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Cryptocurrencies: looking beyond the hype

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Re: Cryptocurrencies: looking beyond the hype

#31

Post by curiousgal »

CiPHPerCoder wrote: post #17

> Yet, looking beyond the hype, it is hard to identify a specific economic problem which they currently solve. People seem to forget that cryptocurrencies emerged from a culture of cryptoanarchy, not from economists or governments. Anarchists generally don't want to help the government solve problems, they view the government as the very problem to solve. (I'm speaking very broadly here.)

Well as a Tunisian with no access to PayPal, Bitcoin was the only way I could pay for goods and services online there. Nothing can undo the effect that had on my life.

Re: Cryptocurrencies: looking beyond the hype

#32

Post by viach »

stale2002 wrote: post #23
cliffy wrote: post #14

Earlier quoted context omitted.

Let's imagine a scenario where you're not able to withdraw from a bank due to insolvency. If you're in the US your deposits (principal + interest) are insured up to $250,000 by the federal government. [0] If the federal government is insolvent your cryptocurrency will be useless because you won't have reliable Internet access and thus you won't have access to the resources needed to make or verify transactions on you…

You are talking about societial collapse using the future tense, as if this is some hypothetical situation. It is not a hypothetical situation. It is happening right now in Venezuela. All you have to do is look how Venezuelans are using Bitcoin right NOW to understand it's value.

I'm talking about this situation using my own experience , not hypothetical at all. It is obvious my English sucks, oh well ...

Re: Cryptocurrencies: looking beyond the hype

#33

Post by Mc_Big_G »

This might not be particularly relevant to the article, but I'm still genuinely shocked that the HN crowd is so anti-cryptocurreny. Most of the arguments against it are akin to someone in 1995 saying the internet isn't viable because it's insecure, there's no real business use-case for it, no major corporations are investing in it, it's super slow, no one is ever going to use it for real-world business transactions, it's only used by geeks, etc... If you said that in 1995 you were terribly wrong and you'll be wrong about this as well. Criticisms of alta-vista may have had some relevance but criticizing the underlying ideas and technology is short-sighted.

Re: Cryptocurrencies: looking beyond the hype

#34

Post by sebleon »

> hard to identify a specific economic problem which they currently solve

Problem: a handful of private companies could exert monetary censorship.

World changing organizations like Wikileaks are possible because of cryptocurrencies, when Visa/Mastercard/etc began blocking donations. Cryptocurrencies enable anyone to take online payments. [1]

> Transactions are slow and costly, prone to congestion, and cannot scale with demand

Lightning Network has found a very promising solution to these issues. Off-chain transactions can be completed in under a second, without the scalability concerns of on-chain transactions. I highly recommend checking this out if you're unfamiliar [2]

[1] https://www.forbes.com/sites/jonmatonis/2012/08/20/wikileaks...

[2] https://lightning.network

Re: Cryptocurrencies: looking beyond the hype

#35

Post by chrisco255 »

jeffreyrogers wrote: post #18
CrazyInNewYork wrote: post #2

it is hard to identify a specific economic problem which they currently solve Receiving, owning and spending money anonymously. Remember when extortionists had to be paid with a suitcase full of banknotes? Receiving money without being exposed to the danger of fraud. Receiving money via Credit Card is surprisingly risky for the merchant. Transferring money internationally without additional costs. Portfolio optimizat…

> Portfolio optimization. Crypto currencies are probably not perfectly correlated to other assets. So it stabilizes the portfolio to add some crypto. Considering cryptocurrencies have only come to prominence during a bull market and unusual macroeconomic conditions I don't think you can conclude this. I would bet they're strongly correlated with the stock market. And because of lack of liquidity are likely to crash h…

I would not make that bet at all. Why would there be any correlation between crypto and the stock market? Also, crypto is arguably more liquid than stocks. They trade 24/7, there's decentralized exchanges, ATMs for BTC, etc...can't take my company stock to an ATM machine. And cashing out stock often takes weeks.

Re: Cryptocurrencies: looking beyond the hype

#36

Post by tootie »

sebleon wrote: post #34

> hard to identify a specific economic problem which they currently solve Problem: a handful of private companies could exert monetary censorship. World changing organizations like Wikileaks are possible because of cryptocurrencies, when Visa/Mastercard/etc began blocking donations. Cryptocurrencies enable anyone to take online payments. [1] > Transactions are slow and costly, prone to congestion, and cannot scale wi…

You're basically talking about evading sanctions and/or money laundering.

Re: Cryptocurrencies: looking beyond the hype

#37

Post by chrisco255 »

banachtarski wrote: post #4
CrazyInNewYork wrote: post #2

it is hard to identify a specific economic problem which they currently solve Receiving, owning and spending money anonymously. Remember when extortionists had to be paid with a suitcase full of banknotes? Receiving money without being exposed to the danger of fraud. Receiving money via Credit Card is surprisingly risky for the merchant. Transferring money internationally without additional costs. Portfolio optimizat…

> Receiving money without being exposed to the danger of fraud. Receiving money via Credit Card is surprisingly risky for the merchant. We have this well established thing called a credit score which is handled by the credit card agency and resolves trust issues for the merchant entirely. If a person suspects identity theft, they can put a hold on a card, preventing further use. Cards have expiration dates and period…

In the past couple years, my credit card number has been scanned at least 3 or 4 times from (likely) gas pump readers. Those scans resulted in transactions that I didn't have to pay for (but some merchant did).

Re: Cryptocurrencies: looking beyond the hype

#38

Post by tootie »

viach wrote: post #13

> it is hard to identify a specific economic problem which they currently solve It is hard to identify such a problem till you believe you can withdraw your money from a bank anytime. Visiting a bank and getting an answer "please come tomorrow" for several weeks changes a person's view on cryptocurrencies and problems they could solve, imo.

Imagine trying to pay for something with crypto and having the seller deride it as fake money that they refuse to accept. That is illegal with officially minted currency.

Re: Cryptocurrencies: looking beyond the hype

#39

Post by sebleon »

tootie wrote: post #36
sebleon wrote: post #34

> hard to identify a specific economic problem which they currently solve Problem: a handful of private companies could exert monetary censorship. World changing organizations like Wikileaks are possible because of cryptocurrencies, when Visa/Mastercard/etc began blocking donations. Cryptocurrencies enable anyone to take online payments. [1] > Transactions are slow and costly, prone to congestion, and cannot scale wi…

You're basically talking about evading sanctions and/or money laundering.

I'm pointing out a clear example that invalidates a major assertion from the BIS report.

Re: Cryptocurrencies: looking beyond the hype

#40

Post by mrb »

gfo wrote: post #21
CrazyInNewYork wrote: post #2

it is hard to identify a specific economic problem which they currently solve Receiving, owning and spending money anonymously. Remember when extortionists had to be paid with a suitcase full of banknotes? Receiving money without being exposed to the danger of fraud. Receiving money via Credit Card is surprisingly risky for the merchant. Transferring money internationally without additional costs. Portfolio optimizat…

You're joking, right? > Receiving, owning and spending money anonymously. Remember when extortionists had to be paid with a suitcase full of banknotes? As stated in other comments, Bitcoin is hardly anonymous anymore. There's a much greater ability to trace wallet addresses back to individuals or groups than there used to be. > Receiving money without being exposed to the danger of fraud. Receiving money via Credit C…

«As stated in other comments, Bitcoin is hardly anonymous anymore»

Cryptocurrencies ≠ Bitcoin. There are quite a few cryptocurrencies that provide full anonymity (eg. Zcash with its zk-SNARKs.) Besides, Bitcoin is sufficiently anonymous for most.

«Fraud was (and likely still is) rampant in the digital currency community when Bitcoin hit its peak»

Still, for the recipient of an online payment, receiving cryptocurrencies (specifically Bitcoin, Ethereum, etc: the big ones that can't easily be 51%-attacked) are the less risky option that exists for them.

«Also, at least with credit there's legal recourse. It's at least something compared to nothing with digital currencies.»

False. There is legal recourse for cryptocurrencies. Governments have and will continue to legally prosecute cases of crypto theft. It might be harder to recover the money, but there definitely is legal recourse.

«At Bitcoin's peak there was a significant cost to doing any transfers. This is now admittedly lower but to the average person I don't think this is a strong enough argument alone.»

Global remittance fees cost an average of 7.13% (https://remittanceprices.worldbank.org/en) which is terribly high. The crypto tx fee is typically much smaller. This is still a strong argument in their favor.

«takes so much computing power to confirm a transaction»

Transactions don't consume energy. The transaction rate could increase without necessarily increasing the energy consumption. This is a big misconception floating around cryptocurrencies.

«Also, what do you propose when quantum becomes mainstream? Every wallet in existing currencies will be cracked in mere seconds»

And legacy banking will break too (VPNs, IPsec, encryption at rest, TLS shopping sessions, and so on.)

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