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Cryptocurrencies have never claimed they address the hardest parts of financial inclusion. Cryptocurrencies solve the issue of trust. > We need to keep track o

by mkdirp 4y ago

Cryptocurrencies have never claimed they address the hardest parts of financial inclusion. Cryptocurrencies solve the issue of trust. > We need to keep track of our customers’ account balances. Right. That's what the blockchain is able to do. It can assert that you, who says you have 1 bitcoin in your wallet, actually really have 1 bitcoin in your wallet (assuming no attack vectors such as 51% attack). > We need them to trust that their Wave balance is correct and Wave won’t lose the money. This is the same argument as above. > We need to comply with relevant regulations—know-your-customer laws, capitalization requirements, account limits, etc. Not something cryptocurrencies have claimed they can solve. > We need to provide an easy way for users to exchange their balance for cash and vice versa. This is an implementation detail, and entirely depends on how the UX of the wallet is. Sure running a CLI tool and GUI that looks like it's from 2008 (at least it was last time I looked at bitcoin's GUI) isn't great UX, but you can build a different GUI for it. Something plenty of exchanges have already done. > Of course, the above aren’t the main use cases of cryptocurrency today: those are speculation, theft, extortion, more theft, drugs, even more theft, and speeding up climate change. It remains to be seen whether legitimate, productive uses of cryptocurrency will ever justify the hype. We hope so! There it is. This is just an article blindly bashing cryptocurrencies. I implore you to ask yourself, what has previously been used to do all the above? That's right. Fiat currencies such as the GBP, USD, and other currencies. I may possibly be biased, because, I certainly believe cryptocurrency has its place, though I don't believe it will replace fiat. But this article is just unnecessary fear mongering with zero merit.

pcthrowaway 4y ago
> There it is. This is just an article blindly bashing cryptocurrencies. I implore you to ask yourself, what has previously been used to do all the above? That's right. Fiat currencies such as the GBP, USD, and other currencies. Did you read the part after that? It sounds like they might use crypto for other purposes, and that they hope the useful things about it come to overshadow the way it's largely used today.
- mkdirp 4y ago
  Which part? The part that I quoted was the last paragraph of the article with only a paragraph of hiring opportunities afterwards, unrelated to the article..
Forgeties79 4y ago
>We need to comply with relevant regulations—know-your-customer laws, capitalization requirements, account limits, etc. >>Not something cryptocurrencies have claimed they can solve. I agree to an extent, but the problem is crypto has this massive culture of “we don’t need to solve it because no gods, no masters.” For them it’s a feature to protect, and they are far from a small minority in the crypto space.
Retric 4y ago
Trust is the biggest issue with cryptocurrency. I can trust my bank + the government to keep my money safe. As has been repeatedly demonstrated, I can’t trust an exchange and keeping your own wallet is extremely risky.
- ilammy 4y ago
  > I can trust my bank + the government to keep my money safe. Trust them to keep your money – yes, you can absolutely rely on that. Trust them to have “your” money back – that’s a taller order. But it it will be safe, sure. At least with cryptocurrency you don’t have to keep it at an exchange, while the governments are pushing for abolishing cash and keeping all the money in banks.
  - deleted 4y ago
    [deleted]
  - nonamenoslogan 4y ago
    I don't know where this idea that governments want to abolish cash comes from. The crypto-world loves to bandy this about, but in reality a HUGE portion of the people still transact constantly in cash. Granted in the US only about 10-15% of people are "cash-only," but 85-90% use cash daily. Cash isn't going anywhere anytime soon, no matter how great Starlink gets, no matter how much Illuminati-conspiracy the Internet dreams up, electronic only money is a pipe dream in the foreseeable future. Maybe in another 50-100 years? Who knows.
    - randomhodler84 4y ago
      The dollar lost 99% of its value in the last 100 years. Eventually folks will wake up and not want to earn or accept money that melts away so quickly. It should take a lot less than 50y at the rate of print.
- mkdirp 4y ago
  Right, I never said you can trust exchanges. You do not have to use an exchange. That's the whole point of the decentralised nature of cryptocurrencies.
5350-uiop-1130 4y ago
Yes, but I think a lot of the meta narratives around crypto currency (used to draw in fresh liquidity) are based around financial "inclusion" - as in bank the unbanked, and own your own keys etc. But of course anyone that has interacted with crypto currencies, or more importantly the exchanges knows that's not really true. Mostly it's a very efficient means of taking money from the poor and diverting it to the rich. I think jackson palmer of dogecoin called it hypercapitalistic.
- bart_spoon 4y ago
  > Mostly it's a very efficient means of taking money from the poor and diverting it to the rich. I think jackson palmer of dogecoin called it hypercapitalistic. Anything that is designed to be deflationary, like Bitcoin, is inherently going to increase income inequality and harm the poor to the benefit of the rich.
rvz 4y ago
I'm sure many critics are finding it extremely difficult to ignore the certain inevitable failure of cryptocurrencies everyday since, the same arguments presented are once again refuted by yourself. They were crying over HN when Stripe jumped in for crypto payments due to regulatory clarity and they are crying over it again because it still hasn't died faster than they expected to. The simple reality is, it isn't going away; even after regulations. I challenge them to continue to ignore it, as we all know it will collapse real soon. /s
tablespoon 4y ago
> Cryptocurrencies have never claimed they address the hardest parts of financial inclusion. Cryptocurrencies solve the issue of trust. Uh, what now? They actually do a worse job than traditional finance. What happens if I pay for something with a credit card and the vendor fails to deliver? Why I dispute the transaction and get my money back. It's less important that I have absolute trust in the vendor, because I have fall back mechanisms. Cryptocurrencies are deliberately designed so that can't happen. The only "trust" problem cryptocurrencies solved was keeping track of stuff like account balances in a distributed ledger, but that's purely a problem created by the ideological choice of a distributed ledger.
- miohtama 4y ago
  > What happens if I pay for something with a credit card and the vendor fails to deliver? You are paying 2% - 5% premium on the price for this insurance that a credit card company providers. This is what the merchant gets charged in transaction fees and flat fees to get access to Visa/Mastercard network. There are many cases when you do not want to have insurance benefits of credit cardand you would simply take 2% cheaper price. However, with the current consumer payment rails (credit/debit) this is in practice impossible. (Granted some large enterprises like Amazon get charged less, but economics of scale, combined with the business practices, of Amazon have been found to be harmful for ecommerce ecosystem as a whole.) I think it is ok to let the free market to pick the winner. Cryptocurrency might not be an ideal solution for all problems, but it might be still a good solution especially in developing countries where banking system is expensive, inefficient and corrupt. Let the option be available for others even if you do not use or believe in it yourself.
  - diputsmonro 4y ago
    With crypto you pay the additional overhead of gas fees, which are often unpredictable and may cost more than the item itself.
    - miohtama 4y ago
      Can you cite any source for this?
unholiness 4y ago
The strawman this blog post argues against, who claims part of the upside of crypto is that it will help the unbanked and underbanked soon join the world economy... definitely exists. In large numbers. It's a naive view, but a common one. It deserves the counter-argument it's getting.
kgwgk 4y ago
> Cryptocurrencies have never claimed Cryptocurrencies have never claimed anything - and never will. Proponents of cryptocurrencies, however, have claimed an impressively large number of things - often contradictory.
- lostmsu 4y ago
  Groups of people may claim contradictory things, and yet consist of individuals having consistent stories.
  - kgwgk 4y ago
    Sure, the point is that "cryptocurrencies have claimed" almost everything under the Sun - to the extent that it makes sense to say that "cryptocurrencies have claimed" anything at all.
mumblemumble 4y ago
> Cryptocurrencies solve the issue of trust. I would argue it's closer to the opposite. Cryptocurrency solves the question, "How do you operate a shared ledger in the absence of trust?" I, sitting in my cushy home in the USA, with my cushy American, NCUA-insured accounts at a fiscally conservative credit union, don't have that problem. I get to benefit from a regulatory environment that has done a quite good job of directly solving the problem of trust for the vast majority of its participants, so that we don't need expensive, complex trustless cryptographic ledgers to manage our electronic assets.
ebiester 4y ago
The article is saying "this is why we aren't doing it for our startup," not "this is why you shouldn't do it for your personal life or startup." It is fair to say that for building a startup, crypto adds additional risk due to the issues they say. It isn't about if those can be overcome, but rather if it is wise for that group of people to approach it for the problem they are solving.

by mkdirp 4y ago

pcthrowaway 4y ago

> There it is. This is just an article blindly bashing cryptocurrencies. I implore you to ask yourself, what has previously been used to do all the above? That's right. Fiat currencies such as the GBP, USD, and other currencies. Did you read the part after that? It sounds like they might use crypto for other purposes, and that they hope the useful things about it come to overshadow the way it's largely used today.

mkdirp 4y ago
Which part? The part that I quoted was the last paragraph of the article with only a paragraph of hiring opportunities afterwards, unrelated to the article..

Forgeties79 4y ago

>We need to comply with relevant regulations—know-your-customer laws, capitalization requirements, account limits, etc. >>Not something cryptocurrencies have claimed they can solve. I agree to an extent, but the problem is crypto has this massive culture of “we don’t need to solve it because no gods, no masters.” For them it’s a feature to protect, and they are far from a small minority in the crypto space.

Retric 4y ago

Trust is the biggest issue with cryptocurrency. I can trust my bank + the government to keep my money safe. As has been repeatedly demonstrated, I can’t trust an exchange and keeping your own wallet is extremely risky.

ilammy 4y ago
> I can trust my bank + the government to keep my money safe. Trust them to keep your money – yes, you can absolutely rely on that. Trust them to have “your” money back – that’s a taller order. But it it will be safe, sure. At least with cryptocurrency you don’t have to keep it at an exchange, while the governments are pushing for abolishing cash and keeping all the money in banks.
- deleted 4y ago
  [deleted]
- nonamenoslogan 4y ago
  I don't know where this idea that governments want to abolish cash comes from. The crypto-world loves to bandy this about, but in reality a HUGE portion of the people still transact constantly in cash. Granted in the US only about 10-15% of people are "cash-only," but 85-90% use cash daily. Cash isn't going anywhere anytime soon, no matter how great Starlink gets, no matter how much Illuminati-conspiracy the Internet dreams up, electronic only money is a pipe dream in the foreseeable future. Maybe in another 50-100 years? Who knows.
  - randomhodler84 4y ago
    The dollar lost 99% of its value in the last 100 years. Eventually folks will wake up and not want to earn or accept money that melts away so quickly. It should take a lot less than 50y at the rate of print.
mkdirp 4y ago
Right, I never said you can trust exchanges. You do not have to use an exchange. That's the whole point of the decentralised nature of cryptocurrencies.

5350-uiop-1130 4y ago

Yes, but I think a lot of the meta narratives around crypto currency (used to draw in fresh liquidity) are based around financial "inclusion" - as in bank the unbanked, and own your own keys etc. But of course anyone that has interacted with crypto currencies, or more importantly the exchanges knows that's not really true. Mostly it's a very efficient means of taking money from the poor and diverting it to the rich. I think jackson palmer of dogecoin called it hypercapitalistic.

bart_spoon 4y ago
> Mostly it's a very efficient means of taking money from the poor and diverting it to the rich. I think jackson palmer of dogecoin called it hypercapitalistic. Anything that is designed to be deflationary, like Bitcoin, is inherently going to increase income inequality and harm the poor to the benefit of the rich.

rvz 4y ago

I'm sure many critics are finding it extremely difficult to ignore the certain inevitable failure of cryptocurrencies everyday since, the same arguments presented are once again refuted by yourself. They were crying over HN when Stripe jumped in for crypto payments due to regulatory clarity and they are crying over it again because it still hasn't died faster than they expected to. The simple reality is, it isn't going away; even after regulations. I challenge them to continue to ignore it, as we all know it will collapse real soon. /s

tablespoon 4y ago

> Cryptocurrencies have never claimed they address the hardest parts of financial inclusion. Cryptocurrencies solve the issue of trust. Uh, what now? They actually do a worse job than traditional finance. What happens if I pay for something with a credit card and the vendor fails to deliver? Why I dispute the transaction and get my money back. It's less important that I have absolute trust in the vendor, because I have fall back mechanisms. Cryptocurrencies are deliberately designed so that can't happen. The only "trust" problem cryptocurrencies solved was keeping track of stuff like account balances in a distributed ledger, but that's purely a problem created by the ideological choice of a distributed ledger.

miohtama 4y ago
> What happens if I pay for something with a credit card and the vendor fails to deliver? You are paying 2% - 5% premium on the price for this insurance that a credit card company providers. This is what the merchant gets charged in transaction fees and flat fees to get access to Visa/Mastercard network. There are many cases when you do not want to have insurance benefits of credit cardand you would simply take 2% cheaper price. However, with the current consumer payment rails (credit/debit) this is in practice impossible. (Granted some large enterprises like Amazon get charged less, but economics of scale, combined with the business practices, of Amazon have been found to be harmful for ecommerce ecosystem as a whole.) I think it is ok to let the free market to pick the winner. Cryptocurrency might not be an ideal solution for all problems, but it might be still a good solution especially in developing countries where banking system is expensive, inefficient and corrupt. Let the option be available for others even if you do not use or believe in it yourself.
- diputsmonro 4y ago
  With crypto you pay the additional overhead of gas fees, which are often unpredictable and may cost more than the item itself.
  - miohtama 4y ago
    Can you cite any source for this?

unholiness 4y ago

The strawman this blog post argues against, who claims part of the upside of crypto is that it will help the unbanked and underbanked soon join the world economy... definitely exists. In large numbers. It's a naive view, but a common one. It deserves the counter-argument it's getting.

kgwgk 4y ago

> Cryptocurrencies have never claimed Cryptocurrencies have never claimed anything - and never will. Proponents of cryptocurrencies, however, have claimed an impressively large number of things - often contradictory.

lostmsu 4y ago
Groups of people may claim contradictory things, and yet consist of individuals having consistent stories.
- kgwgk 4y ago
  Sure, the point is that "cryptocurrencies have claimed" almost everything under the Sun - to the extent that it makes sense to say that "cryptocurrencies have claimed" anything at all.

mumblemumble 4y ago

> Cryptocurrencies solve the issue of trust. I would argue it's closer to the opposite. Cryptocurrency solves the question, "How do you operate a shared ledger in the absence of trust?" I, sitting in my cushy home in the USA, with my cushy American, NCUA-insured accounts at a fiscally conservative credit union, don't have that problem. I get to benefit from a regulatory environment that has done a quite good job of directly solving the problem of trust for the vast majority of its participants, so that we don't need expensive, complex trustless cryptographic ledgers to manage our electronic assets.

ebiester 4y ago

The article is saying "this is why we aren't doing it for our startup," not "this is why you shouldn't do it for your personal life or startup." It is fair to say that for building a startup, crypto adds additional risk due to the issues they say. It isn't about if those can be overcome, but rather if it is wise for that group of people to approach it for the problem they are solving.