151–160 of 230 posts
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If your only goal is to send digital value across the planet why would anyone use Ethereum or Bitcoin? There are a ton of alternatives that cost fractions of a penny in transaction fees.
I donated hundreds of dollars worth of Ether to Ukraine and paid like $2 worth in gas fees. That's less than 1%. Transferwise takes much more %.
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Not to put too fine a point on it, but the reason the US Federal Reserve exists is to "manipulate" the dollar. Personally, I've always liked Singapore's approach of anchoring the Singapore dollar to a basket of major currencies. However, they also give themselves leeway by not publishing the basket's constituents or weightings, meaning they can still make the dollar dance by tweaking those.
Currency pegs are vulnerable to speculative attacks. https://en.wikipedia.org/wiki/Speculative_attack
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I will welcome it when it does, don't get me wrong. That honestly removes a major issue I have with cryptocurrency (at least with Ether, anyway). There are a host of more theoretical reasons I'm not buying into the ecosystem, but remove that negative externality and hey - you do you, not my bag but you aren't hurting others. I'm sure it is closer than ever, if it wasn't then there's something wrong with the developme…
Don't forget that traditional banks consume lots of energy as well. Their armies of employees and tellers are required to drive an hour or so every day, they maintain tons of physical buildings, truck around piles of physical currency etc. Traditional fiat is given legitimacy based on government's monopoly on violence inside their borders which often result in wars. Nothing is free and I'm fairly certain that crypto…
I still prefer Ethereum's variation of Proof of Stake over Proof of Work, but it's by no means clear to me that Proof of Work based blockchains are less resource-efficient than traditional financial systems, and I would wager a comprehensive analysis would show in fact that they have the potential to be vastly more efficient, if they're allowed to scale up their transaction throughput to amortize their energy consumption across more numerous transactions.
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> If they’re settling in rubles or yuan, for most definitions of “easily,” yes. Completely agree with your comment, just wanted to add that the vast majority of international companies will require a settlement in DM currencies (mainly dollar). This ensures that the relative size of the deal stays stable, as these currencies are highly stable and not subject to domestic manipulation. For a deal to be settled in, say,…
>these currencies are highly stable Can you truly call them stable with 7+% official inflation, negative real interest rates, and China owning 3+ trillion USD-nominated assets, which it probably will start to gradually sell in the wake of sanctions against the Central Bank of Russia?
Not all banks are affected, only the most popular ones, it seems (e.g. VTB, Open).
All of them, including the "unavailable" ones, still have USD and EUR transfer options open to use, not sure if they are SWIFT-based or using something else now.
I don't know what's going on, perhaps DDoS from Anonymous or an overreaction from the banks themselves, but I'm pretty sure Putin hasn't even noticed this unavailability. Are they sure they know what they're doing?
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But it does not - or, to the extent that it does, it only does as a yet-unclosed loophole. If crypto is not currency, it needs to be converted to currency before use and as such can trivially be blocked with KYC rules at conversion. If crypto desires to be a serious currency, it needs to greatly improve efficiency and stop being deflationary. (Funnily enough, Tesla accepts dogecoin but not USDT, so maybe I am wrong w…
Crypto is infinitely divisible, and because of lack of physicality it does not really suffer from lack of liquidity on the same sense that you can't cut a 20usd bill in half to pay a 10usd item, you just swipe with your phone or wherever e-wallet you use The deflationary bit, is sort of a problem on the centralization of wealth yeah, but that's a macro problem, not a barrier of entry to individuals I think that your…
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It's not just "authoritarian governments" but rather "governments" in general, unless you consider the EU government to be authoritarian. And circumventing the law has always been the prime use case for crypto since the beginning. I think everyone has always agreed that it's great for that.
> And circumventing the law has always been the prime use case for crypto since the beginning. I think everyone has always agreed that it's great for that. Absolutely. Even the criminals, scammers and extremists using Signal and its E2EE also use it to communicate with each other whilst sending/receiving funds via a private cryptocurrency called 'MobileCoin' which uses an encrypted blockchain and all transactions are…
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Because every single transaction in USD must result in a credit and debit to an account at the US Federal Reserve (except for transactions entirely in paper money -- this is the reason drug dealers like paper money.) For a transaction denominated Yuan(Renminbi) that transaction must eventually result in a debit and credit entry at the People's Bank of China (the central bank of China). In the latter case no US entity…
> Because every single transaction in USD must result in a credit and debit to an account at the US Federal Reserve If I understand it correctly, in this case, isn't the thing prohibiting that transaction the US sanctions (i.e. https://home.treasury.gov/news/press-releases/jy0612 ), rather than exclusion from SWIFT?
However, transacting through the route that goes from consumer -> Russian Bank -> CBR -> Fed -> US Bank -> US merchant (or in the reverse direction) is not the only route. A Russian bank could also transact with a correspondent bank in another country that transacts with a US bank that transacts with the Fed. So the following transaction might still be possible: consumer -> VTB (Russian bank) -> ABN Amro (dutch bank) -> Citi (US bank) -> Fed -> Bank of America -> US merchant. In fact this is probably the more common path (except VTB might have directly transacted with Citi before last week).
The easiest way to stop these other routes is to ban all Russian Banks from the SWIFT system. This is because pretty much every US bank uses SWIFT to serve as the messaging platform by which they transact with correspondent banks (And they will NOT use any other system -- because of US regulations). So simply preventing SWIFT messaging for all Russian banks makes it enormously difficult for Russian Banks to transact in USD.
Hence the emphasis on blocking SWIFT.
But it is not the end of the world for Russia. They still have three avenues for international trade:
1. Trade in another currency, preferably of a country that is less susceptible to US pressure (e.g. China, and eventually their own) This avoids SWIFT, the US Fed and US controllable financial entities altogether.
2. Use proxies. Have an entity located in another country trade in USD on behalf of a Russian entity. It is usual to keep such proxy relationships secret. However, should US govt. discover the proxy aiding a sanctioned entity, they may sanction the proxy itself, and the jurisdiction in which the proxy does business. So this method of transacting is risky for many entities (both banks and other non-financial entities.) So most won't do it. But some will.
3. Barter. This is not as ridiculous as it sounds. For example India had to use this system to buy critically needed oil from Iran, initially, after the latter was banned from SWIFT. For a very large country like India or (especially) China, that domestically produce a very wide range of goods and services, it can be very viable way to trade. But it is still limiting. Both countries have since moved to their own SWIFT like systems to trade with Iran. But of course, one cannot buy US produced (or more generally western goods) this way. So no iPhones.
I looked a bit into the company SWIFT and found this: https://www.swift.com/swift-resource/250836/download (warning: downloads the file) Page 3 is interesting (ignore the rest, they're mostly buzzwords). It shows you the numbers behind the financial infrastructure of the world for international transactions. >FIN availability: 99.996% >Institutions connected: 11k >FIN messages: 9.5b That's about ~300 messages/sec, al…
Because people in places like Japan, China, Australia, New Zealand, India, Singapore, Hong Kong, UAE, South Korea, and many others are hibernating.
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I will welcome it when it does, don't get me wrong. That honestly removes a major issue I have with cryptocurrency (at least with Ether, anyway). There are a host of more theoretical reasons I'm not buying into the ecosystem, but remove that negative externality and hey - you do you, not my bag but you aren't hurting others. I'm sure it is closer than ever, if it wasn't then there's something wrong with the developme…
Don't forget that traditional banks consume lots of energy as well. Their armies of employees and tellers are required to drive an hour or so every day, they maintain tons of physical buildings, truck around piles of physical currency etc. Traditional fiat is given legitimacy based on government's monopoly on violence inside their borders which often result in wars. Nothing is free and I'm fairly certain that crypto…
This is a spurious comparison, traditional banks provide orders of magnitude more services to orders of magnitude more people.
> Nothing is free and I'm fairly certain that crypto will end in less energy consumption, not more.
One day, could, will.
But still isn't and doesn't. With a background of a world scrambling for cleaner power to mitigate climate change. That's the problem.