Steam To Stop Supporting Bitcoin Transactions

[LostinSpacetime]

Well, between that and the NiceHash hack, today is a bad day for bitcoin.

+20% a bad day? hmm..

[LostinSpacetime]

Yes you can. That is the only reason the €500 bill still exists and hasn't been killed off yet. It is used by too kinds of people, criminals and old Bavarians paying cash for cars.

You can ..but not for much longer. Total surveillance is just around the corner. You don't have to be a criminal to see here a problem.

[LostinSpacetime]

I'm glad I never bothered getting into Bitcoin, specifically because of moments like this.

What exactly is the problem right now? Using Bitcoin as a currency is not very convenient for reasons already stated. However, technical problems like transaction fees and times will be solved (Lightningnetwork is the first approach and will be activated within months) and price will stabilize eventually. Uncertainty is the reason for the downs, while "low" price makes rises like in the last two days of over 30% possible. This is a reason why paying with bitcoin isn't a smart thing to do right now.. and will not be for probably one more year. Until then, Bitcoin is just a promise with a pretty healthy and dynamic OSS community behind it.

[LostinSpacetime]

Bitcoin will eventually collapse.The only way for anything to rise 10x in value in less than a year is by becoming a giant bubble.

..unless.. it's a completely new kind of bubble(since all money we use are actually bubbles).. like a decentralized open source crypto currency running on the Internet

[xiando]

First HB, now Valve. Not a good development. This reduces the value of Bitcoin as a currency. It's only as a good, as someone is willing to accept it as payment.

Bitcoin isn't a currency anymore. Yes, it's sad - as the truth sometimes is. $10-20 and sometimes even more to move money around isn't acceptable or competitive. Bitcoin's just a form of digital gold or digital tulips. It makes total sense for steam to just stop accepting BTC as a payment method, if you're buying 100 games then the transaction fee is fine. Paying $20 to buy a $10 game makes zero sense, it's pointless.

And there's another side to the Bitcoin transactions which people tend to forget: 100 people send me 0.01 BTC or something like that for some service I provide. Now I have 1 BTC which has 100 different inputs. The fee needed to spend this will be much higher than the fee for a transaction with one input and one output. BTC fees are set by the transaction size, not the amount. This means that there is a high hidden cost attached to accepting BTC and this cost goes higher in terms of percentage the smaller the amounts are.

Accepting BTC simply doesn't make any sense at all unless you're selling cars or apartments and things like that.

[gbcox]

As a few others have mentioned - bitcoin isn't a currency anymore (not that it really ever was one) - it's a ponzi scheme with no one in charge. There is absolutely nothing backing it's value other than speculators. No wonder you see people refusing to accept it as currency.

[gbcox]

What exactly is the problem right now? .

The problem is what it has always been... it's backed by absolutely nothing.

[1Samildanach]

One nice thing about Ethereum (as a currency - not an investment vehicle) is that it has built-in deflation, which makes it less attractive to speculators. However, being blockchain-based, it's also going to have scalability problems and will be too expensive for low-value transactions.

Do you mean inflation? The current problem is hyperdeflation (i.e. runaway increase in the purchasing power; the inverse of what happened to Zimbabwe's dollar).

It does make for an interesting case to watch, 'cause it's a 'currency' which has no requirement for anyone to spend it, and is not based on any physical product**. The former fact means there is absolutely no natural money flow to counterbalance the deflation (everyone who owns some can actually get through life while never spending any of it); the lattercould cause a dip in price that leads to a bear run, or trigger a realisation for the speculators... leading to a bear run.

Of course, there is potential for software changes to alter the market, but even that will provide some unique observations and data.

*Unlike a national currency, where, at the end of the day, people have to use it to buy bread, or something like gold, where it has commercial uses.
**Tulips, for example, can reach a point where customers go, "Uh, I think I'll just get my girlfriend a solid platinum imitation flower -- it's cheaper, but it'll go down just as well", or some grower decides to go all out (or discovers a new technique/process/whatever) and has a bumper crop.

EDIT: Actually, there is one forced expenditure: processing fees. However, that only comes into play when people make transfers, and from what I understand the price of it would drop as hoarding increases (there would be fewer transactions to process, so it would take a lower bid to get on top of the pile).

[coder]

Do you mean inflation?

Yeah, Ethereum has built-in inflation. Seems to ward off the degree of speculation and hoarding we're seeing with Bitcoin.

One risk with Ethereum is that the supply isn't mathematically-limited, as it is with bitcoin. So, conceivably, you might have someone gain a controlling stake in the committee in charge of Ethereum and change the software to alter the mining reward structure. As we saw with bitcoin, the vulnerability in cryptocurrencies is control of the underlying software.

[audir8]

Seems like some government regulation might help with the various 51% problems that 'cryptocurrencies' have. We don't allow banks to mindlessly merge, among other regulations to prevent unlawful monopolies and concentration of power.

Ultimately, the proof of work model is bound to fail, because it's failed before and it's not about to succeed for the first time. There are better models, and I hope mobilecoin isn't vaporware like lightning is.