Comment by jlokier | Hacker News Reader

Comment by jlokier | Hacker News Reader

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Constraints differ around the world. The term to search for is "unbanked". There are a lot of people unbanked worldwide.

In the UK where I live, "hostile environment" policies make it illegal for some people to obtain any bank account. It is illegal for a bank to open an account without a person providing documentation to prove the "right to banking". (There is a similar law preventing people from obtaining shelter, "right to rent").

Anyone who knows what happened to the Windrush generation, or to many people who transitioned from "legal" to "illegal" while in the country lawfully, due to arbitrary and capricious Kafka-esque processes, relationship breakdowns, or surprise letters you couldn't have anticipated, knows how harsh the hostile environment can be - some of them died due to critical medical care halted.

As you can imagine, such people desparately need the cash system to continue to exist, if only so their friends can support them with cash so they can continue to purchase life essentials.

How does an “unbanked” person convert their fiat currency into crypto? Is there someone taking in reasonably large sums of untracked cash and sending crypto to wallets? (I genuinely am unaware)

The unbanked tend to have small amounts, and what they have isn't always in the form of cash.

I expect there actually are people providing in-person small cash<->crypto exchange services, just like there are e.g. unregulated loan sharks, unofficial "family" banking, etc. for people who cannot use the regular system.

However I was originally addressing the "digital currency" aspect, specifically how "$USD at my bank account" is not universal currency the same way cash is, as many people assume banking is open to all.

This is not to say crypto is the solution either, rather there is no universally usable digital currency at the moment. As far as I know crypto isn't currently particularly _useful_ for friends (who are banked) to give friends who are not small amounts of crypto-cash to spend on useful things like food and shelter.

There are obvious obstacles, such as transaction costs, times, and excessive transparency for that kind of use. People want small transactions between close associates to be private.[1]

But those obstacles cannot be assumed to be permanent. The mathematical developments in zero-knowledge crypto recently have been quite remarkable. Scalability is not a fundamental problem; transactions times are being worked on. Costs are complicated because of economic incentives to keep them high but they could reduce to near-zero. If your unregulated landlord wants to buy a Tesla with crypto next year, perhaps they will accept some amount of crypto for rent now - probably a higher amount than they'd accept in cash.

[1] (I personally prefer large transactions to be traceable while small ones remain private - so that "follow the money" works for accountability on large things.)

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