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Comment by logicalmonster | Hacker News Reader

When evaluating any information from any source, whether from a government or not, you should keep human biases in mind.

The thing to keep in mind here is that India's bankers are giving their opinion on the current biggest competitor to their power and livelihoods. And the report says as much.

> The basic purpose of blockchain, or more generally the distributed ledger, the technology on which these crypto-products run, is to make financial intermediation, and therefore banks, redundant.

Imagine thinking any bureaucracy can give an honest assessment on the thing that makes them obsolete. Any opinion they give out should be evaluated through the lens of them losing their power and livelihoods. Any report from central bankers on crypto is the equivalent of McDonalds executives giving their opinion on Burger King.

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It's clearly important to understand the biases and potential conflicts of interest when analyzing a source. No source is free of bias, and figuring out what those biases are is an important part of critical thinking.

However, a source can be completely biased and still be correct. Any counterarguments need to be based primarily on the provided evidence and conclusions, not the "trustworthiness" of the arguer.

Sorry but to me that logic applies more to crypto than countries. Crypto is a solution with no problem and it’s flush with 100s of billions and so all those billions are hell bent on finding a problem and keep pushing for it

Your privilege is showing. A huge portion of the world is under-banked or completely unbanked. It's one of the largest barriers to quality of life improvement on the planet. Say what you will about crypto's current state, but mathematically enforced property rights wrapped around a weightless, trustless, and borderless currency solves very real problems for some of the worlds least privileged people.

Sure, next time an armed militia thug comes around for "taxes" show him your magical numbers.

I mean, this huge portion goes straight from "unbanked" to using a convoluted highly technical solution that has high volatility and no legal recourse whatsoever... stonks!

I just envision an old man yelling at clouds. I won't convince you. Maybe go read about some bottom up adoptions of bitcoin in places like Nigeria. Or don't, I don't care. You shouldn't buy any and probably should short it.

Speaking of legal recourse, we just recently saw the Government of Canada try and stamp out a form of political protest by trying to arbitrarily freeze participants' bank accounts. Regardless of how you feel about that particular protest, the type of legal recourse many people might think exists with banks might not actually exist, particularly for those who don't toe the line with all of their government's viewpoints, or if there's an actual emergency.

As far as high volatility goes, the question you should be asking is "volatility, relative to what"? The rate of Bitcoin "inflation" is known and transparent. Now compare that to the power of the virtual printing press and the effects of inflation on fiat currencies' buying power.

> this huge portion goes straight from REGULAR MAIL to using a convoluted highly technical EMAIL

Damn that sounded really bull(shit)ish! How do I invest? )

here you go! https://www.investopedia.com/news/short-bitcoin/

> mathematically enforced property rights

This is an oxymoron. How can you mathematically enforce a purely social concept? Property rights aren't tangible things; they are creations purely of law and of the societies they inhabit. Can you mathematically enforce that no one build a house on the land I own? That no one picks an apple from my apple tree, except with my permission?

I just don't see how cryptocurrency helps the unbanked--what does it bring that M-PESA doesn't bring? Furthermore, how are those benefits worth the externalities of cryptocurrency, specifically the massive energy consumption that undoubtedly fuels the climate change that is slowly worsening the lives of many of the unbanked it's purporting to help?

> This is an oxymoron. How can you mathematically enforce a purely social concept? Property rights aren't tangible things; they are creations purely of law and of the societies they inhabit. Can you mathematically enforce that no one build a house on the land I own? That no one picks an apple from my apple tree, except with my permission?

Land or an apple tree aren't natively digital assets. So no, they cannot be cryptographically enforced. Bitcoin is natively digital. If I alone have access to a wallet (i.e. memorized a seed-phrase), my rights to that bitcoin are enforced cryptographically and defended by the power of the network. "Ownership" meaning I have exclusive rights to "spend" them.

"Social construct" still absolutely comes into play though. The social construct is money. Bitcoin being money is a manifestation of a social construct. Are you suggesting something being a social construct means that they are not "real"? Because that would be a MUCH larger debate.

> I just don't see how cryptocurrency helps the unbanked--what does it bring that M-PESA doesn't bring?

A trustless and self-sovereign way to store value? This becomes increasingly important the more corrupt your Government is. For example, if your government wanted to freeze your money because you participated in a protest they don't like.

> Furthermore, how are those benefits worth the externalities of cryptocurrency, specifically the massive energy consumption that undoubtedly fuels the climate change that is slowly worsening the lives of many of the unbanked it's purporting to help?

Electricity consumption, in and of itself, does not fuel climate change. CO2 emissions do. Also depends on the relative climate cost between one system and the system it looks to replace. For example, electric cars are bad for the environment if you look at them in a vacuum. But, they are better than ICE cars. So they are applauded.

I think this is a major point of misunderstanding with the value of crypto currencies. Yes you are protected from say inflation in a currency with a corrupt government, but you will never be protected from someone with more force than you. Meaning, unless you know that no one will hold you at gun point and ask for your password, you are not safe from your government or anyone else. And when I say gunpoint I mean it literally and also figuratively with threats of prison and worse. Hell even in the US 4.5 billion in crypto was confiscated. Why didn’t those people just not give their password to keep the money? Because in the end government control goes way beyond a password.

That's a presumption about ownership of anything under the reign of a government. How is that argument crypto specific at all? Also, that 4.5 billion was mostly confiscatable because of poor key management - not people handing over their keys under duress. Also also, pretending like telling a bank to freeze an account vs threatening you into giving your keys are the same is ridiculous.

Because crypto is thought of as a unique cross border banking solution but you still end up at the whims of your own governments laws, regulations, and their level of protection. Countries like China have banned crypto exchanges, Canada has confiscated crypto for protesting. It’s not this miracle bank account only you have access to that everyone hoped it would be.

...And other countries/states have embraced Bitcoin. The China ban was going to be "the end", fast forward less than a year and the network is stronger than ever. It has more users than it ever has. Bitcoin continues to grow regardless of these actions. It simply doesn't care.

You didn't address the difference between unilateral government-bank cooperative freezing of accounts en masse vs. what's required to strong-arm keys from a single person. Do you acknowledge they aren't even close to the same thing?

No those are very much the same thing. If you can say give me your key or go to prison, the password doesn’t work that well. I would add that crypto is no longer even decentralized as well. Good luck find someone trust worthy to trade into and out of any fiat currency with only your wallet and without using or involving a centralized exchange or program. When goods and services aren’t able to be purchased in the crypto denomination that means on and off ramps actually make buying anything with crypto more expensive after paying any exchange fees. The only benefit would be if crypto went up in relation to fiat currency, but the ones getting rich are those earlier holders only. This is because when you buy crypto you are buying from another person. That other person took your fiat money in order to sell crypto, it was never created upon the moment you bought it except with certain stable coins which are essentially just banks for regular fiat currency, not actually crypto and definitely not decentralized.

> No those are very much the same thing.

You are wrong or being dishonest. The government calling up the bank and saying "Hey, friend. Freeze these 5000 accounts. Thanks!" clearly has less friction than strong-arming 5000 people for their wallet keys.

> Good luck find someone trust worthy to trade into and out of any fiat currency with only your wallet and without using or involving a centralized exchange or program.

I literally do this exact thing pretty frequently. HodlHodl and Bisq both allow you to do this in a trustless and decentralized way. And things will only improve with projects like 'TBD' from Dorsey.

> When goods and services aren’t able to be purchased in the crypto denomination...

But they are! Let's see... this week I've bought coffee with bitcoin, I've bought a new golf hat, I bought a magazine subscription, and a VPN subscription. This month I bought an iPad utilizing bitrefill. Early days? Sure. "Aren't available" is bullshit though.

> The only benefit would be if crypto went up in relation to fiat currency, but the ones getting rich are those earlier holders only.

What? You're just wrong... Bitcoin is up 250% in the last 2 years. I've been in for 1.5 years and it's literally out performed everything else I own.

I see your point, there’s more friction at scale but on an individual level I question if the friction is enough. I hadn’t seen those programs, but it looks like they are at least able to make a trade to a traditional bank account via which does make things better even if you are limited once it gets into your bank account. I’m wondering if I could make a $1M+ transfer to an account without an issue, maybe a few hundred or thousand works fine without setting off alarms with the banks and govt simply because it’s not worth their time. But the heart of it is really being able to actually buy and sell goods and services. It seems that every time a company starts accepting it they stop, Tesla, valve, and more. I think that’s pretty much going to be determined by government regulation and the way governments tax transactions. If they are taxing it like an asset and not letting it inflate or deflate tax free like a currency then it will get really tough to do taxes for sellers. Yes earlier is better, 2 years ago is better than now and I’d probably estimate 2 years from now will be better than now as well as long as adoption continues to increase and more true use cases evolve. I may be a bit pessimistic but it feels like we should be well beyond the ability to buy and sell goods easily if it were to reach mass adoption. But obviously from your responses I have a lot to learn myself even as things are changing.

The problem is the utopia you are envisioning only happens if the whole world is moulded into either one government or no government at all. All those paperless mathematical property rights are constructs of individual governments that are in turn a by product of the borders between geographical places. Crypto only will exist when there is peace and more importantly prosperity, without a network, energy and resources there is no crypto.

> The problem is the utopia you are envisioning only happens if the whole world is moulded into either one government or no government at all.

Now you're thinking! And you're starting to see why crypto is a much bigger deal that it first seems.

There are so many "Oh shit, if this then that" moments as you figure out where we're likely headed.

Not even a little bit. I am saying the exact opposite.

> India's bankers are giving their opinion on the current biggest competitor to their power and livelihoods

Some of crypto’s biggest backers are on Wall Street. For obvious reasons. Crypto is making Wall Street billions while letting them preach from beneath a populist veneer.

This is true of individual crypto-holders too. The people with billions in crypto are all over twitter saying how holding coins and NFTs is for the people.

The crypto ecosystem is almost exactly the same as the massive wealth concentration in America, except worse. The narrative from those at the top, and the willingness of people to defend them, is the same.

People rabidly defending Elon Musk is equally strange. He’s trolling on the internet, not looking out for you.

Blockchain does not make banking obsolete. We can already do business by moving raw currency around, but hardly anyone does that. There is a whole crypt banking sector that provides exchanges, custody, lending...

And if you take inflation overhead, consumed by miners and other services to keep BTC or ETH running (5% to 10% annually), there is not much advantage over existing banking.

> Blockchain does not make banking obsolete

It doesn't, but Satoshi thought it would. See for example the Genesis block.

> There is a whole crypt banking sector that provides exchanges, custody, lending...

Back in the day, the idea was to make every citizen financially sovereign. It didn't work in practice because those services you mention are useful. (Just like crypto has trouble working as a payment infrastructure, because chargebacks are an useful and demanded service)

You need to read this not as an assessment of merit, but as a strategic outlook. Central banks see crypto as dangerous to the economy and threatening to their power and their country's sovereignty. Central banks have a lot of power. It stands to reason that they will use that power with the aim of either destroying or co-opting the technology. The merits of cryptocurrency and its underlying ideology are unimportant, because those building and using it (for the most part) and negligible power compared to the institutions it would threaten.

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