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Cryptocurrency and the unbanked

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Re: Cryptocurrency and the unbanked

#91

Post by imtringued »

shadowprofile76 wrote: post #28
masklinn wrote: post #10

Earlier quoted context omitted.

> a solution desperately in need of a problem. Or a pyramid scheme in need of an excuse / justification.

Please do define how Bitcoin or Ethereum (among others) are "pyramid schemes". Cryptocurrencies have indeed been used for pyramid schemes by specific actors, but then again so has normal money, and many other things. Numerous people on this site who presumably have the intellectual faculties to know better toss that little qualification out from their mouths almost reflexively out of emotional crypto-hate, but have a…

It doesn't matter if it is a crypto scheme or pyramid scheme. The token itself is not a product, the central distributor sells you tokens in a presale and then you have to recruit new members through marketing the token and sell them your tokens. The point is that there is no end goal. The last person to buy the token didn't get chocolate coins that he can eat.

Re: Cryptocurrency and the unbanked

#92

Post by imtringued »

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...

Why hasn't that happened? I can answer it very easily. Freicoin is a Bitcoin fork that has a holding fee to avoid speculation. Nobody used it. Nobody will use Bitcoin.

Re: Cryptocurrency and the unbanked

#93

Post by acdha »

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 only true to the extent that you can exchange those tokens for the things you need. Just as with all other asset classes, once a government makes an effort those options dry up — and the public nature makes it worse because the system is designed to help the government auditors trace your transactions and punish everyone who’s helped you launder funds, which will be priced into the costs which are already higher than the unbanked can afford.

Re: Cryptocurrency and the unbanked

#94

Post by toolz »

zinekeller wrote: post #86
toolz wrote: post #85

Earlier quoted context omitted.

If you wanted to understand how crypto can help, you should've asked a question - not declared something about crypto that was both incorrect and tangential to the point being made. close to 50% of sub-sharan africa owns a cell-phone and internet quality is of little consequence to crypto as any short frame of connection can facilitate much of what was being described in your parents context (which is infrequent "sav…

The problem is that mobile banks have existed in Africa long before mobile cryptocurrency transactions have been possible. Is the problem is indeed with the banks specifically and not because they literally don't have anything to save? Because I don't think it's solvable with cryptocurrencies in this situation, mainly beacuse banks there have lowered the deposit requirements to the point that you can open an account…

if you want to save and don't have a bank within a reasonable traveling distance - what are your alternatives? Almost everywhere in africa will have at least spotty internet within walking distance - the same can't be said of access to a bank. Now if you have identification maybe you can open an internet bank account (although I suspect that's very difficult for countries/areas that are under-served) or you could buy crypto from any vendor and know that it's secure the second you send it to your wallet.

It's also likely to be expensive to send paper money to your internet bank account as you'll be purchasing wire services or similar, whereas crypto vendors could be nothing more than a contact you have buys crypto and sells in exchange for paper currency.

I don't know enough about these peoples situations to know what will end up serving them best, but I do know having options will always be to their benefit and at the very least crypto will be competition on competing forms of currency.

Re: Cryptocurrency and the unbanked

#95

Post by ItsMonkk »

imtringued wrote: post #89
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…

>Inflation is theft by central bankers to pay for politician’s desires without openly increasing taxes on the people. This is weird. Inflation can happen without any central bank activity. Regular banks can lend out money. People can spend their money faster. All of that creates inflation without benefiting the government at all.

Central banks set the interest rates that regular banks base their rates at. I don't know how you would de-couple those relationships.

Inflation like what we had under the gold standard is bad, it leads to currency hoarding. Deflation is bad, as it leads to all sorts of bad effects. And minimal inflation can also be bad, as it leads to higher asset prices if the velocity is dropping.

I've been working through a thought experiment where we have a cryptocurrency that ensures that velocity stays constant. It does so by enforcing a tax on transactions, where you lock in a transaction to occur at a certain time in the future, but you can pay for it to occur sooner. The more we are taxing, the more we can ensure that the economy is doing well, the more the money supply is allowed to expand.

I'm also thinking that PoW is an extremely bad model, and I would prefer to work with their proof-of-weather, where weather is determined by a combination of many different weather trackers that we can prove occurred but are unable to predict much ahead of time.

It seems to be a good model, but there's still a lot to think about.

Re: Cryptocurrency and the unbanked

#96

Post by lottin »

9krxk9xy wrote: post #77
lottin wrote: post #21

Earlier quoted context omitted.

Which is a ridiculous claim, both because 1) crypto is not more accessible, and 2) being able to access more financial services doesn't make you less financially illiterate.

How is it not more accessible? To open a bank account in the United States, you have to provide an absurd amount of identification and contact information. This usually includes: >Your name & date-of-birth >Your social security number >Your driver's license and/or passport >A video selfie for some online banks >Your street address >Your email address >Your phone number Some of those items can be difficult acquire and…

> On the other hand, I can get an open-source bitcoin wallet on my PinePhone and just use it.

I rest my case.

Re: Cryptocurrency and the unbanked

#97

Post by DennisP »

davidgerard wrote: post #88
DennisP wrote: post #65

Earlier quoted context omitted.

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.

Crypto prices aren't showing anything like stability - I don't see at all how you could claim that. Denationalisation of Money was arguably disproven by the ICO boom - it turned out that actual users just treated the shitcoins as proxies for BTC and ETH, and BTC and ETH as proxies for dollars.

I said we're heading for that, not that we're there now. The demand for transactions is increasing at a rapid pace. I don't think it's reasonable to expect price stability with so much change in demand.

Re: Cryptocurrency and the unbanked

#98

Post by EdwardDiego »

shadowprofile76 wrote: post #28
masklinn wrote: post #10

Earlier quoted context omitted.

> a solution desperately in need of a problem. Or a pyramid scheme in need of an excuse / justification.

Please do define how Bitcoin or Ethereum (among others) are "pyramid schemes". Cryptocurrencies have indeed been used for pyramid schemes by specific actors, but then again so has normal money, and many other things. Numerous people on this site who presumably have the intellectual faculties to know better toss that little qualification out from their mouths almost reflexively out of emotional crypto-hate, but have a…

The current crypto bubbles seem to be working on the "greater fool" theory, same principle can be argued to underpin MLMs - your downline are your "greater fools", and you only make money so long as you (or your existing fools can) can recruit more fools.

Re: Cryptocurrency and the unbanked

#99

Post by ben_talent »

louwrentius wrote: post #33
davidgerard wrote: post #22

This is ridiculous crypto pumping. None of this works unless the world already runs on crypto. And not even El Salvador actually does that, because the populace hate the bitcoin system, the official payment network is completely unreliable, and the unofficial wallets don't have the fees subsidised. The most common issue with "banking the unbanked" is a lack of sufficient documentation. This is not a problem in El Sal…

100% Agree. Frankly, I think this article doesn't belong on HN in any shape or form. It's just people shilling left and right to pretend that cryptocurrencies will be a thing. They aren't and the will never be, because they can't. Cryptocurrencies will make few people rich, but most people, the ones too ashamed to admit it, will lose it all and then some. Ask yourself: where does the money come from? Answer: that lam…

Hey I reposted this article

The conclusion of the article says: "... it's not a magical solution. The reasons for financial exclusion are rooted in deep inequality"

What kind of articles do belong on HN?

Re: Cryptocurrency and the unbanked

#100

Post by megameter »

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…

HN doesn't(as a rule) have economic philosophers in its userbase. What it does have are people who have built their livelihood within the familiar framework and set of rules abided by nations. The system has worked for them, and if it works for you, you're going to be deeply attached to it, in the "attachment theory" sense. When you are attached to an idea, you defend it like it's your kid while also denying that you are doing something exceptional and possibly risky to yourself in defending it. Right from the beginning, Bitcoin made its stance clear that it was going to attack the top-down framework of money. At first this seemed mostly hypothetical, even though the implementation worked. It could be easily dismissed and called dead. Now it's a whole industry with broad, complex impacts. It is winning the war.

The less toy-like crypto becomes, the more you see people freak out about it and try to push it back in the Pandora's box it came from. It's the same kind of thing that happens when people get deeply involved in politics and see an "us and them" and their side loses. They ghash their teeth and spread falsities to keep it from haunting them. And that is most cryptocurrency threads among crypto haters: deep down, they really want the state to enforce the market, because that is "how the world should be".

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