Cryptocurrency and the unbanked • Hacker News Board

Re: Cryptocurrency and the unbanked

#61

Post by zinekeller » Sun, Oct 03, 2021, 1:26 PM UTC

lowkey wrote: post #55

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…

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?

This is feasible if you have something for long-term savings. At the same time though, this doesn't solve the day-to-day problems though (like transactions), especially in context of Africa.

Re: Cryptocurrency and the unbanked

#62

Post by api » Sun, Oct 03, 2021, 1:39 PM UTC

zinekeller wrote: post #2

Eh, probably, but so can mobile banking solutions[1] that are popular in Africa. Unlike in, for example, Europe where mobile payments requires a (relatively fancy) phone, M-Pesa works even on basic phones, which you can't say about cryptocurrencies in general. This is not to dismiss them, of course, but "conventional" currency already has a solution for this, so unless you're advocating for decentralisation (which is…

Conventional currency can do anything cryptocurrency can do with far less overhead and usually less complexity… if you can trust someone.

The problem is that centralized trust creates moral hazard and over time tends to be abused. Abuse of centralized trust can be incredibly destructive both financially and in humanitarian terms.

To me the key question is which is cheaper?

Is it cheaper to run cryptocurrency with all its overhead or is it cheaper to use faster cheaper simpler centralized systems and “eat” corruption and abuse since those represent the hidden costs of those systems.

The answer differs depending on which society you are evaluating and it’s corruption index. It’s not the unbanked that represent a hidden base of cryptocurrency users. It’s those that reside in kleptocracies and failed states.

Re: Cryptocurrency and the unbanked

#63

Post by bradwood » Sun, Oct 03, 2021, 1:46 PM UTC

davidgerard wrote: post #60

bradwood wrote: post #39

Earlier quoted context omitted.

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 "b…

> the populace hates everything about it

This sentence alone tells me everything I need to know about your position: "the populace" (implying everyone) and "everything" -- riiight... I think you need to tone down the superlatives a bit and maybe try researching both sides for your next article. A 1000 people marched against bitcoin -- this is hardly "the populace"...

There is no arguing that it (Chivo) got off to a shaky start... but we already know that Chivo has more users than the banks have fiat accounts in El Salvador.[1]

As to "bitcoin systems" -- it's just regular bitcoin and the lightning network and these are _global_ systems, not systems that are only "there"...

Finally, you just need logic to know that if something is sold in BTC, and you have a BTC wallet, you can buy something in BTC, using your BTC wallet, without needing fiat. Hence, fiat on/off ramps are obviously not needed to be able to be paid, and live, and save, and purchase stuff there.

[1]: https://twitter.com/nayibbukele/status/1441846960332361730?s...

Re: Cryptocurrency and the unbanked

#64

Post by ahallock » Sun, Oct 03, 2021, 1:46 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…

Ignore those people then. There are communities dedicated to their projects and care about the underlying tech and long-term vision. Every industry, especially those involving money, will have unsavory elements. It's human nature.

Re: Cryptocurrency and the unbanked

#65

Post by DennisP » Sun, Oct 03, 2021, 1:53 PM UTC

davidgerard wrote: post #59

lowkey wrote: post #57

Earlier quoted context omitted.

“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 -…

Then you would expect the value of cryptocurrencies to drop like a stone and never recover, but it hasn't worked out that way. Maybe markets aren't quite as agnostic as you think.

Seems to me we're actually heading for the competing private currencies advocated by Hayek, who thought the result would be long-term price stability without the need for top-down control.

Re: Cryptocurrency and the unbanked

#66

Post by plebianRube » Sun, Oct 03, 2021, 1:57 PM UTC

> Consequently, knowledge is the most vital asset to be able to use the financial opportunities that crypto offers. Knowledge about how to use the technology and, more importantly, about cyber security. How can I keep my money safe? Which dapps are good to exchange, loan, and lend money, and how do I recognize scams?

I think increasing knowledge is one of mankind's highest aspirations. If after doing research, you find it isn't for you, so much the better. At least you've increased your knowledge.

People who knee-jerk react and downvote without having knowledge of the space seems to be the norm here.

Crypto isn't something that can be learned in an afternoon, or be taught with a few comments. It is an overlap of technological and social space that is evolving constantly.

Re: Cryptocurrency and the unbanked

#67

Post by blueblisters » Sun, Oct 03, 2021, 1:59 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…

Central banks debase currencies to discourage people from hoarding cash and using it as a store of value instead of investing it into productive assets. They are not perfect but they don't pretend to be something they are not.

Bitcoin claims it's a "currency" but almost everyone uses it like a store of value (HODL) because its value keeps increasing.

Re: Cryptocurrency and the unbanked

#68

Post by lowkey » Sun, Oct 03, 2021, 2:05 PM UTC

davidgerard wrote: post #59

lowkey wrote: post #57

Earlier quoted context omitted.

“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 -…

“Central banks debase currencies to discourage people from hoarding cash and using it as a store of value instead of investing it into productive assets.

So they claim. Could it also be that debasing the currency is far easier than taxation as a form of wealth appropriation since the effect is subtle and indirect?

Re: Cryptocurrency and the unbanked

#69

Post by prepend » Sun, Oct 03, 2021, 2:23 PM UTC

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…

It’s weird how unusable my experience is. I recently tried to open a basic account with an exchange, Gemini, and after a few rounds of onboarding (all confusing and disjointed) I was kicked out of the process. My nascent account was closed with a confusing message.

After emailing I was told that they decided not to open my account for reasons they won’t state and there’s no appeal.

This was weird because I was a new customer with no transactions and all I had done was send a photo of my passport and enter KYC info.

All a bad experience and just shows it’s ridiculous compared to banks.

Banks have problems, but they do have regulators at least.

Re: Cryptocurrency and the unbanked

#70

Post by redka » Sun, Oct 03, 2021, 2:33 PM UTC

jonnycat wrote: post #52

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 usi…

I agree with you about the importance of the social and economic ramifications - after all, that's the main idea behind a lot of cryptocurrencies, conceptually. I guess you might be right though that this isn't obvious or some perhaps not think of it as an important objective. I'm not sure about the trap though - or maybe I think of it differently - because what you're describing I associate only with some form of business bastardization of the idea where people are led to believe false things without ever actually grasping the underlying concepts. In which case, sure, there's your postgres or your web panel or whatever. But if you know any better you'll realize that if you *can* build something without requiring blockchain or other such systems then you're simply doing something else entirely and it might be completely unrelated. The whole point is that you can't just host an application with Postgres backend or create anything that is more efficient or "technically superior" (not easily, anyway) without compromising the uncompromisable which is some crucial property of the system, eg. decentralization, permisionlessness. I can easily conjure up "better" solutions to an infinite pool of problems if I can simply reject the requirements.