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Comment by jmyeet | Hacker News Reader

Crypto may well be the biggest solution looking for a problem I've ever seen.

Apart from the obvious issues (eg energy expenditure) the one myth that needs to die about crypto is that it is extragovernmental and indictments such as this and the Bitfinex laundering case recently should underline that.

The simple fact is that the developed world could shut down what little utility cryptocurrencies (and NFTs) have tomorrow if they chose to. China banned mining and mining was gone immediately (largely moving to Kyrgystan it seems). Defenders will say you can't shut down the network and that might be true but it's irrelevant.

The threat of legal action will be enough to keep th evast majority of people away. And the weakness of any crypto is that at some point it has to interface with the real world or it's completely useless. Obvious example: the traditional financial system. Access to the US financial system is what allows the US government to exercise influence over European financial institutions to stop them, for example, dealing with sanctioned countries like Iran.

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Cryptocurrency is the solution for a very valuable problem. How do you commit financial crimes and frauds in a way just new enough to confuse people that what you're doing may be valuable?

What about drugs? Cheaper, less middlemen, higher quality, safer delivery. What’s not to like?

Fewer middlemen? Now to buy from your dealer, you have to go via a marketplace, after converting your real money on an exchange. That's at least two other intermediaries...

Your dealer… may just be buying online (and stepping on it).

Depends on what they’re supplying. Something locally grown, ok, but overseas labs synthetics can involve a lot of middlemen.

Easy. Criminals, extremists and fraudsters use Signal for E2EE communications and MobileCoin (an untraceable, privacy cryptocurrency) to fund it all. [0]

It is what criminals and terrorists are using to make their activities impossible to trace. Got to thank MobileCoin for enabling that.

[0] https://support.signal.org/hc/en-us/articles/360057625692-In...

MobileCoin whitepaper didn't make any claims about untraceability, AFAIK.

What does 'No one except for the sender and receiver can see the details of the transaction.' with an encrypted blockchain tell you about MobileCoin's traceability?

I do thousands of transactions with thousands of people every day without committing financial crimes and without paying any fees. It's extremely valuable to my businesses.

Wrenches can be used as weapons but they are also essential for plumbers.

It’s more that you found a legitimate use for Agent Orange.

Fun fact (and not to detract from your allegory), agent orange was widely used by Ontario Hydro from the fifties to late seventies to clear trees from around power lines. The people handling it weren’t really well-informed of what exactly it was or how dangerous it was, so there have been a number of lawsuits. I have an uncle who recalls being jokingly hosed down with the stuff on a hot day by a guy working a sprayer in the back of a truck. Whoops.

https://www.cbc.ca/amp/1.1048075

Agent Orange isn't toxic (colloquially speaking) if it's manufactured properly and free of dioxins.

Curious - what is your use case?

Folks tend not to answer this question because they know it's not a good one.

Let's take bitpay, probably the largest and oldest merchant processing system for crypto transactions. They publish stats. [1]

- 40% of all of their transactions globally are for prepaid gift cards.

- 20% of all of their transactions globally are for "internet."

- 14% of all of their transactions globally are for "vpn."

So 75% of all of their transactions globally are for merchant categories closely associated with fraud. And the reason is obvious: it's slower, more expensive and less convenient than using a credit or debit card. So it self-selects.

Folks who "find a way to make it work" are usually ideological, in crypto (i.e. found other people who don't care that it's impractical or criminal) or have otherwise found ways of "processing crypto transactions" (i.e. using bitpay where the merchants do not receive crypto because of course they don't why would they).

[1] https://bitpay.com/stats/

And fiat money can be used to deal drugs.

I mean I don't defend crypto, the way things are going is that they'll be just as regulated and centralized as digital fiat is, and a lot of it is people getting rich, or hoping to - I mean I'm one of those people, still waiting for my handful of dogecoin to go up 10.000% so I can retire. But I also have a regular job, regular savings, and regular stonks because savings account interest is a joke.

The exchanges can be regulated, but good luck trying to regulate a global peer to peer network!

You just need to regulate the end points. At some point, someone needs real money instead of robux.

Those are the exchanges I mentioned. But no, if it's widely enough used, it can be an entirely self contained system.

But it’s not widely used, that’s the whole problem.

Say you created a business accepting exclusively cryptocurrencies. You need to ship an item? You need “dirty fiat”. Let’s say you’re only selling NFTs or services, your hosting provider wants paid in real currency. Food? Housing? Utilities? Fiat. Fiat. Fiat.

Unless it’s accepted for the entire supply chain of LIFE, you’re screwed.

Seems like a mix of port blocks and criminal penalties, while not killing cryptocurrency, would greatly hinder its overall utility and thus any associated fiscal value.

Look at bittorrent. While it's impossible to kill it, targeting agregation platforms definitely made the protocol immensely less relevant than it was 20 years ago.

BitTorrent made itself less relevant by relying on end to end networking and symmetrical links, neither of which panned out.

Such as? The Pirate Bay still exists as do thousands of other websites listing torrents.

BitTorrent traffic went down as streaming services increased.

What these critics don't tell you is that the transactions of these cryptocurrencies are traceable and transparent making the majority of many cryptocurrencies pointless to use for 'committing financial crimes'.

Otherwise, why do you think that these criminals are turning to privacy coins like Monero and MobileCoin, etc?

Keep in mind that "financial crimes" can mean very different things to very different regimes. In Nazi Germany, it was a "financial crime" for Jews to take any wealth with them when they emigrated.

This idea that cryptocurrency is good because it enables “good” crimes (avoiding unjust oppressive governments) is at odds with the hard facts that cryptocurrency is used for “bad” crimes far more often. Many orders of magnitude more often, in fact.

I just can’t buy into these arguments that we should be overlooking these rampant frauds and crimes (like the multi-billion fraud in this article and many more like it) because it might hypothetically enable some oppressed people somewhere in the world to escape some government oppression.

In these hypothetical scenarios, are we supposed to believe that the oppressive governments would just look the other way and let people transfer their wealth into crypto exchanges before fleeing? That would defeat the purpose of the government restrictions, so obviously not. Or are we supposed to believe that they moved all of their wealth into crypto and took it out of exchanges and into private wallets before the oppression? The crypto maximalists would love that because it would drive up crypto prices, but it’s not practical in a world where most people have their weath in assets like houses, cars, and diversified investments.

Actually yes assume those things happen and move the oppressive government further down the line to see a pro-crypto absurdity:

Are we supposed to believe that crypto is magically cleaned when the oppressive government seizes it and uses it or resells it? for all purposes right now, thats true and no transaction flagging software is advanced enough to consider that yet.

Woah woah that crypto came out of a mixer at some point in time!!! Thats used for “bad” crimes orders of magnitude more than “good crimes”, I think….

Oh nevermind, this passed through one of the seoveriegn washer addresses later, all good!”

> This idea that cryptocurrency is good because it enables “good” crimes (avoiding unjust oppressive governments) is at odds with the hard facts that cryptocurrency is used for “bad” crimes far more often.

The Fifth Amendment is invoked far more often by actual criminals to hide their crimes than people avoiding government oppression. Doesn’t mean the Fifth should be abolished.

Just that normal people don't benefit overall.

If you are for bitcoin and its 'benefits' and you are not someone who is doing tax fraud in a big way, you do not benefit from crypto, you are loosing.

Unreported income is tax money which is missing for schools, infrastructure and co.

It might not be used always efficency but it benefits you more than not having it. It should also be a much higher motivation for everyone of us to stop tax fraud all together instead of complaining about taxes and trying to avoid taxes.

This is bullshit. People deserve a way to send money without middlemen and unfortunately that requires a means of attempting censorship resistance or at least consensus within a nearly arbitrarily adversarial network.

> People deserve a way to send money without middlemen

Why? Please don't just make unfounded assertions.

The free movement of capital is a long-established right in Europe.

https://en.wikipedia.org/wiki/European_Single_Market#Capital

If you read what you linked, you'll find that this only applies for Euros within the Eurozone, with exceptions for capital controls in place.

That's the European single market. Single market means freedom of movement of goods and services, capital and labour. In other words, it's not just capital. And it applies to a small set of countries which all agree to having a number of common rules and regulations. And it's not without intermediaries.

What's "deserved" is subjective, but I'll bite. People from countries that are fiscally irresponsible and have tight capital controls "deserve" access to an asset that, while volatile, gives them a better hedge than hyperinflation and can't effectively be blocked by their dysfunctional government. See Zimbabwe, Venezuela, and citizens of any country that has a black market exchange rate for dollars/euros(Argentina, Lebanon, Turkey). You could make the case that this is something for international organizations like the UN/IMF to solve, but, they don't on any timescale that's meaningful to the person whose weekly paycheck buys less bread every week. They already have access to the same information and websites we do(with a VPN), accessing a globally distributed and decentralized ledger is as fundamental as their right to access twitter/facebook.

Americans and Europeans have very limited experience with hyperinflation and volatile currencies, plus we have robust banking/fin-tech sectors so of course we're more prone to scoff at the problems cryptos will solve.

Are you sure crypto will solve the problem of volatile currencies? BTC crashes on around a yearly basis [0], it's to find any currency more volatile than that.

[0] https://www.yahoo.com/video/7-biggest-bitcoin-crashes-histor...

Yes, they're called stablecoins. Dai is a decentralized stablecoin that is always pegged to $1 USD. Rai is a stablecoin that is pegged to itself (using a feedback mechanism).

Both are on Ethereum and if you keep wealth in them that wealth cannot be confiscated or censored (except with a physical wrench attack).

because it crosses the line into censorable speech

Payments are not speech. Find a better argument.

except that sometimes they reduce to speech. especially in cases where there are incidental human rights violations suppressing those payments. the examples why this cannot be left up to arbitrary governments are abundant. so there's nothing wrong with my argument. if you disagree then please show proof.

by the way just a heads up I suggest you learn the value of basic human kindness in your manner.

My definition of basic human kindness includes NOT shilling and trying to defend and justify get-rich-quick pyramid schemes and fraudulent scams, under the pretense of not wanting to pay your taxes.

Speech is the use of language to communicate ideas and thoughts. A payment is not speech. Paying involves transmitting of a financial asset. It doesn't involve the use of language to communicate ideas and thoughts. Therefore, it's not speech. You can't arbitrarily decide that something is speech, just because it suits your interests. This is not how things work.

of course it uses language. it's called a protocol for a reason. god this debate is tiresome.

Whatever. Good luck convincing anyone that a financial transaction is speech.

I don't need to, mr. creates-strawmen-to-try-to-avoid-the-real-discussion. Many people already hold the view that certain financial activities reduce to the freedom to speak or pursue happiness. It didn't come from me. Good luck convincing anyone that you've ever experienced real threats to your human rights.

Of course it didn't come from you. It came from the bitcoin ideologues. You simply repeat what they say like a parrot.

Your logic doesn't make sense.

You are part of a system like a country. You are part of that country and the country acts on your behalf.

IF there is a good reason that the state only allows sending money after certain criteria are met, its for the good of the country (normal countries, not corrupt ones).

Then the country and its laws has the right to reduce that freedom.

You might believe in the republic idea of everyone for him/herself but studies also show that for normal earning people, this is not helping them at all.

Its not a global basic right to 'deserve a way to send money without middleman'. I'm not even allowed to just move to another country. I'm in one way or another imprisoned in my birth country.

I'm not the property of a government. And please show me where rights are granted to governments and by who and for what basic purpose.

And it's not always about govs.

You may be imprisoned. but dont imprison others with your assumptions

You are part of a system not the property of it.

I'm totally lost on what you are trying to imply with "And please show me where rights are granted to governments and by who and for what basic purpose."

You are fully aware that there are countries. You should know how they work, you should know what models of representation exists and which forms of gov you are in.

Give yourself the illusion that you are independent while paying taxes and putting on your seatbelt.

Just answer the question. If you can't then perhaps you should admit you're arguing about your ideas rather than specific facts. Nuances actually matter here. You said a government has a right to reduce my freedom to participate in a certain system. I'm asking you to cite it so we can speak about something real instead of following a path that leads very clearly to imprisonment of those with whom the buck actually stops (the citizens).

It could provide as a store and transpiration means of value in times of crisis. For instance some of the Ukrainian banks are now shutdown. If you had crypto you could access your wealth. Same thing applies for Russian citizens who have nothing to do with the war but will soon have their assets frozen. Did you consider all use cases before posting, or just glee at yet another anti crypto post on HN and thought “yay! I get to post something negative about crypto again today”?

didn’t bitcoin price take a nose dive when russia invaded? the opposite behaviour than what you’d want from a store of value

Yeah, went from $35,000 each to $39,000... it's about a 8% increase or "nose dive" as you call it.

And... 18 hrs prior to being at $35000 it was at.... wait for it... hang on... can you guess... ? $39000.

We did it! War = good for crypto?

You realise, if the banks go, so does the internet, right?

https://twitter.com/netblocks/status/1497409488403505153

The operative word here is “could”. There are a number of pie in the sky benefits of crypto that may be supported by small handfuls of anecdotes that don’t and never will generalize to the public at large. When comparing the potential pros to the existing cons, crypto is a gigantic net negative that is being pushed in order to make small pockets of investors very wealthy, nothing more. And yes, I understand the data structures, protocols, and most of the ideological rationalizations used to promote the fantasy.

> never will

And from which time traveler did you get this information?

The future is pretty hard to predict accurately, especially in such definitely terms like "never".

Assuming ill-intent is not an argument. Engage with the argument. This is HN.

> For instance some of the Ukrainian banks are now shutdown. If you had crypto you could access your wealth.

For instance, the Russians were cut off SWIFT. If the oligarchs had crypto, they could access their wealth and render sanctions ineffective.

Believe it or not the Ukrainians are in a war, and currency is not their biggest problem - that would be the tanks, and the bombs and the planes. Once the war resolves, so will their access to money. On the other hand, systems designed to evade sanctions are making that process longer and more painful - and more likely to resolve in the aggressors favor, as the Russians are better capitalized. The Russian people need to feel the pain to pressure their government to end the conflict.

Some pain is good, and so is our ability to inflict it.

What exactly is the valuable problem you are thinking in your head and how is it better solved by cryptocurrency and blockchain that can't already be done with existing methods, technologies and contractual agreements backed by various international treaties and dialectic tests for loopholes through thousands and thousands of years trading between countries, provinces, cities and entities?

Read past the first sentence. Comment is tongue in cheek.

For me it’s funny to see twitter comments now asking can we impose crypto sanctions on Russia. It’s like all these institutions and mechanisms we have are there are for a reason

> The simple fact is that the developed world could shut down what little utility cryptocurrencies (and NFTs) have tomorrow if they chose to. China banned mining and mining was gone immediately (largely moving to Kyrgystan it seems). Defenders will say you can't shut down the network and that might be true but it's irrelevant.

How is it irrelevant? The ban in China did not affect the operation of the network.

With regard to the "move", this is plagued by the same flaw the energy consumption statistics are: you don't know where the miners are. Not acknowledging this limitation is somewhere between disingenuous and stating a falsehood.

This does not demonstrate that developed nations "could shut it down tomorrow".

If Western nations enacted policies on bitcoin similar to China, this wouldn’t shut down the network entirely but would drive it underground. This would limit the usefulness and presumably value of the network, at the very least.

Banning miners would send them to the next-most corrupt country with cheap energy.

A more meaningful move would be to ban exchanges, so that miners can no longer take exit liquidity at the expense on retail "investors".

It’s a good point that so far, major changes for miners haven’t affected operations.

I’m not sure it’s true that nobody knows where they are. There are rankings by country. They need Internet access and power. Many operate openly. Large data centers aren’t invisible.

Also, miners were kicked out of Kyrgyzstan. Many machines were confiscated. It seems a lot of miners moved to the US because, even if they are eventually shut down, at least they will still have their machines, hopefully.

Governments could greatly reduce the hash rate by cracking down on miners who operate openly, and then Bitcoin would be considerably less secure against a takeover.

Suppose, after getting kicked out of many places, many miners move somewhere without strong property rights, and then the government takes control of the machines and runs them? Or maybe the miners keep running, but the government tells them which transactions to block?

They just stop it as they don't know how to use it and they also don't care about it anyway.

Only the corrupt ones might accept a bribe.

So far that’s been true. Would you count on people never learning?

That would not be very good in the current situation. This would lead to more energy consumption, more intransparent bribes etc.

I hope not.

I want to donate to a cause that Justin Trudeau finds "unacceptable." I want to send money to Ukraine. I think this week we saw problems with tradfi in the developed and developing world. And of course in the good ole US of A, I hear stories of civil forfeiture every other month.

“Civil forfeiture” does not and has never meant “fiat forfeiture.” If the government tells you to forfeit your assets (justly or unjustly!), you can be certain that they will not be amused or deterred by attempts to hide those assets via cryptocurrency.

> “Civil forfeiture” does not and has never meant “fiat forfeiture.” If the government tells you to forfeit your assets (justly or unjustly!), you can be certain that they will not be amused or deterred by attempts to hide those assets via cryptocurrency.

If they don't know it exists, they can't take it. Just like I can cross the border with a hundred thousand in crypto in a wallet. And even if they find the hardware wallet, that is not enough to seize the funds, especially if it's a brain wallet or something similar. The same simply doesn't exist for fiat.

> If they don't know it exists, they can't take it.

I've said this before: any financial system that turns a presumed crime (the efficient cause of the asset seizure) into direct evidence of another crime (trying to hide assets) is not a good financial system.

What you're describing doesn't exist in practice for any medium of exchange.

Just like I can cross the border with a hundred thousand in crypto in a wallet.

No, you can't. You can cross the border with the private key for a wallet containing the addresses of a hundred thousand units of crypto, but the crypto isn't in your wallet (either kind), it's in the blockchain ledger of whatever cryptocurrency you're using.

And this is an important distinction from money, because the money is actually in your wallet and you can use it without an internet connection, but the crypto is actually in the cloud and requires an internet connection to access and use.

Interesting. Just for fun, thinking through this more I could just give someone my private key instead of transferring funds on the blockchain. Then the transaction does not require the internet, only the verification of funds in the wallet (which could be elided if the participants so chose).

Note that folks who claimed their bank accounts were frozen because they were “donors to the convoy” never actually verified that that actually happened [1]. At the same time the government, the RCMP, and the banks have come out and said “that didn’t happen” [2]. Last, the government ceded its emergency powers after about a week total, despite claims on HN and various thinkpieces that they would be extended in perpetuity [3].

[1] https://www.cbc.ca/news/canada/british-columbia/mp-mark-stra...

[2] https://www.theglobeandmail.com/canada/article-rcmp-banks-an...

[3] https://www.thestar.com/politics/federal/2022/02/23/justin-t...

And then there was GoFundMe and GiveSendGo. I am not arguing the politics here. I am responding to the critique that crypto is a solution in search of a problem.

Those are companies with policies.

They have to listen to laws.

Guess what happens if crypto would become bigger and actually a problem for all states globally?

Do you really think they will just accept this? In which way do you think they literlay can't control crypto anymore?

Just because its digital and on the internet, doesn't mean its digital only. It is not and as long as that is, its easy for a state to make sure crypto will never ever reach this level.

You don't believe a state can do this? Just a small reminder about the great firewall from china. There are countries who shut down their internet, literaly.

The reason they didn't extend them was that they didn't want to go through the senate vote, and also because of the extreme controversy it caused. Trudeau had said earlier he wanted to extend them past the 30 days. So it's weird to say that the controversy and reactions were baseless because their intended goal was achieved. And that was to make Trudeau's decision as politically costly and controversial as possible.

Also accounts were still seized over a protest, so it doesn't matter if it was from people donating or those who were protesting

https://financialpost.com/fp-finance/banking/convoy-leader-d...

(Url is weird and doesn't match the actual article)

So in other words...the system worked exactly as it was designed to work...

I guess but only because there was a very very vocal backlash. It wouldn't have necessarily worked if everyone was just complacent and apologetic for Trudeau. Trudeau had no intention of showing any restraint until the backlash intensified.

You are literally just describing how a political system was designed to work: politics.

I never said they were baseless, I said folks claimed this would never end and it did, rather promptly.

> Trudeau had said earlier he wanted to extend them past the 30 days.

Can you provide a source because I can’t find anything backing this claim.

>and the banks have come out and said “that didn’t happen”

The article didn't say it didn't happen. In fact, it says it did happen:

“individuals and companies suspected of involvement in illegal acts,” such as “influencers in the illegal protest in Ottawa””

What exactly does it mean to be an "influencer"? Why are people being punished for "suspected involvement"? You're using circular reasoning claiming the only people affected deserved it.

>Last, the government ceded its emergency powers after about a week total

What does this matter if they can turn around and re-enact it tomorrow?

I specifically referred to donors, it is largely understood that convoy organizers and a number of participants had their accounts frozen.

I am not using circular reasoning; I am literally addressing the fact that donating $50 to the convoy did not subject you to your bank account being frozen, despite purported claims to the contrary.

The “illegal acts” are referring to the plain-as-day laws that the protesters (to some, occupiers) were accused of breaking, like parking tractor trailers in the middle of the street for weeks blocking traffic in downtown Ottawa.

If folks outside the immediate circle of downtown protesters and organizers were affected, I would find that deeply concerning. But I can only find unsubstantiated rumors. If you have a credible source indicating otherwise, I’d appreciate it.

And how do you feel about economic sanctions for Russia, Putin, etc? (And crypto being a way to evade them)

Do you think a cryptocurrency is any less susceptible to civil forfeiture than cash?

You are correct, evading economic sanctions is another problem crypto solves. :)

(I am not here to make any value judgments)

You've just made one.

> Crypto may well be the biggest solution looking for a problem I've ever seen.

I think this hinges on what problem you identify. If someone identifies centralized financial systems as bad, even if they're efficient, the problem is real and the solution fits the problem. If you contest this, as many do for good reason, it becomes a solution in search of a problem.

The solution doesn't fit the problem though. Sure, in theory bitcoin-style cryptocurrencies can replace centralized financial systems. But, as keeps being demonstrated, including by this very example, in practice what you end up with is different, less-efficient, centralized financial systems dominated by fraud.

how is it less efficient? Obviously btc can't replace the financial system but crypto can.

Investors in the next 10 years are going to realise that an omnipool was all that was needed in the first place and the NYSE is a dinosaur in comparison.

Etherium is looking for a PoS system.

Guess what our current fiat system actually is? A highly finetuned evolutionary PoS system.

It has features like:

- transparency

- fraud detection

- political sanctions (russia vs. ukraine, north korea, iran...)

- fairness due to transparency (you pay your taxes, i do: we both pay our fair share of infrastrucutre cost etc.)

- easy to use (my grandparenst were able to use it)

- save

- easy authentication and authorization system (i can get money with my passport)

- globally accepted

- low transaction fees

- self optimizing system due to capital market (one bank can do transactions faster and cheaper than you can)

- transparency Crypto, besides privacy coins is the most transparent you can possibily get. It's a public, immutable ledger. The US can literally go in an change the total supply anytime with zero transparency. And since USD is the global denomination of debt, when i increase my supply it actually makes my currency more valuable since everyone is shorting their own currency (Since their debt is in USD) and inflation leads to asset inflation which is a good thing for the wealthy, but a negative thing for those holding and dealing in USD. = us plebs.

- fraud detection

See point above, fraud is built into the system.

- political sanctions (russia vs. ukraine, north korea, iran...)

Political sanctions have been this economic philosophy that hasn't entirely played out in the countries doing the sanctions favor. These economies, due to force have been required to be much more verticly integrated and invest into the economies most hit by sanctions. Sanctions don't do much and the problem is, the more you sanction the less leverage you have.

- fairness due to transparency (you pay your taxes, i do: we both pay our fair share of infrastrucutre cost etc.)

What is fair about the current tax system? See my transparency point above, all those people trying to evade crypto taxs are in for a rude awakening when the governmeent develops machine learning to track and trade public ledgers... Everyone knows it's a public ledger... exactly the oposite of being descrete.

- easy to use (my grandparenst were able to use it)

Becausee it started being built when your grandparents grandparents were alive. Most shops didn't accept CC's when they first came out and it took a generation for the technology to preliforate. I'd say crypto has done what the old system did in 1/4 of the time.

- save

I get 4% APR on my stablecoins. 20+% on my DeFi Pools paid in stable coins.

- easy authentication and authorization system (i can get money with my passport)

I can provide authorization with a 10 word pneumonic.

- globally accepted

What is globally accepted exactly? USD? no it's not... it's only acceepted in the US. If i want to do business globally i have to swap to that asset. I not only have to worry about remittance, currency exchanges, trade fees and loan denomination. Terra has the ability to swap between many different currencies using stablecoins with almost no transaction fees.

- low transaction fees

BTC and Eth have extremely high transaction fees, but any V3 crypto has lower transaction fees than the current financial system. - self optimizing system due to capital market (one bank can do transactions faster and cheaper than you can)

self optimizing system due to capital market (one bank can do transactions faster and cheaper than you can)

Play around with some decentralized exchanges, solona or DOT. they can do transactions faster and cheaper than any incumbent, including VISA or the NYSE.

You make a lot of wrong assumptions. Not sure why or if you do this on purpose though.

- Crypto is not transparent. Its continuously mentioned as a benefit of crypto. You should be fully aware of all the methods crypto provides to be intransparent. Tumblers, Lightning network or when you go away from bitcoin, monero is inherent intransparent.

- You might ignore the Efficiency of political sanctions, but the struggles for those people are real. I have been to Iran and have seen it by my own eyes.

- Crypto is still not easy to use. Stop lying to yourself. Go to el salvador and look how they use it. There is only one small city able to use the lightning network properly. The rest of the country doesn't know how to handle it properly. They also have fraud as most of them never got their crypto which was promised to them.

- " 20+% on my DeFi Pools" you should understand better what you are actually doing. You do high risk, low sanctioned, under the radar gambling. Stop comparing 20% of some shitty gambling/ponzi schema to anything real life

- "I can provide authorization with a 10 word pneumonic." wow. I forgot my 4 digit pin a few times in the last 10 years. I literally lost my company password and the muscle mnemonic for half a day. I literally can't lose my passport. My country will make a new one for me. Try to rememeber your 10 words when you are 70. Try to make sure that you do not enter your 10 words in a system which can transparently steal your money as soon as you tell it your 10 words.

Have you ever spend the amount of time you spend on learning about crypto to learn about fiat?

I'm just going to point out that you said nothing about proof of stake here, and I am getting the sense from your other comments that you do not understand the technicalities of the traditional finance system, or cryptocurrencies.

I'm fully aware how PoS in context of crypto works.

But let me tell you what the PoS part is in our current fiat system:

I get my salary in fiat. I save my fiat in a bank account for being used later. I might not need to hold 1tb of ram available and proof that i have it running, but i already proof that i trust my fiat because i get my salary in it. I pay with it, i save it.

I have a high stake in it. I also have systems/tools available to me for my fiat like banks and laws.

This is no different to what etherium proposes: For PoS you need to buy and hold etherium and you get etherium for doing so.

this comment shows a bit of misunderstanding on what the point of POS is.

It is not some saving mechanism, it is a concensus mechanism. It ensures fraud doesn't occur and that more crypto isn't being created out of thin air. It is a way to incentivice node operators to act fairly.

If the USD had a POS system, I would 100% have all my money in it. but i can't verify the whims of the FED

Can you buy options, derivatives, futures? Can you invest in startups? Can you easily send money anywhere in the world in seconds?

99% of the world can't, either because of where they live, or the government deciding they're not allowed to because they're not rich enough to join the elites.

This is the world Ethereum unlocks - a global financial system that allows anyone to participate regardless of where they were born or their background.

If you value freedom you'll see it's a far superior financial system than the one we have today.

It's not technically ready yet, but the path is clear and it will be there sooner than you think.

> Crypto may well be the biggest solution looking for a problem I've ever seen.

It seems like it precisely solved the problem it originally claimed to solve to me. Permissionless p2p transactions. Full stop, no political baggage to argue about.

I think it's others look for "bigger" problems for it to fill that are the problem, not the tech itself.

Blockchain's killer app is Bitcoin. Someday folks will finally realize this.

Many will think it's useless until they unfortunately find a need for it.

With crypto you can transfer your wealth across borders away from oppressive regimes or an incoming army by memorizing 12 words.

It's hard to overstate how valuable that is for anyone who finds themselves in that position, and it's becoming more relevant by the day.

You can only do this as long as you are able to convert fiat to crypto and back.

You can also only do this as long as crypto is so small that its not getting banned.

And for everyone who doesn't has this issue, crypto is actually bad: the overall benefit of anonymous money transfer benefits who want to do illegal things which are illegal for purposes.

Would you like to know that others are doing tax fraud and you are the fair citizen? Knowing that they do not contribute to schools and infrastructure while using your schools and infrastructure?

We do not benefit from tax fraud. The mafia does.

>You can only do this as long as you are able to convert fiat to crypto and back.

>You can also only do this as long as crypto is so small that its not getting banned.

Killing cryptocurrency is impossible if people value it and can exchange it for fiat in-person.

>And for everyone who doesn't has this issue, crypto is actually bad: the overall benefit of anonymous money transfer benefits who want to do illegal things which are illegal for purposes.

Governments can make anything illegal for any reason they want. I've lost a ton of trust in the Canadian government after they deemed it illegal to donate to a cause they disagree with.

>Would you like to know that others are doing tax fraud and you are the fair citizen? Knowing that they do not contribute to schools and infrastructure while using your schools and infrastructure?

>We do not benefit from tax fraud. The mafia does.

The mafia has far better ways of committing tax fraud than using cryptocurrency.

Only the rich will benefit from banning cryptocurrency.

"if people value it"

People stop valueing it when they can't do anything with it. Currently no one cares about crypto for anything besides gambling. There is a very long way ahead for any crypto to become anything else.

". I've lost a ton of trust in the Canadian government after they deemed it illegal to donate to a cause they disagree with." You are still in a democracy. Feel free to move to russia if you prefer a dictatorship. but otherwise its your responsibility to accept democratic decisions you don't like or you don't understand.

I'm not saying its always fair or that democracy/canada is the best thing in the world but for you as an individual, with the current options that actually is the best case for you.

"Only the rich will benefit from banning cryptocurrency." the rich don't care. They benefit from everything which makes money.

>China banned mining and mining was gone immediately (largely moving to Kyrgystan it seems).

Kearney, NE seems like a popular destination too, for crypto mining.

https://www.npr.org/2022/02/24/1081252187/bitcoin-cryptocurr...

You surely meant Kearney, NE. NB in the North-American context stands for New Brunswick, Canada.

Yes, Thank you.

there is that expression, morality is how people think the world _should_ be, economics is the reality of how it _really_ is

the problem = lack of investment options, stagnant wages, inflating cost of living, being priced out

solution = gambling on crypto and making some money

speaking as a millenial. honestly crypto is the only way could ever dream of buying a house.

ive been working 15 years and saved 150k. average family home in my town is over 1 million.

and stocks are inflated, the s&p is almost at a 90 degree angle. i bought btc in 2014 and my only regret was not buying more.

Everything is inflated and has been bid up. Cryptos are certainly no exception, it's only gotten worse in the last two years with all the FOMO they fostered and salesman that gathered to profit off my disillusioned generation. To each their own, but I think the idea that TINA to crypto is plain silly, yet I know more people (am millennial) owning crypto than stocks, always with this notion that TINA. At least with stocks you're still entitled to legal ownership of cashflows, with cryptocurrencies today you merely get a late entrance ticket to a digital commodity that might have monetary value, but trades like just another risk-on asset.

The S&P500 will always look like a 90 degree angle on a long enough timeline, that's just how exponentials work. And it is by definition exponential as earnings compound, a quality cryptos do not possess. But it is ironic to hold that against it when 5-year charts in the crypto world look as they do.

Time will tell which way it resolves I guess.

yes, crypto is inflated, and a pump and dump, but there is opportunity there, and hope. and that is what most retail are buying.

i mean something changed in the stock market after 2008. i'm not really educated enough in finance, but it seems the value of stocks just went vertical. and since the covid pandemic everything has doubled in value. i know its related to decrease in value of usd but since my salary doesnt even increase to match inflation so its the same both ways.

if i invest in stocks, at best i will get 2x after 5 years, at worst i will be buying at the peak of the everything bubble.

FWIW, my point isn't that crypto is doomed and entirely useless - I have a more nuanced opinion (tho no position) but that's not why I'm commenting. I also don't mean to be giving advice to anyway, just sharing opinions while it's on topic. My point is that a whole damn lot of my age group peers have drunk the Kool-Aid that crypto is the only game in town and that there is no alternative, which is silly to be respectful, and foolish to be less so.

No one rational would argue there is no opportunity there, there's tremendous trading opportunity in any market and it only goes up (as well as the risk) the more volatile and unregulated it is. There's also tremendous opportunity to make money in the Turkish market, Russian ones these days I bet will mint millionaires. That doesn't say anything regarding if it's a good idea or not to partake, let alone to buy, pray and hodl.

>that is what most retail are buying.

That kills your opportunity, going to the crowded asset isn't exactly good for you, it just increases your cost basis and reduces your earnings or dividend yield (not that you get one with most cryptos). It's good if you're trading and have an edge in that game tho, but that's not what people I know do when they buy crypto for the long haul or gamble for the short term.

>if i invest in stocks, at best i will get 2x after 5 years, at worst i will be buying at the peak of the everything bubble

That seems to be the general theme. Pessimistic outlook on the best case for stock with an optimistic outlook for the best case in crypto while ignoring it's worst case. Also while ignoring the monumental amount of fraud and open scheming in crypto (CC: all the influencers and their literally worthless NFTs, the rugs, the thefts, the bot-phishing), doesn't exactly scream "rational, not a bubble market".

Why not realistically looking about the worst case for both rather than focus on the best case for one? For crypto it's possibly getting offramps rugged by governments or even simply the market changing it's mind - with no intrinsic value there's basically no floor. In both cases you get wiped entirely. For stocks there'll always be a floor as they represent stakes in the actual economy, real companies with real balance and earnings sheet. Worst case historically is a -90%, but that went with the great depression and famine, you'll have bigger worries. A 2008 style historic crisis is a mere -50%.

I think owning crypto makes sense, but I can't understand the rationale behind being all-in crypto with significant life savings which I see a lot. If it's really gonna overtake the entire fiat system, you'll be just fine even without risking to lose everything you own in the even it's a dud and doesn't overtake the financial system.

Ethereum has revenue 1b per month - and that’s 100% profit. It’s highly undervalued at the moment.

You mean miner fees? How's that a 100% margin after hardware and electricity? Sure if the network transfers to a PoS/ETH2 model those operating costs go down, but so will transaction fees, hence revenue, with the planned sharding, transaction wrapping/bundling (I'm forgetting the terminology here) and burning, no? It also seems necessary to gut those transaction costs if ETH wants to be useful. Even then, that staking model isn't exactly costless either for nodes, they do have to freeze assets therefore giving it opportunity cost and making their goods highly illiquid.

I'd add, if your revenue figure is right, 12B profit (let's be generous) isn't exactly something to drool about on a 250B base. A 5% yield is of course fine if sustainable, arguably high end (in line with sectors like oil, but below sin sectors and specific stocks), but I'd bet 5% is not the sort of returns the crypto crowd is aiming for, not even close. There are safer ways to earn 5%.

>Crypto may well be the biggest solution looking for a problem I've ever seen.

People don't understand crypto yet... play around with it a bit.

Things not possible in the current financial system:

- Participate in a crowdlown on polkadot.

- Play around in some DeFi. Earn yield on two assets.

- Store some files hyperlocally and encrypted on peoples laptop with filecoin. And learn how persistant indexing will help the internet be more resiliant.

- Sell some data using ZKsnarks.

- Query the blockchains persistance with the graph.

And if you don't do any of the above and you still hate crypto, just do this for your future self.

- Write a smart contract that sends some coins back to your wallet in 10 years.

If you're correct in your opinion, you get to make fun of all your friends who spent a percentage of their portfolio in the crypto space. And joke about how they should have cashed out in 2020.

But if you're wrong, you have missed the technological innovation of your generation and the potential to shake up the class system.

> the potential to shake up the class system.

0.01% of bitcoin holders controls 27% of the currency in circulation. [0]

If this is changing the class system in any way, it's for the worse.

[0] https://www.wsj.com/articles/bitcoins-one-percent-controls-l...

Because i doubt the roth childs are among those whales.

Think again. https://www.coindesk.com/markets/2021/07/20/rothschild-inves...

for the rothchilds it represents .00001% of their total wealth.

The rothchilds keep their wealth in art, land and gold and why they have managed to stay rich for so long.

I can point to atleast one person who's class shifted and that person is me.

Also, you cherry picked one point among many and misunderstood it. Although there may be some of the financial elite who bought in early in BTC and crypto (Especially A-Z) there was alot of nerdy technologists among the winners. Also, alot of those winners have gone to set up hundreds of crypto companies who might even be more centralized.

Anti-centralization isn't the point i was making, it was a redistribution of that centralization which obviously can never be supported with hard facts but rather a feeling and subjective experience i've had with crypto billionaires.

What you're saying comes down to "it might make the problem of inequality and class worse, but hey maybe I'll be on top this time".

I suspect you're having a hard time getting people to sympathize and are receiving a lot of pushback because that is an incredibly selfish view that makes people dislike what you're proposing.

You're coming at if from an angle of fixed pie wealth, then yes. It might make inequality and class worse. But if the total wealth on planet earth is not fixed and you can create wealth through technological innovation, network effects and solidarity then no, giving the technologically driven nerds alot of money to do cool shit with hardly makes "he problem of inequality and class worse".

Edit: Also, your WSj article is bullshit. I believed you, but that analysis is a bold faced lie and cherry picks alot of facts to arrive at the analysis. OFC all the exchanges are going to appear to have alot of btc and since they are "Actively" trading it, that's the only accounts showing up on the analysis. Most of the BTC owners are maxi's - they don't move or use their BTC. Look at a real wallet distrobution and exclude sitoshi's old wallets cause everyone is pretty sure those are lost to the world. BTC distro is ALOT more decentralized than the USD.

Replacing the current megarich with a different set of megarich isn't "shaking up the class system". It's just changing the nametags.

Exactly this!

> Crypto may well be the biggest solution looking for a problem I've ever seen.

Truth. And I have not idea why people think Crypto is a hedge against anything. It pretty much follows the stock market and gold, albeit in much higher gamma.

I'm not aware of any threats by developed countries to ban citizens from interacting with cryptocurrency networks. It seems like the trend is quite the opposite, actually: Most countries are clarifying and tightening up their regulations to ensure legal cut-outs for exchanges and other crypto related money service businesses.

If anything, countries might want to ban mining due to its environmental impacts, but as you illustrated, there are plenty of countries for mining operations to move over to, resulting in a game of cat-and-mouse that at its very most impactful might help catalyze the move from Proof of Work cryptos to Proof of Stake cryptos. I just don't see any future where all crypto is largely banned.

Where is this threat of legal action I'm not seeing?

Agreed. I think the Russia situation may be an interesting test to see whether cryptocurrency can be a viable replacement for SWIFT. I don’t think it will be because, as you said, it is not extragovernmental, and at some points those funds need to be repatriated. And of course cryptocurrency provides a useful public ledger all the way to repatriation.

"Thugs with guns could shut it off at any time" is the weirdest criticism of anything I have ever seen. Don't you see it can be said of everything?

Just buy some and stop being a hater. It's not early anymore.

>Don't you see it can be said of everything?

So why this and not anything else? What's so special about Bitcoin anyways, other than the fact that some HN commenters seem to have some heavy bags that need offloading

The problem is climate change.

https://medium.com/humanizing-the-singularity/can-the-world-...

Smart contracts are the best shot we have of doing carbon, methane etc. tracking, managing offsetting payments and everything else required to start getting a grip on the CO2 emissions of the consumer economy.

I’ve got to admire the Chutzpah of claiming that crypto is the solution to climate change… and seriously, why on earth would this sort of tracking need smart contracts rather than say a database managed by a certification organization? Or even the UN?

In case Justin Trudeau's war on truckers prevents you from helping them buy electric cybertrucks. Or you need to do some cap and trade with Russia. You've got to take the internationalist view here.

This may well be a troll. I really want to believe that it is because the alternative is too depressing. I have a sinking feeling it isn't a troll however. I see so many Crypto Andys who argue for crypto out of unadulterated gross naivete about how anything outside of a very narrow slice of crypto works.

The obvious problem is that crypto is hugely energy inefficient. Bitcoin in particular consumes a ton of energy with PoW (proof-of-work aka proof-of-waste). Defenders will then point to PoS (proof-of-stake) but that creates a different set of problems (eg the computing power for PoW is part of what keeps the network robust whereas PoS is more like a democracy where you get one vote for every $1 you have).

Carbon trading is never going to happen. It's an idea that's been around for at least 30 years. The only people who are interested in it are those who are invested in it. The only thing that will reduce carbon emissions is the alternatives being cheaper. That's it. Absolutely no one is going to even mildly inconvenience themselves otherwise.

And again, any such ideas suffer from the same problem all crypto does: interfacing with the real world. Like how do you agree on the value of something releasing (or potentially sequestering) carbon (or methane or whatever)? It's up for debate. How do you make sure what someone emits is what they claimed to have?

It's a bit like the ivory traders of Hong Kong who magically have never run out of ivory even though the trade was banned and they're only meant to sell existing stocks.

>whereas PoS is more like a democracy where you get one vote for every $1 you have

Less like this and more of how a company is run in real life. Investor, founder, codebase contributor and early coin buyers have alot of the say in the network... Which actually is exactly how it should be. If you were involved in the creation of the network, you should have a say in it's path forward... So am i missing something or does POS completely invalidate your arguments?

>And again, any such ideas suffer from the same problem all crypto does interfacing with the real world. Like how do you agree on the value of something releasing (or potentially sequestering) carbon (or methane or whatever)? It's up for debate. How do you make sure what someone emits is what they claimed to have?

Same way we do it now... Outside validation. The only thing it would do is make it more resistant to fraud is you can have multiple oracles in an open contract that eveeryone will cry foul over if it. Additionally, some of those oracles can be IOT objects controlling and reporting emissions.

These are all solved problems that you are bringing up, the only thing new here is that smart contracts would allow a number of novel things to be done with carbon credits like swapping them for various assets, more controlled reporting with a fixed standard, greater visibility across the supply chain, etc. etc.

I get he didn't explain himself, but there are smart contracts on !Ink which is POS and eth is trying to transition to POS if they can convince individuals to bet on the concensus change.

cryptocurrency saving us from climate crisis! no one saw that one coming

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