcoins-practical-use](http://alexmuir.com/bitcoins- practical-use)

<comment><USER39> I can guarantee the following;

1\. More people have Applepay than have a Bitcoin wallet 2\. More stores and restaurants accept Applepay than Bitcoin

12.2M people had used Applepay at least once between launch and the end of February -- Some significant portion more than once. There were only 12.263M bitcoin transactions in the same time period -- many of which were basically dust / micro-transactions of a few pennies worth of BTC.

There are only 1.5M bitcoin addresses with more than $2.50 in them.. 97% of addresses have less than .001 bitcoin.

<comment><USER38> Good points. It doesn't address the fact that Apple Pay is currently only usable in the US. And it will be forever limited to those with the latest iOS device and credit cards. My point is that Bitcoin provides more functionality than Apple Pay today for the 99.9% of the world who aren't holding an iPhone 6 in the US.

</comment></comment></comment><comment><USER40> OP needs to check out [https://purse.io](https://purse.io)

Use case for consumers: discounts on Amazon.

Use case for earners (mostly unbanked): earn Amazon gift cards as payment and convert to fiat through bitcoin.

Blog showcasing counterargument: [https://medium.com/@PurseIO/10-use-cases- for-bitcoin-c6b7182...](https://medium.com/@PurseIO/10-use-cases-for- bitcoin-c6b7182aa1b9)

</comment><comment><USER41> Monetary gold is just a physical implementation of a secure ledger with very limited inflation, and at a $6T market cap, it's clear that such a ledger has value for more than just black and grey market uses.

Bitcoin is a digital version of a secure ledger (with long term zero monetary inflation) but solves gold's transport, secure storage, divisibility, verifiability, etc issues.

</comment><comment><USER42> "These make up a significant portion of transactions."

That's a bullshit statement. Prove it, or shut up.

<comment><USER43> It can be inferred from SilkRoad's revenue. Plus, about ~50% of blockchain transactions were gambling related before they all moved offchain. You could tell because all the gambling addresses were labeled on blockchain.info

Hard to get gambling numbers now because it's all private and offchain.

</comment></comment><comment><USER44> Bitcoin has also pushed the art of cryptographic hash calculation forward. This helps us better understand how to protect ourselves from large-scale (government) brute-forcing of password hashes, for example.

As others have said; Bitcoin is more than just a currency.

</comment><comment><USER45> One of my biggest problems with bitcoin is that half the bitcoins which will ever be created are already in circulation. That means the rise of bitcoin is just going to create a new "1%", who own the majority of the currency.

<comment><USER46> Actually we just passed two thirds of all coins mined.

</comment></comment><comment><USER47> Bitcoin network is the first truly-open financial/transaction/value network that allows developer to innovate on top of it.

What if you think it this way?

I also want to point out that bitcoin might have a shot at being a global currency.

</comment><comment><USER48> Why is not speculation/wealth storage not an use case?

</comment><comment><USER49> This is the shittiest article I've read on HN to date.

Remittance not useful because of currency exchange spreads? Well then no currencies are useful for remittance.

As for the illegal part, are US dollars not useful for Drugs, Gambling, Tax Evasion and Escaping capital controls anymore? So then, when was the last time some one used US Dollars for any of the illegal activities above? The news didn't reach me.

<comment><USER50> I think the argument against the remittance case is that if you're going USD->BTC->EUR, you're probably better off just going USD->EUR because it doesn't expose you to the risk of BTC. I actually disagree with this; the remittance case can be quite useful when the government has an artificial exchange rate that disagrees with reality. Maybe that falls under the "illegal" category.

But as for illegal uses, the US dollar is useful for drugs, gambling, etc. specifically because it's very useful in legal transactions as well. There's a chicken and egg problem: most people don't engage in illegal activity, but right now if you use BTC it's a red flag that something illegal is going on. If you want BTC to be really useful for illegal transactions, it needs to be useful for legal ones and gain wider adoption.

That was my reading of it, anyway.

<comment><USER51> USD to EUR is not interesting at all. It's the thousands of combinations of the other 200 currencies that are.

<comment><USER50> Right, but what is the upside of using XXX->BTC->YYY instead of XXX->USD->YYY? In the instances where there is no liquid market of XXX or YYY to USD, it is highly unlikely that there will be a liquid market of XXX or YYY to BTC. If conversion between XXX and USD is illegal, then BTC is essentially being used to avoid local laws, and falls under the "illegal" category the author described.

BTC would be a great intermediary currency if there wasn't one already in the form of USD. I just don't see any advantage that BTC would offer over USD, even in the presence of high levels of BTC liquidity (assuming nothing catastrophic happens to the USD, of course).

</comment></comment></comment></comment><comment><USER52> There is no such thing as "semi-illegal". It's either legal or illegal.

</comment><comment><USER46> Use it and you will find out.

</comment><comment><USER53> 1\. There will continue to be nothing that Bitcoin does better than existing systems, apart from money laundering and purchasing illicit goods.

2\. No, not remittances. The expensive bit of Western Union is in fact that last mile. [http://www.reddit.com/r/Buttcoin/comments/2ne03g/the_buttcoi...](http://www.reddit.com/r/Buttcoin/comments/2ne03g/the_buttcoin_remittance_challenge/)

3\. It will remain difficult to turn your Bitcoins into conventional currency (which is the only reason there's such a spread between exchanges). [http://www.thebtcindex.com/](http://www.thebtcindex.com/)

4\. It will get even harder to turn your conventional currency into Bitcoins, as any exchange not being run by blatant crooks puts you through the anti- money-laundering mill.

5\. The protocol problems will continue not to be fixed, unless most of the hashing power and Mircea Popescu can be convinced to go along with the Bitcoin Foundation. No 20-meg blocks for you!

6\. 99% of current hashing power came online in 2014; this will be very price- sensitive [http://www.coindesk.com/bitcoin-mining-firm-cointerra- files-...](http://www.coindesk.com/bitcoin-mining-firm-cointerra-files- chapter-7-bankruptcy/) and much will go offline as the price drops, maybe coming back next hash adjustment.

7\. Miners will continue to sell their coins immediately to cover costs: we are circling equilibrium, where the cost of mining 1 BTC is about 1 BTC. The pool of money to pay for them comes from new Greater Fools.

8\. Transaction irreversibility will remain Bitcoin's sticking point, as speculators who are insufficiently computer-savvy keep getting burnt. "No chargebacks" will continue to repel customers and not attract businesses.

9\. More exchanges will get hacked and/or just take everyone's money. (e.g. just in January: BitStamp, 796, LocalBitcoins, EgoPay.)

10\. Everyone who bought in the last year and held is a bagholder. Their claims and speculation will get increasingly frenzied. Ask for non- Bitcoinsphere numbers supporting all claims.

11\. The bagholders and gambling addicts will continue to be taken by obvious scams, e.g. the two Ponzi scheme sites in just January.

12\. Sidechains will continue to be vaporware and not in fact a thing that exists, let alone solves any problems. Bitcoiners will still talk about them as if they exist in the present, therefore you should ignore that altcoins are possible. (OTOH, pettycoin might get finished this year.)

13\. Altcoins will continue to be even scammier than the Bitcoin ecosphere, boggled as I was to realise this.

14\. The price is presently being held up by speculation and wishful thinking. No new reason will come along. The "fundamentals" are a castle in the air.

15\. Nobody actually wants smart contracts. They know that the plot of Dr. Strangelove is literally an unstoppable smart contract going wrong. Real customers want problems to be fixable when circumstances change, real companies want to retain the option of lawyering out of a stupid deal. The only people who would want smart contracts are businesses looking to screw over their customers even more than "mandatory arbitration" clauses do. This is about as appealing to customers as no chargebacks, for the same reason.

16\. Blockchains, even if by some remarkable wrinkle they turn out useful for something, will not lug Bitcoiners' 33 GB of SatoshiDice penny shavings with them. Bitcoiners will continue to bring up "blockchain technologies" as a reason to bother with Bitcoin regardless, because that's literally all they have.

(Bitcoiners misunderstand that when a techie calls something "interesting" they don't necessarily mean "useful", "feasible" or "practical" — often they mean "what the hell even is that" or "I ain't even mad, that's amazing". The blockchain, particularly as implemented in Bitcoin, is very much the last.)

</comment><comment><USER54> I derided Bitcoin and cryptocurrencies in general until I seriously looked into it, and then I could hardly sleep for days because of the huge implications of it.

Bitcoin allows people who are unbanked, especially in developing countries, to hold and transmit money across the world at practically zero cost. Since bitcoin is decentralized, there are no middlemen like banks to take a cut or freeze your account.

Besides, there are a lot more crimes being perpetrated with fiat and credit cards by financial institutions and governments. And with _new allegations that it was the US Feds that stole the money from Mt. GOX users_ (and not Mark Karpeles), I wonder if there isn't a nasty propaganda campaign against bitcoin going on.

This article is close to clueless. But then, for a time so was I.

<comment><USER31> The article we're discussing might be wrong, but it's fairly level-headed.

Responses like this, with breathless invocations of the world-changing implications of Bitcoin and heroes-and-villains narratives about governments and banks, sap credibility from Bitcoin.

They suggest that very simple arguments with Bitcoin critics can't be addressed without stipulating that Bitcoin is going to rewrite all of commerce and perhaps even all of regulation. Virtually nobody in the real world is willing to stipulate that.

If Bitcoin is going to work out in the long run, it will need arguments that work even if the IRS retains its ability to enforce tax laws and the DOJ retains its ability to regulate casinos.

<comment><USER55> If the IRS is going to work out in the long run, it will need arguments that work even if the blockchain retains its ability to maintain a globally distributed ledger.

Are you surprised bitcoin still exists considering the white paper unapologetically spoke heresy against government and bank collusion? That must be frustrating. Seeing the NYSE invest in a bitcoin company must have been a poke in the eye for you!

<comment><USER56> This kind of comment is probably why Mr. Ptacek chose the word "believer" downthread.

<comment><USER55> Let the record show it's CRYPTOGRAPHY that requires faith, not the enshrined powers of the IRS.

</comment></comment></comment></comment></comment><comment><USER57> The honest answer: tax evasion and money laundering.

</comment><comment><USER58> That's a good article on Bitcoin. Bitcoin had two big runups. The first was driven by Silk Road (the drugs use case), and the second was driven by China's exchange controls.

For a few months in 2013, it was legal in China to buy Bitcoins with a debit card in yuan. The Bitcoins could then be sold outside China for dollars or euros. China has exchange controls. Ordinarily, it's quite difficult to convert yuan to dollars or euros from inside China. Bitcoin made it possible.

Then the People's Bank of China (roughly equivalent to the US Fed plus the US Treasury) cracked down, and in 2014 the price of Bitcoin went into a dive from $1100 down to the current $240. That's how we got here.

Bitcoin mining in China may also be a way to bypass exchange controls. China encourages exports. China's government has no problem with someone setting up a business, making something, selling it outside China, and keeping the proceeds outside China. That doesn't violate exchange controls, because no yuan have left China. A Bitcoin mine fits that model. If you have a successful business in some interior province and want to get out enough dollars for a villa on the Riviera, a share in a Bitcoin mine is a good option. This may be driving much Bitcoin mining activity.</comment>


How do you stop scripters from slamming your website hundreds of times a second? - <AUTHOR>

My server is on a VPS so the bandwidth is limit.
how can I prevent robot except Google to crawl my website down.  how to prevent it make  hundreds of times a second to my site.
thanks. <comment><USER2> The major crawlers should respect robots.txt, so you can put directives there to restrict access by useragent. For other types of traffic, look into rate limiting and throttling settings on your web server. Apache has mod_evasive, for example, and others should have similar features. Since it is a VPS, your hosting company should also have some protections in place such as a load balancer or firewall that has some way to throttle requests to your VPS. If the traffic is malicious, they should be able to filter it based on IP or region. If it is legitimate traffic, you should consider upgrading to a more scalable setup, for example several servers behind a load balancer, maybe with some way to programmatically add servers based on load. This is easy to do with Amazon EC2, ELB, and cloudwatch

<comment><AUTHOR> very helpful

thank you very much thank you!

</comment></comment><comment><USER3> <http://news.ycombinator.com/item?id=1787354>

this is about (defending) brute force/ssh attacks, but the iptables rules are similar

<comment><AUTHOR> helpful! Thank you very much!

</comment></comment><comment><USER4> for nginx look at Limit Requests <http://wiki.nginx.org/HttpLimitReqModule> \- or if not running 0.7.20 or newer, try Limit Zone. This is the best if you're just looking to control things with nginx, but I would also recommend putting HAproxy in front of it and have it handle the connections limit, a much richer feature set to handle such things. It handles slow DDos attacks like Slowaris automatically [http://www.snapt-ui.com/haproxy/defend-against-slowloris- wit...](http://www.snapt-ui.com/haproxy/defend-against-slowloris-with- haproxy/) \- and is able to do tons more. Here Willy (HAproxy developer) talks about other things he's done with it [http://www.mail- firstname.lastname@example.com/msg00291.ht...](http://www.mail- firstname.lastname@example.com/msg00291.html)

<comment><AUTHOR> very helpful

thank you very much.

</comment></comment><comment><USER5> you can use robots.txt to stop the ones that behave. those that don't behave, you would need to cut them off upstream. depending on how you are metered, that might mean dropping the connection when it gets to your box or it might mean having your hosting provider do it before it gets to your vps.

<comment><AUTHOR> thank you very much

I use the Nginx as the web server currently. is there some best practice for this?

thank you.

<comment><USER5> you want to drop connections either upstream from your machine or before nginx ever connects. assuming that is, you want to block certain connections.</comment></comment></comment>


Ask HN: Statistical Comparison of Startup Survival in Recession - <AUTHOR> I'm curious what statistical comparison might exist of startup survival during the last recession, based on particular factors.<p>Things that occur to me:
method of making money (various freemium flavors/paid subscriber/ad supported) Who was the target customer/user? Was the company selling a new type of service or product, or an improved version of an existing service/product? <comment><USER2> Working in the financial industry from 2007 to 2009 the time when recession was at its deepest, i can tell you consumers had their hands burnt and fried to ashes after the markets tanked. So much that talking about investments would get their eyes wet and they would swear never to put money in the markets.

But just as markets revived post 2010 people again blindly started writing checks as per what their consultant advised. Although by this time I had moved out of the industry.

The malady is that individuals never show interest in actually learning how to make investments. And they go by heresay and greed.

I got offers to set up a financial trading terminal but as i fundamentally don't believe in trading as opposed to investments, I refused and preferred to relinquish my consultancy job.</comment>


Bankers now Too Big to Jail - <AUTHOR> http://www.rollingstone.com/politics/news/gangster-bankers-too-big-to-jail-20130214 <comment><USER2> Reading Taibbi as someone in finance is like watching Bravo's Silicon Valley for much of HN. It's hyperbolically relatable in a way that makes you laugh but simultaneously grimace-inducing as you realise how mis-informative it is to someone without prior knowledge.

Take HSBC. Yes, it is a cock up of grand proportions to allow Iranian money anywhere _close_ to your American subsidiary. And yes, everyone involved in the Libor scandal should go to jail (as I expect many of them will).

Then one notices that this was largely trade financing for buyers in India, Greece, and South Korea. HSBC, like Standard Chartered, grew out of a tradition of giving a great deal of independence to country offices. Sort of like IBM. This increases flexibility but makes miscommunication more likely. Anti-money laundering is hard and margin compression at banks has thinned compliance teams. Financing terrorism suddenly becomes something more banal - a zealous banker shifting records around for a client he may have known from pre-revolutionary days (Iran was a U.S. ally until the 1979 revolution).

Does this excuse the behaviour? No. But it certainly dulls my pitchfork. Just as I avoid Fox News to stay abreast of American politics I would encourage you to seek out sources chasing understanding. Then again, a good outrage isn't a cheap good either :).

<comment><USER3> Thank God this is at the top of the page. I'm always shocked to see Taibbi get so much attention on HN. I would take his commentary about as seriously as I would any other polemicist of the Glenn Beck / Michael Moore variety.

<comment><USER4> I've found that opinions that run contrary to the group leanings often do well on HN. Its still a pretty intellectually curious place.

</comment></comment></comment><comment><USER5> It amazes and depresses me that it takes bad behavior on a level that is easily explainable (i.e. help terrorist launder money) for people to get upset at how untouchable large international financial institutions have become.

The LIBOR scandal is so much bigger and more important than this HSBC case but it seemingly gets a pass from public outrage since there's no easy TL;DR explanation of it.

<comment><USER6> Libor TLDR: "Organizations set their interest rates to a random number that some banks came up with. The banks changed how they came up with the number without telling anyone, and the organizations got mad because it caused them to lose money while the banks made money."

<comment><USER7> Libor TLDR: "Fraud."

<comment><USER8> I don't think that's enough to make people understand whether the governments should just fine them or that they need to put hundreds of people in jail.

<comment><USER7> Fraud is a crime. When it involves enough money (amount depending on jurisdiction) people are supposed to go to jail. It is my understanding that the amounts involved here were significantly above those required for any jurisdiction.

</comment></comment></comment></comment></comment><comment><USER9> This related hearing [1] led by freshman senator Elizabeth Warren is eye- opening. She can't get a straight answer on the last time a major bank was taken to trial over its offenses.

[1] [http://www.dailykos.com/story/2013/02/15/1187417/-Elizabeth-...](http://www.dailykos.com/story/2013/02/15/1187417/-Elizabeth- Warren-to-bank-regulators-When-was-the-last-time-you-brought-Wall-Street- banks-to-trial)

<comment><USER10> She does get a straight answer. Regulators don't sue; they have a steady-state relationship with the banks where their concerns are addressed with consent decrees. Lawsuits are insanely expensive in the best of cases, but they're worse when you're suing a megabank, because the suit impacts the broader economy.

It is a little disingenuous for Warren to act surprised about this. She knows not only why regulators don't sue, but also how unlikely it is that we're going to start doing that (it'd be economically irrational for us to do so).

Her heart is in the right place. Too Big To Fail is a real problem. But if you've got a bunch of wasp nests in your back yard, you don't fix the problem by jamming sharp sticks into them.

<comment><USER11> That's a little uncharitable. It's obvious that Senator Warren's real question is: Do the banks have any reason to feel as if they face a threat of real legal action if they break the rules?

If not, that's surely something we can and should change.

<comment><USER12> s/break the rules/break the laws/

Completely different meaning. If ate a bar of chocolate in the library despite posted signs against eating and drinking. I broke a rule. If I threw my chocolate bar at the librarian's face with an intent to injure him, I broke a law (assault and injury etc.)

<comment><USER11> And if there wasn't _anything_ you could do to land yourself in court, wouldn't you start to wonder if there are any real laws at all?

<comment><USER12> Oh there's no doubt that laws were and are being broken by top banks every single day. The problem is that they have enough concentration of power on their side (in most western countries) that it's almost impossible for the feeble democratic institutions to effectively punish them.

</comment></comment></comment></comment></comment></comment><comment><USER13> About 8 years ago an investor in my first company was defrauded by a con artist. This led me on a crazy 4 year chase which resulted in the discovery of a series of pump and dump stock frauds worth over $1 billion (think Enron, divided into smaller pieces) and possible ties to terrorism. This was a result of class action lawsuits, SEC investigations etc. None of which resulted in any type of jail time, and one of the individuals lives nicely in a 20 bedroom mansion in Barbados.

The sad part about all of this, was that I notified the SEC on multiple occasions with physical proof that people were defrauding the government and individuals. The SEC's responsibility wasn't "to handle foreign citizens." Homeland Security "didn't handle securities cases." The IRS needed the person's Social Security Number, name and address. When someone moves from one state to another, the states stop communicating on any type of prosecution.

The whole process was a fascinating/scary insight into how easy it is to commit fraud in the United States.

So as a word to the wise for first time entrepreneurs, don't be afraid to ask investors, VCs or others where their money comes from.

<comment><USER14> Please write a blog post on this!

<comment><USER13> Will do. Mind being a second set of eyes on it?

<comment><USER13> Third set of eyes would be helpful.

The most difficult part will be figuring out how to condense it down.

</comment></comment></comment></comment><comment><USER15> > "Had the U.S. authorities decided to press criminal charges," said Assistant > Attorney General Lanny Breuer at a press conference to announce the > settlement, "HSBC would almost certainly have lost its banking license in > the U.S., the future of the institution would have been under threat and the > entire banking system would have been destabilized."

Corporations don't commit crimes, people do. Executives employed by this company were responsible for all of the illegal activities that this story describes. They get paid a shitload of money because they take risks on behalf of the company and are supposed to be responsible for the results of those actions. When they perform well, they get a huge bonus. When they don't, their punishment is that they get "only" their salary and no bonus. Fine, whatever. But when they authorize actions that are _clearly_ illegal, _they should go to jail_.

The attorney general should be finding the responsible executives and prosecuting them. If the company doesn't cooperate, then throw the board in jail. The company can then hire/elect replacements who will be properly scared shitless of doing anything illegal. These guys are supposed to be compensated for the risks that they take. You can't have a multi-million dollar (personal) upside and no comparable downside. In a just society, the downside needs to be that if you're caught breaking the law, _you go straight the fuck to jail like everybody else_.

If you don't make people personally responsible for their actions, you're effectively giving them a blank check to do whatever the hell they want and then hide behind an operation that won't be touched because it's too big to fail. You also have employment contracts that require the corporation to pay legal fees and use their enormous resources to protect them from personal liability.

Obviously there are situations when a company needs to defend its executives in order to conduct normal operations, but the line in the sand needs to be drawn at accusations of criminal behavior.

<comment><USER16> > Corporations don't commit crimes, people d

but but corporations are people ?!? they said

</comment></comment><comment><USER17> There are some very obvious issues here, like the deliberately un-investigated SARs; but I'm inclined to side with HSBC in some places here. Where transactions with and accounts held by persons or countries against whom the US has sanctions in place are concerned, I think HSBC was entirely correct in saying "these accounts aren't in the US, so we're not going to report them to the US government". The US government has the power to regulate banking in the US... not throughout the entire world.

<comment><USER18> But doing things like purposely obfuscating money flowing between the US and Iran as a middle man to get around sanctions?

<comment><USER19> Banks are not in charge of policing the world. If the US wants to stop funds/goods from leaving/ending up in Iran they should stop those funds/goods from entering/leaving the US in the first place.

<comment><USER18>
      | Banks are not in charge of policing the world.

I never claimed that they were. If HSBC wants to transfer money between (e.g.) Turkey and Iran, then the US has no say, even if they don't like it.

      | If the US wants to stop funds/goods from
      | leaving/ending up in Iran they should stop those
      | funds/goods from entering/leaving the US in the
      | first place.

This is a straw-man. I'm not talking about attempting to prevent _every possible thing that ever leaves the US from ever entering Iran under all possible circumstances._ That's obviously impossible.

The article paints a picture that HSBC provided the service of routing money around so that people in Iran could transfer money to the US and vice versa. The entire purpose of this service would be to obfuscate the origin or destination of the transfer from the US government.

I wouldn't say that requiring HSBC to not do this would be requiring them to 'police the world,' but if they want to be chartered as a bank in the US, it certainly makes sense that they should 'play by the rules.' If they were specifically offering/advertising a service to clients where-by they would actively skirt those rules, it doesn't seem like there is an issue with (at the least) revoking their charter.

<comment><USER19> > if they want to be chartered as a bank in the US, it certainly makes sense > that they should 'play by the rules.'

It appears they are not doing that and it appears their charter won't be revoked.

The point I tried to make was that no matter what you do to restrict such transactions from happening, they _will_ happen. The only people that suffer from sanctions are the poor, the rest will continue underground.

If you want to play global policeman and if you want to limit access to goods/funds for some country you have but one option, to close your borders. Once stuff leaves your sphere of influence anything can happen, and making it illegal to do something typically has only one effect, it will drive up prices.

HSBC saw an opportunity to make money, and being a bank they acted on it and did not care about the consequences. If you want to make a principled stand then yes, by all means have their US banking charter revoked and jail their execs. But if you don't do that then this will simply repeat, different names, different labels same principle.

Having principles costs, sometimes it costs a lot.

<comment><USER18> W.R.T. HSBC not being punished, you're preaching to the choir here.

</comment></comment></comment></comment></comment></comment><comment><USER20> If you want to commit a white collar crime make sure that it involves stealing or laundering billions of dollars through the banking system rather than downloading journal articles that are ostensibly in the public domain.

</comment><comment><USER21> This is pretty incredible.

I remembering reading about this way early on... and cast it aside as some false hyped up story.

Then I saw it being reported by high profile journals...

The biggest banks in the world are aiding terrorists and drug dealers do their work in the most crucial way: handling the financial end of things.

Isn't that just absolutely absurd? I don't know what to think at this point.

<comment><USER22> We should stop talking about this immediately and focus on the real issues like arresting Julian Assange for aiding the enemy, several of the things he leaked could potentially be used by the enemy in some way, somehow.

<comment><USER23> I was tempted to add to the sarcasm thread but I'll save that for reddit.

A key problem here is getting and maintaining attention by a significant majority of the population. Depressing information like this, coupled with the sense of powerlessness turns people off and relegates stories like this to the politically aware fringe of society.

The Daily Show and Colbert Report seem to have the right approach, but they are not enough.

I have an idea for a start-up that could do interesting things with this notion, but between time contraints and not having a partner in crime I fear it will never happen.

<comment><USER24> > Depressing information like this, coupled with the sense of powerlessness > turns people off and relegates stories like this to the politically aware > fringe of society.

Even as a fairly politically-active person, I succumb to this exact sense of powerlessness. It's absolutely the key problem.

> I have an idea for a start-up that could do interesting things with this > notion, but between time contraints and not having a partner in crime I fear > it will never happen.

If you're comfortable sharing, I would love to hear it. It's a problem domain that really needs some attention and effort.

<comment><USER23> I know ideas are a dime a dozen and that it's execution that matters but it's hard for me to share on a site like HN.

I'll send it to you directly for feedback, etc.

Essentially it's about using social media in a different fashion then currently done (i.e., social broadcasting), humor, mockery, ego, shame, titillation and story telling.

</comment></comment></comment></comment></comment><comment><USER25> Matt Taibbi? I agree with his general point of view, but it is amazing that people still consider him a journalist. It appears he has mastered the art of making smears look like journalism.

<comment><USER26> Raise your hand if you guessed that it was Taibbi before clicking the link.

<comment><USER27> _raises hand_

</comment></comment></comment><comment><USER28> >"Had the U.S. authorities decided to press criminal charges," said Assistant Attorney General Lanny Breuer at a press conference to announce the settlement, "HSBC would almost certainly have lost its banking license in the U.S., the future of the institution would have been under threat and the entire banking system would have been destabilized."

Why governments can not confiscate or nationalise HSBC and continue legal operations?

<comment><USER29> That sort of thing leads to investor panics and possibly social instability. Go to the Wall Street Journal website and read the comments on any political story. there's a large number of people who are convinced that Obama is a full-blown Communist and just waiting for his chance to go down the same path as Mao Tse Tung, Fidel Castro, Hugo Chavez etc.

That's why it's safer o work through legislative means. People have wildly distorted ideas about the executive branch.

EDIT: see, for example, one of the sibling comments here.

</comment></comment><comment><USER30> The regulatory capture of pretty much every national government by the global financial superorganism[1] is an existential threat to humanity in ways that we are barely equipped to comprehend.

Some of the more pure examples of this evil ( from the human standpoint ) are what happens in Amazons warehouse facilities [2]. But the more mundane examples show up with your monthly bills.

It seems not long from now that corporations wanting to redevelop a desirable plot of land will be able to buy a permit to exterminate the humans living on it. And while today that notion sounds faintly ridiculous, it's not unheard of; we are all american indians now.

1\. [http://www.kk.org/thetechnium/archives/2008/10/evidence_of_a...](http://www.kk.org/thetechnium/archives/2008/10/evidence_of_a_g.php)

2\. <http://j.mp/XgOnkf>

</comment><comment> guard-of-terra There is a simple solution: don't punish the bank, punish individual bankers.

Don't revoke license, so the world does not collapse, instead make decision makers lose sleep.

<comment><USER31> That's simple-sounding, but I don't think it's simple.

Large organizations like banks are fantastic for obscuring responsibility. The CEOs say, "I didn't know." The line workers say, "I was just following orders."

Everybody in between keeps things hazy because it's useful to their careers. When things go badly, they need to be able to claim it wasn't their fault. When things go well, they try to claim credit.

The net result is nobody gets punished when there is crime on a massive scale.

I think the only viable option is to punish the company. I think it would also be fair to change the law such that CEOs are treated as negligent if they let internal controls get to the point where criminal things are happening without an obvious, chargeable conspiracy by a group of workers. But good luck getting our bought-and-paid-for congressmen to approve something like that.

<comment> guard-of-terra CEO is totally responsible for the big picture.

Should be personally liable for large-scale crimes.

</comment></comment></comment><comment><USER32> It's pretty disgusting that we're throwing principles away for the sake of expediency. How long before there are no principles left? What does that kind of country look like?

Personally I'd like to see a country where the rule of law is still respected. Forget expediency. I'll take some pain every once in a while to avoid this kind of outrage.

<comment><USER33> Do we have fewer principles now than in the past?

<comment><USER27> Of course we do! The past was a perfect glorios place! Men were big strong men who supported a family all on their own. Women were perfect housewives that raised 2 beautiful children. Everyone had a big house a nice green lawn and 2 of those oversized 50s cars. It's been downhill ever since!

<comment><USER32> Well, uh, the country was founded on the principle that a government should be accountable to the people. A lot of men died toward that end. So I'd say that yes, at some point, we did have principles. And it was in the past, oddly enough.

<comment><USER27> Which dying men are we talking about? The ones that owned slaves or just the ones that made sure the black guys could only leave through the door to the alley?

Look, I'm not saying that there's not a lock of fucked up in the world. There surely is, and some of the bank stuff is probably a part of it. But if you step back a bit and consider the big picture things really do appear to be moving in the right direction overall.

<comment><USER32> I would disagree with the idea that things are moving in the right direction overall, but I get that you think so. I don't even think you're totally wrong or crazy, I just disagree.

Agreed slavery was non-ideal but there were a lot of white guys that died during the Revolutionary war.

<comment><USER27> Look at some of the big picture statistics for worldwide poverty, health, lifespans, violence, freedom, corruption, etc. Nearly all of them are moving in a positive direction, in some cases dramatically so.

To me the only really worrying long term trend is environmental impact. We might be consuming our planets resources at an unsustainable rate.

<comment><USER34> _Might_ be? How much more evidence would be needed? The planet can probably sustain less than a billion people long term at a first-world standard of living.

<comment><USER27> 'eh, maybe. Though who knows what future technologies will bring? Maybe in a 100 years will have a 20 billion people but most of them will be uploaded to the singularity. Maybe nuclear & solar will save us all. Maybe we learn to mitigate the effects of global warming by some sort of large scale teraforming projects.

Predictions are hard, especially about the future.

There's a big part of me that thinks that the "we're all doomed because of how we're ruining the environment" comes from the same place as "Americans used to have principles, but now we're just a bunch of self centered assholes" which comes from the same place as [http://en.wikipedia.org/wiki/Tree_of_the_knowledge_of_good_a...](http://en.wikipedia.org/wiki/Tree_of_the_knowledge_of_good_and_evil).

Everyone has their own way of thinking that things used to be perfect but then we turned to sinners and fucked it all up.

</comment></comment></comment></comment></comment></comment></comment></comment></comment><comment><USER35> I'm amazed at all the attacks on Matt Taibbi and Elizabeth Warren in this thread. They are standing up for what they believe is right in their own unique way. They have worked hard to get to where they are. Give them some respect.

</comment><comment><USER36> At this point I have to believe that a Justice Department that will push a guy to suicide for taking files is plainly in partnership with corrupt banks. The Justice Department is merely the legal firm for the banks.

</comment><comment><USER37> I'm amazed Taibbi could write an entire article on this subject and not mention Jon Corzine.

Oh wait. No I'm not.

</comment><comment><USER13> Apologies for linking outside this thread, but some of the audience asked me to write this. Hope it is helpful.

<http://news.ycombinator.com/item?id=5236372>

</comment><comment><USER38> I've started a WhiteHouse.gov petition - Send the Execs to Jail, but Keep the bank running by hiring replacements. Show that people who do this are held accountable, even if the business is too big to fail. <http://wh.gov/dtmj>

<comment><USER39> Excellent idea - have government-selected people with no experience with the company run the company, with a promise that if anything happens in the huge company they are managing, they go to jail. Oh yes, and to make things easier send all the people who know what happens in the company to jail so they aren't accessible and have zero motivation to help. Now you only have to properly cap the pay for new management - to ensure you pay them less than a comparable job elsewhere - and you have a winning recipe. I can't imagine how this could go wrong.</comment></comment>


Ask HN: Ideas to Improve HN - <AUTHOR> Curious if single post (potentially monthly) on generating (actionable) ideas on improving HN would help HN improve.
—————————————
(1) Top-Level-Comment-Format:
- IDEA: (One sentence)
- VALUE: (who needs what and why)
- ESTIMATES: Time & Resources
- VALIDATION: How will you know success happened? How would you compare it's success with prior efforts? How would you know to when to failure happens or related efforts should end? (EDIT: Clarification of meaning "validation" — that being the topic of validation is limited to validation of the "value" not validation of anything else, including but not limited to validation of a given implementation technically, roadmap, etc.)
 One idea per top-level comment to enable clear understanding of votes.
—————————————
(2) Top-Level-Comment-Response-Suggestions:
- FEEDBACK: on idea
- VARIATIONS: of idea
- VOLUNTEER: Planning, Beta, Coding, supporting, financial, maintenance
Suggest limiting each top-level comment to a single topic to enable clear views of voting.
—————————————
(3) META-COMMENTS:
Lastly, I will create a top-level comment for meta-comments on the idea of "Ask HN: Ideas to Improve HN" — which is where all comments about this post should go; all other top-level comments should be "Ideas to Improve HN".
—————————————
DISCLAIMER: Other than having a meaningful understanding of HN/YC, I have no relationship with either. That said, if this makes the home page, I'll ping the HN mods to insure they're aware of it. <comment><AUTHOR> See post description to understand this comment:

>> "I will create a top-level comment for meta-comments on the idea of "Ask HN: Ideas to Improve HN" — which is where all comments about this post should go; all other top-level comments should be "Ideas to Improve HN"."

</comment><comment><USER2> Clicking on a link and having it open in a new tab/window should be a user profile setting that's turned off by default so the current behavior remains the same, but users that prefer this behavior can override the default.

<comment><AUTHOR> Re-Idea: Agree, sounds useful.

Validation: I would suggest first time someone clicks a headline after the feature is live — that by default before opening a new window the user gets an alert allowing them to configure the setting and confirmation they understand how to edit it later if needed.

</comment></comment><comment><USER3> \- IDEA: Rewrite HN in Crank.js

\- VALUE: It would be cool if HN used native JavaScript features

\- ESTIMATES: Week, people rewrite HN all the time shouldn't be that hard.

\- VALIDATION: Should be able to tell from viewing in devtools.

<comment><AUTHOR> Re-Idea: Why does HN need more JavaScript or "native JavaScript"?

<comment><USER3> Sorry, was just being a sarcastic a-hole. Carry on.</comment></comment></comment>


Clothes become microfibre pollution in the sea - <AUTHOR> https://phys.org/news/2020-02-microfibre-pollution-sea.html <comment><USER2> Interestingly, sometimes our solutions end up being part of the problem. I've read that reusable teabags, which are cloth-like and require simple rinsing to clean, also shed microfibres. But when you add napkins and just about everything else into the mix, one begins to realize that just about everything you do is polluting the environment with micro fibres and beads nowadays.

Eventually we have to look into making things out of natural ingredients again.</comment>