Fidelity launches trade execution and custody for cryptocurrencies

https://www.cnbc.com/2018/10/15/fidelity-launches-trade-execution-and-custody-for-cryptocurrencies.html

by lxm • 8 years ago

204 132 8 years ago

Theodores5• 8 years ago

As I understand it Fidelity have bought a chunk of Bitcoin and are currently trying to buy more. They actually do not care about price, they just need the coins so they can setup these new financial things they will let their bigger customers buy into, as part of the portfolio. The cold storage thing is no biggie, they will be holding their new and shiny bitcoins in many, many wallets. So a customer of theirs will be able to effectively buy one of these wallets rather than a stake in a nebulous fund.

I have heard no mention of them wanting to buy the 'fake crptocurrencies', i.e. anything except 'bitcoin', which I think has appeal to their customers in a way that 'ethereum' or 'crypto-kitties' does not.

But is this really progress? If a cafe has customers wanting some new fad food, e.g. 'kale and pulled pork burgers' and if they have staff that have bought into the 'kale and pulled pork' hype then they might as well add it to the menu.

This is becoming a trope:

"No one said when some of these early-stage Internet companies in 2000 were going out of business, 'Gee, the Internet is toast,'" Jessop said. "We don't focus too much on the price. It's a foundational technology — people are trying to get exposure to the trend and expect volatility in the assets themselves."

Could be said about fidget spinners - they have only got started!

In debating this point with a bitcoin 'bore' I was told that there was no innovation in the internet after the dot-com crash until 'ajax came along' and no 'new innovation' came along after that until the iphone came along. I didn't see it that way, but was it?

roymurdock3• 8 years ago

Bitcoin is useful for evading currency controls, semi-anonymous digital payments, and speculation

Blockchain is a new type of database that has larger applications that involve the tradeoff between efficiency and trust

To answer your bigger question you have to ask yourself what you define as "progress" - is Bitcoin/blockchain new? Yes. Is either useful? Sure, for people who are looking to move money around semi anonymously, enforce more expensive supply chain tracking solutions, or make money selling new financial products. Is that progress?

If you, like me, don't see new database/financial engineering that benefits a small group of technologists and financiers as potentially equal in value to the raise in standard of living across huge sections of the world brought by electrification, refrigeration, antibiotics, internal combustion engines, public roads, and white goods, then you may be interested in this thesis: https://www.nber.org/papers/w19895

"While no forecast of a future slowdown of innovation is needed, skepticism is offered here, particularly about the techno-optimists who currently believe that we are at a point of inflection leading to faster technological change. The paper offers several historical examples showing that the future of technology can be forecast 50 or even 100 years in advance and assesses widely discussed innovations anticipated to occur over the next few decades, including medical research, small robots, 3-D printing, big data, driverless vehicles, and oil-gas fracking."

212• 8 years ago

brought by electrification, refrigeration, antibiotics, internal combustion engines, public roads, and white goods

Most of that stuff required financial engineering. The most developed countries on Earth, with the best of those things, also have the most developed financial markets. Coincidence?

village-idiot8• 8 years ago

Blockchains aren’t new, they’re over a decade old at this point.

And in what applications are blockchains superior to centralized applications?

leppr2• 8 years ago

Cryptocurrencies, thanks to their unstoppable and uncensorable properties, enable organic commerce in a frictionless and scalable way.

At this time, I don't know if you can point out a single "industry" that will be revolutionized by cryptocurrencies.

But what's certain to me is that there will be (subtle at first but no less powerful) lasting shifts in how human societies are organized, which today rely so much on governments for order and enforcement.

fattire• 8 years ago

I dunno. For me, this initiative does not leave a good impression about Fidelity. Okay, maybe they're not buying a stake in bitcoin themselves, but even serving/promoting the cryptocurrency scene/culture seems pretty sketchy to me. (And wasn't the big selling point supposed to be that you bypassed the big financial institutions?)

leppr2• 8 years ago

I too boycott exchanges trading SAR, VES, and other such "sketchy" currencies. Big financial institutions should stick to respectable assets.

I also stopped using USD because I don't support the Iraq invasion.

sueders101• 8 years ago

The sketchy aura of cryptocurrencies(at least with regards to Bitcoin and Ethereum) seems to be progressively fading away. And if you’re solely looking at cryptocurrencies as a long term investment vehicle, it makes sense for Fidelity to have an offering for their customers.

tootie• 8 years ago

Bitcoin/crypto was designed with express intent of allowing financial transactions to be safe and trustworthy without a central broker (ie a bank). Since the value of a coin was essentially arbitrary, speculators with big graphics cards drove the price up leading a bubble which has attracted the sharks and now the whales. I haven't seen any major breakthroughs in the technology, but there has been innovation in the usage of coins from simple currency to investment securities. Arguably we've come full circle and Bitcoin is now the opposite of what it intended but that doesn't mean it isn't innovation. Frisbees used to be pie plates.

hnmonkey2• 8 years ago

Where have you seen that they've bought Bitcoin and are trying to buy more? It would be interesting to see the evidence of this I think.

And as a note... other cryptocurrencies aren't 'fake cryptocurrencies' since they're actually cryptocurrencies. There might be some scams for sure, but ones that are not Bitcoin are just not Bitcoin yet are still currency.

Also, why are you putting quotes around different things like 'fake cryptocurrencies,' 'bitcoin,' 'ethereum,' 'crypto-kitties,' 'kale and pulled pork burgers,' 'bore,' 'ajax came along,' and 'new innovation?' I'm not sure I understand what you're trying to imply there.

Theodores5• 8 years ago

Not every financial dealing is in the papers, sometimes you need to know people with skin in the game to know what is going on. They aren't buying coins through the 'over the counter' ways basement-dwelling kids buy coins though. If you want sizeable quantities of Bitcoin then you need to be buying very differently in a whole new world of brokering. None of this affects the price you see on exchanges, as you can imagine someone buying USD billion worth of coins is an entirely different venture, exchanges can't supply that, they don't have enough sellers. You have to reach out to people who mined significant quantities years ago and also have the problem of not being able to sell on 'Coinbase grade' exchanges.

Regarding 'fake cryptocurrencies', there is a big distinction between Bitcoin and every other coin. Bitcoin genuinely isn't controlled by one individual, it is actually decentralized in the true sense. Is anything else?

A second point regarding 'fake cryptocurrencies' is that a currency - crypto or otherwise - has to be a means of exchange. Apart from in-game tokens and gambling chips there are not a lot of things you can buy with these wonders of the blockchain. Bitcoin is different in that regard, you might struggle to buy things with it at your local newsagent, however, it did gain value as a currency for buying drugs in the days of the Silk Road. You can donate to Wikileaks with it too. There was a time when you could buy other things with it, even a Dell computer. Although Bitcoin did not make the cut for retail transactions it did morph into digital gold, definitely with value as a currency in the eyes of many, albeit with tax dodging benefits.

A third point. From a city point of view Bitcoin is a commodity, everything else is merely an 'unlicensed security'. Of course there are those who want to beg to differ on this. But we live in a world where tomato ketchup can be deemed a 'vegetable' by regulatory types.

The distinction is that coins that are decentralised in name are still with a central point of control due to having a company/org that can be identified as starting it. This is an inescapable distinction. Due to history Bitcoin has ended up as a unicorn, it is not possible to anonymously setup another coin and walk away from it as happened with 'Satoshi Nakamoto', who created what 'he' did from the 1996 NSA White Paper on blockchain things, allegedly. Every subsequent coin has creators, whether they promise anonymity and give away 100% of the coins to strangers matters not.

At time of writing it does not look like anything but Bitcoin really is satisfying points 1 - 3 to make it as something that is a currency in the true sense of the word. Words are our servants and not our masters and the term 'unlicensed security' is generous, 'crypto-currency' is a bit too generous since means of exchange is far from satisfied. 'Tokens' is good, as in those things you might buy to spend in a car wash. 'Chips' would suit me fine too, as in those things you buy at a casino.

Regarding the use of quotes, I am not an American and I know that U.S. readers do not understand humour that is used elsewhere in the English speaking world. American English is very different, for instance the country name 'Ireland' is pronounced 'Ireland' but Americans think it is 'I-re-land'. Poe's Law applies and on HN there is not the custom of using emojis, therefore I tend to use air quotes to indicate that I am not being deadly serious about analogies and phrases that Americans may consider pejorative.

pmorici• 8 years ago

I wonder if they are working with Coinbase behind the scenes on this or if this is a totally independent product. They have a partnership with Coinbase that lets you view your Coinbase balances from your account page on Fidelity.

omegaworks6• 8 years ago

More capital wasted to entrench a fairly useless commodity[1] that requires electrical energy expenditure that rivals entire nations' usages[2]. We are bounding toward climate catastrophe and our largest institutions are taking stakes in actively destructive tulips.

1. https://www.tik.ee.ethz.ch/file/74bc987e6ab4a8478c0495061661... [pdf]

2. https://www.wired.co.uk/article/how-much-energy-does-bitcoin...

seibelj9• 8 years ago

The energy is available on the free market. Or acquired for the express purpose of blockchain mining (I.e. new geothermal energy created specifically for this industry and impractical to transmit other places).

If you want to ban bitcoin mining because it “wastes” energy, there is an argument to be made for banning any industry not absolutely necessary for society because it destroys the planet. Why do we have sports stadiums? Rock concerts? Car racing?

The other argument is that what bitcoin achieves through mining is only possible with financial institutions, the court system, and so on. What power does that system use?

And finally, new innovations will likely end PoW mining for some major block chains like Ethereum, but it is extremely doubtful bitcoin will ever switch.

Also, your first link is a white paper on scaling unrelated to the statement that bitcoin is a “useless commodity”, so I’m not sure why you are using it to back up your assertion.

omegaworks6• 8 years ago

The paper describes the problems inherent to bitcoin. I think blockchain might be a good fit for some things, but bitcoin makes a terrible currency.

The relevant section:

Today’s representative blockchain such as Bitcoin takes 10 min or longer to confirm transactions, achieves 7 transactions/sec maximum throughput. In comparison, a mainstream payment processor such as Visa credit card confirms a transaction within seconds, and processes 2000 transactions/sec on average, with a peak rate of 56,000 transactions/secnsactions/sec on average, with a peak rate of 56,000 transactions/sec

latchkey• 8 years ago

Here is another one for you. [3]

3. https://www.academia.edu/37178295/The_Cost_and_Sustainabilit...

omegaworks6• 8 years ago

From your source:

When the Gold Standard was abandoned, our paper currency became backed by nothing but promises. Ever since then, the value of currency has tended to zero, and money to infinity.

It fails the sniff test with its naive understanding of what currency is.

corv7• 8 years ago

I'm disappointed of HN comments whenever cryptocurrency topics come up.

People are forgetting that Nakamoto Consensus is a legitimate CS breakthrough concerning the Byzantine Generals Problem.

Is it acceptable to bash every stock in the Nasdaq just because a second tech bubble popped and some SV companies are behaving unscrupulously?

Frenzied speculation brought about inadvertent side effects but these should not detract from the fact that significant advancements are continuously being researched and implemented.

jjcm• 8 years ago

For those of us less aware of the crypto space, can you ELI5 the Byzantine Generals problem and how the Nakamoto Consensus fixes it?

seibelj9• 8 years ago

The problem is how to achieve agreement (“consensus”) on the truth when at least one person is actively lying and trying to disrupt the truth. In the context of digital money, it’s how you prevent the same coin being spent twice when manipulating digital information is easy.

A related problem is a Sybil attack, where a decentralized peer-to-peer system that is truly open makes it easy to generate new identities and overwhelm the system, so simply relying on the majority of accounts to agree on truth can still be subverted by a motivated attacker.

Bitcoin was a novel solution to this problem by using “mining”, or raw computation power, as a mechanism for enforcing consensus. This made Sybil attacks worthless as the only thing that truly matters in Bitcoin is computation power, which is expensive, and an attacker would need 51% of the power to attack the network.

erwan• 8 years ago

It's a classic topic of study in the field of distributed systems.

The overarching goal is consensus between agents (e.g servers) over the state of the system.

For example, suppose that you want to achieve atomic consistency (i.e at any point in time the committed/persistent state of the system is homogeneous across all live nodes) in a private cluster replicating a database. The incoming requests are routed randomly to any node in your cluster. You have a synchronization mechanism (a consensus algorithm - like any-Paxos, Raft, Viewstamped Replication etc.) that lets you get this cluster of machines to agree on the state of the database. This is useful if you want fault-tolerance. The synchronization part is the consensus. The agents have to agree on the state-transition.

Now, observe two things:

1. This is a private cluster you own. In other words, you can make all the machines run the same software, trust each other, and assume they act on a best effort basis.

2. The failure model is "fail-stop". If a machine encounters some kind of failure, it won't exhibit arbitrary behavior but rather crash immediately. And you do not consider the case where a machine is taken over and tries to mess with the rest of the cluster in order to violate the desired safety guarantee (atomic consistency).

Obviously, these works if you are a privately own company and can spend resources hardening the parts of your network that are susceptible to be taken over. In a private setting, these assumptions are sufficient even though they are weak and optimistic. In practice, this is not so much an issue.

This falls apart however when you are in an adversarial setting and when your cluster is an open and public network that anyone can join or leave at any point in time. In that model, malicious actors can also show-up and exhibit/fake any kind of failure they want (e.g re-order messages, lie on their internal state, attempt to spoof other agents etc.). In that case, we say the fault-tolerance model is Byzantine. We go one level above in difficulty from the comfortable fail-stop assumption.

That's the gist of what Byzantine fault-tolerance is about. It defines the ability of a distributed system to resist a subset of its network trying to break consensus by any means possible as long as a sufficient majority remains honest.

For years, the major result on Byzantine Fault-Tolerance (BFT) had been a system called PBFT which although innovative and first of its kind, suffered several limitations. One of them was that any node in the network needed to have a complete list of the other nodes in the network, another was high-overhead, and communication complexity.

The innovation of Bitcoin cannot be explained without providing full-context of many different topics (defining asynchronicity, FLP result etc.) but the crux of it is that it offered a way to circumvent these limitations by massaging some of the requirements and cleverly aligning incentives such that you get a system where: 1/ safety is preserved even in an adversarial setting 2/ anyone can join/leave 3/ you get some degree of asynchronicity, 4/ many other things.

I realize this cannot be a satisfactory or exhaustive exposition of all the innovation that Bitcoin introduces but that would turn this comment into x10 its current length.

Lazare• 8 years ago

Byzantine generals: N generals wish to coordinate their attack on a defending army. The attack will succeed if a majority attack at the same time, so you send messages to the other N-1 generals saying "attack tomorrow at dawn".

But wait: Some of those messages may have been captured by the enemy, and some generals may simply not agree with your strategy. If enough generals don't attack, but you still attack, you will fail. So the new plan is to send a message to the other N-1 generals saying "attack tomorrow at dawn, please reply with confirmation that you will be participate", and then if you get confirmation from at least (N/2 - 1) generals, you can attack with confidence.

But wait: Your fellow generals know that the enemy is potentially capturing messengers, and they won't want to attack if nobody else is attacking, and they know nobody will attack if they don't get the confirmation, so they need confirmation that everyone got their confirmation.

But wait: You'll need confirmation of their confirmation, and so down the rabbit hole we go.

What we end up with is a network of messengers, where every general keeps broadcasting a planned attack date to all the others, but it never able to be certain that the others heard and agreed to it. What's needed to solve this problem is a way of sending a message who's mere existence proves that a majority of generals are committed to the attack, and thus you don't have to reply to the message asking for confirmation that everyone still agrees.

Enter proof of work. What if each general would, upon receipt of the proposed attack date, perform some complex and time consuming calculation; maybe have some poets write a poem in iambic pentameter about the proposed date, and then the first one to finish attachs the poem to the message, and rebroadcasts it? Each time a general receives a new message, they'll take the one with the most poems attached, and start writing a new poem that references the attack date and all previous poems. Fairly soon you'll have a massive chain of dozens of epic poems about the proposed attack date. This tells you a couple of things:

1. All those poems are too much work for one rogue general (or the defending army) to have done. This took the finest minds of the most of the Byzantine general staff to create.

2. And that means that most of the generals must be okay with this plan, because they've spent all week writing poems about it.

3. And most of them must be aware that everyone else is okay with it too, since they've all seen all the poems everyone else saw.

The mere existence of this attack plan, with all of it's self-referentials poems attached, is proof that a consensus attack date exists, and means you're safe to attack, without needing to communicate further.

(For another, much shorter attempt at explaining the link, see: https://bitcointalk.org/oldSiteFiles/byzantine.html)

gotocake• 8 years ago

The comments seem to honestly reflect the state of the technology, its environmental impact, the annoyance factor of its extreme adherents, the total lack of a really compelling non-ideological or criminal use case after more than a decade, and a deflating bubble. The insane gulf between the promises made by the “every day brings a new breakthrough” crowd and the reality of ICO’s and Bitcoin is vast, and hard to ignore. Blockchain is a neat idea, but presently it is used in ways that are far from compelling, and I’m yet to hear of a non-hypothetical application that could change that (apart from buying drugs, or money laundering).

It’s also hard to forget the last few years of relentless evangelism, which was equal parts annoying and ethically challenged.

corv7• 8 years ago

The comments reflect the (perceived) state of the technology.

One has to admit that the reputation of the entire space has been tarnished by snake oil salesmen. For some historical context it is worth looking at countless examples such as the Railway Mania[1] of the 1840s or the more recent Dot-Com bubble[2]. For more depth one can read Mackay[3].

Some of the most promising advancements in payment channels were only published as papers in 2016[4] and are understandably still being implemented. If anything the speed at which enthusiasts are willing to deploy experimental software at their own risk is breathtaking.

Regarding the environmental impact of the Bitcoin network, while being widely derided for its energy use, it is in fact using less electricity than the major credit card networks. It is also using less energy than global gold mining. There are ways to reduce consumption should a consensus accept the tradeoffs.

The term "Blockchain" as it is currently used often refers to private chains which are in vogue with corporate stakeholders. This appears to be a solution in search of a problem–I have not been able to identify a compelling use case here either.

Most ICOs are outright scams.

It is truly unfortunate that promising advancements of micropayments, smart contracts and the world's closet thing to an incorruptible currency are lumped together with so much rubbish.

[1]https://en.wikipedia.org/wiki/Railway_Mania [2]https://en.wikipedia.org/wiki/Dot-com_bubble [3]https://en.wikipedia.org/wiki/Extraordinary_Popular_Delusion... [4]https://lightning.network/lightning-network-paper.pdf

legionof7• 8 years ago

I think that it's much harder to think of valid use cases in the US and other developed countries (not that they don't exist)

But, for the most part, our financial systems work. In countries like Venezuela, it doesn't, and blockchain is much more revolutionary.

stale20024• 8 years ago

The compelling usecase is censorship resistant financial transactions.

The fact that you have never been subject to financial censorship puts you in a priviledged position that you are fortunate to be in.

I am similarly priviledged in that I have never needed to use TOR, but I still recognize the extreme value of something like TOR brings for the billions of people in the world who live under oppressive, censoring governments.

colordrops• 8 years ago

"money laundering" is a feature, not a bug. To bucket all forms of monetary subversion as a bad is like saying all drugs are bad. There is too much control exerted by various authorities and companies over transactions and Bitcoin creates a much needed outlet.

csomar• 8 years ago

This "I don't see a use-case for my very limited life/experience/work" is very toxic.

I use Bitcoin to get paid and to pay. That is legitimate. I know a lot of people that uses it for the same reason. There is also a whole lot people using it to evade capital controls; which is modern day repression on freedoms.

Also what is wrong about buying "drugs"? Would you say the same about an encrypted messaging platform that operates in China. That the user should not use it since China did not approve that?

basch• 8 years ago

I’m yet to hear of a non-hypothetical application that could change that

shared accounting systems between collaborates. complete replacement of ap/ar and every company in a consortium not needing to keep their own, isolated, audit requiring, double entry books. the amount of duplication reduction potential is staggering.

Kinnard• 8 years ago

Working on it!

Theodores5• 8 years ago

I'm disappointed of HN comments whenever cryptocurrency topics come up.

Couldn't agree with you more, however, this story is not about a significant advancement in technology and people are reading too much blockchain into it.

This new investment product is nothing to do with 'proof of stake' or the ethics of bitcoin mining. In essence it is a fund that is backed by bitcoin that has been purchased privately without going through exchanges people know about, e.g. Coinbase.

People investing in this fund do not have their transactions recorded on the blockchain. The bank simply have bitcoin in cold storage to back the fund in a similar way to how banks used to have gold in a vault. With legacy banking the gold did not physically move every time someone used the ATM. Same here, no bitcoins get moved.

This is not a difficult story to understand. There is no need for people to be getting uppity about it and to downvote those that bring information to the story that is obfuscated by how the crypto-media have described it thus far from their understanding of the press releases made available.

billions2• 8 years ago

HN is incredibly homogenious across certain verticals, crypto being one of them. The earth is flat and you'll be downvoted if you suggest otherwise. All ideas should be up for fair debate and, at worst, let the "wrong" side choose to believe what they please, unless you think your thoughts need external censoring as well.

CaptainZapp• 8 years ago

No, I would never downvote for opinions expressed.

But I certainly downvote ludicrous and dishonest statements like Visa consumes more energy than bitcoin and here's why.

While theoritcally true here's the thing:

While one bitcoin transaction consumes 1'005 kWh of energy 100'000 visa transactions require 169 kWh.[1]

Trying to frame that in a way that Visa is more expensive than Bitcoin, energy wise, is a deeply dishonest sleight of hand, which absolutely deserves to be downvoted into oblivion.

[1] https://www.statista.com/statistics/881541/bitcoin-energy-co...

mindfulplay• 8 years ago

Well....There is a stark difference in appreciation for TCP/IP the computer science protocol versus the Cesspool that is the internet or the early AOL crap...

arcticbull6• 8 years ago

Besides the battles over efficiency (it's bad) and novelty (it's not really), there are some truly fundamental blockers to adopting cryptocurrencies. For instance, this poor Redditor lost the keys to a wallet with $40,000 of crypto in it [1]. This happens all the time. Being your own bank is literally the worst. Plenty of jokes ensued:

"It's just like the time I lost my car keys and need to buy a new car next day."

"It’s just like the time that I lost my house keys and had to move into a homeless shelter."

"It's just like the time I forgot my personal question to my 401k account and I got locked out forever, nobody could help me, and I lost the entire balance."

Unlike all the efficiency and speed questions, this part here is a stated, inalienable objective of Bitcoin and other cryptocurrencies. This is the expected behavior. Some clown designed it to work like this. Imagine grandma trying to use this. Remember that time PayPal locked your account and you were so mad you couldn't get at your $600 for a few weeks? Now imagine you lost your life savings because you can't remember your password and literally nobody can help you now, or ever again - and thats the point.

I'd imagine it'll destroy itself anyways, it seems like any random walk ends in 100% of coins lost to human inability to preserve access.

Who cares how amazing the system is technically? It's designed to be actively hostile to human users.

[1] https://i.imgur.com/RP7ighy.jpg

mrhappyunhappy• 8 years ago

I comment on these issues on Reddit all the time and get downvoted to hell. People there just don’t want to hear it.

whiskers08xmt• 8 years ago

Of course having access to the private key, need to be the most basic way to access funds. It's the only thing that's guaranteed to be uncensorable, while minimizing the requirement of trust. It is a big responsibility though, and should not be taken lightly. The crypto-currency community is partly at fault here, for blaring memes like "If you don't control your private keys, it's not your Bitcoin", without any regard for whether or not people are ready for that responsibility.

That being said, there are number of ways you can store your crypto-currency, with varying degrees of trust-minimization:

- Use a multi-signature smart contract wallet, where a master key has power to move the money. If the master key is lost, the money can be moved by X out of Y keys signing off on the transaction. You can then distribute the Y keys to your trusted associates, preferably without telling them who the other key-holders are.

- Use a dead-hand smart contract wallet, where the money can be retrieved by a trusted associate, if the dead-hand switch hasn't been activated within Z amount of time. Can be combined with the above, in case further trust minimization is needed.

- Store your crypto-currency at a FDIC exchange. Pretty much the same model as the banking world. This really should be the go to way for the average Joe, as it mirrors what you currently can expect from online-banking.

michaelscott• 8 years ago

It's also incredibly important to note that Bitcoin (and really all current cryptocurrency implementations) are still very much in their early stages, like a child intuitively understanding the spatial dimensions of the world by bumping into furniture.

The environment probably needs more rigorous and academic consideration in order to legitimise it (if for no other reason than that it does contribute to comp sci theory at least).

I also do not think that Satoshi Nakamoto intended for his technology to be the last say in the crypto space. The implementation was given to the world to iterate on and improve the tech (just like every other tech ever). Environmental impact of mining, inefficiency, scalability etc. should all be considered candidates for improvement as opposed to armchair criticism alone.

simias• 8 years ago

I don't think anybody denies that Satoshi's Bitcoin whitepaper was novel and extremely clever. At least I don't. But being novel and clever is not enough to justify the "frenzied speculation" that followed IMO.

You seem to root for cryptocurrencies so I can understand your frustration when faced with naysayers like me but understand that the feeling is mutual. Ten years that we hear the same promises, ten years that we're told that "it's being researched", ten years that we only see half-assed solutions to fundamental problems that create as many issues as they solve (e.g. Segwit, PoS) or basically give up on the whole ideal of cryptocurrencies by introducing centralization or trusted peers (Ripple and many others). Ten years on, billions of dollars speculatively invested, "clever people" supposedly working on these issues and what do you have to show for it? People basically reinventing the current banking system on top of an inefficient, wildly speculative asset. "Fidelity just made it easier for hedge funds and other pros to invest in cryptocurrencies". New ways to speculate with cryptocurrencies!

The conversation is frustrating because all's been said. We all know where we stand and at this point the only way to move forward would be for the cryptocurrency scene to come up with something truly novel and useful, not something that reinvents the current banking system but worse.

Ten years on, and with as much intellectual honesty I can muster, I still see only two worthwhile uses of cryptocurrencies: buying drugs online and serving as some sort of notary to timestamp documents. For these two things Bitcoin is actually very competitive. For the rest as far as I'm concerned it's either "reinventing the wheel but worse" (re-creating current infrastructure only less efficiently) or "software cold fusion" (pipe dreams that would require major breakthrough in computer science to achieve their stated goals).

Frenzied speculation brought about inadvertent side effects but these should not detract from the fact that significant advancements are continuously being researched and implemented.

The frenzied speculation is basically the only actuality surrounding cryptocurrencies these days. Maybe this research you speak of is going to bear fruits and revolutionize the world as we know it or maybe it's going to fizzle out gently as hype dies. This is not a small startup in a garage, this is supposedly a trillion dollar market cap industry, "we're working on it" doesn't cut it for me anymore.

esotericn• 8 years ago

"If you don't believe me or don't get it, I don't have time to try to convince you, sorry" - Satoshi Nakamoto

Our job is to keep on grinding to bring these things into fruition.

It's a shame that scammers in the space have turned most technologists against Bitcoin. But really, there's nothing that can be done other than to keep pushing.

Keep up the fight. If it doesn't work, it doesn't work. But really, this mud flinging is distraction. And yeah, there's a bloody lot of it.

Novashi• 8 years ago

We don't have to keep current cryptocurrencies around just because there was a CS breakthrough in its first implementation.

Should keep all of these shitcoins and ICO scams around because 1/100 might be legit while 99/100 of them do real damage to investors? Or do you want to keep them around because a CS breakthrough being implemented takes precedence over enforcing financial fraud?

helen___keller• 8 years ago

Why wouldn't people be irrationally angry at crypto? Every mainstream use case marketed online has turned out to be an extreme dud.

Online payment system through bitcoin? High confirmation times, sometimes high fees, and very few accepting vendors

Deflationary store of value through bitcoin? Nope, just speculative frenzy.

"Ethereum World Computer"? More like platform for ERC20 token fraud. Top dapps get low thousands of users, so Etherum has thus far failed to turn up anything of note to the mainstream.

"Will be ready for mainstream once (SegWit / block size increase / lightning / PoS) is done"? None of these have materialized into any mainstream value.

On top every mainstream use case being a dud, the goalposts move every single time there's a discussion about crypto. If you bring up the transaction time, you get "it's supposed to be digital gold". If you bring up the speculative frenzy, you get the "it's supposed to be a foundational technology, not immediately useful". It's exhausting, and it's predictable that there can be no good faith discussion since the speculative price varies based on public opinion & new user buy-in (ie shilling galore).

It's great that some people in Venezuela have found blockchain actually useful for avoiding the collapse of their currency, rather than hypothetically useful like it is for the rest of the world. Personally, I would be happy to not hear from any blockchain project ever again unless it has say 100,000 daily users that actually use it "as intended" - say as a payment system rather than as a speculative investment, or as a decentralized computing platform rather than as a speculative investment disguised as a token.

DennisP• 8 years ago

I don't mind the skepticism. What's disappointing to me is that the comments usually rehash the same tired arguments and ignore the actual article. What's the point?

Immortalin• 8 years ago

Time to add crypto support to KloudTrader :)

https://kloudtrader.com/narwhal

SideburnsOfDoom• 8 years ago

In a gold rush, you get rich by selling shovels. You don't even have to have a strong opinion on whether there really is any gold to be found, in order to see the market opportunity for shovel sales.

tim3332• 8 years ago

They don't say if the custody is insured against loss/theft which has been a sticking point for institutional investors. They basically can't stick your money in unless it is, and none of the existing custodians have been. I can see why insurers are reluctant when it only takes one or two insiders to transfer the coins to some account they control and say oops we've been hacked.

pastor_elm• 8 years ago

great time to get in on the dip

Fidelity launches trade execution and custody for cryptocurrencies

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