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Can someone explain to me how these decentralized systems make our current system more economically efficient? I just cannot see why anyone would actually use

by mrep 10y ago

Can someone explain to me how these decentralized systems make our current system more economically efficient? I just cannot see why anyone would actually use it outside of the illegal market.

mhluongo 10y ago
A couple benefits cryptocurrency brings over the traditional finance system, off the top of my head. * democratic access. I don't need to ask Visa, PayPal, or any other payment processor to accept payments online. There are plenty of businesses underserved today. Some of these are in "gray" areas, others aren't. * disintermediation of middle-men. There are tons of rent-seekers in finance (eg, banks protected by a regulatory moat). An open system that competes with them will lower prices for everyone.
brokenmachine 10y ago
For a start, I'm going to hazard a guess that you have never sent money to family overseas. With bitcoin you can transfer money internationally for cents and in seconds.
- vectorpush 10y ago
  > I'm going to hazard a guess that you have never sent money to family overseas. Bitcoin is utterly useless in this regard. Converting bitcoin to usable currency is very impractical in most locales and nearly impossible in others (no, meeting up with strangers to exchange bitcoins for cash at a 20% markup does not count).
  - brokenmachine 10y ago
    Maybe useless if you need to convert it to paper dinosaur money at the other end... No middlemen taking a cut at every step is one advantage of Bitcoin, and very fast international transfers is another. I think of Bitcoin as an awesome idea for a replacement of the current corrupt system, not something that integrates well with it. It is not perfect but it's certainly better than the current system. Might be unrealistically idealistic but I hope a cryptocurrency succeeds. Anyway, it is still possible for people to transfer Bitcoin between themselves with no middlemen.
    - vectorpush 10y ago
      > Maybe useless if you need to convert it to paper dinosaur money at the other end The vast majority of people on this planet use "paper dinosaur money" because that is what the overwhelming majority of merchants accept. There's also the fact that most people will have to convert their local currency into bitcoin before sending it because they aren't bitcoin enthusiasts who have arbitrary sums of bitcoin at their disposal. Most of the time acquiring bitcoin requires a bank account and can take days to acquire because of KYC and bank account verification (and that assumes you're comfortable uploading your photo id and other documents to bitcoin services). > I think of Bitcoin as an awesome idea for a replacement of the current corrupt system The cryptocurrency ecosystem is infamous for its association with fraud, abuse and incompetence. Whenever a bitcoin company goes offline for more than a few hours it's actually a serious concern that the operators might have absconded with the funds leaving users utterly powerless to recover their money or bring the operators to justice. Bitcoin operators have lost or stolen MILLIONS of dollars worth of money from bitcoin users... yet the current system is the corrupt one. My "dinosaur money bank" has never lost or disappeared with my money. Literally never. > it is still possible for people to transfer Bitcoin between themselves with no middlemen Which is useless if your overseas family wants to pay for goods and services like groceries, rent, medical care and other basic needs. You can say whatever you like about the ease of moving bitcoins internationally but it's a fact that almost everywhere in the world bitcoins are not accepted in exchange for goods and services and most people are not technically sophisticated enough to safely convert their bitcoins into local currency.
  - snark_hater 10y ago
    Nonsense. I've been using it for years to send money to my family back home and it's been nothing but seamless and extremely useful in every single way. Send bitcoins to a local exchange, convert into fiat and withdraw into a local bank account. Total expended time: 10 minutes. Compare that with using WU, where someone physically has to go to a local WU office, or even worse, doing a wire transfer where the recipient bank puts a freeze on the money until AML documentation is cleared (typically handled by calling the bank and stating the source of the money, but still a pain). Another way to send money is to get a bitcoin debit card, give it to a family member and load it every time you want to send money. Uninformed opinions should be kept to oneself, lest one ends up looking like they're talking out of their ass.
    - vectorpush 10y ago
      See my reply to brokenmachine. Let's do a little thought experiment. Suppose that I, living in the USA, want to send money to my aunt living in the Caribbean. Let's also say that she has never used bitcoin (like most people) and that I don't have an account on a bitcoin exchange (like most people). How do I get her $1000 within 24 hours using bitcoin?
toomim 10y ago
It takes 3-5 business days for a bank transfer. Bitcoin takes 10 minutes, and ethereum takes seconds. 10 minutes is more efficient than 3-5 days.
- Rikstam 10y ago
  Except that if you fail to include a transfer fee big enough, your transfer may take weeks, or never even get confirmed at all. Case in point: I've been trying to actually buy something with my BTC in the last few days, but because my wallet is an older version or something (with a small default transfer fee), my transfers are seen by just one peer and then are not confirmed. I dunno, last time , 2 years ago, when I paid / transfered bitcoins, it took 10 mins max. I guess the mining business has increased or changed since then.
  - mikekchar 10y ago
    Your "wallet" is a key. It's data. Upgrade your client.
- pjc50 10y ago
  This depends on your country. The UK's "Faster Payments" system offers <10 minute times for free among UK bank accounts. America is behind a lot of the first world in the complexity, slowness and cost of its banking system. Plans are in progress to roll out similar systems all across the Single European Payments Area.
codingmyway 10y ago
Microtransactions will be the killer app. There is massive demand for the web economy to run off real money instead of bloated clickbait ads. There's money in it. So it will happen. Sending card details for small transactions is both insecure and too much mental overhead. Broadcasting single a transaction from a virtual bit of pocket change is not. Once every browser has a wallet and people keep a few satoshis in there the web will go through another revolution. Bitcoin also acts a store of value in a world where people want to save for the future in a form that can't be taken and devalued easily. Whether people want smart contracts without the common sense back up of humans and courts I'm not so sure. Ethereum is interesting and will have some use cases but it's not a certainty that the risks will be overcome.

by mrep 10y ago

Can someone explain to me how these decentralized systems make our current system more economically efficient? I just cannot see why anyone would actually use it outside of the illegal market.

mhluongo 10y ago

A couple benefits cryptocurrency brings over the traditional finance system, off the top of my head. * democratic access. I don't need to ask Visa, PayPal, or any other payment processor to accept payments online. There are plenty of businesses underserved today. Some of these are in "gray" areas, others aren't. * disintermediation of middle-men. There are tons of rent-seekers in finance (eg, banks protected by a regulatory moat). An open system that competes with them will lower prices for everyone.

brokenmachine 10y ago

For a start, I'm going to hazard a guess that you have never sent money to family overseas. With bitcoin you can transfer money internationally for cents and in seconds.

vectorpush 10y ago
> I'm going to hazard a guess that you have never sent money to family overseas. Bitcoin is utterly useless in this regard. Converting bitcoin to usable currency is very impractical in most locales and nearly impossible in others (no, meeting up with strangers to exchange bitcoins for cash at a 20% markup does not count).
- brokenmachine 10y ago
  Maybe useless if you need to convert it to paper dinosaur money at the other end... No middlemen taking a cut at every step is one advantage of Bitcoin, and very fast international transfers is another. I think of Bitcoin as an awesome idea for a replacement of the current corrupt system, not something that integrates well with it. It is not perfect but it's certainly better than the current system. Might be unrealistically idealistic but I hope a cryptocurrency succeeds. Anyway, it is still possible for people to transfer Bitcoin between themselves with no middlemen.
  - vectorpush 10y ago
    > Maybe useless if you need to convert it to paper dinosaur money at the other end The vast majority of people on this planet use "paper dinosaur money" because that is what the overwhelming majority of merchants accept. There's also the fact that most people will have to convert their local currency into bitcoin before sending it because they aren't bitcoin enthusiasts who have arbitrary sums of bitcoin at their disposal. Most of the time acquiring bitcoin requires a bank account and can take days to acquire because of KYC and bank account verification (and that assumes you're comfortable uploading your photo id and other documents to bitcoin services). > I think of Bitcoin as an awesome idea for a replacement of the current corrupt system The cryptocurrency ecosystem is infamous for its association with fraud, abuse and incompetence. Whenever a bitcoin company goes offline for more than a few hours it's actually a serious concern that the operators might have absconded with the funds leaving users utterly powerless to recover their money or bring the operators to justice. Bitcoin operators have lost or stolen MILLIONS of dollars worth of money from bitcoin users... yet the current system is the corrupt one. My "dinosaur money bank" has never lost or disappeared with my money. Literally never. > it is still possible for people to transfer Bitcoin between themselves with no middlemen Which is useless if your overseas family wants to pay for goods and services like groceries, rent, medical care and other basic needs. You can say whatever you like about the ease of moving bitcoins internationally but it's a fact that almost everywhere in the world bitcoins are not accepted in exchange for goods and services and most people are not technically sophisticated enough to safely convert their bitcoins into local currency.
- snark_hater 10y ago
  Nonsense. I've been using it for years to send money to my family back home and it's been nothing but seamless and extremely useful in every single way. Send bitcoins to a local exchange, convert into fiat and withdraw into a local bank account. Total expended time: 10 minutes. Compare that with using WU, where someone physically has to go to a local WU office, or even worse, doing a wire transfer where the recipient bank puts a freeze on the money until AML documentation is cleared (typically handled by calling the bank and stating the source of the money, but still a pain). Another way to send money is to get a bitcoin debit card, give it to a family member and load it every time you want to send money. Uninformed opinions should be kept to oneself, lest one ends up looking like they're talking out of their ass.
  - vectorpush 10y ago
    See my reply to brokenmachine. Let's do a little thought experiment. Suppose that I, living in the USA, want to send money to my aunt living in the Caribbean. Let's also say that she has never used bitcoin (like most people) and that I don't have an account on a bitcoin exchange (like most people). How do I get her $1000 within 24 hours using bitcoin?

toomim 10y ago

It takes 3-5 business days for a bank transfer. Bitcoin takes 10 minutes, and ethereum takes seconds. 10 minutes is more efficient than 3-5 days.

Rikstam 10y ago
Except that if you fail to include a transfer fee big enough, your transfer may take weeks, or never even get confirmed at all. Case in point: I've been trying to actually buy something with my BTC in the last few days, but because my wallet is an older version or something (with a small default transfer fee), my transfers are seen by just one peer and then are not confirmed. I dunno, last time , 2 years ago, when I paid / transfered bitcoins, it took 10 mins max. I guess the mining business has increased or changed since then.
- mikekchar 10y ago
  Your "wallet" is a key. It's data. Upgrade your client.
pjc50 10y ago
This depends on your country. The UK's "Faster Payments" system offers <10 minute times for free among UK bank accounts. America is behind a lot of the first world in the complexity, slowness and cost of its banking system. Plans are in progress to roll out similar systems all across the Single European Payments Area.

codingmyway 10y ago

Microtransactions will be the killer app. There is massive demand for the web economy to run off real money instead of bloated clickbait ads. There's money in it. So it will happen. Sending card details for small transactions is both insecure and too much mental overhead. Broadcasting single a transaction from a virtual bit of pocket change is not. Once every browser has a wallet and people keep a few satoshis in there the web will go through another revolution. Bitcoin also acts a store of value in a world where people want to save for the future in a form that can't be taken and devalued easily. Whether people want smart contracts without the common sense back up of humans and courts I'm not so sure. Ethereum is interesting and will have some use cases but it's not a certainty that the risks will be overcome.