Posted by ibobev 12 hours ago
Since then I've come to the conclusion that it's never worthwhile to buy crypto with fiat. Any scheme which asks that of its users creates too much continuity between the old way and the new way--it allows the illegitimately rich to continue to be illegitimately rich even after switching to the new system. Anything with that property doesn't deserve to be the new system.
What we need is a discontinuity. A system that wants not your money, but your participation, and which doesn't acknowledge the value of your old money. Today's crypto isn't it.
The quickest route to profitability had something to do with solving problems in ways that--by happenstance--let them stay solved. This is relevant since profitability is how banks decide whether to grant a loan, and loans are what cause USD to enter the system. Previously, we mostly had good reason to want people's ventures to succeed.
But nowadays, most loans are for zero-sum ventures that have more to do with capturing a share of some fixed resource (attention/influence mostly), or building something that helps some of us at the expense of others (missiles, datacenters, planned obsolescence, surveillance, etc). It's no longer clear whether we're better off with the success or failure of a randomly chosen business venture. Maybe that venture seeks to harm us.
The quickest route to profitability has changed. Now it's about making things worse for the many while benefiting the few (since it's the few who have all the money). Yet we're still treating dollars as valuable despite the fact that they're issued on the basis of profitability, a property that no longer has much to do with making our lives better.
So I think we need a system that understands consent. When I accept some abstraction from my employer in exchange for my labor I need to be able to look at it and decide whether accpepting it helps people who are helping me, or whether it helps people who want to poison my drinking water for their mining endeavor. Dollars don't carry enough information to enable me to make that decision, and so far neither does crypto.
We don't have to banish scarcity entirely before building monetary systems that are not based on it. Once we figure out the better way, it'll likely be crypto-shaped, except it won't ask you to buy it, it'll just ask you to use it. It'll be a rejection of the old ideas about value.
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, any negative externalities associated with you choosing what item of value you want to trade for exists whether you demand it immediately or defer acceptance until some time in the future. Trying to find a new way to practice accounting isn't going to change anything.
> 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.
It may be, but it is one you, the employer, can easily ask during the interview. If a prospective employee doesn't align with your values, you don't have to hire them, and thus won't have to make them any promises to deliver anything that you don't feel comfortable with. This isn't only theoretical. "Cultural fit" is considered by a large swath of employers to be one of the most important aspects of hiring.
I know the typical HN account loves to over-engineer solutions to mundane things, but you really don't have to invent some new type of accounting for this. All you have to do is talk to the people in your life.
That said, banks do provide a useful service for many people. However, that service doesn't magically happen. One has to choose the bank they are comfortable employing. Which, again, requires an interview before accepting a bank to work for you. That is where you can make sure the bank you choose to utilize the services of aligns with your "cultural fit".
Talking to the people in your life is all you need here.
But it requires types of debt which are not exchangable for one another. Whether it's working to take us to Mars or it's working to provide healthcare to our neighbors is something that debt should declare directly, it should not require a duplicate investigation at each transaction.
They got it by you accepting their promise to deliver something of value in the future. If nobody out there is willing to accept their promise of delivering future value, they don't have anything. That's the whole abstraction. It is materialized out of thin air when you agree to accept the promise.
Some new kind of hypothetical accounting system cannot possibly change anything. It will always be a hindsight account of the promise that was made. The only possible change is for you to tackle the promises themselves. Which requires talking to people. That is where the promises are made.
That's an enormous claim and I really doubt it.
The exceptions to this pattern that I've come across don't have enough money to be hiring people.
Maybe I've just been unlucky.
Do you mean, in general, as a society/culture, or are you just having an incredible run of jobs where each time that business is the problem?
So I've been taking classes with the idea that maybe I'll change careers, an I talk with people in the new industry, and I'm learning that they feel the same way about their jobs.
And I ask all of my friends and family about it and either they're true believers in something that it's clear to the rest of us is a problem, or they're clear-eyed about the fact that deep down their employer is quite shady.
There doesn't appear to be any money in anything that people actually want to happen. All of the investment appears to be in places that common folk are uncomfortable with (weapons, propaganda, financial abstraction, etc). Of course this perception is colored by my personal experiences, I can't exactly step outside of them. So to answer your question: it's both.
It can't always have been this way. There are so many good things left over from the past economy. It's like we were once speeding along towards a place we all wanted to go and then somewhere around the time I entered the workforce (2005) we realized that the steering wheel doesn't work and the car we're in isn't actually going where we want it to go. Record highs in the stock market, but to what end? Who cares about a car that goes very fast if it just takes you to an arbitrary place in the distance which has nothing to do with your needs?
Something like Amazon is a partnership between the capital class and, to zeroth-order, everybody else, to screw over a small slice of the proletariat (their own employees and retail / warehouse workers) and the bourgeoisie (brick-and-mortar store owners).
It sucks when the capitalist Eye of Sauron focuses on however you make your living as a thing-to-make-more-efficient but when it lands on how someone else makes their living shit gets cheaper.
What kind of harm do you have in mind here?
The lives of many people who have never given Elon Musk a dime have been materially worsened by the fact that he has a bunch of money, since that money bought political power and he used it in a way that was very destructive to a lot of people across the globe.
Happy for you that you weren't impacted, but a lot of people were and still will be.
The entire field of crypto was an attempt to create scarcity where none existed, by turning scarce electricity into special numbers.
Come on dude
In circles the agreement is that trust creates a 1:1 value ratio. I value the tokens you mint periodically as equal to my own, and this influences the number of tokens I give you in exchange for a loaf of bread or something. If I value the bread at 6 of my own tokens, that's the price I change you: 6.
But maybe we value each other's contributions to society differently, perhaps we consult the graph and end up with a 2:3 ratio where I trust you more than you trust me. This ratio influences prices. That loaf which I value at 6 of my tokens (times two, divided by three) I offer to you at a price of 4.
Or maybe you're working to cause me trouble, damming the river I drink from or somesuch, so the trust graph gives us a 5:1 trust ratio. In this case I'm going to need 30 of your tokens in exchange for this bread because I'm aware that by feeding you, I'm giving you energy that you'll spend harming me.
After exchange, the tokens get wrapped in a layer that indicates me as well. Since the next person to accept it will be benefiting both you and me by doing so (contributing to a system that supports our various activities), they'll have to consider the trust ratio between themselves and both of us in order to determine whether to value it. This creates a risk on my part: maybe I'll accept your token and be unable to find anybody who will subsequently accept it from me because everybody I associate finds your activities problematic. (These dynamics are all implementation details, humans just scan a QR code and see a price that was determined by the weighted trust graph).
You don't encounter tokens with problematically large stacks of wrappers because demurrage counteracts inflation. We're constantly minting new tokens for ourselves, and the value of existing tokens are constantly degrading so nobody has a token that's 100 years old. That is to say, they have a half life, they decay out of existence eventually, so there's an incentive to continue to be trustworthy and useful, rather than just hoarding enough that you can then opt out of being trustworthy for the rest of your life.
> I (an important person who is very loved and trusted by thousands of people)
The ratio we end up will not be a function of how many people trust you, or how many people trust me, it'll only consider cases where I've trusted somebody who trusts you, or where you've trusted somebody that trusts me. We opt-in to the asymmetry by using variable degrees of trust to enable or prevent the activities of our peers. It restores balance to the "vote with your wallet" situation. Currently, the only way to vote with your wallet is to vote yes or to abstain. This lets you vote no.
For a first pass I'm considering using https://github.com/cblgh/appleseed-metric for the trust graph. But I don't intend to start by making apps like the one I've described here--nothing so politically charged as money. I figure I'll get the protocol working with things that are low stakes and easy to get on board with and try my hand at making something money shaped only once it's performing well for other stuff.
Circles trust isn't about how much I actually trust you to deliver the product I bought and not harm me - it's about how much I trust you to not be a Sybil clone. But if Musk is harming me then I'll not trust his coins and people will have to find someone else to pay through.
You also have to make sure your intended outcome is a Nash equilibrium. In your system it sounds like I can set up a relay that pays out 1:1 (or 1+fee:1) without wrappers, which will quickly become a requirement, making the system harder to use, capturing a financial fee from normal system users, and unsolving the problem you wanted to solve.
All or nothing means that we have to chose between excluding outsiders entirely, or treating them as equals. A rich outsider shouldn't be able to use a pile of money that the locals don't have a say in and act like a king, but on the other hand there should be a gradual path to gaining the trust of the locals which has to do with whether you're helping or harming them.
I'll have to think about Nash equilibria. As for making the system harder to use... I guess there will always be the problem of displaying different prices to different people based on how trusted there are, but I think it's a small price to pay compared with avoiding the exploitation that rich foreigners visit upon poor nations: exploitation mediated by the fungibility of money. As for the other complexities of use, that's just software implementation details.
I remember here on HN 10 years ago everybody wanted to put everything on a blockchain. Some were betting on the collapse of the financial system.
None of those things happened but ethereum created a neutral, stable, secure cheap and transparent programmable financial platform.
Because it is neutral a lot of people ported the bad things happening in the traditional financial system to crypto: the scams, debt, speculation, etc.
And then most people started to hate it.
I guess 20 years ago most porn was hosted on Apache web servers, now it would be nginx. Should we hate nginx because of porn?
I'm not really excited about blockchains at all actually. They put you in the wrong sector of the design space that falls out of the CAP theorem. CRDT's and partition tolerance however, I think there's something useful in there.
The notion that people gravitate to metal vs "fractional sheep" is without historical evidence. People in fact, a long time ago, did trade things like IOUs or pieces of broken reeds or sticks[2]. Those sticks acted like IOUs and were often traded around far past the original parties to the contract.
Money is a contract between you, your peer/counterparty, and whatever organization you "trust" to mediate if someone really isn't happy with the outcome of a situation.
Money is, indeed, culture.
[1] https://www.adamsmithworks.org/documents/chapter-iv-of-the-o... [2] https://en.wikipedia.org/wiki/Tally_stick
Crypto also has to tell a story about why it's valuable. There was a lot of anti government rhetoric and fear mongering (from libertarians) but the public never really believed the story was true. It was a lot of FOMO.
NFTs failed completely to sell their story but crypto is still hanging on among its supporters. AI is telling a similar story about the value of tokens which is being well received
... Then how do we, as a society, determine how much a dollar is worth?! We do use force to enforce the stories we tell about fiat. But 'believe this story about how much a dollar will buy you and how much you owe, or else we will send thugs to your house' isn't disproving the point at all.
Would one argue that an airplane is a _story_ ? If no one believed in the technology and lost faith in all pilots no one would fly. But that doesn't change the reality of the technology and competence of the pilots.
I get the sentiment, but I am not sure _story_ is the right word.
Currency OTOH is basically a (forgery-proof) piece of paper with a number written on it, or even just a number in a database on some (hopefully well-protected) server. So it can only be used to buy stuff as long as we all agree that it's worth something. Of course, it helps if a government and/or a central bank is behind it, but even without a functioning government, a currency can limp on for decades, such as in Somalia, where the last banknotes were printed in 1991, but people still used them as the lowest "rung" of a three-tier system consisting of the Somali shilling, the US dollar and mobile phone payments, until recently when businesses sort of agreed to not accept them anymore (https://www.theguardian.com/world/2026/may/11/poorest-somali...).
From what I last heard about crypto miners, the price of mining is not enough to justify price of rig + electricity, so they are quietly switching to AI.
Wonder how long the second scam will last.
You can sell inference, but it has to actually be real.
The public never believed it because it runs squarely into the basic fundamentals that underpin the global financial system.
The finance industry learned long ago that currencies have to be stable and predictable in order to be trusted, and therefore NOT financial instruments to speculate heavily on. There's been this reality distortion field that crypto can be both a currency and speculative asset, but that hasn't borne out. If your digital dollar can gain/lose 5% of its value in a day, how do you trust it to transact with?
Crypto has been speed-running into many lessons we learned decades ago from the "Free Banking" era before the Fed, back when states ran their own banks, currencies, etc. Government got involved in banking management as a way to improve the stability and security of the financial system since things like fraud were rampant.
It gets even easier once you toss in Visa, Mastercard, Discover, Amex, various debit card and regional networks, and ubiquitous banking services. Checks and online ACH payments are free or nearly free. Payment card platforms are cheap in consideration the value you get for them.
Meanwhile actually spending crypto is quite expensive - worse than Visa’s transaction fees, and far less consumer and merchant protections.
Crypto doesn’t make that any better.
Neither does online ordering. Online orders have to have a degree of KYC.
In my view the actual issue has always been that cryptocurrency folks don't understand what purpose money serves, mostly because they're all basically gold bugs. To strain the "money is a technology" metaphor, this is a product-market-fit issue -- like trying to build a cloud orchestration framework that only works on DIY Belwulf clusters or a web framework that only looks nice on teletype.
You get in on the speculative promise of making yourself wealthy. It's sold to you by the people at the top, and the message is amplified by the grifters and the pick mes in their orbit.
It's never been a convenient exchange of money. If they'd focused on this, maybe the argument would have worked. Instead, it's wacky and has the worst UX of any banking apparatus in the world. Including giant US banks stuck in 2005. This sucks because this is literally the value being sold, and it doesn't deliver on it at all.
By the time quantum chips can attack crypto's underlying hardness (2029?), most of the coins won't have the engineering talent and support left to migrate to more secure cryptography. We'll start seeing shit coins popped left and right, which will cause mass panic. That will cause sell offs, even if the big name brands manage to secure themselves temporarily.
Quantum computers might harm BTC or some other chains if the devs can’t get their house in order soon enough, but there’s no reason to think it fundamentally alters whether cryptocurrency is mathematically viable
It's not going to happen.
Probably half the value in Ethereum and Bitcoin will be popped this way.
Some nice loss harvesting in the past will help with some other financial moves down the road. I'm definitely checking in now and then, but mostly see it as background noise.
It's pretty hard to really lock people out of stable coins really. You really just need someone to sell you some type of cryptocurrency that can be eventually exchanged for stablecoins. You can even do "peer to peer" trades if the government really cracks down on holding crypto.
I agree with the sentiment of this article but atleast some parts of the world with poor currencies like Latam have seen some benefit from stbales.
Low-life businessmen ruined the technology outside of some spaces where there is strong tech leadership. They did too much damage to reputation of the whole industry
They did the same butchering to LLM/AI tech.
The ratio of degenerate engineers is maybe 30% but business people is 80%.
People I have worked with were much better compared to other companies I worked in like aviation or consulting
The fact that you your vision is undermined by a determined group of profiteers doesn’t diminish the value of what you can accomplish toward an ideal future.
Money was always the point.
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
Sanitation is a problem for one person as well, as is health. Social problems arise specifically with the interaction of two people. You can't have a scam without two people, for instance.
Definitions that collapse the entire space under discussion into one category are useless. If sanitation is a "social problem" then everything is a social problem, and the reason why that is useless is just that a definition that does not distinguish has no utility. In mathematical terms, to say that something conforms to that definition yields zero bits of information. "Public health" is its own category. In the real world no two categories can ever be fully separated from each other but just because plausible scenarios can be spun out in which sanitation becomes involved in a social problem doesn't mean that on the whole it is much better understood and talked about as a separate category.
Crypto has social problems. If one person sits in a basement and "does crypto" by themselves who cares? They can declare they own as many basement-coin as they like. It takes a second person to have a problem.
Social = society, keep that in your head.
The vast majority of problems you are going to face in your life are social problems because you live in a vast interconnected society with millions/billions of other individuals.
And it is important to remember that almost all problems are social problems, we get a quite a few of the libertarian types on HN that think "I'll just ignore other people and now I've solved every problem in the world". It's why this group of people thinks this way, it makes the problem way easier if you ignore reality.
Money, and the assorted scams around it, regardless of what type of money it is, is a social problem by definition.
You see this a lot from people who have been lucky enough to live in places where problems get addressed somewhat automatically. When you spend enough time in places where that isn't true, you quickly realize how indoor plumbing - or almost anything, really - becomes a social problem.
Health: If your neighbour has a contagious disease, that is going to be an issue for society as well.
Are we going to pretend that COVID as a problem doesn't fit your chosen definition perfectly: "two people to have it, and that they must have it in relation to each other, which is to say, some sort of social interaction or communication must be involved as well."
Sanitation and health are social problems because if they are not handled they have an extreme effect on society in general. Hell, for plumbing we ONLY care about it as a social problem. If you go live somewhere far enough away from people, we don't care if you shit in a bucket. If you live in a city, we absolutely care about the social effects of not having sufficient plumbing.
If my neighbour has a broken TV, that's a problem that will never affect society. If my neighbour has a contagious disease, or even a non-contagious condition, there are a LOT of ways that affects society.
Same with a neighbour with plumbing that isn't up to code. There's a reason we send government agents in to verify plumbing installations, but we don't give two shits about your TV setup.
I suspect that anyone that says that plumbing or health is not a social problem is living in a place where those things are handled well enough as a social problem that you have never seen what happens when they aren't handled.
I think it's reasonable to say that a problem is a social problem to the degree that its severity as experienced by one person depends on other people's behaviour.
If I accidentally drop a rock on my own foot, this seems to be obviously not a social problem. But if I am more likely to be carrying a rock in the first place, or less likely to be wearing protective shoes, because of how society is organised, then to that extent I claim that it is a social problem. This is not an abstract example: Over time, changes in society's attitudes to dangerous kinds of work have directly, and indirectly through health and safety legislation, led to massive reductions in workplace harm since the Industrial Revolution.
Under this rubric, all it takes for a problem to be social is for it to be possible to imagine that society being organised differently would lead to a different level of suffering. Does this lead to nearly all problems being classified as social problems? Yes -- but that is not a problem in itself, that is just an accurate picture of reality! It is still useful -- indeed much more useful -- to place problems on a spectrum of social-ness; nothing "collapses" unless we are determined to make a black-and-white distinction.
If my neighbour has a "removing raw sewage from living spaces" problem, it is very much a concern for me.
If my neighbour can't watch TV, I don't care.
TV breaks because entropy doesn't like you = personal problem.
TV breaks because manufacture designed it to fail 3 months after warranty = social problem.
There are absolutely social issues around vaccines — how do we fund their development? how do we distribute them? how do we convince people to use them? — but as a technology I would say they solve a problem that is mostly independent of human relationships.*
* Obviously, you could say that vaccines actually do solve a social problem because pathogens are often passed between humans, but I think then the definition of "social problems" becomes so broad as to be meaningless.
"how do we stop dying from pathogens" is like, the textbook public health problem. it's pretty much the question which the entire concept of public health spawned from.
so, if you specifically wanted to talk about the technology of vaccines or whatever instead of general pathogen prevention, you should just say that instead. i cant read your mind.
If we want to say that any value generating - including crime - is inbounds, then LLMs are FANTASTIC scam machines. There are incredible uses for LLMs in a lot of stealing money spaces.
> It's actually riskier in every meaningful way
That statement is only true to you, not everyone.
You're in Crimea right now. You want some gasoline. You have some magic numbers in your magic rock. It needs you to cast a spell to transmit those magic numbers to someone else. I guess it probably also needs ... some electricity and some network access and some time to make those magic numbers update in the gas station's magic number.
In what way is this actually going to help you in a total collapse? Let's stand around over my iphone and cold wallet and spacex terminal while we wait for things to beep the right number of beeps?
In the off-chance you find yourself in this situation, what's to stop the party with the gasoline from just pointing a gun at you or your corgi and asking you to add some zeros to the number of magic beans you're zapping into their magic number?
Now, perhaps you as an international agent of mystery, can use some shiny rocks or magic pieces of paper to make your escape, and you can then, once safely back in a stable society, use your magic numbers and spells to transfer "wealth" to some organization closer to your new physical location (let's say belize?) -- in which case, to avoid a bunch of tedious laws and such, perhaps that magic trick will work in the way you suggest.
But, when things go haywire and there's just Hobb's all against all, I'm not sure a magic cold wallet of certificates is going to do much.
Combined with effective accelerationism[1] you can see why we could be heading towards somewhere a whole lot worse than The Bad Place.
This is revisionism. That is not at all how it started.
Trump and the general rise of Populism is not the cause of the fall of Western democracies, it is a consequence.
Meh, it's arbitrage against slow moving financial regulations.
There are times when financial regulations are "bad" in a way that this trait is desireable - i.e. your failing institutions use case - but in many cases these regulations are, actually, there for a reason.
And now in practice crypto transactions for "normal" people are performed by bank-like institutions who log every transaction anyway, so this characteristic is really only valuable to the people deeply involved in the crypto world who are using it mainly to do "normal" crimes.
My only take away with crypto is, think of that one movie "In Time" but instead of the whole time = currency concept and the arm clock, what if crypto could be applied to a physical piece of e-paper like thing, where it says what its worth, and its worth what it says, you can transfer it on a whim from the paper to your phone (to a wallet) and back and forth.
If anyone figured that out, fully seamlessly, fault tolerant, that alone imho would be worth investing time and attention into.
Basically make the crypto real and physical, something fluidly tangible to where everyone can hold it and understand it.
No one can hack your wallet if all your "crypto" is not in it. You can spin up new wallet on a whim.
The only real way I can think is something like how monero works, where whoever owns a coin can "decrypt" said coin (or that's my limited understanding of how monero works).
Re: privacy though, there's many solutions. Single tailored chains for privacy, mixers, encrypted tokens, permissioned chains, etc.
In my experience, privacy, while important, is not something users actually care about enough to demand a solution for. Most web3 users today just want to degen and gamble, and they're okay with KYC to do so.
I was trying to send some money to my parents the other day and it’s still slow and expensive.
The logical conclusion of this train of thought (which I agree with) is that people who heavily invested in crypto may significantly benefit from weakening strong currencies and institutions. Make of that what you will.
> Outside of that, as an EU/US citizen I don't see why I'd hold stablecoins instead of fiat.
Especially as an EU citizen: in the EU it is illegal, by law, to have stablecoin yield. So for example the HN unicorn Coinbase can give 3.5% yield annualized (or whatever the current yield is), automatically, to anyone in the US that owns USDC. But in the EU the very same Coinbase is forbidden, by law, from giving the same yield on the exact same USDC.
Now I'm not saying the yield on EUR on a EUR bank account is exciting: what I'm saying is holding a currency losing to insane inflation and which doesn't give anything back is wild.
And it's only for stablecoins: for example as an EU citizen on my brokerage account, where I have real USDs, they automatically yield when they're idling.
So it's not that you cannot get yield on currencies in the EU: it's the way they categorized stablecoins.
Now as I understand it there are ways to get yield on stablecoins in "smart contracts" but that's another can of worms for IIUC atm there have been scams upon scams upon hacks upon thefts upon neverending shenanigans.
So yup: stablecoins as an EU citizen, not good.
"money market fund". If they're yielding, they're holding bonds. Normally this distinction doesn't matter, but we're deep into financial plumbing here.
If you try automating bots to do KYC for debit cards what you'll be doing is basically looking like a money launderer and get all your accounts shut down.
The existing "credit card" infrastructure is not designed to compete with that.
Now some actors like Paypal could have come up with an HTTP 402 standard and implementation 25 years ago but they never did. I am not sure why.
On-chain transactions are still not free. x402 isn't settled in batches or rolled up anywhere AFAIK, so large volumes of tiny payments are still not cost-effective. Facilitators such as Coinbase only subsidize transactions up to a point: https://docs.cdp.coinbase.com/x402/core-concepts/facilitator
There are ways around this, but with tradeoffs.
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 your perspective. But once you try to move money between continents, even with ID and documentation, you’ll understand that Coinbase is a godsend.
> ACH, most bank does not allow send to stranger, and it takes 1~3 days for settlement among those which allow.
> Wire, expensive ~$30 per transaction.
> Paypal/Venmo/CashApp, Schrödinger's fraud trigger you never know it's gonna work or not. Plus they report to IRS so more paperwork during tax season.
> A lot of banks report every transaction of your checking account to credit bureaus.
So stable coin is my preferred way, and luckily among my circle it is widely accepted. Any amount is instant with a few cents fee at most.
You’ll generally have the conversion slippage and transaction fee regardless - so the difference is the second conversion.
In practice, that isn’t too expensive and worth it for the speed; though that may change if you’re sending larger or smaller amounts than I am (in $1k-10k range).
Edit:
Replying by edit due to rate limits — but subcontracting and personal loans, eg, until a client pays.
Being a consultant is hard; being a consultant with no support network is harder.
Crypto has its own failure modes: https://www.web3isgoinggreat.com/
(day job is in US financial services, have consulted on implementing aml/kyc/sanctions support for where crypto rails meet traditional finance infra)
Credit risk and identity dictate the speed of the funding step. If you stripped KYC out of the equation entirely, the bottleneck wouldn't just be speed — the legacy banking system would refuse to route the transaction at all.
It is important to distinguish that you are fundamentally involved in a credit network, pulling funds not pushing funds, that just gives the illusion of speed. For verified users, the sub-minute speed is a mix of local real-time banking rails and Wise extending short-term trust that the incoming funds won't bounce. For an unverified or high-risk user, Wise forces a holding period until the money physically clears, dragging the process back down to standard banking speeds.
Wise's innovation was to provide their service "over the top", i.e. unbundle wire transfers from your bank's default offering. This has driven down both speed and pricing, in the same way that dial-through (e.g. calling card based) long distance carriers created massive competition and drove prices down in long distance calling, while under the hood it was all still just regular phone calls.
Never had much of a need for other services when transferring across the globe.
But it could also be theater, yeah. A friend of mine buys USDT on a P2P exchange and immediately sells it (so, sends money to a stranger’s bank account and then gets paid by another stranger). It could just as well be some e-wallet thing like WebMoney or whatever, but the fact that you can move USDT to your own wallet instead of immediately selling it makes it a bit more reassuring I guess.
Cryptocurrencies have a great and really boring application. You have to think "who needs a reliable ledger distributed among many entities?"
The answer is institutional banks the likes of JPMorgan. They have a few cryptocurrencies, you need to be another large bank to use them. Big banks send each other large sums of money constantly back and forth. In no sense do they send each other "real" money, it's just accounting... a ledger.
"Cryptocurrencies" are better thought of as mathematically proven accounting software than money. Plenty of organizations need to be able to keep track of money is between a collection of mostly-trusted peers. With cryptocurrencies they can ditch a lot of the transaction and accounting software.
Banks and brokerages very often use software written 40 years ago because it's so much trouble to get correct.
cryptocurrencies are the ledger software, API, and data store layer -- and you do need trust between peers because the JPMorgan will take actions to reverse transactions if there are problems that need fixing.
It's not magical, but it is convenient for the actual ledger actions to be mathematically proven instead of the result of accounting rules in code.
"Real money" these days is exactly that, i.e. accounting entries on a ledger, and has been for the better part of the past century or so.
> Plenty of organizations need to be able to keep track of money is between a collection of mostly-trusted peers. With cryptocurrencies they can ditch a lot of the transaction and accounting software.
What is blockchain technology if not even more complex accounting software? It has its uses, but a network of mostly trusted peers is probably not one of them.
I remember saying this about Google Wave: it was a solution in search of a problem. Cyrpto specifically and blockchain in general is absolutely a solution desperately in search of a problem. And I honestly think not enough people were honest about their motivations. They saw Bitcoin go through the roof and were eager to be on the next rocketship, which never happened (well, there's Ethereum but it kinda happened at the same time although it started later).
It's been a sea of shitcoins and rug pulls ever since. Anyone rmemeber NFTs? Just another scam on top of a scam to sell more crypto.
Sometimes there's an advantage to an outsider's perspective on a problem space. It's the essence of disruption. But way more often than not, it's just snake oil salesman looking for a quick buck. And trying to disrupt the financial system without understanding it has shown itself to be a dismal failure, kinda like the graveyard of "Google killer" search engines in the 2000s and early 2010s.
because fiat can be taken away from you.
It's just LARPing.
Usually LARPers are conscious that they don't have magic or any sword skills. I'm pretty sure the person who you respond too really think what he wrote.
Seems they were having trouble "taking it away by the justice system."
For the same reason government across the world have pressured or banned exchangers of monero.
Crypto is surrounded by vast amounts of misinformation, misdirection, or misunderstanding. So you get these myths and generalization propagated through lack of education. "I heard crypto is completely anonymous", "I heard crypto can't be taken away from you". Then someone gets tricked out of their crypto, or uses BTC to commit some crime and gets a quick reality check.
From a black and white viewpoint the possibilities are the same but the practicality is a bit different (then realize with crypto the hole might only exist in your mind). Maybe the government has control over your body but there is some victory in not letting them have your assets even if they take your life and without having to destroy the underlying value.
Personally I think a cleaner distinction is bearer assets vs titled assets. Both can be taken but bearer assets can be made impractically difficult to seize, especially against the masses at once, whereas titled assets (like bank accounts and deeds) can be taken by the government trivially (ex: in US, IRS can freeze without even a warrant) and at mass scale quickly.
The mere fact you've delayed the use of money doesn't mean the value is gone. I can't do dick with my money until I've at least logged into amazon or driven to the local walmart, yet it's value remains, of course the longer I have to wait to spend it the worse it is. The time value of money means its less valuable to me if I'm locked up for decades before I can get it, but even in jail indefinitely I could secretly reveal it to a friend who could share the money to get some nice ramen packets or cigarettes.
If we take the creative approach, then according to the equivalence of inertial reference frames in the principle of relativity, taking you away from the money is exactly the same as taking the money away from you. Taking the money from you don't imply someone else must have it, just that you don't. Someone could take your HW crypto wallet even if they can't access the money, happens a lot with wallets confiscated by the government.
But ok, the original goalposts were set at the difference between stablecoins and fiat with regards to how easily they can be taken away from you. There is no difference for all practical purposes in any non-hyperbolic situation.
It's not the same. That's why governments and the FATF at great cost and effort spent decades snuffing out anonymous bank accounts and bearer assets, they didn't do it for the lolz. If you take the person away from the money then any surviving persons can escape and reclaim the money. The person in jail can utter the code/location to a comrade, maybe even before they go to jail. In a western country, the person might even be released from contempt after a time (decades+ contempt sentences are so rare they make headlines) and if criminally charged they will often be out on bond where they can utter the location/codes to others. It's a completely different animal than the government seizing the actual asset and putting it in its vault guarded by armies of police or military as non-human seizure.
>There is no difference for all practical purposes
Only if you ignore the practical differences.
You'd think that it would be easier to just name a few but here we are discussing burying a bitcoin seed under a grave in Timbuktu.
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 "stablecoin" can mean very different things in practice.
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 their backing assets; algorithmic stablecoins have had a tendency to death spiral.
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.
> 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.
Most people that might want to use stablecoins don't have any suitable collateral lying around, so they're dependent on being able to buy or sell it at par. If that peg breaks, the utility of the stablecoin decreases.
- Bitcoin was and is a massive, historic accomplishment in creating digital scarcity for the first time and the long term effects are still playing out.
- Virtually all of the "crypto" or Bitcoin 2.0 schemes in the 15 years since have been scams. Essentially a way for a tech founder to mint tokens out of thin air, and then try to convince others to treat them as money so he can get a huge (fiat-denominated) exit. Stablecoins are basically the only crypto innovation of note that have achieved PMF.
Don't confuse the former for the latter!
This isn’t to say that the entertainment industry hasn’t pulled some awful shenanigans. But they’re generally willing to sell to as many people as are willing to pay the price they set. For the most part they haven’t tried to place hard limits on how many total people are allowed to watch a movie and control it with some sort of limited edition resellable token. That was an innovation of the NFT folks.
Yeah, I don’t really see a difference between scamming and certain types of rent seeking. So many things could fit in the blank there, not just the entertainment industry.
If:
- you’re not creating value
- you’re exploiting the value someone else has created
- you’re engaging in anticompetitive, anticonsumer behavior
- etc.
yay?
accomplishment? like, something big and good?
Scarcity is not a virtue.
The people in and around the Ethereum Foundation are solving very interesting problems but nobody talk about it on HN. For example I believe they are at the forefront of the use zero-knowledge proofs.
Just dig into [0].
Is the Ethereum Foundation and broader project dedicated to pumping the cryptocurrency ETH? obviously not and they are not by far the top holder of it.
The fact that the crypto is not providing real returns is actually one of the main criticism of the project.
People’s opinion is the ultimate law. If you find a loophole in a contract that gives you everybody’s money, people will just take it back.
It's like war: We don't like war, we don't like people being killed, but man, the amount of technology progress made during war is good.
So, even if you hate crypto; the fact that it is enabling research in cryptographic theory (even if for stupid goals) is good.
Valve hired economist and future politician Yanis Varoufakis in 2012, when Bitcoin was well below $1000, to study "in-game economies" (i.e. digital scarcity) because it was such a big deal in their existing online games.
But all I know is that the only reason why some of my friends are able to work remotely from their country is crypto currency as that is the only way they're able to get paid without 30% to 40% being lost in fees as well as being stored in a currency that might lose a majority of its value overnight. They work real, productive swe jobs and earn enough to support not only themselves, but everyone around them as well making the place they live in a tiny bit better.
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.
Notice that the parent comment didn't use the word replacing.
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 few basis points stolen from you instead of like 80 basis points.
A question though: How do they exchange their crypto into local fiat?
Energy consumption isn't the problem. It's how the energy is generated that is relevant to planetary health, and even then, whose to say the tradeoff isn't worth it. Crypto mining is estimated to take up 3% at most which means 97% is spent on other things. What makes this other 97% more worthy of this energy than crypto mining? The fact you don't see it as valuable?
Also many mining operations take advantage of stranded energy, so energy that would go to waste if not used for on-site mining.
Tether is investing in US Bonds but 10% seem to be Bitcoin.
30% lost in fees??
Can they not manage to open a dollar-backed account somewhere?
Also:
> being stored in a currency that might lose a majority of its value overnight
I for sure put crypto in this same category. “Stablecoin” or not.
Outside the West, the answer is quite often "no". And trying to open an account in the US from outside will run into ID+residency requirements.
If you want to do financial crimes and fraud, you can't (or at least, shouldn't) really do this.
Unspoken by the parent poster is that in practice these people are usually using crypto to break the law in some way, which is why it's valuable to them.
Another way to mitigate this scam is wise revolut etc. But they are also mostly western
Which country will take 30% cut from incoming foreign transaction? The highest combined fees I could find are for Sub-Saharan Africa and those are below 10%, supporting tax/social evasion claim.
Could be completely legal but when folks don't provide details its often safe to assume the worse scenario when it comes to money, taxation and screwing the government.
I basically have one such job, living in a stable but bottom of the table EU economy, and 40% is exactly the ballpark.
People love to rationalize tax evasion like that.
It's harder, if not impossible, if you've been got the wrong set of papers, or are missing them.
> this same category. “Stablecoin” or not.
Like it or not, USDC and USDT do seem to actually be stable. They've been pegged to the dollar for a while now, with increased scrutiny.
There are transaction fees so you're still paying someone. And the it's not government taking what you own, it's scammers!
> The private interest is genuine, a global market's appetite for a frictionless way to hold dollars, captured by the saver who holds the token and the issuer who books the reserves. The cost is paid by everyone outside that transaction. What looks rational for the individual Nigerian saver is corrosive for Nigeria.
The way this is framed by the author is something like "poor $COUNTRY central bank has its citizens best interests at heart but evil stablecoins are tying the poor central bank's hands". The reality could not be farther from truth. In countries mentioned in the article like Argentina, Turkey or Nigeria the governments are incredibly corrupt and they use monetary policy and capital controls to make loads of cheap financing available to the ultra rich while inflating their debts away. The net effect is that in these countries the combination of inflation and currency debasement is used as a direct wealth siphon from the middle/upper middle class to the ultra rich (the poor have no savings and therefore are less affected). As a result the middle and upper middle classes of these countries entirely evaporated in the last 10-15 years.
Stablecoins are not the issue here, the governments are.
> The private interest is genuine, [...] rational for the individual Nigerian saver
You expand upon that rationale. It is individually rational precisely because of corruption, incompetence, external sanctions and many other situations across the world.
This choice is corrosive for Nigeria regardless of whether the Nigerian government is benevolent or malevolent because American monetary policy is ignorant of what would be beneficial for Nigeria and the more people that make that choice the more the future of their society is tied to American monetary policy. It is an incompetent policy by construction. Now you have two problems: corruption, and an inability to effect monetary policy.
You might think, well if and when we solve the corruption problem we can transfer the stable coin back to effect a monetary policy... triggering the run that will drop the peg because the private entities backing the coin aren't regulated like a bank. Although comically, maybe the American taxpayer will then bail out the entity and the Nigerians will get their money!
I hate these type of articles because they often come from people that live in a normal country and don't know the struggle to live in a corrupt shithole where you don't have financial freedom nor security
FTX collapsed and was caught but more conservative crypto exchanges continue to use customer funds, trade against their own customers, use insider information, etc.
Even a supposedly "legitimate" exchange like Coinbase is allowing unregistered securities to trade on its platform.
1.A tiny handful of success stories are pushed to the front.
2.The vast majority who lost money are made invisible.
3.It manufactures the expectation that this time, you could be the one.
4.The price movement itself becomes the reward stimulus.
5.The platform, the exchange, the issuer, and the early investors all hold an advantage in fees or liquidity.
The problem is that this is identical to gambling. But it's dressed up as "finance." The industry obscures the fact that crypto functions as gambling by making people think of it as a new kind of financial asset.
Of course, crypto is technology. It's true that there are technological components, blockchains, smart contracts, and the like. But just because something contains technology doesn't mean the mass marketing around it qualifies as technology investment. Anti-counterfeiting technology is also technology. That doesn't make putting money into circulating counterfeit bills an "investment in currency security technology." By the same logic, the fact that crypto contains technological elements is being used to justify the marketing structure built on top of it, and that, precisely, is the deception.
And for all the talk of decentralization, the reality that USDT and similar tokens end up tethered to a single dominant exchange, heavily coupled to nation states, essentially proves that true decentralization is impossible in practice. This is only natural. Decentralization makes trading inconvenient, so people gravitate toward a single centralized exchange. And at that point, what exactly is the difference between that exchange and a government?
How many teenagers looked with starry eyes into US military recruiting PR campaigns, then get send to Iraq / Afghanistan, and instead of glory and cool adventures that were promised they saw death of peers and civilians on massive scale, they became invaders for at best questionable causes, experienced huge human suffering and destruction... which at the end didn't achieve anything positive at all, neither for US nor for locals, massively in contrary. Heroes look very differently in hindsight.
"This guy won big!" is absolutely a part of the marketing that pulls in the other suckers. It's not a counter-example, it's part of the scheme.
I know people who really enjoy a night out losing a 3-digit sum of money in a casino. Somehow they get sufficient reward from that to make the expense worthwhile for them.
The difference is, that unlike the Crypto enthusiasts, they don't afterwards try to convince me at length that gambling can and should replace money transfers, foreign exchange, banks in general, pension funds, the governmental exchequer etc. That would be cultish lunacy.
tbh that reads a bit like the war on drugs propaganda we got in school back then. You don't want to try the devil's lettuce cause in 2 years you will be a homeless heroin addict in San Francisco, or worse!
- many people don't indulge at all
- many people indulge occasionally to no real harm
- some people indulge in a way that makes a short term recoverable mess
- a few people get addicted and are unable to stop. May or may not also be harmed at this point, but this tends to lead to cumulative harm
- a few people really mess up tragically
Nobody trusts junkies with $100 so it makes sense that shoplifting or burglary can get them the money they need, but a lot of people who have a gambling problem are six figures down, stealing a neighbour's PS5 is a drop in the bucket.
I'm finally almost out and I'm 45. Nobody taught me in school not to use them as they are harmful. Nobody taught me how much money they will actually charge me and how much money I will lose because of them. Whereas if I had just saved my money and bought the thing out right I wouldn't have to pay any extra money.
My school failed me.
It is predatory. Especially to hook teenagers on them at a young age.
> assumes bucket sizes ("many," "some," "a few")
I was trying to be as vague as possible here!
Those pills are actually similar to heroin, yet all of that happened legally in real life, with profits flowing through legitimate financial institutions on a very large scale.
__ ¹ coincidentally what my Dad always used to say about black tar heroin.
Just like the failure of the war on drugs, trying to ban crypto and arresting anyone that owns it would almost certainly be a dismal failure.
Presuming you want to 'kill' cryptocurrency, starving it of interactions with the real economy seems a much easier way to do it.
Well, propaganda or not, hard drugs are bad for you.
About 100,000 die annually from drugs in the US alone.
And people "high" on bleach never killed or injured anybody.
> About 100,000 die annually from drugs in the US alone.
A single substance vs all drugs including prescription, over the counter, and hard drugs while including suicide etc is hardly the support you think it is.
Further actually using the correct numbers and then trying to justify US drug policy based on hard drug overdoses fails when you look at hard drug overdoses in other countries. US numbers are high not because it’s an hard problem, but because our policy is bad.
The point of DARE was to be a cover for getting cops into classrooms talking to kids after the LAPD "Public Disorder Intelligence Division" KGB-esque organization was brought to light and dissolved. Daryl Gates, the head of that program, was the one who approached some academics as a cover. It was immediately discovered that kids who went through the program were more likely to do drugs, but Gates didn't care. Because it wasn't about keeping kids away from drugs.
The entire point of the program was to turn kids into informants on their parent's gang activity. Kids were regularly coerced into narcing.
https://www.youtube.com/watch?v=LzrGCk-F7FY
https://en.wikipedia.org/wiki/LAPD_Public_Disorder_Intellige...
https://en.wikipedia.org/wiki/Drug_Abuse_Resistance_Educatio...
or meaningfully richer as the case may be
While I do get your point about the FUD it generated, a better parallel might be the rise (and eventual fall) of the tobacco industry. There was a lot of fraud and deception in the 20th century about the health effects of smoking. There were ads touting that more doctors preferred brand X. The idea was to correlate something genuinely dangerous and lethal with good health.
Crypto and betting markets, to the author’s point, are repeating this pattern again today in terms of personal finances.
You can say buying crypto is like gambling sure but it literally is not. It's investing in an extremely risky asset that can go to 0. But it is very different than placing a bit on Kalshi or a sportsbook.
I actually have bought CumRocket before but I also bought a lot of crypto and sold it at a profit. I did not use Kalshi later or sportbooks to gamble. I moved to invest in stocks later in life but bought boring etfs and index funds. Trading bitcoin actually taught me risk management and stocks seem much easier to handle in terms of strategy.
Sure I could've turned into a degenrate gambler but that's literally not crypto's fault
But he's not, that's a big issue. If you download DraftKings, it's obvious you are gambling. If you download Robin Hood, and buy shares of Apple, it's obvious you are investing. If you then open Robin Hood and trade oil futures? 0 DTE options? What about when the same app shows you US commodities markets where they are binary options on if the US FIFA team make it to the round of 16?
Buying a bond from the issuer is investing. Buying an IPO is investing. Buying a rental property is investing. Investment implies possible productive result from the action. When you buy shares or bonds already on the market this just exits the previous holder, it does nothing productive.
I would define it differently. If you are putting money in something with the hope that the price goes up, that's speculating. If you put money in something with the hope that it generates income then that's investing.
So buying stocks could be either one.
And using it to generate income, maintaining it for the customers (renters) etc
Scenario 1: I hold all the stock for decades until I die. Under your terminology, I am the sole "investor". Fine.
Scenario 2: 1 millisecond after my purchase I sell everything I bought in the IPO to thousands of market participants. Under your terminology they are not "investors". I can't be an investor either, since I hold no more of the stock. Does the company no longer have investors?
But I must contradict the author, because there is a market of goods, and bitcoin is indirectly involved in it. Namely the dark web market of drugs.
People love drugs, and they use a lot of them, drugs turnover a huge amount of value. And right now people are buying bitcoin, because it's often safe to buy, and exchanging it for monero, that they then use to buy drugs.
I'm very much interested in this market, and how it affects crypto.
They're not without value and theyre not all speculation but what value they do have is almost entirely about facilitating transactions which at least one state considers illegal.
I used to think that this would mean that they'd be outright banned eventually but it seems that the "index tracker for the underground economy" proved to be too profitable an investment for western oligarchs and the chance to undermine rival countries' capital controls proved too alluring for the imperialists in government.
But at the same time there is also finally real finance happening on-chain too. Backpack launched a SpaceX token at IPO that can be moved between on-chain and your brokerage. I think Coinbase announced their on-chain equity offering will have the same capability. Just yesterday Bailie Gifford launched a tokenised fund where the actual register of record is on-chain. I still think crypto has significant potential as financial rails, and that does seem to be being explored by real financial players now too.
Yes it won't be quite so decentralised, but say a number of major banks all spin up a node for say a JPM asset trading blockchain, it becomes semi-decentralised, so they have some advantage of a using a more secure shared ledger, but they also retain more control and thus probably more acceptance within banking, as big players can keep a walled-garden of sorts.
What is the actual societal value of this? Do you seriously believe that such a token helps price discovery?