I'd like to remind the readers that some people use crypto as a payment method and do not speculate.
As far as I know there is no alternative with the same level of convinience that crypto provide (KYC-less and fast payments to anyone in the world with just one secret).
Remember that next time you suggest something among the lines of "crypto should be made illegal".
I bought a new video game in 2011 with BTC and whenever I tell the story the crypto bro in the room laughs at me for not holding on to what amounts to something like half a million dollars now. Sort of like people keep bringing up the guy who bought pizza 2 years prior.
How dare I use a self-proclaimed currency as a currency. I lost all interest once I realized very few people actually want it to be a currency and the main excitement stems from the potential to make money, not the tech or a very idealistic view of banking independent from banks.
You are right, the stupidest part of this is ignoring the fact that real-world use would cause the currency to appreciate. I would say there is value in whatever path led you to investigate a "revolutionary" technology during its infancy.
Crypto-- the original view of it-- is anarchy. The crypto ecosystem we see today is a mode of failure of anarchy as a governance model.
You ultimately need a financial authority to promote "stable" prices, and even that statement is highly political. You also need some serious gravitas to protect the currency, and this is where the crypto episode is most curious. Governments that for years prohibited "competition" of this nature for years in the most draconian of ways, suddenly have been missing in action. That created an environment where crypto metastisized into something socially corrupt, and also it fosters doubt in the competency and motivation of governments to protect what has forever been their turf.
Anarcho-capitslism has always been laughably self-destructive if you are half-serious about modeling the incentives. Most anarchists don't seem to believe that capitalism as-is and anarchism can co-exist. Market socialists are probably the closest you get to having them co-exist.
This is what jumped out at me too. I agree with most of his statements but not with “Crypto is not a medium of exchange”. Yes, all the investment and speculation and “financial instrument” stuff is a mug’s game, but it does mean when I want to make a transaction it’s easy for me to buy some Bitcoin and it’s easy for the other party to sell that Bitcoin. I barely trust my bank to transfer money between different accounts inside the bank; when it goes from bank to bank it’s passing through at least two inscrutable “fraud detection” algorithms implemented by bankers, and if it’s going international it’s likely going through at least two more “fraud detection” algorithms implemented by governments.
The killer app for crypto is "KYC-less" which usually means "I can evade taxes or sell illicit goods". Otherwise, real money is faster, more scalable, and more resilient to users making mistakes.
Nothing I do is illegal; I pay my taxes; sometimes I make mistakes. Why would I ever want to use crypto over real money?
Didn't think I'd see a "I've got nothing to hide" argument on HN. Are you also against E2E messaging apps for the same reason?
Being able to anonymously transfer value should be a fundamental right, as part of our fundamental right to privacy. In the past, cash could be used for that, but with society going increasingly cashless and some governments trying to make large cash transfers illegal, crypto is now the only way to keep this right.
When has anonymously transferring large values of money ever been a right? It’s never been a right.
It’s like saying money laundering should be a right or evading taxes should be a right.
Cash transactions and commerce has been regulated for most of human history, whether it’s been for tax collection purposes or to regulate certain types of transactions.
People who work in cash businesses have never had a right to anonymity. They’ve always had to report sales receipts and earnings so they can pay income, sales taxes or value added taxes.
If you want to buy things with cash, you can. If they don’t take paper currency, use a gift card.
Keep in mind, you’re on camera everywhere and your phone is always tracking you. Practically speaking, it’s very unlikely you’ve been anonymous for some time.
I don't know where to begin telling you how wrong you are. Hammurabi's code has plenty of examples of a punishment of being put to death because you didn't have witnesses, a contract, or a receipt for paying for something. (It's easy for someone else to accuse you of stealing.)
Even in Hammurabi's code, receipts for agents, witnesses, and contracts, were only used for settling disputes in court where fraud may have been committed. Those instances with conflicting claims were a tiny minority of overall transaction volume, meaning receipts were optional and not required for the vast majority of transactions; especially between trusted parties.
As far as that "state" was concerned, all transactions were anonymous until a dispute was brought to court.
Incorrect. The reason fraud was rare was because of the general insistence on documentation. Court challenges were rare because people did in fact KYC.
False. What Hammurabi's code describes is a customer keeping proof of agreement for settling disputes which is Know Your Seller (KYS) not KYC, and it was not required.
Wrong. The transactions everyone is talking about here (whether Bitcoin or conventional financial transactions) fall under the banking laws, not the ones about simple purchases.
It seems you have abandoned your original argument.
How long do you believe KYC has existed? How long do believe believe banks have existed?
When Mansa Musa decimated the global gold market for atleast a century by distributing large sums of money to millions of people on his Hajj (possibly the single largest event of anonymous value transfer in human history), what regulation or law did he violate?
This was a relatively recent event where human history is concerned.
> Being able to anonymously transfer value should be a fundamental right
Why? That doesn't seem like that would produce good outcomes. It's not a 'fundamental right' to transfer unlimited amounts of money with no oversight.
Money is not speech. If you care at all about governments being able to function from taxes, financial regulation, and myriad other things, you don't want people to be able to anonymously transfer as much money as they want.
Even cash has regulations about reporting, especially over certain amounts.
I feel like you're conflating my argument a bit. I'm not saying "People with nothing to hide... etc". I'm saying that as a user, I'm going to pick the option that is best for me.
Crypto is never going to be the option that is best for me. Nor most of 8 billion other people on the planet.
Given the transparent nature of the blockchain, it's actually very hard to hide illegal activity on it. Much of the reason for my bullishness on crypto is that it makes graft harder. I wonder how much of the sentiment against crypto stems from beneficiaries of opaque institutions.
Have you ever paid for anything substantial with real money? It's a huge pain in the ass. I have to go into a bank, even during the height of the COVID-19 pandemic. I have to pay outrageous fees to transfer money & participate in something called a "wire". Where my money will simply be magically transferred to another party somehow. There are a zillion steps, none of which are disclosed to me. It should work fine, but it is also takes an indeterminate amount of time. No one can explain where the money is in the interim period. Also the money could go to the wrong person. Also, the other party has no way of knowing the money arrived. I have to call them and remind them that I sent it & they need to check to see if their bank received it.
3 - Banks making it really hard to do transfer large sums of money.
I can't solve 1, but I can tell you that crypto definitely doesn't solve it. Because making a mistake with crypto is irreversible. The money is just gone. Mom forgot her password because she's getting old? Well, too bad, now Mom is broke and her money is gone forever.
Two is a solvable problem and it's getting better over time. It used to be even slower.
But 3, I'm in favour of. I want it to be hard for me to transfer away my life savings. I want there to be many steps in which my ID is checked and people look me in the eye and verify that yes, this is the thing I want to do. Because I am an idiot, and if you give me a gun I will shoot myself in the foot. I don't want it to be easy to accidentally go broke.
You don't realize that the reason they are slow is because they are insecure. Why don't wires go on weekends? Because there is a possibility of an error, that a human clerk would need to sort out in his working time. Bitcoin can go on weekend because its mathematically secure.
Good point, I've had one hell of a time making down payments on cars or first/last month's rent with cashier's checks when my bank doesn't have physical branches in my area.
If I could have paid with, say, a dollar-backed stablecoin from a reputable institution, I could have made the payment digitally and closed the sale/rental without waiting days for a bank to mail me a check. In the apartment rental case, I might not have gotten passed up because someone else arrived check-in-hand ready to close the deal.
Swift transfers are slower than crypto. And governments have placed various restrictions on it called "capital controls". They say it's to encourage investment into their own economies, but investors knows it doesn't achieve that.
Some U.S. bank transfers are slow. This is not true globally or immutable, and the main reason it’s not a problem is that the payment systems the vast majority of Americans use are fast - much faster than cryptocurrencies.
Capital controls are a political topic. You can disagree with them, dissent is important, but it’s also important to be honest and say that you’re seeing an advantage through breaking the law, which is like discovering that your business is more profitable if you don’t pay taxes.
Mhmm I disagree. A couple of months ago someone in a city subreddit I frequent came asking for help. I wanted to give him some money anonymously, so I used a cryptocurrency to do it. Any other methods available in my country could trace de transfer to me.
It was useful to me for that use case. How would you have done that?
Right... So my bank allows me to gamble online via my c.c (casino) but i am not allowed to buy crypto with my c.c So the bank is telling me what I may or may not do.
Tomorrow, I might not be able to buy goods from some of their vertical intergrated partners.
Freedom to transact has many forms. Sue you pay youre taxes and do nothing illegal now. But that is only true as far as you follow their laws of what is right and not illegal.
Bitcoin itself won't, but the exchanges will; even when your coins are not on an exchange, addresses will be listed as suspect and watched closely if for example a hacked exchange's cryptocurrencies are transfered to it, basically freezing it. No exchange will touch it, and in extreme cases, the blockchain can be forked to undo a transaction.
Sure, that's true, but you don't need the exchange to transfer value if you're using Bitcoin. Granted, you need them to get that value in your local currency and in cash (just like you need another Bank to transfer Paypal into cash).
> No exchange will touch it, and in extreme cases, the blockchain can be forked to undo a transaction.
How often has the fork happened though ... twice? three times? If we're getting into that kind of rareness, we'll lose all relevance. Banks sometimes outright steal from their customers, but it's so rare that I wouldn't put it up as an argument against using a bank.
As for receiving tainted coins: that's a more interesting point. Has anyone ever tried tainting large wallets by transferring known-bad coins to them?
That says you shouldn’t use PayPal, just as the billions locked or stolen by cryptocurrency exchanges says you should be careful about who you entrust with large amounts of money.
PayPal is one of company of many. If you want bad customer service, they've been delivering that for a couple of decades but that's a problem specific to them and there are better alternatives available.
It is definitely an area where regulation can help but the point is that you don't need to wait to give your business to someone else.
Is more customer-friendly regulation of Paypal (they're a bank in Europe, you don't get more regulation than that) really something that is reasonably going to happen?
Lots of things would be vastly improved if only improbable things would happen (Google fights SEO-spam! Fusion brings unlimited energy too cheap to meter! Humanity unites in peace!), but would you place your bets on them happening instead of assuming the messed up reality we're in an dealing with it?
Faster? It's been 4 days since I sent a wire to my family in another country and it's not there yet. I have been waiting for 2 weeks recently for an ACH transfer between my two accounts in the US.
Because often payment processors arbitrarily agree with eachother decide not to do business with someone you want to do business with. With crypto, they can't stop you from paying for someone.
Payment processors are currently a form of zero representation government that decides what businesses are allowed to exist online, and they frequently abuse this power. They can only by avoided by using crypto. This is the one big use case of crypto i see as important, really...
Just out of curiosity, which country are you based in? Because for people based in countries with high inflation, crypto is a great tool to get paid in usd and reinvest it without being forced by their governement to convert it into their currency. Obviously, if you're based in a country with a strong currency and where all financial intstruments are available, that's not important.
“ Because for people based in countries with high inflation, crypto is a great tool to get paid in usd and reinvest it without being forced by their governement to convert it into their currency.”
I hear this quite a lot. Do we have any figures that say it’s actually happening at any scale?
Compare how many teams in crypto come from argentina (and latam in general) and south east asia compared to e.g. fintech or ai. In my experience many started by accepting remote jobs paid in crypto and then later working full time in the field.
So they don't use cryptocurrencies per se. They pay people in us dollars aka fiat.
Same as companies using offshore bank accounts for the same purpose, or paying out cash in envelopes.
People getting paid in USDC of course still need to convert a large amount of it into local cash/cash-equivalent because they still have to pay rent, pay for food etc.
They use a blockchain to transact in USDC because it's more convenient that posting cash across borders. Freelancers usually don't have the financial means to open offshore companies.
I think weaving tampons into your hair expresses your unique individuality and shows strong character, and you should definitely go for it, especially if you will be attending weddings, funerals, speaking in public, going on a blind date, receiving an award, sitting for an oil painting, or giving an acceptance speech for being elected to public office. Just stay out of the rain!
1 BTC currently is 22,987 USD. "The 2023 Honda Civic has a base MSRP of $24,650" [1]. No sane person, i.e. person not having more money than they can count [2], wanting to buy a car would ever spend the 1 BTC today for a Honda Civic, maybe the 'market' will go up and they will be able to afford a 48K Mustang Mach-E, or maybe it will go really up and be able to afford a 250K Lucid Air Sapphire. Actually spending the crypto 'money' is irrational behaviour, from an economical standpoint: just wait a few months/years, maybe it will go up: crypto forces the users into typical pyramidal thinking, a forever delayed gratification.
Ok. So maybe you can accept as economically rational to spend a few Satoshis for a bagel. Then where do you draw the line where BTC (or the other cryptos) stops being an effective currency? 15K?, 10K?, 1K? Let's say you want to buy a computer: 1 ETH is currently 1,637 USD, one Macbook Pro 13 M2 is 1,300 USD. Aren't you an irrational economic agent if you spent the 1 ETH today instead of waiting a few months maybe ETH will be back at the 4.6K ATH, when you will be able to buy a MacBook Pro 16 with M2 Max?
Yes, stocks are also an awful mechanism through which the East India Company fooled some "spice bros" to give them money for worthless papers. However, no Wall Street person will argue with a straight face if I want a bagel I just have to sell some BRK.A.
One must stop once in a while and ask themselves: what are they are trying to achieve, do they really want to be an effector in maximizing the pain and suffering of the world through vapid technology.
> However, no Wall Street person will argue with a straight face if I want a bagel I just have to sell some BRK.A.
That's exactly what you're doing when you buy something: trading an asset (dollars) that can appreciate in value in a savings account for some good you want or need right now.
Sure, but no one expects that the 25K they have in their savings account to be worth tommorrow 250K. With crypto that could be a possibility, it more certainly could be 0, but a possibility nonetheless. I just don't think a society should have a gambling mechanism as a large scale economic operator.
Arguably a big part of crypto's volatility is because it isn't widely used enough. If as many people traded in Bitcoin as currently traded in USD, I think that would average out most fluctuations.
I'm also not sure how you delineate between speculation and gambling. Are you for the current system of speculative trading of regular currencies?
I could agree in principle on the volume argument, perhaps after looking over some economic models. However, a big part of the USD stability in the past 78+ years stems from the causation chains which make the following fact possible: the US Navy is the second air force in the world [1]. In order to believe in the stability of BTC, I must ask the stalinist question: "how many divisions has Satoshi?" [2]. It is a sad reality but might will make right in this silly world of ours for the foreseeable future. Now that's an invariant which I would have loved to see cryptocurrencies tackle, but they seem to have no interest in this, it's more of a changing of the guard ceremony, this crypto-fiat dance.
Coming to your question, to regulate or not to regulate [3]. I come from the very far left field (pun intended). The most different approach that I've seen recently, one which could maybe move the world in a significant way, is the financo-fiction detailed in Yanis Varoufakis' Another Now [4]. One of the more radical proposals from the book is that the persons starting a company should have only one share each: more of a library card system than a market. In another presentation, Varoufakis says something along the lines: compounding interest becomes a tool of exploitation when the poor are forced to borrow more and more from the rich which only get richer. Therefore, no, I am against the status quo as much as you can get, and although I am not an optimist, I believe it is up to us to decide in what kind of world we want to live and what kind of future we want to nurture.
[3] I asked ChatGPT to make a poem starting from Shakespeare's verse:
"To regulate or not to regulate, that is the question asked,
Whether 'tis nobler in the realm of finance to keep markets free,
Or to take action against the sea of risks and save us from a crash.
The pitfalls of speculation oft bring economic pain,
Should we not protect, regulate, and keep it in check to gain?
The choice is ours, the consequences dire,
Let us ponder, deliberate and make a wise decision, not retire."
The difference is stocks have a reliable basis for going up based on an underlying asset that generates wealth. Most crypto is backed by nothing, some is backed by other crypto which is also in the end nothing.
Generates what wealth? Dollar "wealth" which is also backed by nothing.
There is no such thing as intrinsic value, value is only ever determined inter-subjectively. Crypto has value as long as people want it, just like every other asset or currency.
> The difference is stocks have a reliable basis for going up based on an underlying asset that generates wealth.
In theory, in practice it's a supply / demand game that can be manipulated by news, sentiment, and rich people.
Tesla does not have the underlying asset that made its stock worth as much as it did. It is/was a small player in the car manufacturing world in terms of sales and profits etc, yet its stocks and the company was somehow worth more than all the other car manufacturers combined.
It's a deflationary currency. I hear the country got into trouble with those 90 years ago, but if the only alternative is a hyperinflationary currency, the dynamics of a deflationary currency might be a danger worth approaching.
It's not so much a deflationary currency as an unstable one; its value has gone from $100 (or even less, the charts don't go back that far) to over $60.000 and back to the $20.000 range. That's incredibly unstable and not something I'd willingly would choose as a currency.
If by some weird magic I had today all the BTCs forever locked in Nakamoto's wallet, currently around $23 billion, I would give them all away just to be able to live in 2140, the year the last BTC will be mined. So I guess BTC is actually a currency after all, haha.
Speaking of convenience, secret, fast, out of govt' oversight..
Hawala https://en.wikipedia.org/wiki/Hawala is in practice for long long time, and it is almost exclusively used to avoid tax and for underground operations (ex. illegal betting).
Huge volume is moved, so should it made legal? No.
Why should betting be illegal in the first place? A private transaction that hurts no one seems to be none of the government's business. It shouldnt have to be underground to start with.
> There is a legitimate argument for creating KYC-light rails for small global transfers
Then let's do it! I keep hearing that we "should" fix regulation or we "should" improve global transfers. Competition spurs innovation. The global financial hegemony can now consider themselves competed against. The proper move is not to ban your competition, the proper move is to build a better product.
If, for every citizen in every country on earth, we fix regulations, build efficient payment rails, solve corruption, and stop printing money and causing hyperinflation, crypto truly will have no use case and will quickly go to 0. I'd love to see that happen. Your move, incumbents.
> Competition spurs innovation. The global financial hegemony can now consider themselves competed against
This isn’t how politics works. Crypto threw a flaming lint ball of fraud at the rich world. Pleading that it’s also helping the disenfranchised doesn’t help advance a KYC-light discussion as much as a regulatory-vacuum one. It’s easy to ban (or heavily tax and erect stricter KYC guardrails at the interfaces between crypto and the fiat and real economies, what I’m concluding is the best middle path) and punt the “what did we learn” bit to a committee with a few years to write a report. Especially when the beneficiaries don’t vote for you.
Nobody used cryptocurrencies for payment before speculation happened. You had people paying 10k BTC for a pizza and;.. that was it, because they were funny internet coins. The only reason people take cryptocurrencies as payment now is because they have value. Why do they have value ? Because people can speculate on it.
Saying that cryptocurrency should be made illegal is a stupid idea, of course. However, cryptocurrency miners should have to declare their activities and pay much higher electricity prices, so that we could actually use that electricity for more useful things.
EDIT: because the argument of "how is this different than the dollar hurr durr": it's not! The dollar has value because people trust the US government to keep existing, because I can exchange it for actual goods and people want it. The primary goal of the USD isn't to speculate, it's to exchange goods. The same cannot be said about your favorite shitcoin.
The lack of value for funny internet coins doesn't come from it being digital, it comes from being absolutely worthless because noone wants to take it. When a government, a physical entity is formed and says "the US Dollar is the currency we'll use to exchange goods", you have value in the USD because you know you're going to be able to use it. You'll be able to buy your lunch with it, because the state you live in says that you have to take it.
Your bitcoin only has value because it can be used to... have more value. It's worthless, and should speculation be gone, you'll go back to it being an unused toy.
Dollars have value because they force you to pay taxes with them. They used to be valuable to foreign nations, because the oil cartel OPEC used to force them to use U.S. Dollars to buy oil. Nowadays nations can use Dollars, Rubels, and Yuan.
Agree with you but would say that it’s more like virtual silver. A legit commodity of sorts but whose accessibility and supply makes it a good vehicle for bad actors to act.
The big difference is the infrastructure required. If crypto goes out of fashion, your random numbers get riskier to test as virtual silver because transactions will get slower and riskier.
The other big thing is that crypto fills a void between dealing with bank settlement costs and cash. Once the US government or Eurozone come up with a digital currency model, crypto is pretty much dead as a means of transacting.
These risks are what make it so attractive to scammers.
It's only KYC-less until you need to buy something that can't be bought with crypto, which is 99+% of the things I buy.
Payments are fast and relatively easy if the recipient wants to be paid in crypto. There are lots of fast and easy payment options if the sender gets to dictate how the value is stored. I can email you an IOU right now. But most people would prefer their local currency, and getting currency A -> crypto -> currency B is neither fast nor easy and almost always involves a KYC process.
You can do the same with cash, why not extend that to digital money? After receiving a cyrpto paying you can declare it to the goverment if it goes above the minimum required by law (exactly as with cash). It would be ridiculous if you had to KYC for a 200$ cash payment.
Ah, yes; the immoral, oppressive rules of "I can't make as much money as I want by lying to people so they give me their money in exchange for nothing."
^ This is a classic logical fallacy called a false syllogism. The archetypal example is "All men are mortal. Socrates is mortal. Therefore, all men are Socrates."
I assure you that all cryptocurrency is neither a moral good, nor is it Socrates.
Alright, because of the unknown number of users that use it and don't speculate - we'll keep the Ponzi scheme going, ignoring the damage and abuse caused so far. Is that good enough solution or?
But most cryptocurrencies are terrible for payments because they are so volatile. The ones that are useful for payments are stablecoins, which are scams in a different way—when Tether falls a lot people are going to lose their shirts.
As far as I know there is no alternative with the same level of convinience that crypto provide (KYC-less and fast payments to anyone in the world with just one secret). Remember that next time you suggest something among the lines of "crypto should be made illegal".