Cryptocurrency and the unbanked • Hacker News Board

Re: Cryptocurrency and the unbanked

#51

Post by joefourier » Sun, Oct 03, 2021, 12:24 PM UTC

redka wrote: post #38

As usual, here on HN, any time something is posted that relates to cryptocurrencies the discussion gets filled with negativity and even, seemingly unprovoked, outright hostility toward the idea. Overall HN (in my opinion) has a very good quality of discussion and I often read the comments before opening a link or even just for the sake of it. Nevertheless when it comes to cryptocurrencies that assumption goes out the…

The cryptocurrency space has been almost entirely overtaken by people whose sole interest is to get rich from coins increasing in value. These people don’t actually care about the technical aspects or real-world use outside of how it creates buzz that makes the price go up.

The field is basically fuel for the worst elements of the wider financial world - pure speculation, hype, volatility and discourse appealing to greed and FOMO, with the actual fundamentals negligible outside of a few niche uses.

Meanwhile HN is filled mostly with engineers and tech-minded people (“geeks” if you will - I include myself in that group), and it is no surprise that there would be distaste for a formerly technologically promising field that has turned into a playground for trend-following marketers.

Re: Cryptocurrency and the unbanked

#52

Post by jonnycat » Sun, Oct 03, 2021, 12:25 PM UTC

redka wrote: post #38

As usual, here on HN, any time something is posted that relates to cryptocurrencies the discussion gets filled with negativity and even, seemingly unprovoked, outright hostility toward the idea. Overall HN (in my opinion) has a very good quality of discussion and I often read the comments before opening a link or even just for the sake of it. Nevertheless when it comes to cryptocurrencies that assumption goes out the…

I think there's a certain trap that many software engineer & technical types fall into with crypto. Crypto & blockchain are often portrayed as technically superior solutions to many problems, especially by non-technical people. Many of these problems, upon technical scrutiny, are actually not better with crypto: for most crypto use-cases, one could build a more efficient, simpler & "technically superior" solution using centralized services like, I don't know - a Postgres database and a REST API. In this way, a lot of technical people see crypto as a solution in search of a problem.

But the interesting thing about crypto is - in my opinion - not technical: it's social, and economical. Due to the decentralization, it changes the kinds of systems & solutions that are socially and economically viable. When I say "economical", I don't mean that the solutions are necessarily cheaper in the dollar sense, but in the sense that it changes which parties can participate in and profit from those systems. DeFi, for example, lets individuals participate in, and benefit from, transactions that used to only be provided by traditional banks.

So while there are many technical types that do see this side of crypto, there are many for whom their deeper technical understanding is a bit of a liability on the topic.

Re: Cryptocurrency and the unbanked

#53

Post by [deleted] » Sun, Oct 03, 2021, 12:38 PM UTC

redka wrote: post #38

As usual, here on HN, any time something is posted that relates to cryptocurrencies the discussion gets filled with negativity and even, seemingly unprovoked, outright hostility toward the idea. Overall HN (in my opinion) has a very good quality of discussion and I often read the comments before opening a link or even just for the sake of it. Nevertheless when it comes to cryptocurrencies that assumption goes out the…

[deleted]

Re: Cryptocurrency and the unbanked

#54

Post by zinekeller » Sun, Oct 03, 2021, 12:38 PM UTC

3np wrote: post #46

zinekeller wrote: post #40

Earlier quoted context omitted.

> Cryptocurrencies (when done in a way that liberates the user as opposed to being wrapped in centralized fintech) break this dynamic completely. Now, tell me how to do this exactly ? (At least a general sketch?) Because I really think that this is really not a problem that can be seen with cryptocurrency, but rather with how societies work, which is hard to solve. I don't want to favour one or the other, but societa…

Maybe not “exactly” but for key management roughly something like the Ledger Nano X (has to come down 10x in price obv): Small separate device that can be used to sign transactions with. Can be used with smartphone wirelessly. This device should also work seamlessly for general 2FA and auth/identification, preferably usable with government services. Apart from being sold directly to consumers, it could be issued by p…

Okay, I will assume that the government is either caring, doesn't care or incompetent (meaning not actively suppressing this). You forgot the mining side, so how do you solve that? Because, for example, the 50%+1 problem is still there, right, so if you really want a decentralised system, you also need to solve this.

Also, your solution doesn't work against oppressive governments. (Again, I don't have a solution to that, just pointing out that they do exist.)

Re: Cryptocurrency and the unbanked

#55

Post by lowkey » Sun, Oct 03, 2021, 12:43 PM UTC

zinekeller wrote: post #40

3np wrote: post #34

Earlier quoted context omitted.

(I don't feel I'm expressing myself well here, but bear with me:) Something that tends to be underappreciated is the risk associated with contemporary mobile payments solutions. Both the individual and the local economy become incredibly reliant on a small number of private companies. For more well-off individuals who can spread their risk ad easily switch providers, this is much less of a practical risk and therefor…

> Cryptocurrencies (when done in a way that liberates the user as opposed to being wrapped in centralized fintech) break this dynamic completely. Now, tell me how to do this exactly ? (At least a general sketch?) Because I really think that this is really not a problem that can be seen with cryptocurrency, but rather with how societies work, which is hard to solve. I don't want to favour one or the other, but societa…

See Bitcoin’s BIP-39.

With crypto, if I can remember 12 words I can freely transport my life savings anywhere in the world and no government can seize my wealth without torturing me into giving up my passphrase. Can you share a similar strategy for refugees using fiat, gold, real estate, stocks or bonds?

Re: Cryptocurrency and the unbanked

#56

Post by lowkey » Sun, Oct 03, 2021, 12:45 PM UTC

zinekeller wrote: post #54

3np wrote: post #46

Earlier quoted context omitted.

Maybe not “exactly” but for key management roughly something like the Ledger Nano X (has to come down 10x in price obv): Small separate device that can be used to sign transactions with. Can be used with smartphone wirelessly. This device should also work seamlessly for general 2FA and auth/identification, preferably usable with government services. Apart from being sold directly to consumers, it could be issued by p…

Okay, I will assume that the government is either caring, doesn't care or incompetent (meaning not actively suppressing this). You forgot the mining side, so how do you solve that? Because, for example, the 50%+1 problem is still there, right, so if you really want a decentralised system, you also need to solve this. Also, your solution doesn't work against oppressive governments. (Again, I don't have a solution to t…

See my point above. If you can memorize 12 words crypto makes this possible. No other store of value can make the same claim. No hardware wallet is required.

Re: Cryptocurrency and the unbanked

#57

Post by lowkey » Sun, Oct 03, 2021, 12:55 PM UTC

chii wrote: post #13

EdwardDiego wrote: post #9

Earlier quoted context omitted.

Cryptocurrency really feels like a solution desperately in need of a problem.

Crypto is a solution to the "problem" of centrally controlled money. I'm just not 100% sure that it is a real problem, but those who buy it either believe it to be, or at least, want to hedge for it.

“The root problem with conventional currency is all the trust that's required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust.” - Satoshi Nakamoto, The Bitcoin Whitepaper.

What if I told you that the root cause of inflation is not the price increases, those are a side-effect. The real cause is that the value (aka purchasing power) of your money is being diluted by means of central banks printing money and stealing value from the populace over time.

70% of the US dollars that were ever created were created since the invention of Bitcoin. It is only natural that the real value of those dollars has fallen.

Inflation is theft by central bankers to pay for politician’s desires without openly increasing taxes on the people.

Bitcoin fixes this because no politician, central bank or corporation can ever inflate the supply over 21 million, nomatter what they do.

Re: Cryptocurrency and the unbanked

#58

Post by redka » Sun, Oct 03, 2021, 12:58 PM UTC

joefourier wrote: post #51

redka wrote: post #38

As usual, here on HN, any time something is posted that relates to cryptocurrencies the discussion gets filled with negativity and even, seemingly unprovoked, outright hostility toward the idea. Overall HN (in my opinion) has a very good quality of discussion and I often read the comments before opening a link or even just for the sake of it. Nevertheless when it comes to cryptocurrencies that assumption goes out the…

The cryptocurrency space has been almost entirely overtaken by people whose sole interest is to get rich from coins increasing in value. These people don’t actually care about the technical aspects or real-world use outside of how it creates buzz that makes the price go up. The field is basically fuel for the worst elements of the wider financial world - pure speculation, hype, volatility and discourse appealing to g…

I don't find it surprising that this space is being crowded with opportunists, marketers, scammers or people motivated by greed because that's the most obvious thing that would happen when you mix vast amounts of money with new technology that offers such possibilities. Their existence doesn't invalidate any actual premises.

Re: Cryptocurrency and the unbanked

#59

Post by davidgerard » Sun, Oct 03, 2021, 1:03 PM UTC

lowkey wrote: post #57

chii wrote: post #13

Earlier quoted context omitted.

Crypto is a solution to the "problem" of centrally controlled money. I'm just not 100% sure that it is a real problem, but those who buy it either believe it to be, or at least, want to hedge for it.

“The root problem with conventional currency is all the trust that's required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust.” - Satoshi Nakamoto, The Bitcoin Whitepaper. What if I told you that the root cause of inflation is not the price increases, those are a side-effect. The real cause is that the value (aka purcha…

The article says "cryptocurrency", not bitcoin. There are 10,000+ cryptocurrencies - and both the trading markets and the payment markets are agnostic as to which token they use, as long as traders can make money and payments go through.

Anyone can make their own crypto, and they do - so cryptocurrency as a whole is hyperinflationary.

Bitcoin maximalists say, but bitcoin is first and unique in many ways. Certainly - but not in ways that the trading or payment markets appear to care about. The "banking the unbanked" proposal is much closer to the payments market - nothing about it seems to depend on bitcoin's special characteristics.

I note that you're proposing a bitcoin version of Austrian economics there, with the word "bitcoin" substituted for "gold" - but Austrian economics proponents have long noted this cut'n'paste cryptocurrency problem with the bitcoin proposition.

Re: Cryptocurrency and the unbanked

#60

Post by davidgerard » Sun, Oct 03, 2021, 1:08 PM UTC

bradwood wrote: post #39

jsemrau wrote: post #15

Not yet. The on and off-ramps are still way too complicated. Getting an account with one of the established banks (a.k.a exchanges) is painful. AML/KYC takes weeks, the user interface is a mess, every turn costs you "fees", trading is dominated by whales when they move their money around to pump some shit-err... alt-coin, and finally getting back into fiat so you can actually use all of the "in-game" currency is slow…

On and off ramps are predicated on the necessity to transfer fiat into and out of crypto. This (some would argue) is just an intermediary state before _everything_ is crypto. In El Salvador, there is no need to off-ramp fiat into BTC...

> In El Salvador, there is no need to off-ramp fiat into BTC...

This is a functionally incorrect description of how the system is working there, or doesn't. In practice, the bitcoin systems there are tremendously unreliable, and the populace hates everything about it. I wrote this about how it's going: https://archive.is/mJY30

You could argue that none of what went wrong with it is "bitcoin" per se - but then, the "bitcoin" system that El Salvador actually has doesn't resemble what Nakamoto proposed in any way.