Comment by null0pointer | Hacker News Reader

Comment by null0pointer | Hacker News Reader

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Cash is good, in fact Bitcoin was originally proposed as “Peer-to-peer digital cash”. Crypto attempts to extend some of the properties of cash to the internet. Unfortunately Bitcoin has kind of failed in this goal at this point and become used more as a store of value rather than a medium of exchange.

You have good points about the physicality of cash and the guarantee that merchants will accept it. Crypto can be carried around physically with a hardware wallet, though it’s still not quite as good as cash in this regard. And that guarantee that cash is accepted comes with legal tender status. You can’t be guaranteed to be able to spend CAD in US for example, but plenty of the world has multiple legal tenders, see Europe.

I like cryptocurrencies, but admittedly they are still pretty clunky to use. Bitcoin has a lot of development momentum behind it, but I don’t see it as the feasible option going forwards due to the scaling shitshow and lack of privacy (no, taproot won’t solve this because you need privacy by default otherwise private transaction default to “suspicious”). Ethereum is great, I really like Vitalik’s leadership and it arguably has even more development momentum than Bitcoin. Unfortunately it also has the scaling and privacy issues like Bitcoin and additionally it seems to be primarily used to create pump and dump scam coins and shit like NFTs which are always going to clog up the base layer. Monero seems to have the most potential to me. It is like Bitcoin but has default privacy and on-chain scaling (we will have to see how that holds up under more adoption) without the dogma.

Honestly, I think the solution to crypto and other e-payment methods being hard to use is for the next government that wants to adopt crypto to go with a PoS crypto. Then they can purchase a reserve, stake it, and issue a series of notes keyed to some portion of that reserve (in other words, if their reserve was split into a billion notes, they would have a billion unique serial numbers).

Citizens could then just use the notes (with counterfeit measures in place) or bring it to the bank to deposit, and (at their discretion) withdraw on-chain. If the citizens want the staking rewards, they'd have to self-custody on-chain, but the nation could implement a system where users/merchants could scan the notes on receipt (which would validate the authenticity, as well as provide information about circulation which would help with anti-counterfeit measures). Upon scanning, you'd then get a kickback from the staking rewards, proportional to the amount and the date of last scan.

Sounds like a nightmare, but it makes it accessible to homeless people, elderly, etc. and it's honestly more private than existing digital payments; scanning would be at your discretion.

Sure but doesn't that essentially ask the government to back the whole thing? In which case, how is that scenario any different than life w/o cryptocurrency (i.e. physical cash + debit cards + credit cards)?

The government is custodying the crypto, sure. But they can't arbitrarily print more. E.g. you can verify that your note is tied to some amount of crypto on the blockchain.

If you want to self-custody, you can. If you want to make payments on-chain, you can.

The cash is just for convenience and making it more accessible to people who might not have phones. Blending custodial solutions as a way to abstract the complexity of actually using crypto away from people, with the actual blockchain they serve as an interface to, lets people choose their approach based on their comfort level.

Bitcoin has already won; Satoshi proved it in the paper. Its pre-existing longer blockchain has more proof-of-work put into it than the competitors, they cannot overtake it because they're backed by the same underlying asset (energy). The demand for mining one squeezes out the market for the other.

Aren't blockchains fun!

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