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Crypto in 2026: Oh, This Is the Bad Place

stephendiehl.com

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Re: Crypto in 2026: Oh, This Is the Bad Place

#361

Post by FredFS456 »

energy123 wrote: post #224
this_user wrote: post #107

Earlier quoted context omitted.

> it enables people to transact monetary value bypassing for-profit operators such as western union and paypal You are not even getting rid of that, you are just replacing them with a different set of middlemen in the crypto ecosystem who are demanding substantially higher fees than, say, a Wise does.

Wise demands a massive fee through bid-offer spread, they're more expensive than many regular retail banks for FX conversion. They're basically running a deceptive advertising campaign due to customers not knowing about bid offer spread. Wise is even worse than "zero-fee" stock trading platforms like Robin hood who do payment for order flow. At least PFOF is more competitive and regulated and you're only getting a fe…

From my own comparisons, when converting, say, $1000 USD with Wise the spread+fee is about half of any of the banks that I have accounts with. Where Wise takes a huge cut is if you convert $10 at a time.

Re: Crypto in 2026: Oh, This Is the Bad Place

#362

Post by JimsonYang »

alehrs wrote: post #50

I've been deep into crypto for years and I was a big stablecoin supporter. I was fascinated by the tech and I still am. But everything outside the tech itself is just trash, scams, and gambling. I've come to believe that "pure" decentralization is neither practical nor particularly convenient. The only real use case that makes sense to me is giving people in developing countries access to a stable currency they can a…

>the only real use case that makes sense to me is giving people in developing countries...

The markets hasnt accepted that. In gaza the cost of using crypto for foreign exchange far exceeded the cost of using cash, or prederably a US bill.

People just simply trust paper bills in developing areas

Re: Crypto in 2026: Oh, This Is the Bad Place

#363

Post by swat535 »

toomuchtodo wrote: post #174
zmgsabst wrote: post #116

Earlier quoted context omitted.

I use crypto for exchange between friends (US + EU) and myself (SE Asia). Our options are IBAN (slow!), WesternUnion (fees, denials, hassles) or crypto (10min, cheap). We chose crypto - because it’s the practical path from their bank to mine. CashApp and Coinbase interface with my actual bank accounts, on my end. If you don’t do international banking, then much of the utility is diminished — so I’m not surprised by y…

I use Wise often to move money between USD, EUR, and AUD, and it plugs right into my US credit union and brokerage accounts. International transfers settle in under a minute to Australian and European bank accounts in my experience.

Wise, like any other fintech is fun until it randomly closes your account and bans you. No one can ban you from Crypto, that's a good selling point imo.

Re: Crypto in 2026: Oh, This Is the Bad Place

#364

Post by skybrian »

blenklo wrote: post #56
himata4113 wrote: post #45

Cryptocurrency is very much a double edged sword, on one hand it enables people to transact monetary value bypassing for-profit operators such as western union and paypal as well as hinders corrupt government institutions from confiscating or otherwise devaluing what you own. Of course this also allows people with harmful intentions to do the same, bypass centralized systems that keep fraud in check, mitigate theft a…

And they also make their place they live and the rest of the planet a tiny bit worse due to the energy consumption of bitcoin, if they support bitcoin in any form even with lightning. A question though: How do they exchange their crypto into local fiat?

They’re more likely to use a stablecoin and those don’t use Bitcoin.

Re: Crypto in 2026: Oh, This Is the Bad Place

#365

Post by graemep »

abirch wrote: post #353
datadrivenangel wrote: post #320

Earlier quoted context omitted.

Right! It's not that stable coins are decentralized, it's that the centralized holder is not in your jurisdiction and so your jurisdiction can't deface their money!

The only bad thing with USD based stable coin is you have to trust that the USA will keep paying its debts longer than you hold the stable coin.

The US has no reason not to pay its debts. Its debts AFAIK are USD denominated. How often has a country defaulted on debt in its own currency? I can think of one example and I thought it was a stupid thing to do at the time (it was forced by creditors, presumably as a punishment) and it was not a complete default, but a haircut.

Re: Crypto in 2026: Oh, This Is the Bad Place

#366

Post by swat535 »

toomuchtodo wrote: post #174
zmgsabst wrote: post #116

Earlier quoted context omitted.

I use crypto for exchange between friends (US + EU) and myself (SE Asia). Our options are IBAN (slow!), WesternUnion (fees, denials, hassles) or crypto (10min, cheap). We chose crypto - because it’s the practical path from their bank to mine. CashApp and Coinbase interface with my actual bank accounts, on my end. If you don’t do international banking, then much of the utility is diminished — so I’m not surprised by y…

I use Wise often to move money between USD, EUR, and AUD, and it plugs right into my US credit union and brokerage accounts. International transfers settle in under a minute to Australian and European bank accounts in my experience.

Wise, like any other fintech is fun until it randomly closes your account and bans you. No one can ban you / freeze your assets with Crypto, that's a good selling point imo.

Re: Crypto in 2026: Oh, This Is the Bad Place

#367

Post by graemep »

mekdoonggi wrote: post #211
graemep wrote: post #206

Earlier quoted context omitted.

When people in a developing country cannot hold foreign currency it is a result of a deliberate decision by their government. That creates a number of issues. They may well be breaking the law holding stable coins. It means practical difficulties in buying stable coins (they need someone who will sell stablecoins in their currency).

The fact that governments might not be able to stop people from using stablecoins affects the laws, though.

The governments cannot stop people holding physical notes either, and they still have the laws.

Re: Crypto in 2026: Oh, This Is the Bad Place

#368

Post by sunshine-o »

lxgr wrote: post #268
sunshine-o wrote: post #165

Earlier quoted context omitted.

The original stablecoin, DAI, used since 2017 by a lot of people living in countries ravaged by horrible inflation cannot be taken away. It can just be a smart contract with overcollaterised crypto backing it. And the idea is kind of genius. All the USDT and USDC which appeared later on a just "proxy" for "real" dollar hold by Tether or Circle. There is nothing permissionless or decentralized about them. So "stableco…

DAI (now called USDS) is largely backed by assets well within reach of US financial regulators these days, no? Even a few years ago, it was mostly backed by USDT and USDC, which both can be frozen by their respective issuer. I don't think any of the non-custodial stablecoins had a very good track record even just in the medium term. Overcollateralized crypto-backed stablecoins are exposed to the market value risk of…

Yes.

So DAI is a distinct system from USDS. The relationship is the creator of DAI is the same as USDS and I believe his new organisation maintains the legacy DAI contract and system.

If I remember correctly, the DAI model was beautiful:

- Instead of getting your DAI from an exchange, you could deploy your own instance of a vault, lock your ETH as collateral in it and mint DAI.

- So it was not a unique vault for every DAI but you could choose your collateral assets from an authorized list for your own vault.

I am not sure if in the case of a collapse of USDC and USDT you would have been the only one able to close your own vault and get back your good collateral assets...

Those "decentralised" stablecoins are complex and feel like they had to start from a blank page and create USDS to stay relevant in a more competitive and regulated crypto world. For example USDS has the mechanism to block it for specific holders (like USDC and USDT) but it hasn't been activated as far as I know.

This is why when there is a hack ETH, BTC and DAI are used because they are the "better" money...

In the end I agree, if you can back a decentralized stablecoin with a centralized stablecoin, how good is that system really?

The best stablecoin is the one you deploy a vault for, back it with over-collaterized (anywhere between 3 and 10x) uncensorable cypto (like ETH) and are the only one who can close the vault unless it get liquidated.

Re: Crypto in 2026: Oh, This Is the Bad Place

#369

Post by __MatrixMan__ »

win311fwg wrote: post #340
__MatrixMan__ wrote: post #303

Earlier quoted context omitted.

That's the perspective that our current systems are based on. And back when the majority of the problems that people were up against had to do with there being not enough of something to go around--when it took half of us working in the fields just to feed the rest of us--then the system worked relatively well. 9 times out of 10, when somebody got a loan (which is the event that injects dollars into the system) it ha…

> When I accept some abstraction from my employer in exchange for my labor That abstraction is simple debt. Your employer is, in exchange for what you've given them, promising to return to you something of value (food, shelter, entertainment, etc.) in the future. Money is the account of the promise made. The alternative is to forgo the debt and trade something of equal value at the time of the transaction. However, a…

Simple debt isn't cutting it anymore. The "Debt to whom, and what outcomes does that person value?" question is important. Ignoring it and continuing to buy and sell simple debt traps people in situations where their economic way forward involves contributing to outcomes that makes their material situation worse. It's time bomb, each generation has diminishing incentives to participate.

> alternative is to forgo the debt and trade something of equal value

"equal value" is only a well defined concept when we have shared interests. But when half of us are trying to go to Mars and the other half is trying to prevent the first half from going to Mars so we can instead dedicate those resources to healthcare... when we're fighting over the steering wheel rather than fighting against a common enemy... then we can't usefully coordinate around a single untyped notion of "value". We're just running in circles negating each other's efforts. Our current economy is mostly waste.

New ways of accounting that don't obfuscate conflicts of interest the way that simple debt does will indeed change things.

Re: Crypto in 2026: Oh, This Is the Bad Place

#370

Post by olalonde »

Surprised to see him writing about this again. He spent years completely consumed by his hate for crypto, tweeting around the clock, before suddenly rage-quitting social media. I assumed he had permanently unplugged for his own peace of mind.

The irony is his background as a former "blockchain" startup founder, right during that mid-2010s era when people who missed the early Bitcoin boat desperately tried to make "enterprise blockchain" happen. It reads like a severe case of cognitive dissonance reduction. Having spent years trying to make the wrong iteration of the tech happen while missing the actual wave, he embarked on an endless crusade to manifest a collapse just to retroactively validate his own poor decisions.

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