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Fintech dystopia

fintechdystopia.com

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Re: Fintech dystopia

#51

Post by thwarted »

didibus wrote: post #40
willprice89 wrote: post #3

> people are either still too afraid of looking like they don’t understand, still too deferential to Silicon Valley’s supposed technological expertise, or still too busy doing other things, to voice any skepticism about blockchain-based solutions I'm not afraid of looking like I don't understand - I simply don't understand. I've tried reading a few "yellow papers" for crypto projects and they are so abstract and full…

It helped me to start from the problem it tries to solve. Fundamentally, we've been making digital versions of everything. We have digital phone calls, television, bookkeeping, document writing, drawing, etc. One thing we didn't have digitally was a currency. Why would we want a digital currency? For similar reasons to all the other stuff above. It's more convenient. When you "transfer money" from your bank account t…

> When you "transfer money" from your bank account to another, your bank has to physically move the associated cash from it's vault to the other banks vault, by hiring secure trucks, people, and so on. If the money has to cross a border, that's even more of a hassle, now you have to physically cross a border with a truck full of cash. When a bank "holds onto your money", they need a big vault full of cash, they have to count it, account for every dollar, physically safeguard it, etc.

While I'm sure some of this is true for some banks at some point in history, this is the kind of understanding of a given industry that results in TechBros reinventing buses or juicing machines.

> This is a huge cost, inefficiency, and a big challenge of banking, and it's one reason transaction fees and banking fees are so high.

The reason banking fees are so high is because they charge what the market will bear, and most of the banks customers are a captive audience. It doesn't cost $2 to perform a transaction at an ATM; it costs pennies, if that. Banks should be paying you for holding, and putting to use, your money.

Re: Fintech dystopia

#52

Post by TheCowboy »

yieldcrv wrote: post #31

I love automated market making and the varying research there I think this is successful in its goals Liquidity providing on concentrated liquidity pools is something I would like to see in the high volume US equities market But will realistically only exist on tokenized platforms that trade their surrogates It’s extremely lucrative and was only in the domain of market making firms before this technology

One problem with this is crypto AMM (automated market making) works best with stability and low volatility. For example, it's terrible in the context of prediction markets. Market makers get hosed due to real life, and traders (me) can profit at their expense. It's a big part of why prediction market traders encouraged Polymarket to develop orderbooks. And if crypto is viewed as disruptive, then it's likely inducing greater volatility.

A lot of these things are lucrative until they're not. If they are inherently lucrative then that profit will diminish as people catch on.

Re: Fintech dystopia

#53

Post by er4hn »

didibus wrote: post #40
willprice89 wrote: post #3

> people are either still too afraid of looking like they don’t understand, still too deferential to Silicon Valley’s supposed technological expertise, or still too busy doing other things, to voice any skepticism about blockchain-based solutions I'm not afraid of looking like I don't understand - I simply don't understand. I've tried reading a few "yellow papers" for crypto projects and they are so abstract and full…

It helped me to start from the problem it tries to solve. Fundamentally, we've been making digital versions of everything. We have digital phone calls, television, bookkeeping, document writing, drawing, etc. One thing we didn't have digitally was a currency. Why would we want a digital currency? For similar reasons to all the other stuff above. It's more convenient. When you "transfer money" from your bank account t…

> Why would we want a digital currency? For similar reasons to all the other stuff above. It's more convenient. When you "transfer money" from your bank account to another, your bank has to physically move the associated cash from it's vault to the other banks vault, by hiring secure trucks, people, and so on. If the money has to cross a border, that's even more of a hassle, now you have to physically cross a border with a truck full of cash. When a bank "holds onto your money", they need a big vault full of cash, they have to count it, account for every dollar, physically safeguard it, etc.

>

> This is a huge cost, inefficiency, and a big challenge of banking, and it's one reason transaction fees and banking fees are so high.

That's absolutely not how this works though. Banks perform electronic transfers and most of the money is accounted for in databases. The problems are slow, antiquated, technology, which is made worse by the amount of regulation surrounding it that makes it hard for new contenders to enter and drive down prices via competition.

Cryptocurrency is trustless, but there is an interesting tangent about if you _do not_ want a government to control monetary policy.

Re: Fintech dystopia

#54

Post by ArtTimeInvestor »

I think people here on HN keep underestimating the relevance of crypto for four reasons:

What crypto is already useful for is not to replace the cash in your pocket and your savings account. It is useful to replace SWIFT and Fort Knox.

What crypto will be useful for in the future is uncertain. But uncertainty does not mean pie in the sky. How the internet would be used was uncertain in the 70s.

Yes, nerds were already excited about the internet in the 70s. Have a look ath the "Mother of all demos": https://en.wikipedia.org/wiki/The_Mother_of_All_Demos It takes decades to iron out the details of how to use fundamentally new technology.

Fear of change. Is there any new technology that HN is in favour of?

Re: Fintech dystopia

#55

Post by BobbyTables2 »

anon-3988 wrote: post #25
salawat wrote: post #12

Earlier quoted context omitted.

>If that other half is stupid, the technology side will have to overcompensate or will maliciously abuse them. Repeat after me. Do not use technology to try to solve people problems.

> Repeat after me. Do not use technology to try to solve people problems. I am saying the solution to make people smarter or empower the people. Buy now pay later, credit cards, and all these bespoke algorithms is just an illusion to make people feel better when they get ripped off.

Indeed!

When I was growing up, I didn’t understand check cashing places, payday loans, the layaway counter in the stores, home equity loans, reverse mortgages, auto leasing, and such.

And looking back, I’m amazed how much nonsense is out there. These are more traps than tools.

Re: Fintech dystopia

#56

Post by knowaveragejoe »

willprice89 wrote: post #3

> people are either still too afraid of looking like they don’t understand, still too deferential to Silicon Valley’s supposed technological expertise, or still too busy doing other things, to voice any skepticism about blockchain-based solutions I'm not afraid of looking like I don't understand - I simply don't understand. I've tried reading a few "yellow papers" for crypto projects and they are so abstract and full…

To steelman the crypto side: I think the stuff that is most interesting is found _around_ crypto and not necessarily within most cryptocurrency projects.

For example, there have been a lot of novel or interesting projects centered around cryptography, consensus, decentralization, anonyimity. On a sociological level, there are a lot of interesting social/economic experiments unfolding in the DeFi world as we speak.

But I think that is where the truly interesting or valuable contributions to humanity as a whole end, and the vast, vast majority of it otherwise is just speculation or scams. It is hard to find that signal in the noise, but it is there, if you look.

Re: Fintech dystopia

#57

Post by jcranmer »

didibus wrote: post #40
willprice89 wrote: post #3

> people are either still too afraid of looking like they don’t understand, still too deferential to Silicon Valley’s supposed technological expertise, or still too busy doing other things, to voice any skepticism about blockchain-based solutions I'm not afraid of looking like I don't understand - I simply don't understand. I've tried reading a few "yellow papers" for crypto projects and they are so abstract and full…

It helped me to start from the problem it tries to solve. Fundamentally, we've been making digital versions of everything. We have digital phone calls, television, bookkeeping, document writing, drawing, etc. One thing we didn't have digitally was a currency. Why would we want a digital currency? For similar reasons to all the other stuff above. It's more convenient. When you "transfer money" from your bank account t…

> When you "transfer money" from your bank account to another, your bank has to physically move the associated cash from it's vault to the other banks vault, by hiring secure trucks, people, and so on.

That hasn't been true for, uh, centuries. It's like literally the entire point of banking, to allow financial transactions to take place without having to physically haul around collateral anywhere.

(And if you want a digital version of what banks actually do, it's called SWIFT, and has been around since checks Wikipedia 1973).

Re: Fintech dystopia

#58

Post by BobbyTables2 »

steve_adams_86 wrote: post #19
salawat wrote: post #12

Earlier quoted context omitted.

>If that other half is stupid, the technology side will have to overcompensate or will maliciously abuse them. Repeat after me. Do not use technology to try to solve people problems.

This reminds me of something I read here the other day. There was an exchange about social implications of technology, and the idea of designing software based around our understanding of these matters more in the future. Someone responded like "lol, sure, we can find some sociologists to start programming our apps", and I thought Damn. That's really missing the point. And it seems so arrogant. Like, not only do we l…

Well put! Turns out “tech bros” aren’t that good at sociology either!

Even in computing, a profession dominated by scientists and engineers, has a lot of failing. Even the damn SPEC benchmarks don’t know to average numbers correctly.

Re: Fintech dystopia

#59

Post by Analemma_ »

ArtTimeInvestor wrote: post #54

I think people here on HN keep underestimating the relevance of crypto for four reasons: What crypto is already useful for is not to replace the cash in your pocket and your savings account. It is useful to replace SWIFT and Fort Knox. What crypto will be useful for in the future is uncertain. But uncertainty does not mean pie in the sky. How the internet would be used was uncertain in the 70s. Yes, nerds were alread…

I’ve mentioned this before, but I’m really sick of the “ok, crypto doesn’t have any uses now, but they’re coming eventually” defense. For one thing, it’s unfalsifiable, and I suspect this is why it’s so popular, since unfalsifiable claims are pretty much the only ones that crypto boosters have left. It’s also just pathetic: Bitcoin is coming up on 20 years old; how many technologies had no compelling use cases after 20 years? And this hasn’t been a neglected 20 years, it’s been 20 years of massive hype and tens of billions in investment and R&D, with nothing to show for it.

As I pointed out last time, Bitcoin was released at roughly the same time as the iPhone. Nobody needed to wait for use cases for the iPhone: the global economy immediately reoriented itself around the smartphone, because it delivered massive amounts of obvious value to customers. If this isn’t happening around cryptocurrency, at some point you have to face facts that it’s because the value isn’t there.

Re: Fintech dystopia

#60

Post by ordinaryradical »

ArtTimeInvestor wrote: post #54

I think people here on HN keep underestimating the relevance of crypto for four reasons: What crypto is already useful for is not to replace the cash in your pocket and your savings account. It is useful to replace SWIFT and Fort Knox. What crypto will be useful for in the future is uncertain. But uncertainty does not mean pie in the sky. How the internet would be used was uncertain in the 70s. Yes, nerds were alread…

It has to have better use cases than fraud and gambling for the first ten years of exploration for me to buy this argument.
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