Do Cryptocurrencies Provide ANY() Real-Economic Value at All?

In controversial-but-legal industries (think adult entertainment, gambling, cannabis), it can be difficult to get traditional banking and payment processing services that are taken for granted by more normal businesses. I've seen crypto used in this context for B2B transactions (paying for IT services).

Also, it's a decent option for international transfers. International wires are more expensive (even when compared to current BTC tx fees) and slow (2+ business days). And if either the sender or the recipients doesn't have a bank account are reduces to Western Union or similar, which is simple robbery. I don't know what SEPA Instant Transfer Credits are, but I suspect you need a bank account.

The original use case related to international transfers was remittances... ie, immigrants sending money home. In reality I suspects it's used much more often for getting money out of certain countries like China that have set limits on outgoing transfers.

So far, I haven’t seen any.

Consider an NFT with smart contract which apportions a percent of each future purchase to the original seller.

Now consider a stock issued by a company as the NFT.

With traditional stocks, the issuing company only obtains funds one time. All future value gains are captured by traders.

Finally, consider issuing stock that as NFT with the contract above.

In this model, as a stock rises in value, both the company and traders gain.

I don’t think blockchain has much real world value in a legal sense.

We’ve been running various pocs on it, with major and minor suppliers, crypto-people? (not sure what to call those techie/artist/idealists or what they call themselves) and the universities for the better part of two decades now in the European public sector. We’ve never been capable of finding a reason to use it. I do get the argument about stuff like land ownership in more corrupt countries, but you it still sort of turns into an utopian dream, because no-one in those regimes really care if you’re right. All the proof in the world doesn’t stop people with guns from taking your positions.

I think Maersk and it’s containershipping business, and it’s blockchain based proof of container authenticity is one of the few examples where the technology actually works better than anything else. And that’s mainly because Maersk itself is big enough, and has big enough legal support, to refuse containers that are tampered with. Sort of like the corrupt government situation, but inverse.

For finance it has no real value for legal purposes, again because trust is sort of worthless when your authorities aren’t with it. You can’t deny it’s “get rich quick” schemes of course, and it’s extremely valuable for white-washing money, dealing with black-Market goods and various forms of fraud. Which isn’t really value to dismiss, considering how big a GDP international crime has.

Time is more valuable than gold. Crypto saves time. Some experiments to test for yourself and measure the time elapsed:

pay someone in a foreign country. Do it again except at 2am on a Sunday.

Wire someone some money. Now do the same outside bankings hours. Now do the same but try and do a test transaction first.

Try setting up a new company. Add a vesting clause. Now handle actual distribution of dividends. Measure the time and legal fees in the non crypto version.

BAT - basic attention token is paid to you if you enable ads in brave browser. The benefit here is that it's anonymous (at least to the point when you want to cash-out).

If you live in Turkey right now and want to move capital out that cesspit, cryptos are a pretty good option (even if they've just been made illegal).

you cant handle the truth

Q1: The benefit is that as long as you are connected to the internet, you can make the transfer. It doesn't matter if your bank or your police wants to stop you, you can do it.

Q2: Because when central banks become unreliable, or hyperinflation kicks in (Venezuela, Greece), trade using the central bank currency may become hard. You wouldn't transfer USD→COIN→EUR, but USD→COIN, and then use the coin directly.

Q3: Laws are not computer programs. They are ambiguous and execute in the brains of a few humans. Smart contracts are precise, and they require the entire population of coin users to disagree with the computed outcome.

Your conclusion does not take into account the case of not trusting government institutions.

All your arguments has this implicit assumption of a central authority that you trust to do its job:

  - "SEPA is pan-European credit transfers". Emphasis in  "European". Good luck _reliably_ sending money to China or across Atlantic _in_several_days_. Reliable 10s is a dream there.
 
 - "Every country already has its native currency." Emphasis on "country". With a central bank that manages the supply. 

 - "All (democratic) countries have courts in place." Again, emphasis on "countries" and "democratic" (which you obviously felt the need to put in).

The fundamental technical innovation of cryptocurrencies is permissionless decentralized consensus - you don't need a trusted central authority to execute transfers and contracts. That is (in my opinion) where the fundamental "usefulness" of crypto stems from.

While it's understandable that some could write this off as trite, it's the best way to obtain high-quality illicit substances and to sell them through the internet.

This is very important to some people and the current economic systems don't allow that to occur. It's "real" economic value even if you don't think it's right.

Yes, it shields you against your own government by giving an alternative they can't stop or ban.

In some parts of the world, government is hostile towards their own population, either by incompetence or malice. Debasement of the national fiat currency is theft perpetrated by the government and crypto provides an alternative for that.

Can you just use US Dollars? Sure you can. But your government can search you for the bills. Or they can block the specific website you're using or the US banks can be hostile towards citizens of your country (Neteller, skrill and several others outright banned Venezuelan citizens, and some US banks are making difficult the process to open bank accounts)

But how about volatility? Sure is a problem. But with fiat you know is only going down, at least with crypto it can go up.

Is always interesting seeing the threads on HN on crypto and how it never considers an actual hostile government.

Did PayPal provide any real economic value at all? Shouldn't credit cards already provided everything already?

If you agree PayPal did provide real economic value, you admit the system before it was imperfect.

So PayPal fixed the last hole in the system?

I think there are a very few projects out there with actual working products that provide real economic value.

VeChain [0] for example, has been quietly establishing itself as a viable solution for supply chain transparency [1]. Walmart uses VeChain through its Food Traceability Platform [2].

[0] - https://www.vechain.org/

[1] - https://seekingalpha.com/article/4415383-vechain-is-blockcha...

[2] - https://traceability.walmartmobile.cn/walmart/p/100074210400...

I got rich with Bitcoin, the value in my life has been quite tangible. I live in big house, drive a nice car, I don't have to work unless I want to. This is how I would pretty much define value.

Q1. by accepting and preferring BTC as a payment for my services, I was able to retain better value/purchasing power from my labour long-term. By changing my fiat currency to BTC I was able to also increase my purchasing power. Clear value to me. I don't know if this has some externalities and don't care really. My transactions are legal and counterparties have been as happy as people in typical business transactions are.

Q2. It doesn't have to exist, it happens to exist and you can choose not to use it.

Q3. "Smart contract" is a marketing term and "smart contracts" are not replacing traditional courts in any sensible way. The whole claim is just nonsense (there is much bullshit in crypto).

Q1. I don't live in Europe. Wire transfers from my US bank can only be sent domestically, cost me $20, and require me to fill out a form and then stay up until 2AM so that a person can call me on the phone during business hours in the US and I can confirm that I did in fact fill out that form. Wire transfers from my Japanese bank are more reasonable but cost 10000x as much money to send and (under ideal conditions - during business hours long before closing on a weekday) take longer to settle than modern cryptocurrencies.

Q2. Why should Apple stock exist when we already have dollars? Why should Brazilian Real exist when we already have dollars? I wouldn't trade USD for BTC for EUR. I would probably trade USD for EUR directly. As a consumer, the best place I can do this is FTX, a cryptocurrency derivatives exchange, because they provide end-users with the extremely competitive forex rates of a Hong Kong bank's OTC desk. The second-best place is probably IBKR which provides extremely competitive rates because it's literally a forex broker but takes days to wire money in and out. The third-best place is probably Shinsei Bank, which is one of the two most popular banks for foreigners in Japan and provides suspiciously good forex rates compared to all other consumer banks in the world.

Q3. "Smart contracts" are not really a replacement for the legal system. They are, at least for now, mostly a way to build non-custodial versions of traditional financial products. Again, this is sort of like saying "Why do we have oil futures and SPY puts when you can just buy oil or sell SPY?"

Re: Conclusions: Ok, but did you try to use the internet to let your US customers pay you dollars which you would then give to your US creators who create pornography for your customers? How many providers accepted this proposal? What fees do they charge?

The potential applications of cryptocurrencies are far-ranging. Sadly, however, the current actual applications seems to be mostly just get-rich-quick schemes and highly speculative investing that's stimulated by the extreme volatility.

If the crazy stuff settles down, it might maybe someday become an actual currency that people can use to exchange legit goods and services safely. Currency should be boring.

I wonder a lot if the crazy aspects of crypto currency are by design or if I utterly misunderstand even the fundamental nature of currency. For one thing, why have the computational simulacrum of mining? Why does crypto currency NEED to use outrageous amounts of power solving puzzles to "mine" bitcoins? Is this manufactured scarcity really needed to bootstrap it as a currency? The white papers I've seen don't seem to address that kind of stuff, but are perfectly happy to obfuscate the "why" aspects.

There are some test applications and fringe uses cases, some of which are mentioned in this thread, but I've come to the conclusion that crypto is so early that's is more of a movement than anything else. It's a movement to 1. cut out the middlemen and make the same financial ecosystem globally accessible to everyone and 2. make the financial ecosystem programmable from the ground up without the need for clunky add-ons.

We're far away from both because, like you said, countries, governments are regulations are not going away anytime soon. But I do think it's inevitable that things will change and "global programmable finance" becomes the standard. I think it will follow something like Planck's principle [0] - it's not going to happen because people are going to be convinced by crypto, but because the next generation will adopt crypto as more of a default.

At least for me, that's the reason I'm involved in crypto. I can't think of a tangible benefit I get from transacting in crypto, but I would much rather live in a world where countries, governments, and banks are less powerful and more transparent than they are now.

I think in 100-200 years we may look back and ask ourselves how we could ever live with inefficient and corrupt governments, financial, and legal systems that are based on geographical locality instead of them being internet-based. We probably won't be using the current incarnation of crypto, but I doubt the current institutions will survive, and crypto is a step towards that.

[0] https://en.wikipedia.org/wiki/Planck%27s_principle

Currently much of the value is not seen until it's too late.

ie: If Bitcoin had existed in the 1930's many Jews could have fled Nazi Germany with their life savings.

As for other platforms like Ethereum it's more about trusted middleman disintermediation. You put you money in a bank to receive 0.5% APR while they lend it out 3-10%. Why the spread? DeFi cuts out the fat and replaces it with protocols to pass more on to both sides of the transaction.

The ultimate disintermediation is governance. With strong cryptography and smart contracts new forms of governance are possible such as liquid democracy.

Similar to representative democracy of today except if you don't like how your representative is voting on an issue you can veto and cast your own vote. You can also choose which representative to delegate to rather than be being forced a rep by majority.

This all sounds like platitude, but what these all share in common is enabling individual freedom and in a world that is continually eroding individual freedoms, crypto begins to look increasingly more valuable.

The real value is in the democratization of the control. Sure no crypto network is 100% in this realm yet, but all of the reasons you see on this page tie back to the fact that central regulatory bodies are both bad for innovation, and bad for personal privacy.

I don't need a government, bank, or anyone besides the other side of my transaction to be involved in it.

If you, like some of us, live in a country where the government of the day can seize your bank accounts because of your political views, storing your assets as crypto has real-economic value.

For me the only utility lies with the likes of Sia, Filecoin etc. To an extent doing to storage what AirBnB does to homes.

Cryptocurrency provides economic incentive to support a blockchain, and a blockchain provides support to a decentralized, distributed service.

For example:

1) Money transfer - with no central point of failure or central point of control, a blockchain database provides trustless support to verify and maintain a history of transactions. But to do the work, economic incentives to workers must be applied.

Example: Bitcoin

2) Storage - once again, no central point of failure or control, with a blockchain providing the history and data regarding what is stored, and with cryptocurrency providing economic incentive for someone to provide storage to the network.

Example: Siacoin

3) Contracts - trustless contracts or escrow, maintained in a blockchain database with code for execution maintained on the blockchain as well. Verification and execution of code is done by workers who are incentivized by cryptocurrency.

Example: Ethereum

Why use cryptocurrency instead of USD? Because USD isn't electronic and is heavily regulated. As much as we like to think our money system is electronic, its really only hacky applications on top of our existing banking system. I used to work at a very large bank in the payments processing division, and you have no idea how many times they screwed up payments across the entire world. Sunday morning deployments often involved double-charges, missed charges, and overall screwing up virtually every merchant in North America. The only reason our monetary system hasn't collapsed is because people work very, very hard to fix all of these hidden failures. Cryptocurrencies remove the human element and provide a more efficient, error-free system.

Globale employment of digital workers is a breeze to do with a fast blockchain based solution. The workers can be onboarded using their wallet, their contributions can be logged on the blockchain, and their rewards can be directly paid out to their wallets. Their work can be analysed without the need to know which gender they have or where they come from. This opens the door for unbiased reputation and reward schemes. A true equaliser.

This is an application of blockchain technology that becomes much more expensive without it. The hassle of hiring people around the world, paying them, and rating their work objectively is expensive and very difficult.