Are These Weaknesses of Bitcoin? What About Dash?
This is a great podcast and I enjoyed the discussion with Jeff of Dollar Vigilante. One of the interviewers - I think @officialfuzzy but maybe someone else - brings up three weaknesses of bitcoin (I'm paraphrasing his views):
- (Consumers) Can't spend bitcoins fast enough without introducing a centralizeable layer.
- (Producers) As soon as businesses get bitcoin, they have to cash into fiat for stability.
- (All) We have bitcoin exchanges and you can only keep bitcoin safely in a wallet and it's difficult for every day users to use bitcoin.
First, a business that sells bitcoin for the stability of the US Dollar is investing in a side of the pair (USDBTC) that has lost 99.9999% of its value since bitcoin began. The US Dollar is stable? Not measured in bitcoin terms! The US Dollar is only stable when measured by comparing it to some items. Even gold since 1971 has absolutely routed the DXY - the US Dollar index.
Second, I agree that bitcoin is facing a challenge of fast spends. This is a strength of Dash, though. And Dash, unlike Steem, does not have the inflation Steem does. Likewise, a 51% attack on Dash is a low probability since someone would have to spend a lot of money to do that - create over 2000 masternodes and vote against Dash's interests. It would make more sense to support Dash and more profitable.
Every cryptocurrency and crypto-asset are still being challenged on the security front. This is just as true for Steem as it is for bitcoin as it is for Dash.
I like Steem. I like Dash. And, of course, I like bitcoin. Still, there are not necessarily arguments in favor of Steem, so let's be careful about addressing what are weaknesses and strengths. Great interview overall and definitely worth everyone listening. I really liked the point where the issue of the owners owning a lot of Steem was addressed - it was their idea, so like Facebook or any other idea, they should own a lot of it. If people don't like that, they can always develop a better idea.
Update: to answer the below question:
I don't know much about Dash, but what's stopping someone from creating a bunch of nodes through cloud computing, buying a bunch of Dash over a long period of time, then shorting Dash on an exchange and attacking the network.
Excellent question because this is popular; unfortunately, someone asking this doesn't know just how expensive this would be. In order to bring down Dash, you would either have to buy a lot of Dash to create enough masternodes to do a 60% attack (note 51% wouldn't be enough due to how the voting system works), or you would have to convince the existing masternodes to do something stupid. There is a low probability of both.
Note: some of our posts appear on our blog FinTekNeeks.
The one thing that constantly annoys me with bitcoin, and pretty much all cryptocurrencies is that people will always use a 3rd party to store them.
How stupid? People hate banks, they want to get away, only to summon into existence crypto banks. How silly can that be?
People need to be more responsible with their money.
Agree with you with the exception that for some people, they like trading other altcoins so they keep a portion on hand to trade those.
However, if a person thinks that safety is guaranteed at an exchange, they're crazy. We can easily lose, so I warn people to avoid keeping all eggs in one basket.
It's nothing wrong with trading, and keeping a small tradeable % in an exchange.
But when I see people using exchanges as banks, some guy wired 1 million $ to an exchange, and left it there after seeing how much "safety" the exchange guaranteed, I mean: 2FA auth, HTTPS, e-mail confirm on withdrawal... Wow that must be ultra safe, what could go wrong?
Just ask all the exchanges that used the same security protocol and still got hacked.
I agree with you on DASH being great tech and a great community too! It is solid! There is plenty of room in the space for other amazing things such as Steem, too, of course.
People (who are not crypto people mind you) have an incentive to lock away their capital into steempower to be able to support bootstrapping the network. I see DASH people here, who have a very good community for marketing their tech and community to the world so they feel how addictive and awesome the platform is--and that is extremely valuable on its own merit. I also see DASH working with BitShares btw, in this ICO. So don't worry there is plenty of room for all of these good cryptos. But let's face it--Steem is bringing people who have never touched crypto. Can you really say that if our community supports it like DASHs community supports DASH, that Steem wouldn't continue to grow perpetually? It destroys facebook, twitter, medium and other social networks if for no other reason than its sheer scalability and censorship resistance. That isn't even talking about the economic aspect.
As for the problem you see with the dollar...once again I agree (sadly because I'm and American who gets to watch this ridiculousness), but who is saying there cannot be other kinds of assets backed by steem? SBGOLD would be nice wouldn't it? Or SBDASH to track the value of Gold and DASH in your savings (I'm more of a silver freak that gold though)? And lets face it maybe you later will be able to hold those steembacked assets against SBD since it is obvious the USD is just the best of the worst currencies--at least for the time being.
As for the inflation, if 100% of steem were to be locked in steempower, the maximum actual inflation is around 10%. That is less than bitcoin. Last time I checked something like 97.6% was locked in steempower and the trend was staying at that point as people earn and power up.
I greatly appreciate your input and am happy you enjoyed the hangout! Feel free to join us and answer questions about DASH anytime you want :)
Here is the link if you want to get some of your community together to represent!
https://steemit.com/beyondbitcoin/@officialfuzzy/guest-signups-beyond-bitcoin-hangout-170-8-26-16-rsvp-to-friday-s-hangout-ask-q-s-suggest-topics-or-promote-your-favorite
Thanks @officialfuzzy; sometime you can host a show and interview me about my book and we'll also talk Dash!
I don't know much about Dash, but what's stopping someone from creating a bunch of nodes through cloud computing, buying a bunch of Dash over a long period of time, then shorting Dash on an exchange and attacking the network.
Nothing that I can see. But I have a feeling it would cost a LOT of money and the only people I can see wanting to kill it would be the Government.
But honestly...I think the "elites" would want to control something like that quietly as opposed to trying to kill it. Unless they wanted to compete with it. But at this stage why not do both and own stake in both sides of the game? Heck this could be the case with all top crypto tech though. This is the stuff that bothers me most. For the actors at the very very top, the kind of money that it would take to slowly buy tokens in every blockchain that can scale to meet demand would be child's play.
The only thing communities can do is try to identify the actors and be able to minimize damage if this is in fact the case. Of course luckily no matter what people can always fork and create their own chains (as long as drones don't come hunt them down and take them to prison).