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Crypto is an unproductive bubble

alexkolchinski.com

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Re: Crypto is an unproductive bubble

#431

Post by sofixa »

Melting_Harps wrote: post #424
koonsolo wrote: post #415

Earlier quoted context omitted.

I'm in the EU, doing a lot of bank transfers. I would love to see 24/7 instant bank transfers. The theory is nice, the practice however is very poor. With nano, I do actually have instant, 0 fee, 24/7 money transfers. Sorry, but your claim is just not true in practice.

> Sorry, but your claim is just not true in practice. Of course it isn't, but they clearly have an axe to grind against things they do not understand at all and they will remain oblivious to the the very obvious fact that SEPA is pretty broken--EU nations and non-Euro nations (within the EU) do not transfer directly or instantly either. It can take days and the expenses, transfer rates, and exchange rates are not 0 e…

> they will remain oblivious to the the very obvious fact that SEPA is pretty broken--EU nations and non-Euro nations (within the EU) do not transfer directly or instantly either

You're aware that SEPA is for the eurozone only, right? SEPA is slow-ish (2-3 days) and free, and now there's SEPA Instant, supported by many banks ( I don't think there are stats, but all of the 5 banks i use have it) which is fast and works 24/7, and usually free ( some old banks are trying to monetise it at 1€ per transaction). It's still better than in crypto land or the US. Of all similar cases, the only one I've heard of that is probably better is the Indian UPN(?).

Re: Crypto is an unproductive bubble

#432

Post by karmafish »

city41 wrote: post #132
karmafish wrote: post #103

I used to have many of these same biases, before I actually used crypto. First off, it is factually incorrect to say that transaction costs are higher than traditional banking. In fact, costs on some blockchains are negligible when compared to traditional banking fees -- literally fractions of a cent for moving large sums of money. Moreover, it is very liberating to be free of banks, with all of their absurd controls…

Maybe I just don't use many features of my bank. But my bank doesn't charge me for anything at all. What are some examples of banks gouging and fees? And my accounts are insured for free.

Overdraft fees alone cost poor people billions of dollars, for one.

Re: Crypto is an unproductive bubble

#433

Post by thr0wawayf00 »

gonehome wrote: post #290
thr0wawayf00 wrote: post #157

Earlier quoted context omitted.

> Banks won’t protect you from wire fraud either. This is half-true. A wire transfer can't be reversed due to end-user error, which can be abused by fraudsters. However, Incorrect input on the bank's behalf does warrant a reversal. I'd compare my bank screwing up vs a crypto exchange screwing up (Like getting hacked). I'm still not protected if the exchange gets hacked and my coin is exfiltrated. I am protected if my…

You’re right about FDIC protection. The wire fraud example is really the least important part of my comment (it was just showing risk exists with some traditional financial transactions too). Exchange risk is tempered somewhat by Coinbase which is more comparable to a standard bank in terms of risk (imo). The true value and capability that’s distinct with crypto is self-custody and that is the important part of my co…

> Exchange risk is tempered somewhat by Coinbase which is more comparable to a standard bank in terms of risk (imo).

The fine print does not bear this out at all. Coinbase states in their TOS that your funds may not replaced in the case of a breach because they do not insure the entirety of accounts, nor do they stipulate a guaranteed insured amount:[0]

> In case of a covered security event, we will endeavor to make you whole. However, total losses may exceed insurance recoveries so your funds may still be lost.

Comparing the risk profile of Coinbase to a bank is no different than blindly trusting a big bank not to fail. These are not analogous institutions from a risk management standpoint.

0: https://help.coinbase.com/en/coinbase/other-topics/legal-pol...

Re: Crypto is an unproductive bubble

#434

Post by TomSwirly »

fhe wrote: post #338
wraptile wrote: post #309

Earlier quoted context omitted.

You're comparing apples to oranges. Decentralized systems by nature suffer for slow adoption (just look at decentralized networks like Mastodon which are objectively better than alternatives yet lag behind in adoption). Finally, bitcoin is a financial product, I really don't know any other financial systems that we're adopted quickly other than maybe payment processors. We still struggle to adopt centralized systems…

"Decentralized systems by nature suffer for slow adoption" I don't see why that's self-evident. Decentralized applications get fast and wide adoption all the time, e.g. Napster.

Or git.

Re: Crypto is an unproductive bubble

#435

Post by TomSwirly »

wraptile wrote: post #309
pavlov wrote: post #302

Crypto people love to say “it’s the early days.” But it’s not. Bitcoin is 13 years old. At that age, Windows was on >90% of the world’s computers. Java at age 13 had taken over enterprise software and was about to conquer mobile via Android. Cryptos are used by maybe 0.1% of computer users (if we’re very generous about what exactly constitutes usage). Considering the amount of investment they are an expensive failure…

You're comparing apples to oranges. Decentralized systems by nature suffer for slow adoption (just look at decentralized networks like Mastodon which are objectively better than alternatives yet lag behind in adoption). Finally, bitcoin is a financial product, I really don't know any other financial systems that we're adopted quickly other than maybe payment processors. We still struggle to adopt centralized systems…

> Decentralized systems by nature suffer for slow adoption

What about Git, or Napster, or filesharing in general, or Tor?

Re: Crypto is an unproductive bubble

#436

Post by TomSwirly »

gonehome wrote: post #125
Nextgrid wrote: post #115

Earlier quoted context omitted.

> you can memorize your wallet seed words and recreate your wallet on the other side of a border Governments can trivially prevent this if they wanted to. Bringing your wallet along will be of no use if nobody dares to transact with you because they themselves will then need to explain the source of their newfound wealth. The current ability of crypto to (sometimes) escape government oversight is temporary and only e…

A United world government could non-trivially prevent this (though enforcement would still be difficult at the individual level). We don’t have that though, and in practice today it’s useful in order to escape authoritarian dictatorships. The specific case I read about was someone escaping the Russian occupied areas of Ukraine this way: https://www.forbes.com/sites/tatianakoffman/2020/06/13/why-b... It’s also more co…

> in practice today it’s useful in order to escape authoritarian dictatorships.

Or in fact, any financial law by any government. And yet if you say a major application of crypto is crime everyone gets all hurt...

Re: Crypto is an unproductive bubble

#437

Post by cellis »

qgin wrote: post #263
cellis wrote: post #235

Earlier quoted context omitted.

Stocks "represent ownership", is such fiction I don't even know where to start. If you really believe this, I'd like to sell you 49% ownership in my next venture! I of course have 10x voting rights and can issue more shares whenever I'd like ('oh but why would you do that? Won't that depress the value of your stock too?' 1. Not really because of crazy structures of the banks that underwrite these issuances, and 2. Be…

Stocks have value because of dividends (or for stocks that don’t yet pay dividends, the likelihood that one day they will pay dividends). But ultimately, it is a bet on actual cash transfers from the profits of the business to your own pockets. All share price appreciation comes from bets (maybe far removed in time) on future dividend payments. Most crypto has no basis for value like this. Tokens based on proof of st…

If I have 100% control over the issuance of said stock, you don’t really “own” anything. Whether you benefit in the profits is subject to contracts and my whims.

Re: Crypto is an unproductive bubble

#438

Post by hiq »

koonsolo wrote: post #415
pavlov wrote: post #311

Earlier quoted context omitted.

The EU created and deployed instant zero-cost 24/7 bank transfers while crypto was twiddling its thumbs talking about “early days” and puffing out PoW carbon. If even the European Union moves faster than your cutting-edge decentralized system, maybe you have a problem.

I'm in the EU, doing a lot of bank transfers. I would love to see 24/7 instant bank transfers. The theory is nice, the practice however is very poor. With nano, I do actually have instant, 0 fee, 24/7 money transfers. Sorry, but your claim is just not true in practice.

> 0 fee

Every time I look at a no fee platform in the cryptocurrency world, it turns out that it's subsidized somehow. If you want to make a fair comparison with e.g. SEPA transfers, you have to assess where this comes from. For a lot of these networks, it's just a way to gain adoption and it doesn't reflect whether it's sustainable for them in the longer-term.

The compromise I have to make as a user is to use their cryptocurrency with all the drawbacks it has. But it doesn't matter if it takes me no time to send $CRYPTO if I need to wait hours before I can convert it back to fiat money and actually use it. That will remain the case as long as these cryptocurrencies remain niche, it's a bootstrapping problem.

Re: Crypto is an unproductive bubble

#439

Post by dist1ll »

mvkel wrote: post #381
wraptile wrote: post #309

Earlier quoted context omitted.

You're comparing apples to oranges. Decentralized systems by nature suffer for slow adoption (just look at decentralized networks like Mastodon which are objectively better than alternatives yet lag behind in adoption). Finally, bitcoin is a financial product, I really don't know any other financial systems that we're adopted quickly other than maybe payment processors. We still struggle to adopt centralized systems…

Decentralized systems, like the internet? It was pretty damn big after it was 13 years old.

There was 16 years between the launch of ARPANET and the specification of the DNS.

It took more than 20 years for a website to exist on the internet.

Re: Crypto is an unproductive bubble

#440

Post by derangedHorse »

tinodb wrote: post #422
tluyben2 wrote: post #396

Earlier quoted context omitted.

People use custodial wallets which is a bad idea anyway; but it supports the original point; people generally do not understand or care about the basic premise of decentralisation (and, as such, have no interest in the added inconvenience, although with enough tech that can be solved). They use crypto because ‘get rich quick’ and ‘no taxes’ and they do not know or care about how it works. Their coins are in centralis…

But rarely anyone is capable of securing local wallets, especially when it concerns serious amounts of money. So back at trust we are.

I wouldn't say it's rare for those actually entrenched in the crypto community. Hardware wallets are fairly easy to secure and if you really want no trace of ownership, you can just memorize your 12 word seed phrase.
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