Yea, who would have thought that you don’t want to build a venture on top of a currency. There is no other use case in blockchain than transferring wealth plus some quality of life features like time locks, multi signatures etc.
it seems he missed how those quality of life features are viable businesses on their own
there are plenty of services taking a cut from people trying to use this
multisender.app - pay/airdrop multiple people, thats it.
team.finance - broadcast to your community that you locked your tokens, instead of just saying so.
they solve a problem, they collect a cut from volume of transactions, they aren’t sitting in business development meetings around San Francisco because that’s reserved for grifters
I think OP was perfectly willing to acknowledge these other use cases:
> Crypto speculation is a vast and fast-growing market, while other use cases are small.
Simply put, cryptocurrency has turned itself into a side-pot for disillusioned and desperate investors. The 'dream' that you're being sold is the same one we pondered 10 years ago - if we add enough bureaucracy, a democratically-controlled currency is feasible!
Time has proven this wrong. Every attempt at making the '15th competing standard' ends the same way. Nobody is putting their money in cryptocurrency, and arbitrary architectural rehashes like the Ethereum Merge isn't going to drive adoption.
I think crypto pundit narratives are absolutely worth criticizing and making fun of
I can also observe that outside of crypto, speculation is a vast and fast-growing market, while other use cases are small in comparison.
Financial services is a big sector, servicing an even bigger pile of assets, led by an even bigger notional value of synthetic assets and derivatives.
and every other sector is smaller.
so the outcome in the crypto space not only fits one of the original narratives of crypto, it also makes no sense how uninterested, alongside disillusioned, people hold crypto to a separate impossible higher standard.
Crypto isn't necessarily held to a 'higher standard', though. Not a single cryptocurrency is required to be audited by independent parties to confirm that there isn't deliberate wrongdoing. There are no encryption or privacy standards to be held to, cryptocurrency doesn't have ISO-compliance checks or even a concept of red-team/blue-team. On an individual basis, these features might seem desirable. At a higher level (eg. the financial services sector), every last one of these is a deal-breaker. There isn't a CFO on the planet that wouldn't laugh you out of the room for suggesting crypto as a replacement for Western Union.
Pretty much the only advantage it holds over TradFin is transparency, which isn't a direct upgrade. Distributing a main ledger encourages rampant speculation, which leaves most cryptocurrencies as awful stores of value. The outcome of the crypto space is as-expected, IMO - any deregulated sector will inevitably be a race-to-the-bottom. I too like to argue in good-faith for the benefits of cryptocurrency, but comparing it to the dollar is like complaining that your orange doesn't taste like an apple. Cryptocurrency simply cannot exist as a suitable substitute for a state-backed currency without abandoning everything that makes it unique.
these are strawman arguments, that I think can all be talked about individually, and this is all for you to pick apart one dream you heard about replacing state backed currency. This is one of the narratives I was referring to as worth making fun of.
so can you try rewinding and responding again, putting that particular thing aside and responding to the ways people use the amount of speculation in crypto to ignore the amount of speculation in the parallel economy? It functions accurately to power a permissionless economy, rampant speculation is because humans are in both. That means it’s working as a platform.
Regarding what dream or narrative that is from: There were threads where people talking with Satoshi realized contracts and derivatives could be executed on chain and even collateralized with the cryptocurrency, and this has happened and will continue.
In practice, the most popular cryptocurrencies like Bitcoin and Ethereum have been audited by more independent parties than almost any other software. No auditor would have passed up the opportunity to be the one who discovered a major hole in Bitcoin.
The first two require centralized governance to function, so putting it on a blockchain is useless. Voting requires anonymity, so putting it on a blockchain is dangerous.
Neither of those require centralized governance (see Handshake, see Uniswap v2) and you can get anonymous voting on-chain as long as you have a registry of voting weight (see a variety of ZKPs).
It amazes me that on this forum for technologists, so few are familiar with the technology... and still try to tear down crypto so passionately.
It amazes me that crypto-fanboys simply refuse to think through the failure modes of their toy projects. If you put your domains or your money on the blockchain, and you lose your keys, your domains or your money are gone with no recourse. This makes it obviously unusable in practice (keys get stolen all the time), and the only solution is centralized governance. This is fundamentally the oracle problem, and adding more and more layers of bullshit complexity won't fix it.
Some ZKP-Voodoo may provide weak anonymity (the votes are not immediately obvious), but the voter can still prove to a third party who he or she voted for. Obviously this makes it vulnerable to vote buying and voter intimidation.
Hm, by that logic we shouldn't ever do cryptography at all I guess? I mean keys get lost all the time, what's the point?
On ZKPs... seriously, you're calling cutting edge advances in cryptography "voodoo"? Do you not realize how anti-intellectual that is?
There are plenty of proofs for truly anon voting, without auditability if that's what you so desire. More protocols include it than not because it turns out people want to be able to audit elections! The difference in this system is users have to volunteer the information, rather than rely on an election operator.
Just like how Skiff has being using other blockchain projects such as ENS domains as well as decentralized P2P software like IPFS to help build their product offering. [0]
After checking their github repos I’m only seeing a web mail client with metamask for auth instead of user password. It’s using a normal graphql api. Very decentral. I guess web3.0 only requires a „login with metamask“-button now.
Oh, and about the cool, very decentral drive on IPFS thing: the drive is still only on a single server, pinned by a single server. That’s how IPFS works. It it would work otherwise and they didn’t have to actually pay their storage bills, they wouldn’t limit the storage to a mediocre 10GB less-than-gdrive shit tier.
Sign in with private/public keypair instead of Google auth or per-site auth is a pretty incredible advancement of authentication on the web.
IPFS does not need to be single drive. The user has the option to self host. The original platform also can go insolvent and the user can pin through another service.
The best theory I have heard for why crypto is so popular besides gambling is that it is fun to think about. True engineers love working in crypto since it feels cutting edge and is more advanced than other technologies.
This might continue even after pump and dump, but will no longer be lucrative.
I think good engineers (critical thinkers + goal-oriented problem solvers) usually give up and find a better tool (i.e. without an blockchain) for the job after not too long.
There is similarly no shortage of “architecture astronauts,” and whether the greed fuels the use of the wrong tool or vice versa — it probably doesn’t matter in the end.
>I think good engineers (critical thinkers + goal-oriented problem solvers) usually give up and find a better tool
Say it one more time for the people in the back!
A lot of us are still refining/discussing the same core concepts, cryptography, distributed systems, disbursement, consensus, just in different fields without the 'coin' component attached. A lot of this tech in crypto was nothing new (blockchain, proof of work, hashing, distributed databases), but the combination of them presented new and interesting hurdles to overcome. As time passed we saw new utility for these concepts to solve other interesting problems, but the entire time being a researcher in the cryptoasset space has felt like trying to be a 'serious engineer' while your cubicle is located in a casino floor. You can't make a commit or push a draft paper without it being a market-moving action, that is a social element that a lot of industry theory just doesn't have nailed down yet, and as engineers can be very stressful. Most of us just want to solve problems and build cool things, but its hard to create novel solutions at financial gunpoint.
Really? Sure, reading the whitepapers and playing with something new for a while has been fun, but "true engineers" will realize pretty soon that there's always a better tool for every. single. usecase.
I've sold all of my crypto for a while because it just felt like gambling. Recently I listened to the rational reminder podcast [0], where they dug up some studies that basically show that people investing in crypto think they have high financial literacy but are measurably financially illiterate. Note that the bar for financial literacy really isn't high, they discuss that in the podcast too. That really cemented my opinion about crypto.
Up front: I hate crypto. I think it is stupid and any use case it has can be solved much more efficiently with existing tools.
To me this blog reads like post-breakup copium. Dude just spent two years of his life and who knows how much money trying to find a market, only to realize there isn’t one. But he is sure someone else will find it! The technology is good!
No it isn’t. And no they won’t. Admit when you are wrong and serve as a lesson to others.
I hate cryptocurrency too, but claiming that P2P technologies aren't good or don't fix problems is pretty laughable. Programs like Bittorrent and Soulseek have left media corporations quaking in their boots for decades. Cryptocurrency, despite all of it's shortcomings, is insanely resistant technology and even the most despised shitcoins will probably outlive your youngest living relatives. It's fine to loathe it, but the underpinnings of P2P technology are absolutely phenomenal, and increasingly relevant in a world where protocol trumps products.
The real conundrum of cryptocurrency is that the technology is awesome, but the social implications of ripping the safety rails off the free market is so dire that only a disillusioned nerd could advocate for it.
Peer to peer tech isn’t exclusive to cryptocurrency shenanigans. Neither is cryptography. I don’t hate these technologies. I don’t think they are useless. Quite the opposite. But the cryptocurrency/blockchain “stack” is a solution in search of a problem. I personally believe any good use case for this stack will be so hyper specific you’ll need to pay others to run copies of he ledger so you can have the consensus mechanism. But then you run into privacy issues and are better off duplicating your standard DB to some audited write only instance.
There's a big difference between saying cryptocurrency (or, more broadly, blockchain) doesn't solve real-life problems and saying P2P systems don't solve real-life problems. You appear to be attacking a strawman.
> Bittorrent and Soulseek have left media corporations quaking in their boots for decades
did they? From my understanding availability of piracy was not really the issue behind the decline in revenue e.g. we still have all p2p infrastructure going on but the media revenue is through the roof - because of streaming.
Also to me it seemed more people used file serving service e.g. megaupload to download movies / music rather than torrents..
> and increasingly relevant in a world where protocol trumps products
does not seem to describe my experience at all. Most things that I and mainstream users tend to use are based on closed products rather than protocols... I hope the trend will disappear but it does not seem like it.
> Up front: I hate crypto. I think it is stupid and any use case it has can be solved much more efficiently with existing tools.
There are no alternative to a decentralized currency. Personally, I believe that the world would be a better place with a neutral/decentralized currency but I recognize that not everyone shares this opinion. I can't say that I "hate" fiat though, that seems a bit too strong.
With the recent Ethereum PoW -> PoS move, I suspect there isn't much profit to be had for anyone except large ASIC farms, so my prediction is a bunch of people are currently discovering the crypto is too corporate for them.
As for the substance of the complaints, yes any unregulated international industry is going to be an ongoing scam. That won't change. We've seen what proud names like HSBC or any other international banking corporation gets up to - law means little, crooked schemes are common. Take away the government choke-point and all the classic schemes will come back.
But people are sorely underestimating how much long term good is going to get driven by this market. It is always going to be one step from collapse, and in 20 years we're going to do a compare and contrast to traditional international banking and discover crypto is just better. Bitcoin has so far weathered rising interest rates far better than I predicted and is looking like quite an acceptable asset for a diversified portfolio. The next crisis is upon us and the governments of the world are going to start haircutting accounts if inflation isn't robbing people of enough money. International capital flows are at risk with all this strife breaking out.
They can't stop crypto, at this point it is clearly here to stay. It is going to be transformative and probably for the better. No-one likes capitalism either and look how much wealth that ended up creating - people only stopped complaining after the wealth creation dismantled and humiliated all the competition. The use cases for crypto is circumventing regulation and sure all the authoritarians can complain, but it'll be an embarrassment to see how much wealth that will create in time. Bad luck if you want tight government control on who I can send money to, it isn't technically feasible any more. You'll have to physically stop me.
What do you think capitalism means? You say nobody likes it, but also that it's what creates all the wealth we have... How are those two ideas compatible?
The people with the capital get to make decisions based on owning capital.
> You say nobody likes it, but also that it's what creates all the wealth we have... How are those two ideas compatible?
Why would they be incompatible? "nobody" is exaggerating but look at the protests against the 1%, general criticism of the existence of billionaires general efforts to move decision making from capitalists to government agencies (include trends in tax policy and government spending) and background complaints about how society is too materialist. Entire governments started out by killing all the capitalists they could find (China & Russia spring to mind, I doubt they are alone). In any major industry you'll find people mounting active campaigns to try and neuter the capitalists - even sometimes in food where I'd think by now people should have learned the lesson that the alternatives don't work.
You don't have to go very far to find someone who objects to the idea of making any given decision based on who has the most money. People by and large seem to find the whole idea distasteful. In my opinion rather similar to how they dislike the idea that burning energy to prove wealth.
Yeah, though I argue that isn't much of an insight. The whole point of crypto is resisting the law. It was a project by people who objected to large banks being given cash bailouts and didn't feel like challenging that through legal processes.
> Bad luck if you want tight government control on who I can send money to, it isn't technically feasible any more. You'll have to physically stop me.
As I've said previously, this ends when the second plane hits the tower: once it becomes useful enough for terrorists and sanction busters, it also becomes radioactively dangerous to interact with.
Even the ideologues are jumping off the crypto ship now?
The author admits that he couldn’t find any worthwhile products or use cases in crypto, but continues to believe in it because he’s a “fan of Hayek and Von Mises” and the “ideas we read in The Sovereign Individual [..] are worth fighting for.”
It’s no different from 1970s intellectuals who felt that, sure, the Soviet Union had some problems, but it would eventually work out because “I’m a fan of Marx” and “the ideas in the Communist Manifesto are worth fighting for.”
Cryptocurrencies are only tertiarily a technology project. The essence is the combination of entirely theoretical ideology and confidence tricks. And that’s what makes crypto so similar to a Scientology-style cult.
> "As a fan of Hayek and Von Mises, I was fascinated by the idea of a currency free from the government's manipulation."
Monetary systems are so crucial to modern civilization that if you do set up a 'government-independent currency' then whoever has the most control over that monetary system themselves becomes a kind of de facto government. This is seen in historical studies of black-market currency systems, where things like a bottle of rum or a kilo of cocaine became effective measures of exchange (leading to the rise of organized crime in the USA in the 1920s, or the rise of drug cartels in Latin America from the 1970s onwards, which acted in reality as alternative government systems).
So, who controls bitcoin? This article points to whales and mining pools:
Money after all is a social phenomenon, and only has value because people agree it has value - although that is as true for $USD and gold as it is for bitcoin. This then raises the question of who controls those monetary systems (hint: the control system in all cases is not at all democratic in nature).
Probably the optimal global currency system (if you value stability) is the basket-of-currencies approach, in which the $USD loses its supremacy and monetary values are tied to the average values of the basket. This requires some understanding of how global central banking operates, and for that there's no better source than Nomi Prin's Collusion:
This is my favorite fake, no details article to indirectly defend the ultimate of all ultimates of temporal power - the money printing press.
OK BRO!
GOOD BYE!
Despite never touching crypto up until now, I feel it finally has a solid use case.
ETH’s merge along with the existence of L2 networks means it can put western Union out of business for international same party (sending money to yourself) money transfers, The KYC on both sides not withstanding.
Hell even NFTs —- the clearest feverdream tinted scam —- had a use case after all: tokens for securitizing and allowing speculation in membership networks (see Gary V coin).
Sure someone could have just made a much less wasteful self-hostable/SaaS secret club membership app but NFTs seem to have found exactly one use case as a membership mechanism du jour which enables speculation (importantly, giving people a way to profit from their early “investment” in one creator or another).
At the risk of stoking the ire of HN, does anyone still think crypto does not have a use case?
There are a lot of things it is not and has not turned out to be, but IMO the biggest issue was needlessly destroying the earth and that seems to be all but solved now.
Of course, FedNOW may prove to make crypto for money transfers an even worse option relatively but… I think we may be at the start of an actual crypto boom (where there is actually Utility underpinning ETH’s value)
Another thing I find quite exciting is the idea of trading shares via a blockchain.
While obviously becoming a financial exchange is a key choke point for innovation because of the requirements, I can imagine a shadow network based on settlements of contract negotiated with blockchain with small trusted networks of investors.
All you need is to request the stock certificates and you can actually sign them over (let’s consider this an unorthodox “settlement”). Does this mean that we have a substrate for person to person hawala systems (which are normally outlawed by the government?)
I've been hearing the Western Union usurper argument since 2010. I doubt any of the people making those arguments actually use those services.
There's an ease of use aspect to it that crypto boosters simply cannot understand, because they are used to dealing with a dizzying array of exchanges, cold wallets and nonsensical alphanumeric strings, and think that this is the UX that regular people will accept.
I absolutely agree it’s not ready for regular people to use.
> I've been hearing the Western Union usurper argument since 2010. I doubt any of the people making those arguments actually use those services.
I know you weren’t talking about me but I’ve actually used western Union, and while it wasn’t bad, it wasn’t a particularly pleasant nor pain free experience either. Wise is EXCELLENT though.
More importantly, money exchangers and check caching places extract a TREMENDOUS toll on people who are forced to use them, and the prospect that could change is actually pretty good.
Up until now the main issue was the wastefulness and lack of scale/purpose fit of blockchain. It seems like ETH is poised to solve those things where BTC was stuck due to the interests of miners.
There are problems, but it really does feel like blockchain might have just finished it’s infancy (the scam era, let’s say).
Maybe I should publish something longer form on this. I had something written then chose to self censor
I would suggest you do write something up, because there is a lot of myopia among the pro-crypto crowd about the real-world challenges of cross-border fund transfers. There is often an enormous difference in the tech-savviness of people that send the money, relative to those who collect that money. Crypto assumes similar levels of knowledge between both parties, which is how you end up with people sending ETH to a BTC address, causing it to fall out of the money circulation entirely.
I too have worked in the money services business, so I know the good and bad about these companies. They are by no means angels, but they work within the regulatory systems of the countries in which they operate and that creates costs and bureaucracy. But it also prevents problems that most of the crypto sector likely doesn't see, due to lack of real world logistical experience.
> I would suggest you do write something up, because there is a lot of myopia among the pro-crypto crowd about the real-world challenges of cross-border fund transfers.
Will do! I am confident I have the same misgivings but the base assumption here is that cross border fund transfers are hard, but crypto gives the system a chance to be rebuilt (with technology that's much more traceable, as well) -- without governments funding development and doing the political wrangling and horse trading to get on one system.
I'll try to lay this simpler thought out even simpler (for my own sake) -- If nation X and nation Y trust Coinbase, and have negotiated how to off ramp, and Coinbase satisfies KYC with both countries/participating institutions, we can theoretically do away with SWIFT + TARGET2 or VISA at the end of the day. What Coinbase as done is also not so unassailable (where as VISA very much is), so there will be many Coinbases, and this will drive prices down.
> There is often an enormous difference in the tech-savviness of people that send the money, relative to those who collect that money. Crypto assumes similar levels of knowledge between both parties, which is how you end up with people sending ETH to a BTC address, causing it to fall out of the money circulation entirely.
I agree -- I think this assumption of Crypto is optimistic and wrong. But, I also see this as opportunity -- this is a problem to be solved. Crypto needs people willing to do the hard work of building reliable, trustable, and reversible transactions, and essentially re-imagining what transactions, contract enforcement, and escrow look like without the threat of violence from one government in particular.
Maybe people shouldn't manage their own crypto wallets at all -- maybe they should be managed custodially -- that's an industry that needs to spring up. I know this is peak crypto-bull-speak but I assure you I am not a crypto bull (I literally do not hold any) -- but I can really imagine the recreation of the modern bank. An entity you trust to manage your crypto and help you make purchases/safeguard your money that takes drastically less fees than the modern bank. I could Trust and reputation becoming paramount, moreso because there is less recourse.
> An entity you trust to manage your crypto and help you make purchases/safeguard your money that takes drastically less fees than the modern bank
I am interested to read your article as I am open to changing my mind, but I know for a fact that this quoted bit will not happen to any meaningful degree.
In the scenario you posit, the market has to have consolidated around a few key players. Coinbase wins over Visa for instance. What incentive does CB then have to charge lower prices to merchants? Why shouldn't they help themselves to the same margins that Visa were enjoying?
> I am interested to read your article as I am open to changing my mind, but I know for a fact that this quoted bit will not happen to any meaningful degree.
Well I am also open to changing my mind -- would you mind explaining how you know this? Is the implication here that the regulation and operational heft of banks will be sure to apply to any new challengers?
> In the scenario you posit, the market has to have consolidated around a few key players. Coinbase wins over Visa for instance. What incentive does CB then have to charge lower prices to merchants? Why shouldn't they help themselves to the same margins that Visa were enjoying?
I think that it's natural for markets to consolidate around a few key players, almost inevitable in the capitalistic system.
I'm positing that it is much easier to challenge Coinbase than it is to challenge any existing banking infrastructure in the US, so you get a much better chance of actual competition and prices being pushed down.
The pool of people who can start a crypto exchange and the group of people who can open up a bank in the US are of wildly different size.
> it really does feel like blockchain might have just finished it’s infancy (the scam era, let’s say).
I don't buy it? Structurally, nothing has really stopped the social engineering and manipulation of cryptocurrency. The same principles that made cryptocurrency attractive for scamming still hold true, and the audience of potential legitimate users shrinks with each passing day.
I hate echoing the comment above, but I've been hearing this argument since 2012. Cryptocurrency will not graduate from it's scam phase unless it has a centralized judicial body to punish and correct wrongdoings. If that ever happens, cryptocurrency will have no tangible benefits when compared to centralized alternatives.
> I don't buy it? Structurally, nothing has really stopped the social engineering and manipulation of cryptocurrency. The same principles that made cryptocurrency attractive for scamming still hold true, and the audience of potential legitimate users shrinks with each passing day.
Two things (excuse my curtness I think they are good points that can stand alone):
- social engineering and manipulation is present in all forms of money, investments, etc -- it's human nature. Crypto essentially democratized it much like MLMs do. So I wouldn't call this a failing of crypto necessarily, but crypto did amplify the effect greatly.
- I think "the audience of potential legitimate users shrinking every day passing day" will choke out scamming narrative along with the legitimate use narrative. Once this post-fire brush is cleared, new things (useful things with actual utility) may have a chance to grow.
> I hate echoing the comment above, but I've been hearing this argument since 2012. Cryptocurrency will not graduate from it's scam phase unless it has a centralized judicial body to punish and correct wrongdoings. If that ever happens, cryptocurrency will have no tangible benefits when compared to centralized alternatives.
It's a good argument (and it's not wrong either).
As far as the judicial bodies, I do think that they can be distributed/federated though, and that small networks can grow with trust as currency, anew. Right now the established systems have found one way to encode trust via contracts and implied/actual force, etc. I think that crypto might be able to offer a new way to enforce trust for less serious/lighter use cases.
I think of it this way -- do I need the full faith and credit of the united states government to buy a coffee? Maybe not. Also in making that statement I am fully aware that being money is one of the biggest failings of crypto so far, but I think PoS ETH2 + L2 + Sharding/rollups (future) will actually make it possible (in theory at least) to surpass VISA's transaction volume as a network.
Also, I think there's a huge way crypto might be better than the traditional alternatives -- it represents a chance to redraw the boundaries.
The current system is ossified -- even if crypto is simply a re-creation of the existing system with worse efficiency maybe it's similar to trying to change the engine in a moving plane/train/automobile. You build a second, possibly shittier engine which can be less tied to the mistakes of the first, switch to that, then maybe switch BACK to the original engine after upgrading/changing it.
Optimistic, but I think the current success of PoS ETH2 (and the fact literally anyone else can take it and run their own) warrants some optimism.
I have used Bitcoin sporadically in that very niche. I'm probably an exception, and I'm in the nerd crowd already, obviously. Some of my friends and family have indeed played around a bit with cryptocurrency, enough to be comfortable receiving some Bitcoin. Bitcoin is the easiest way to send money to some of them, practically speaking.
I'm in Canada. They're in the United States. They don't have PayPal. Bitcoin is actually one of the few options available. Sending just $40 of funds internationally, when either or both parties don't have a US dollar account, or even a bank account, and definitely no PayPal account, is potentially quite difficult. Money transfer? Except Western Union is also difficult to work with sometimes. Last time I called for identity verification, they seemed not to comprehend I was not in the United States, and I couldn't get it sent. Fees are brutal, too, at easily 20% for a small amount. So, potentially difficult enough, that even the headache of cryptocurrency starts to look attractive.
In the most recent case, he could turn BTC into cash at a machine at his local convenience store. Surprisingly convenient, really.
He doesn't have a bank account as he's on the blacklist. Not sure why. But in the United States, if you write too many bad cheques, commit cheque fraud, or just default on your overdraft, basically anything where the bank closes your account with cause, you may find getting a bank account again, from any other bank, very difficult. (They have a reporting service they almost all report to and verify with.)
About 10 million Americans are blacklisted like this, from what I understand. And then you have people who lack ID, or who can't get an account for another reason. The unbanked add up to a fairly significant market - something like 5 - 8% of American adults.
Once the fundamental underpinnings are well-established, expect a UX renaissance. Everyone knows the current UX is dogshit.
Either way, the table-stakes for digital and financial literacy in the modern world are rapidly changing, and we should be prepared for some increased level of baseline complexity in the coming decades.
And IMO this is a problem to be solved. I am generally optimistic in the human race in that if there is a problem to be solved, and money/status/etc attached -- we'll solve it, given enough time.
Imagine how complicated computers, AI etc are -- is it that we just haven't gotten the same UI/UX visionaries to apply themselves to crypto yet?
As a UX specialist who has worked in the crypto industry, we are there. We are working on it. There's just a few dozen of us compared to thousands of facebook employees who can A/B test features till the sun comes up.
> international same party (sending money to yourself) money transfers
But you've not sent money to yourself, you've sent Eth to yourself, and you still need a forex transaction on each end?
> Does this mean that we have a substrate for person to person hawala systems (which are normally outlawed by the government?)
I've thought of crypto as "hawala banking for geeks" for a while now, but if it's banned by the government then inserting extra steps does not fix that and if you become big enough they will come after you for money laundering.
Why do you want to trade shares via a blockchain rather than a perfectly normal broker?
> But you've not sent money to yourself, you've sent Eth to yourself, and you still need a forex transaction on each end?
True -- it cuts down on middle men though!
Also, there's the very very theoretical case of buying things in ETH/USDC/whatever else. While buying things in BTC and ETH may be a pipedream (I don't think so in the ETH case but I won't try to defend it), stable coins are quite alluring as essentially proto-FEDCoin.
There is no reason every nation won't have a coin, and they'll be traded that way. There are a lot of negative effects to more heavily digitizing the money system, but that's another discussion -- crypto is just serving as an emotionless, politics-free money transferer (of course, it is enveloped in politics still), with a different fee structure (vs. Western Union, for example).
I said this elsewhere but basically it gives us a chance to rebuild the money system. Even if what we build is bad it's not like we're being forced into it -- but if it's even a little better, the value is infinite (given infinite time).
> I've thought of crypto as "hawala banking for geeks" for a while now, but if it's banned by the government then inserting extra steps does not fix that and if you become big enough they will come after you for money laundering.
>
> Why do you want to trade shares via a blockchain rather than a perfectly normal broker?
I'm not sure the government will ever actually ban it at this point. Especially with the relatively "blessed" nature of USDC and size Coinbase has grown to (and it's market leader position). I think at this point bitcoin exists as a political tool and prepping mechanism for the complete digitization of currency. FedNOW is the first step in that direction, maybe we'll get FEDCoin later.
Brokers charge fees, and are protected by capital requirements and regulation (which also protects consumers of course!). I think a rebuild of the system gives us a chance to meaningfully improve on the system of legislation and regulation we have so far -- the second build of finance, let's say.
For example, it's unnecessarily hard to set up an ETF -- I think the middlemen, gatekeepers, and fees there could be reduced to near zero there.
It adds two middle-manned transactions instead of one?
This seems to be the same wishful thinking that's come out of the crypto space for about 10 years now. There's no reason to think now is any different.
ETH - middleman is all stakers and nodes securing the network, in which you can also participate.
USDC - same, but with a centralized company who will blacklist your funds if you are on a US sanction list. Already very different degree of permissioned entrance to finances than a bank or money exchanger.
DAI - same as ETH but also depends on a permissionless and much wider pool of users across the world governing the protocol, which you can also opt into.
Technically more if you count ISP, computer provider, and the bank handling your fiat to actually get in and out of the exchange.
But the idea is, once in the system, there are less intermediaries*. So if you send ETH or USDC, the receiver can spend that token for certain services or investments instead of converting back to fiat.
* specifically, intermediaries that control your funds or could censor your transactions.
That's not the idea I was responding to, which was the usual "it's great for international transfers" stuff, which as always completely ignores the two extra transactions introduced.
Also, was there not a report just a few days ago about the new PoS eth validators that are complying with US sanctions, making up a majority of the new blocks? This seems to go against the whole "reducing intermediaries who could censor transactions thing".
Either way, none of these arguments are new, and AFAICT, cryptocurrency hasn't made a huge dent in the transfers market in the last ten years of people saying it will.
But it does work for international transfers, if you also assume that the sender and receiver are spending the token for services, or if either party is not in a rush to exchange from or to fiat. An example would be a US citizen pulling crypto profits and sending remittances in tokens to their Latin American relatives, who wish to have some alternative liquid value not controlled by their banks or government in the case of financial collapse.
Crypto is probably not going to replace interbank USD-to-USD transfers but this is not something it needs to replace.
Usage is definitely increasing[1], but it won’t replace the extractive remittance industry overnight. The technology and UX still has a long way to go to be useful to non-nerds and the general public. Only this month did Ethereum even become a carbon neutral value transfer mechanism, which paves the way for future improvements.
And yes, if the majority of stakers commit to OFAC censorship, they can block your transaction to a sanctioned address. This is not great, and something the core devs will probably seek to circumvent in future, but it is not the same as a bank, payment processor or credit card company blocking your account on a whim.
> But it does work for international transfers, if you also assume that the sender and receiver are spending the token for services
We're explicitly not assuming that. We are explicitly not assuming that, how many times must it be said?
From up-thread "you've sent Eth to yourself, and you still need a forex transaction on each end", to which someone replies "True -- it cuts down on middle men though!".
In that situation, you have not, in fact, cut down on the middle men.
And now three posts from you saying "But it does if you want if you want eth at both ends"
Look again. The original statement did not explicitly assume forex. And the original comment to that statement was a question as to whether forex is needed; the answer is “no, if you don’t require fiat” - and obviously it also depends on calling Eth and stablecoins “money” which many crypto users do.
> international same party (sending money to yourself) money transfers
>> But you've not sent money to yourself, you've sent Eth to yourself, and you still need a forex transaction on each end?
Somewhere along the way the discussion changed from one party transferring to them self, to two parties.
> Despite never touching crypto up until now, I feel it finally has a solid use case.
I'd reword this as "I finally feel it has a solid use case", as the use case of "put western Union out of business for international same party money transfers" has been present since day one.
You're just now understanding that it takes time for complex software systems to mature and reach their goals. Next time a novel system appears, this reframing of your mentality might help you to see the benefits earlier on and become an early adopter.
> I'd reword this as "I finally feel it has a solid use case", as the use case of "put western Union out of business for international same party money transfers" has been present since day one.
This is true, that was badly worded. Maybe something like "the few use cases that make sense to me have finally become guilt-free".
> You're just now understanding that it takes time for complex software systems to mature and reach their goals. Next time a novel system appears, this reframing of your mentality might help you to see the benefits earlier on and become an early adopter.
But I still don't necessarily want to be an early adopter in every piece of technology. I'm perfectly content to let people find the sharp edges and report back -- and either way up until now it was an absolute no for me with the environmental impact (knowing that PoS was possible) and rampant low-grade scams.
> the few use cases that make sense to me have finally become guilt-free
Again, it takes time for novel, complex systems to reach their goals. Proof of work was a rudimentary attempt at security a network, and if you read the Bitcoin whitepaper, it was never suggested as the best solution. This wording still applies undue negativity to crypto fundamentals.
It's totally fine to not jump on every new technology, but equally fine not to be a hater towards new technology which is still being developed. :)
> The unfortunate truth is that the current crypto killer feature is the creation of a global, permissionless, gigantic casino of worthless digital assets. This is quite far from the ideas of decentralization, privacy, and unstoppable digital assets we read in The Sovereign Individual.
This neatly encapsulates the often tragic distinction between ideology and real-world human behaviour.
You want a currency free of state intervention, you got it. That the majority of the market chose to leverage that for building casinos is the purest essence of that freedom.
Ideology-based financial systems that rely on actors 'doing the right thing', with no regulations to incentivize/coerce such behaviour, will usually fail to achieve its own stated objectives.
The fact that blockchain is a super interesting accounting method is completely lost on the average consumer who just wants to buy food and pay bills. If crypto can't do this, it's not real currency.
And most of them intuitatively understand that making your own currency out of electrons probably won't work in the long run. Otherwise, work would become obsolete and the economy would grind to a halt.
And the speculation game is a lot like playing the lottery. Everyone can't win and if you aren't a loser yet it's only because you haven't been playing long enough.
> And most of them intuitatively understand that making your own currency out of electrons probably won't work in the long run. Otherwise, work would become obsolete and the economy would grind to a halt.
This statement has validity but I don’t think it implies what you seem to think it does.
That the continual creation of new currencies is not a globally sustainable process does not mean we should not experiment with their creation. It also does not preclude a handful of them that support valid and important if not revolutionary use cases.
I don’t hate crypto but I find the people over hyping it disgusting. I still have yet meet a use case other than transferring value, which is something I also haven’t found a need for myself. That’s your crypto progress for those saying “we are still early”.
BTC bro timing his exit with the ETH merge? Good riddance. Things are only starting to get interesting this year, hopefully this trend of BTC maxis leaving crypto will give more room for the actual engineering and cryptography to grow. See: Farcaster, MPC, SSLE, DVT, light clients, ZKPs.
84 comments
[ 3.1 ms ] story [ 158 ms ] threadthere are plenty of services taking a cut from people trying to use this
multisender.app - pay/airdrop multiple people, thats it.
team.finance - broadcast to your community that you locked your tokens, instead of just saying so.
they solve a problem, they collect a cut from volume of transactions, they aren’t sitting in business development meetings around San Francisco because that’s reserved for grifters
so its easy to see how OP missed that
> Crypto speculation is a vast and fast-growing market, while other use cases are small.
Simply put, cryptocurrency has turned itself into a side-pot for disillusioned and desperate investors. The 'dream' that you're being sold is the same one we pondered 10 years ago - if we add enough bureaucracy, a democratically-controlled currency is feasible!
Time has proven this wrong. Every attempt at making the '15th competing standard' ends the same way. Nobody is putting their money in cryptocurrency, and arbitrary architectural rehashes like the Ethereum Merge isn't going to drive adoption.
I can also observe that outside of crypto, speculation is a vast and fast-growing market, while other use cases are small in comparison.
Financial services is a big sector, servicing an even bigger pile of assets, led by an even bigger notional value of synthetic assets and derivatives.
and every other sector is smaller.
so the outcome in the crypto space not only fits one of the original narratives of crypto, it also makes no sense how uninterested, alongside disillusioned, people hold crypto to a separate impossible higher standard.
Pretty much the only advantage it holds over TradFin is transparency, which isn't a direct upgrade. Distributing a main ledger encourages rampant speculation, which leaves most cryptocurrencies as awful stores of value. The outcome of the crypto space is as-expected, IMO - any deregulated sector will inevitably be a race-to-the-bottom. I too like to argue in good-faith for the benefits of cryptocurrency, but comparing it to the dollar is like complaining that your orange doesn't taste like an apple. Cryptocurrency simply cannot exist as a suitable substitute for a state-backed currency without abandoning everything that makes it unique.
so can you try rewinding and responding again, putting that particular thing aside and responding to the ways people use the amount of speculation in crypto to ignore the amount of speculation in the parallel economy? It functions accurately to power a permissionless economy, rampant speculation is because humans are in both. That means it’s working as a platform.
Regarding what dream or narrative that is from: There were threads where people talking with Satoshi realized contracts and derivatives could be executed on chain and even collateralized with the cryptocurrency, and this has happened and will continue.
It amazes me that on this forum for technologists, so few are familiar with the technology... and still try to tear down crypto so passionately.
Some ZKP-Voodoo may provide weak anonymity (the votes are not immediately obvious), but the voter can still prove to a third party who he or she voted for. Obviously this makes it vulnerable to vote buying and voter intimidation.
On ZKPs... seriously, you're calling cutting edge advances in cryptography "voodoo"? Do you not realize how anti-intellectual that is?
There are plenty of proofs for truly anon voting, without auditability if that's what you so desire. More protocols include it than not because it turns out people want to be able to audit elections! The difference in this system is users have to volunteer the information, rather than rely on an election operator.
I think this comment explains most of it: https://news.ycombinator.com/item?id=31356857
Basically an emotional reaction.
Just like how Skiff has being using other blockchain projects such as ENS domains as well as decentralized P2P software like IPFS to help build their product offering. [0]
Perhaps they found a use case for it.
[0] https://skiff.com
Oh, and about the cool, very decentral drive on IPFS thing: the drive is still only on a single server, pinned by a single server. That’s how IPFS works. It it would work otherwise and they didn’t have to actually pay their storage bills, they wouldn’t limit the storage to a mediocre 10GB less-than-gdrive shit tier.
IPFS does not need to be single drive. The user has the option to self host. The original platform also can go insolvent and the user can pin through another service.
This might continue even after pump and dump, but will no longer be lucrative.
(edit: see also "nerd sniping")
There is similarly no shortage of “architecture astronauts,” and whether the greed fuels the use of the wrong tool or vice versa — it probably doesn’t matter in the end.
Say it one more time for the people in the back!
A lot of us are still refining/discussing the same core concepts, cryptography, distributed systems, disbursement, consensus, just in different fields without the 'coin' component attached. A lot of this tech in crypto was nothing new (blockchain, proof of work, hashing, distributed databases), but the combination of them presented new and interesting hurdles to overcome. As time passed we saw new utility for these concepts to solve other interesting problems, but the entire time being a researcher in the cryptoasset space has felt like trying to be a 'serious engineer' while your cubicle is located in a casino floor. You can't make a commit or push a draft paper without it being a market-moving action, that is a social element that a lot of industry theory just doesn't have nailed down yet, and as engineers can be very stressful. Most of us just want to solve problems and build cool things, but its hard to create novel solutions at financial gunpoint.
Really? Sure, reading the whitepapers and playing with something new for a while has been fun, but "true engineers" will realize pretty soon that there's always a better tool for every. single. usecase.
[0] [The Rational Reminder Podcast] The Expected Returns of Financial Literacy (EP.217) https://podcastaddict.com/episode/144952992 Relevant part starts at 17:40
To me this blog reads like post-breakup copium. Dude just spent two years of his life and who knows how much money trying to find a market, only to realize there isn’t one. But he is sure someone else will find it! The technology is good!
No it isn’t. And no they won’t. Admit when you are wrong and serve as a lesson to others.
The real conundrum of cryptocurrency is that the technology is awesome, but the social implications of ripping the safety rails off the free market is so dire that only a disillusioned nerd could advocate for it.
did they? From my understanding availability of piracy was not really the issue behind the decline in revenue e.g. we still have all p2p infrastructure going on but the media revenue is through the roof - because of streaming.
Also to me it seemed more people used file serving service e.g. megaupload to download movies / music rather than torrents..
> and increasingly relevant in a world where protocol trumps products
does not seem to describe my experience at all. Most things that I and mainstream users tend to use are based on closed products rather than protocols... I hope the trend will disappear but it does not seem like it.
Who said that? Are we not allowed to talk about p2p without talking about crypto any more?
There are no alternative to a decentralized currency. Personally, I believe that the world would be a better place with a neutral/decentralized currency but I recognize that not everyone shares this opinion. I can't say that I "hate" fiat though, that seems a bit too strong.
As for the substance of the complaints, yes any unregulated international industry is going to be an ongoing scam. That won't change. We've seen what proud names like HSBC or any other international banking corporation gets up to - law means little, crooked schemes are common. Take away the government choke-point and all the classic schemes will come back.
But people are sorely underestimating how much long term good is going to get driven by this market. It is always going to be one step from collapse, and in 20 years we're going to do a compare and contrast to traditional international banking and discover crypto is just better. Bitcoin has so far weathered rising interest rates far better than I predicted and is looking like quite an acceptable asset for a diversified portfolio. The next crisis is upon us and the governments of the world are going to start haircutting accounts if inflation isn't robbing people of enough money. International capital flows are at risk with all this strife breaking out.
They can't stop crypto, at this point it is clearly here to stay. It is going to be transformative and probably for the better. No-one likes capitalism either and look how much wealth that ended up creating - people only stopped complaining after the wealth creation dismantled and humiliated all the competition. The use cases for crypto is circumventing regulation and sure all the authoritarians can complain, but it'll be an embarrassment to see how much wealth that will create in time. Bad luck if you want tight government control on who I can send money to, it isn't technically feasible any more. You'll have to physically stop me.
> You say nobody likes it, but also that it's what creates all the wealth we have... How are those two ideas compatible?
Why would they be incompatible? "nobody" is exaggerating but look at the protests against the 1%, general criticism of the existence of billionaires general efforts to move decision making from capitalists to government agencies (include trends in tax policy and government spending) and background complaints about how society is too materialist. Entire governments started out by killing all the capitalists they could find (China & Russia spring to mind, I doubt they are alone). In any major industry you'll find people mounting active campaigns to try and neuter the capitalists - even sometimes in food where I'd think by now people should have learned the lesson that the alternatives don't work.
You don't have to go very far to find someone who objects to the idea of making any given decision based on who has the most money. People by and large seem to find the whole idea distasteful. In my opinion rather similar to how they dislike the idea that burning energy to prove wealth.
As I've said previously, this ends when the second plane hits the tower: once it becomes useful enough for terrorists and sanction busters, it also becomes radioactively dangerous to interact with.
The author admits that he couldn’t find any worthwhile products or use cases in crypto, but continues to believe in it because he’s a “fan of Hayek and Von Mises” and the “ideas we read in The Sovereign Individual [..] are worth fighting for.”
It’s no different from 1970s intellectuals who felt that, sure, the Soviet Union had some problems, but it would eventually work out because “I’m a fan of Marx” and “the ideas in the Communist Manifesto are worth fighting for.”
Cryptocurrencies are only tertiarily a technology project. The essence is the combination of entirely theoretical ideology and confidence tricks. And that’s what makes crypto so similar to a Scientology-style cult.
Monetary systems are so crucial to modern civilization that if you do set up a 'government-independent currency' then whoever has the most control over that monetary system themselves becomes a kind of de facto government. This is seen in historical studies of black-market currency systems, where things like a bottle of rum or a kilo of cocaine became effective measures of exchange (leading to the rise of organized crime in the USA in the 1920s, or the rise of drug cartels in Latin America from the 1970s onwards, which acted in reality as alternative government systems).
So, who controls bitcoin? This article points to whales and mining pools:
https://cryptobriefing.com/who-controls-bitcoin-guide-btc-st...
Money after all is a social phenomenon, and only has value because people agree it has value - although that is as true for $USD and gold as it is for bitcoin. This then raises the question of who controls those monetary systems (hint: the control system in all cases is not at all democratic in nature).
Probably the optimal global currency system (if you value stability) is the basket-of-currencies approach, in which the $USD loses its supremacy and monetary values are tied to the average values of the basket. This requires some understanding of how global central banking operates, and for that there's no better source than Nomi Prin's Collusion:
https://www.goodreads.com/book/show/36204933-collusion
Return of the Special Drawing Right!
Despite never touching crypto up until now, I feel it finally has a solid use case.
ETH’s merge along with the existence of L2 networks means it can put western Union out of business for international same party (sending money to yourself) money transfers, The KYC on both sides not withstanding.
Hell even NFTs —- the clearest feverdream tinted scam —- had a use case after all: tokens for securitizing and allowing speculation in membership networks (see Gary V coin).
Sure someone could have just made a much less wasteful self-hostable/SaaS secret club membership app but NFTs seem to have found exactly one use case as a membership mechanism du jour which enables speculation (importantly, giving people a way to profit from their early “investment” in one creator or another).
At the risk of stoking the ire of HN, does anyone still think crypto does not have a use case?
There are a lot of things it is not and has not turned out to be, but IMO the biggest issue was needlessly destroying the earth and that seems to be all but solved now.
Of course, FedNOW may prove to make crypto for money transfers an even worse option relatively but… I think we may be at the start of an actual crypto boom (where there is actually Utility underpinning ETH’s value)
Another thing I find quite exciting is the idea of trading shares via a blockchain.
While obviously becoming a financial exchange is a key choke point for innovation because of the requirements, I can imagine a shadow network based on settlements of contract negotiated with blockchain with small trusted networks of investors.
All you need is to request the stock certificates and you can actually sign them over (let’s consider this an unorthodox “settlement”). Does this mean that we have a substrate for person to person hawala systems (which are normally outlawed by the government?)
There's an ease of use aspect to it that crypto boosters simply cannot understand, because they are used to dealing with a dizzying array of exchanges, cold wallets and nonsensical alphanumeric strings, and think that this is the UX that regular people will accept.
> I've been hearing the Western Union usurper argument since 2010. I doubt any of the people making those arguments actually use those services.
I know you weren’t talking about me but I’ve actually used western Union, and while it wasn’t bad, it wasn’t a particularly pleasant nor pain free experience either. Wise is EXCELLENT though.
More importantly, money exchangers and check caching places extract a TREMENDOUS toll on people who are forced to use them, and the prospect that could change is actually pretty good.
Up until now the main issue was the wastefulness and lack of scale/purpose fit of blockchain. It seems like ETH is poised to solve those things where BTC was stuck due to the interests of miners.
There are problems, but it really does feel like blockchain might have just finished it’s infancy (the scam era, let’s say).
Maybe I should publish something longer form on this. I had something written then chose to self censor
I too have worked in the money services business, so I know the good and bad about these companies. They are by no means angels, but they work within the regulatory systems of the countries in which they operate and that creates costs and bureaucracy. But it also prevents problems that most of the crypto sector likely doesn't see, due to lack of real world logistical experience.
Will do! I am confident I have the same misgivings but the base assumption here is that cross border fund transfers are hard, but crypto gives the system a chance to be rebuilt (with technology that's much more traceable, as well) -- without governments funding development and doing the political wrangling and horse trading to get on one system.
I'll try to lay this simpler thought out even simpler (for my own sake) -- If nation X and nation Y trust Coinbase, and have negotiated how to off ramp, and Coinbase satisfies KYC with both countries/participating institutions, we can theoretically do away with SWIFT + TARGET2 or VISA at the end of the day. What Coinbase as done is also not so unassailable (where as VISA very much is), so there will be many Coinbases, and this will drive prices down.
> There is often an enormous difference in the tech-savviness of people that send the money, relative to those who collect that money. Crypto assumes similar levels of knowledge between both parties, which is how you end up with people sending ETH to a BTC address, causing it to fall out of the money circulation entirely.
I agree -- I think this assumption of Crypto is optimistic and wrong. But, I also see this as opportunity -- this is a problem to be solved. Crypto needs people willing to do the hard work of building reliable, trustable, and reversible transactions, and essentially re-imagining what transactions, contract enforcement, and escrow look like without the threat of violence from one government in particular.
Maybe people shouldn't manage their own crypto wallets at all -- maybe they should be managed custodially -- that's an industry that needs to spring up. I know this is peak crypto-bull-speak but I assure you I am not a crypto bull (I literally do not hold any) -- but I can really imagine the recreation of the modern bank. An entity you trust to manage your crypto and help you make purchases/safeguard your money that takes drastically less fees than the modern bank. I could Trust and reputation becoming paramount, moreso because there is less recourse.
I am interested to read your article as I am open to changing my mind, but I know for a fact that this quoted bit will not happen to any meaningful degree.
In the scenario you posit, the market has to have consolidated around a few key players. Coinbase wins over Visa for instance. What incentive does CB then have to charge lower prices to merchants? Why shouldn't they help themselves to the same margins that Visa were enjoying?
Well I am also open to changing my mind -- would you mind explaining how you know this? Is the implication here that the regulation and operational heft of banks will be sure to apply to any new challengers?
> In the scenario you posit, the market has to have consolidated around a few key players. Coinbase wins over Visa for instance. What incentive does CB then have to charge lower prices to merchants? Why shouldn't they help themselves to the same margins that Visa were enjoying?
I think that it's natural for markets to consolidate around a few key players, almost inevitable in the capitalistic system.
I'm positing that it is much easier to challenge Coinbase than it is to challenge any existing banking infrastructure in the US, so you get a much better chance of actual competition and prices being pushed down.
The pool of people who can start a crypto exchange and the group of people who can open up a bank in the US are of wildly different size.
I don't buy it? Structurally, nothing has really stopped the social engineering and manipulation of cryptocurrency. The same principles that made cryptocurrency attractive for scamming still hold true, and the audience of potential legitimate users shrinks with each passing day.
I hate echoing the comment above, but I've been hearing this argument since 2012. Cryptocurrency will not graduate from it's scam phase unless it has a centralized judicial body to punish and correct wrongdoings. If that ever happens, cryptocurrency will have no tangible benefits when compared to centralized alternatives.
Two things (excuse my curtness I think they are good points that can stand alone):
- social engineering and manipulation is present in all forms of money, investments, etc -- it's human nature. Crypto essentially democratized it much like MLMs do. So I wouldn't call this a failing of crypto necessarily, but crypto did amplify the effect greatly.
- I think "the audience of potential legitimate users shrinking every day passing day" will choke out scamming narrative along with the legitimate use narrative. Once this post-fire brush is cleared, new things (useful things with actual utility) may have a chance to grow.
> I hate echoing the comment above, but I've been hearing this argument since 2012. Cryptocurrency will not graduate from it's scam phase unless it has a centralized judicial body to punish and correct wrongdoings. If that ever happens, cryptocurrency will have no tangible benefits when compared to centralized alternatives.
It's a good argument (and it's not wrong either).
As far as the judicial bodies, I do think that they can be distributed/federated though, and that small networks can grow with trust as currency, anew. Right now the established systems have found one way to encode trust via contracts and implied/actual force, etc. I think that crypto might be able to offer a new way to enforce trust for less serious/lighter use cases.
I think of it this way -- do I need the full faith and credit of the united states government to buy a coffee? Maybe not. Also in making that statement I am fully aware that being money is one of the biggest failings of crypto so far, but I think PoS ETH2 + L2 + Sharding/rollups (future) will actually make it possible (in theory at least) to surpass VISA's transaction volume as a network.
Also, I think there's a huge way crypto might be better than the traditional alternatives -- it represents a chance to redraw the boundaries.
The current system is ossified -- even if crypto is simply a re-creation of the existing system with worse efficiency maybe it's similar to trying to change the engine in a moving plane/train/automobile. You build a second, possibly shittier engine which can be less tied to the mistakes of the first, switch to that, then maybe switch BACK to the original engine after upgrading/changing it.
Optimistic, but I think the current success of PoS ETH2 (and the fact literally anyone else can take it and run their own) warrants some optimism.
I'm in Canada. They're in the United States. They don't have PayPal. Bitcoin is actually one of the few options available. Sending just $40 of funds internationally, when either or both parties don't have a US dollar account, or even a bank account, and definitely no PayPal account, is potentially quite difficult. Money transfer? Except Western Union is also difficult to work with sometimes. Last time I called for identity verification, they seemed not to comprehend I was not in the United States, and I couldn't get it sent. Fees are brutal, too, at easily 20% for a small amount. So, potentially difficult enough, that even the headache of cryptocurrency starts to look attractive.
He doesn't have a bank account as he's on the blacklist. Not sure why. But in the United States, if you write too many bad cheques, commit cheque fraud, or just default on your overdraft, basically anything where the bank closes your account with cause, you may find getting a bank account again, from any other bank, very difficult. (They have a reporting service they almost all report to and verify with.)
About 10 million Americans are blacklisted like this, from what I understand. And then you have people who lack ID, or who can't get an account for another reason. The unbanked add up to a fairly significant market - something like 5 - 8% of American adults.
Either way, the table-stakes for digital and financial literacy in the modern world are rapidly changing, and we should be prepared for some increased level of baseline complexity in the coming decades.
Imagine how complicated computers, AI etc are -- is it that we just haven't gotten the same UI/UX visionaries to apply themselves to crypto yet?
1. https://ens.domains/
2. https://nftychat.xyz/ [0]
3. https://www.farcaster.xyz/
4. https://tryshowtime.xyz/
[0] I'm the co-founder
But you've not sent money to yourself, you've sent Eth to yourself, and you still need a forex transaction on each end?
> Does this mean that we have a substrate for person to person hawala systems (which are normally outlawed by the government?)
I've thought of crypto as "hawala banking for geeks" for a while now, but if it's banned by the government then inserting extra steps does not fix that and if you become big enough they will come after you for money laundering.
Why do you want to trade shares via a blockchain rather than a perfectly normal broker?
True -- it cuts down on middle men though!
Also, there's the very very theoretical case of buying things in ETH/USDC/whatever else. While buying things in BTC and ETH may be a pipedream (I don't think so in the ETH case but I won't try to defend it), stable coins are quite alluring as essentially proto-FEDCoin.
There is no reason every nation won't have a coin, and they'll be traded that way. There are a lot of negative effects to more heavily digitizing the money system, but that's another discussion -- crypto is just serving as an emotionless, politics-free money transferer (of course, it is enveloped in politics still), with a different fee structure (vs. Western Union, for example).
I said this elsewhere but basically it gives us a chance to rebuild the money system. Even if what we build is bad it's not like we're being forced into it -- but if it's even a little better, the value is infinite (given infinite time).
> I've thought of crypto as "hawala banking for geeks" for a while now, but if it's banned by the government then inserting extra steps does not fix that and if you become big enough they will come after you for money laundering. > > Why do you want to trade shares via a blockchain rather than a perfectly normal broker?
I'm not sure the government will ever actually ban it at this point. Especially with the relatively "blessed" nature of USDC and size Coinbase has grown to (and it's market leader position). I think at this point bitcoin exists as a political tool and prepping mechanism for the complete digitization of currency. FedNOW is the first step in that direction, maybe we'll get FEDCoin later.
Brokers charge fees, and are protected by capital requirements and regulation (which also protects consumers of course!). I think a rebuild of the system gives us a chance to meaningfully improve on the system of legislation and regulation we have so far -- the second build of finance, let's say.
For example, it's unnecessarily hard to set up an ETF -- I think the middlemen, gatekeepers, and fees there could be reduced to near zero there.
It adds two middle-manned transactions instead of one?
This seems to be the same wishful thinking that's come out of the crypto space for about 10 years now. There's no reason to think now is any different.
ETH - middleman is all stakers and nodes securing the network, in which you can also participate.
USDC - same, but with a centralized company who will blacklist your funds if you are on a US sanction list. Already very different degree of permissioned entrance to finances than a bank or money exchanger.
DAI - same as ETH but also depends on a permissionless and much wider pool of users across the world governing the protocol, which you can also opt into.
That's three sets of middlemen then, because you need to both get into and out of ethereum as well.
But the idea is, once in the system, there are less intermediaries*. So if you send ETH or USDC, the receiver can spend that token for certain services or investments instead of converting back to fiat.
* specifically, intermediaries that control your funds or could censor your transactions.
Also, was there not a report just a few days ago about the new PoS eth validators that are complying with US sanctions, making up a majority of the new blocks? This seems to go against the whole "reducing intermediaries who could censor transactions thing".
Either way, none of these arguments are new, and AFAICT, cryptocurrency hasn't made a huge dent in the transfers market in the last ten years of people saying it will.
Crypto is probably not going to replace interbank USD-to-USD transfers but this is not something it needs to replace.
Usage is definitely increasing[1], but it won’t replace the extractive remittance industry overnight. The technology and UX still has a long way to go to be useful to non-nerds and the general public. Only this month did Ethereum even become a carbon neutral value transfer mechanism, which paves the way for future improvements.
And yes, if the majority of stakers commit to OFAC censorship, they can block your transaction to a sanctioned address. This is not great, and something the core devs will probably seek to circumvent in future, but it is not the same as a bank, payment processor or credit card company blocking your account on a whim.
[1] https://blog.chainalysis.com/reports/2021-global-crypto-adop...
We're explicitly not assuming that. We are explicitly not assuming that, how many times must it be said?
From up-thread "you've sent Eth to yourself, and you still need a forex transaction on each end", to which someone replies "True -- it cuts down on middle men though!".
In that situation, you have not, in fact, cut down on the middle men.
And now three posts from you saying "But it does if you want if you want eth at both ends"
That wasn't the question. FFS.
> international same party (sending money to yourself) money transfers
>> But you've not sent money to yourself, you've sent Eth to yourself, and you still need a forex transaction on each end?
Somewhere along the way the discussion changed from one party transferring to them self, to two parties.
I'd reword this as "I finally feel it has a solid use case", as the use case of "put western Union out of business for international same party money transfers" has been present since day one.
You're just now understanding that it takes time for complex software systems to mature and reach their goals. Next time a novel system appears, this reframing of your mentality might help you to see the benefits earlier on and become an early adopter.
This is true, that was badly worded. Maybe something like "the few use cases that make sense to me have finally become guilt-free".
> You're just now understanding that it takes time for complex software systems to mature and reach their goals. Next time a novel system appears, this reframing of your mentality might help you to see the benefits earlier on and become an early adopter.
But I still don't necessarily want to be an early adopter in every piece of technology. I'm perfectly content to let people find the sharp edges and report back -- and either way up until now it was an absolute no for me with the environmental impact (knowing that PoS was possible) and rampant low-grade scams.
Again, it takes time for novel, complex systems to reach their goals. Proof of work was a rudimentary attempt at security a network, and if you read the Bitcoin whitepaper, it was never suggested as the best solution. This wording still applies undue negativity to crypto fundamentals.
It's totally fine to not jump on every new technology, but equally fine not to be a hater towards new technology which is still being developed. :)
This neatly encapsulates the often tragic distinction between ideology and real-world human behaviour.
You want a currency free of state intervention, you got it. That the majority of the market chose to leverage that for building casinos is the purest essence of that freedom.
Ideology-based financial systems that rely on actors 'doing the right thing', with no regulations to incentivize/coerce such behaviour, will usually fail to achieve its own stated objectives.
The fact that blockchain is a super interesting accounting method is completely lost on the average consumer who just wants to buy food and pay bills. If crypto can't do this, it's not real currency.
And most of them intuitatively understand that making your own currency out of electrons probably won't work in the long run. Otherwise, work would become obsolete and the economy would grind to a halt.
And the speculation game is a lot like playing the lottery. Everyone can't win and if you aren't a loser yet it's only because you haven't been playing long enough.
This statement has validity but I don’t think it implies what you seem to think it does.
That the continual creation of new currencies is not a globally sustainable process does not mean we should not experiment with their creation. It also does not preclude a handful of them that support valid and important if not revolutionary use cases.
This is just an early phase.
Yeah, that's probably it.