15 ms·

Switzerland embraces digital currencies and crypto-entrepreneurs

209 points by edward 9y ago

alehul 9y ago
I recently was lucky enough to have a conversation with a co-founder of a large cryptocurrency (identifying details redacted for his privacy), and among many other interesting ideas, he talked about the inflection point for a potential crypto-filled future. He doesn't see people being willing, en masse, to convert the currency they receive (in a paycheck, for example) into another currency unless absolutely necessary. This is a chicken-egg problem if you want crypto widely adopted, where you need the vendors to adopt crypto but it'll likely have to be the government or company first that distributes it to citizens/employees. He specifically mentioned Switzerland as a great country to explore a system like this (think Anti-Venezuela lol); if they were to found/back a decentralized currency, it could quickly reach mass adoption and we could actually function in society on crypto. I'm interested to see whether Switzerland could go that far with their approach. The incentives that could be provided to make it worthy for a country like Switzerland to found/back a currency which they don't ultimately control are unclear, but nonetheless an idealistic concept.
- Hermel 9y ago
  From an economic perspective, you always have to ask: what are the incentives for someone to switch currencies. At first sight, it does not seem to matter much which unit of account you are using. However, there is in fact a strong financial incentive for the young, working generation to switch to a new currency, thereby devaluing all the nominal savings of the old, retired generation. So even in a country like Switzerland, Bitcoin or another cryptocurrency could be used by the young to brake free from paying an unfairly large share of their income to the old.
  - KasianFranks 9y ago
    It's simple, the crypto market rate beats the standard money market rate by leaps and bounds when the average consumer goes cash e.g. during the next downturn or bear market.
  - amelius 9y ago
    > However, there is in fact a strong financial incentive for the young, working generation to switch to a new currency, thereby devaluing all the nominal savings of the old, retired generation. Huh? They could switch too. I don't see the advantage. Also, block chain is the perfect tool for governments to track their citizens' spendings.
  - nosuchthing 9y ago
    a strong financial incentive for the young, working generation to switch to a new currency, thereby devaluing all the nominal savings of the old, retired generation. That's not how economics works. First, who is producing the new supply? How is the new supply being produced? Hopefully by them, and not a 3rd party that exploits the production and sale of this new medium... The reason proof of work coins have no inherent value, is because there's zero economic demand except from speculators. Coins are generated though software which has a measurable cost, and why would a vendor or nation state expose their real world assets to be traded for a database token produced though this software method? You can't just tell all the kids to start using seashells or cryptocoins for their money because it would have to equate or surpass the abilities of normal cash.. for both client and vendor. If anything, one can imagine a nation state issuing a protocol tied to their centralized treasury but that's not too different than using a debit card.
  - pjc50 9y ago
    Changing your unit of account does not make a difference to your employer, your landlord, your utility company, or the shop you buy your groceries at.
  - Yizahi 9y ago
    a) switch to a new currency b) thereby devaluing all the nominal savings of the old, retired generation In reality it won't work like that (A -> B). In this world you most likely will devalue net worth of 99% of people (poor) and prop up net worth of 1% of people (rich) simply because they OWN actual assets - whole factories and industries, mines, planes, ships, hotels, etc. everything that is bigger than a phone and more useful than a house. This move (if hypothetically it ever happened) will create even bigger disparity and faster than now, in years instead of decades.
- mtgx 9y ago
  I'm not sure there's much of a chicken and egg problem at all. The cryptocurrency adoption has steadily increased so far. If anything the biggest problem is understanding how to use cryptocurrencies in the first place. For mass adoption that's where we need to see innovation most (and of course scalability, which is directly tied to mass adoption). I don't see the government adopting/not adopting a cryptocurrency affect adoption in a major way on its own. People who don't understand how to use cryptocurrency still wouldn't use it unless it was forced upon them somehow, like their employer saying their salary will be exclusively offered as cryptocurrency from the next month forward. But that could cause all sorts of issues.
  - Asdfbla 9y ago
    >The cryptocurrency adoption has steadily increased so far. For speculation and investment, not for anything currency-like, though.
    - ghthor 9y ago
      Why is that do you think?
      - ldiracdelta 9y ago
        I'd say lack of transaction speed, they're not easy to use, and almost all crypto-currencies lack privacy. Should everyone in the world get to know that I stupidly bought a soda from the vending machine at 3pm? Or worse..
- roymurdock 9y ago
  It sounds like what you're describing is replacing the functional (read: relatively stable inflation-wise) swiss franc with... ? Assuming you implemented a POW blockchain-based, decentralized (anyone can download and run a node), virtual currency, this would remove control over the supply and generation of the currency from the Swiss National Bank (fiscal and monetary policy experts) and give it to...Chinese cryptocurrency miners + whatever group of developers Switzerland decides to put in charge of maintaining and upgrading the swiss blockchain? What your friend is referring to is actually an idealized economic concept, the "Stablecoin" - one that is pegged to the exact right basket of goods, services, and semi-finished industrial products that it experiences little to no inflation/deflation and can be counted on as a store of value. All countries are or should be trying to create a Stablecoin relative to their own economies - allowing private citizens to assume their $5,000 USD will be able to buy roughly the same amount of goods and services in, say 6 months. All this to say...the Swiss have already created a Stablecoin for their economy...the franc. There is no reason to break up and decentralize an organization that is competently managing a currency. It only makes sense in cases (such as Venezuela) where the central authority is doing a terrible job of managing their currency, and is nowhere near achieving "Stablecoin" status. Or for markets where there is no accepted "Stablecoin" because they are illegal/no enforcement mechanism to honor the transaction (e.g. you can't bring a lawsuit in a US court against a drug dealer if he takes your USD and sells you bad drugs).
  - ghthor 9y ago
    There is no reason the governance needs to change, they could still create a distribed mined coin and maintain goverance over the issue and destruction of tokens to maintain stable trading values.
    - roymurdock 9y ago
      Wrong...if you create a distributed mined coin, you're giving power to the miners. You can try and push updates (say from version 1 to version 2) to the nodes, but if the miners choose to ignore those updates, they can hard fork the network and run it according to a past version, or their own version, essentially creating a derivative currency. This has happened to Bitcoin - see bcash, bitcoin gold, bitcoinX, etc. Decentralizing control by definition gives power to all of the nodes in the network, requiring their buy-in to conduct any type of "monetary policy" by changing the source code and rolling out an upgraded application. Any changes that could increase the hash rate, increase the max number of tokens, "destroy" transactions, rollback to a certain state, etc. would require miner cooperation. Whereas right now central banks can just "create" liquidity by tweaking monetary policy without needing the banks and populace to approve and agree to these changes.
- blunte 9y ago
  Of course it depends on what you intend to do with your money, but for living and operating, local currency is usually most important. Cryptocurrencies serve many specialized needs, particularly in global transfers, but they have little use in day to day, local transactions. Anything that can be traded for value can be considered a currency, so you could theoretically trade equities with other people for goods and services. But usually, that is much less practical than exchanging local fiat currency. Same goes for virtual currencies. Instead, you'll perhaps use virtual currencies as an intermediate currency for simplified financial transfers, or perhaps for storing some of your investments, or for utility reasons (such as tokens which are the utility fee tokens for some exchanges), or perhaps as a form of startup investment (as with ICOs). I do wonder if the effectiveness of bitcoin as a transfer currency was any motivation behind the recent improvement in EU bank to bank transfers. What previously took one or maybe two business days for SEPA transfers has recently been improved to be near instant (so I've read; I haven't paid attention lately). Maybe the banks felt pressure to keep up? Meanwhile, US banking customers are still passing handwritten pieces of paper around. Once US customers get verified accounts with some of the cryptocurrency money exchangers, quick USD->bitcoin->bitcoin->USD transfers are nice and fast and relatively inexpensive (with the recent dramatic drop in bitcoin mining fees).
  - ghthor 9y ago
    Day to day transactions are actually the most likely to be disrupted by crypto when the UX & education hit the right point. The reason for this is crypto can trade with almost zero fees, which compared to card transaction fees make paying in crypto better for merchants, like taking cash.
    - dmitriid 9y ago
      So that’s why most crypto currencies have exhorbitant (compared to credit card transactions) fees?
      - blunte 9y ago
        Which ones do you include in your "most" category? Bitcoin fees, for example, are based partly on the amount of data in the transaction. It's not really a percent of amount sent factor. Whether you send 100 BTC (which is a lot of money) or 0.001 BTC, you'll pay about the same fee assuming the same number of input and output addresses. Also, while bitcoin fees had gotten quite high toward the end of 2017 and early 2018, lately they have reset back down to a very low level. I routinely send batch payments from a dozen input addresses to some output addresses with a value total of a few thousand dollars, paying less than $1 in fees. And anyway, you can't send people money to their credit card. UPDATE: It appears bitcoin fees are back on the rise..., 10x what they were a day ago.
- quadcore 9y ago
  He doesn't see people being willing, en masse, to convert the currency they receive (in a paycheck, for example) I think he meant in the short term, didnt he? In the long term, this is obviously wrong. For two reasons. 1) You dont get a craze like we are witnessing when people dont like the technology. At some point, you have to stop making things complicated: people want it, they are not afraid of it, they are damn excited about it. It's the new gold rush. 2) Cryptocurrencies, once mature, will offer a significant increase in banking quality, innovation and competition. Your current banking system and VISA are 19th-century in comparison of what's coming. In short, we have: people-love-it + old-system. I call the result of that equation obvious on the long term.
  - spiralx 9y ago
    I look forward to that glorious day when Bitcoin, now mature, has crushed the global financial system and established a new era of whale dominance. I'm just not sure that I have enough years left in me to wait until the impossible future arrives...
- csomar 9y ago
  We'll need two things in a crypto-utopia 1. Decentralized derivative adjusted assets. Basically you are holding a contract of 100 Units (instead of 100USD) that represent a decentralized smart contract which trades against other cryptos. Crypto goes up or down but your contract holds a stable value. 2. Automatic search for gateways and routing of transactions. The merchant just shows you the amount in the universal unit (ie: 35 Units) and a QR Code. You scan the QR code and the merchant is paid. The applications and blockchains figure out the rest and connects the different blockchains together.
  - kimi 9y ago
    Yes, or a bunch of coins in your pocket. Not so utopic, but they don't require data access and require no electricity.
blunte 9y ago
It's nice that they take a positive approach to management and regulation, but it's too bad they're so strict about who they let in. I believe if you're an EU citizen you have a path to get in and start a business, but if you're American it seems you're not welcome (unless you start with a lot of funding and basically buy your way in). The Netherlands will let an American come start a business with only (about) 5,000 € and a bit of paperwork, plus another 1,400 in fees. NL isn't making a great effort to attract blockchain businesses, but they do benefit from the generally calm EU regulatory approach to the new technologies.
tomascot 9y ago
Switzerland wants people to spend the money from cryptocurrencies there. There's a lot of money to attract.
- tehlike 9y ago
  not as big as you think it is. current market is mostly manipulated, and liquidity is not as much.
thisisit 9y ago
A cynical way to look at this will be that Switzerland had enabled people - corrupt politicians, dictators etc, especially from third world countries, hide money. They refused to divulge bank details citing privacy concerns. But in recent years details have come to light - either through leaked data or country actions. This has led to weakening of their infamous privacy rules. With cryptocurrency's rise, it offers Switzerland a new way to continue their privacy bs. So, obviously they are going to embrace and enable.
- m_mueller 9y ago
  > privacy bs Privacy is always BS until the lack of it bites you personally. Privacy (i.e. 4th amendment) is to Swiss what 2nd and 4th amendment is to conservative Americans: Our insurance against government overreach. The problem is of course that not every place is as democratic (i.e. ruled by the people as a whole) and low in crime, therefore privacy creates unwanted side effects in form of illegitimate uses. What exactly is illegitimate is up for discussion though - e.g. I consider tax hiding as simply a symptom of governments failing to create stringent market places where taxes flow automatically and fairly. As long as you don't have a world- (solar system?) wide government with total control, you'll never eliminate the availability of tax havens, they just get shifted around - currently the easiest place to hide is probably Delaware. I see cryptocurrency as a nice opportunity to introduce a much more stringent monetary system where it's trivial to trace back the origin of money and track whether it has been earned in a legitimate way, including the deduction of taxes. People will still have the same options in general: (a) store it in a personal offline wallet - somewhat dangerous due to potential loss and/or forgetting access codes (b) give access codes to a trusted bank who will have an interest in tracing whether everything is in order (due to regulations) (c) store it somewhere off-shore, risking fraud What crypto enables is basically a clean separation of (b) and (c), which would make life easier for Swiss banks in the current landscape, i.e. allow them to once again deal freely with foreign nationals, especially Americans.
  - thisisit 9y ago
    It seems it is true - you read what you believe and rest is all lost. So thank you for quoting a misused qualifier from my post for your counter. I don't expect people who have not lived or experienced what people like me in the developing countries have to go through because of the Swiss privacy bs. Though I do expect them to hem and haw when stuff like Panama papers are revealed. Additionally, it seems you don't really understand how cryptocurrency work. Bitcoin is pseudo-anonymous and hence, it allows stuff like this: > I see cryptocurrency as a nice opportunity to introduce a much more stringent monetary system where it's trivial to trace back the origin of money and track whether it has been earned in a legitimate way, including the deduction of taxes. True anonymity which you want from the 4th Amendment, happens in cryptocurrencies like Monero. Those are resistant to blockchain analysis and you can't trace it back to origin.
ymse 9y ago
This is somewhat off-topic, but I think the cryptocurrency craze came at the worst possible time. Here we are, amidst an ecological crisis, the poles are melting, and people are using insane amounts of energy on...mining digital "currencies". Yes, blockchains are useful, cryptocurrency has its place, but if the current (ecological) trend continues, even fiat money will be worthless in many parts of the world in 20 years. Please consider the environment before buying a $3000 mining rig with expected profits of $100/month.
- arglebarnacle 9y ago
  I guess you could argue it's ironic or hypocritical in some way to squander electricity in the era of climate change, but it's completely wrong to identify cryptocurrency as a serious contributor to climate change. We can even set aside the fact that renewable sources of electricity can be and are used to mine cryptocurrency (e.g. the vast bitcoin mines co-located with Chinese hydro dams). The real problem with this argument is it represents the same fallacy you see with "violent video games are driving kids to be more violent" Even if it were true, it tackles the social problem in question backwards. Instead of asking "do video games make kids more violent" we should be asking "what are the main drivers of violence in our society?" Climate change is caused by fossil-fuel power generation, trucking, personal automobiles, greenhouse gas emitting industry, and agriculture. It's not caused by bitcoin, even if bitcoin mining contributes to it in some minuscule way by comparison to the real drivers.
  - grzm 9y ago
    It is very much relevant. In the oft-recited "Reduce. Reuse. Recycle.", they're ranked in order of descending effectiveness: it's most effective to look for ways to reduce energy consumption. Yes, we need to look at which sources we're getting energy from, but just like the most bug-free code is the code that's never written, not needing the energy in the first place makes the first question moot. Of course, this is important across all energy consumption, but that doesn't make it irrelevant or hypocritical to discuss in the context of cryptocurrency mining.
- tlrobinson 9y ago
malthaus 9y ago
Switzerland does not 'embrace' digital currencies per se. We (or rather: our politicians and ecosystem shovel-sellers) are looking desperately for a new focus area after having lost most of the historical wealth management appeal and since some of the early crypto companies settled here they kind of ran with it. The robust political system and wealthy quite egalitarian society is a nice environment to run your company in but is also the reason that the next step of the cryptocurrency revolution will not happen here. Cryptocurrencies are still 100% hype & speculation; a solution in search of a problem. Unless it delivers some real-world applicability i'm not very happy about the reputational risk we expose our country too as i'm strictly in the camp of that it will all come crashing down in a big bang soon.
- scalesolved 9y ago
  Whilst there is a lot of hype and speculation I think you are mistaken about there being no real-world applicability. My bank has so many fees and loopholes for sending money even within the EU and they can take days. I owed a friend some money and I sent him BTC which arrived in a couple of hours with fees that were about 10% of what I pay using the banking system. Real-world applicability and a satisfied user.
  - pjc50 9y ago
    > so many fees and loopholes for sending money even within the EU Get yourself a bank which does SEPA properly.
    - scalesolved 9y ago
      Easier said than done at least in Spain. Poor opening hours and poor customer service. It's one of the reasons I'm a fan of crypto for the ease of transferring.
      - bkor 9y ago
        But the issue is lack of competition, not something that can only be solved by crypto currency. The original statement was that crypto is still looking for an actual problem to solve. Lack of competition and slow transfers isn't something related to crypto. Meaning, at a point Bitcoin took hours to work as well which a really high fee. SEPA apparently is 1 EUR and 10 seconds. Ease of transferring seems dubious as well, crypto can also be slow or quick.
hjkm 9y ago
I've heard that, in Switzerland, you can buy Bitcoin at train station ticket machines.
- buckthundaz 9y ago
  I'm not sure you can buy Bitcoin, but you can buy public transit tickets with Bitcoin (from kiosks) in Zurich and likely elsewhere in Switzerland.

209 points by edward 9y ago

I recently was lucky enough to have a conversation with a co-founder of a large cryptocurrency (identifying details redacted for his privacy), and among many other interesting ideas, he talked about the inflection point for a potential crypto-filled future. He doesn't see people being willing, en masse, to convert the currency they receive (in a paycheck, for example) into another currency unless absolutely necessary. This is a chicken-egg problem if you want crypto widely adopted, where you need the vendors to adopt crypto but it'll likely have to be the government or company first that distributes it to citizens/employees. He specifically mentioned Switzerland as a great country to explore a system like this (think Anti-Venezuela lol); if they were to found/back a decentralized currency, it could quickly reach mass adoption and we could actually function in society on crypto. I'm interested to see whether Switzerland could go that far with their approach. The incentives that could be provided to make it worthy for a country like Switzerland to found/back a currency which they don't ultimately control are unclear, but nonetheless an idealistic concept.

Hermel 9y ago
From an economic perspective, you always have to ask: what are the incentives for someone to switch currencies. At first sight, it does not seem to matter much which unit of account you are using. However, there is in fact a strong financial incentive for the young, working generation to switch to a new currency, thereby devaluing all the nominal savings of the old, retired generation. So even in a country like Switzerland, Bitcoin or another cryptocurrency could be used by the young to brake free from paying an unfairly large share of their income to the old.
- KasianFranks 9y ago
  It's simple, the crypto market rate beats the standard money market rate by leaps and bounds when the average consumer goes cash e.g. during the next downturn or bear market.
- amelius 9y ago
  > However, there is in fact a strong financial incentive for the young, working generation to switch to a new currency, thereby devaluing all the nominal savings of the old, retired generation. Huh? They could switch too. I don't see the advantage. Also, block chain is the perfect tool for governments to track their citizens' spendings.
- nosuchthing 9y ago
  a strong financial incentive for the young, working generation to switch to a new currency, thereby devaluing all the nominal savings of the old, retired generation. That's not how economics works. First, who is producing the new supply? How is the new supply being produced? Hopefully by them, and not a 3rd party that exploits the production and sale of this new medium... The reason proof of work coins have no inherent value, is because there's zero economic demand except from speculators. Coins are generated though software which has a measurable cost, and why would a vendor or nation state expose their real world assets to be traded for a database token produced though this software method? You can't just tell all the kids to start using seashells or cryptocoins for their money because it would have to equate or surpass the abilities of normal cash.. for both client and vendor. If anything, one can imagine a nation state issuing a protocol tied to their centralized treasury but that's not too different than using a debit card.
- pjc50 9y ago
  Changing your unit of account does not make a difference to your employer, your landlord, your utility company, or the shop you buy your groceries at.
- Yizahi 9y ago
  a) switch to a new currency b) thereby devaluing all the nominal savings of the old, retired generation In reality it won't work like that (A -> B). In this world you most likely will devalue net worth of 99% of people (poor) and prop up net worth of 1% of people (rich) simply because they OWN actual assets - whole factories and industries, mines, planes, ships, hotels, etc. everything that is bigger than a phone and more useful than a house. This move (if hypothetically it ever happened) will create even bigger disparity and faster than now, in years instead of decades.
mtgx 9y ago
I'm not sure there's much of a chicken and egg problem at all. The cryptocurrency adoption has steadily increased so far. If anything the biggest problem is understanding how to use cryptocurrencies in the first place. For mass adoption that's where we need to see innovation most (and of course scalability, which is directly tied to mass adoption). I don't see the government adopting/not adopting a cryptocurrency affect adoption in a major way on its own. People who don't understand how to use cryptocurrency still wouldn't use it unless it was forced upon them somehow, like their employer saying their salary will be exclusively offered as cryptocurrency from the next month forward. But that could cause all sorts of issues.
- Asdfbla 9y ago
  >The cryptocurrency adoption has steadily increased so far. For speculation and investment, not for anything currency-like, though.
  - ghthor 9y ago
    Why is that do you think?
    - ldiracdelta 9y ago
      I'd say lack of transaction speed, they're not easy to use, and almost all crypto-currencies lack privacy. Should everyone in the world get to know that I stupidly bought a soda from the vending machine at 3pm? Or worse..
roymurdock 9y ago
It sounds like what you're describing is replacing the functional (read: relatively stable inflation-wise) swiss franc with... ? Assuming you implemented a POW blockchain-based, decentralized (anyone can download and run a node), virtual currency, this would remove control over the supply and generation of the currency from the Swiss National Bank (fiscal and monetary policy experts) and give it to...Chinese cryptocurrency miners + whatever group of developers Switzerland decides to put in charge of maintaining and upgrading the swiss blockchain? What your friend is referring to is actually an idealized economic concept, the "Stablecoin" - one that is pegged to the exact right basket of goods, services, and semi-finished industrial products that it experiences little to no inflation/deflation and can be counted on as a store of value. All countries are or should be trying to create a Stablecoin relative to their own economies - allowing private citizens to assume their $5,000 USD will be able to buy roughly the same amount of goods and services in, say 6 months. All this to say...the Swiss have already created a Stablecoin for their economy...the franc. There is no reason to break up and decentralize an organization that is competently managing a currency. It only makes sense in cases (such as Venezuela) where the central authority is doing a terrible job of managing their currency, and is nowhere near achieving "Stablecoin" status. Or for markets where there is no accepted "Stablecoin" because they are illegal/no enforcement mechanism to honor the transaction (e.g. you can't bring a lawsuit in a US court against a drug dealer if he takes your USD and sells you bad drugs).
- ghthor 9y ago
  There is no reason the governance needs to change, they could still create a distribed mined coin and maintain goverance over the issue and destruction of tokens to maintain stable trading values.
  - roymurdock 9y ago
    Wrong...if you create a distributed mined coin, you're giving power to the miners. You can try and push updates (say from version 1 to version 2) to the nodes, but if the miners choose to ignore those updates, they can hard fork the network and run it according to a past version, or their own version, essentially creating a derivative currency. This has happened to Bitcoin - see bcash, bitcoin gold, bitcoinX, etc. Decentralizing control by definition gives power to all of the nodes in the network, requiring their buy-in to conduct any type of "monetary policy" by changing the source code and rolling out an upgraded application. Any changes that could increase the hash rate, increase the max number of tokens, "destroy" transactions, rollback to a certain state, etc. would require miner cooperation. Whereas right now central banks can just "create" liquidity by tweaking monetary policy without needing the banks and populace to approve and agree to these changes.
blunte 9y ago
Of course it depends on what you intend to do with your money, but for living and operating, local currency is usually most important. Cryptocurrencies serve many specialized needs, particularly in global transfers, but they have little use in day to day, local transactions. Anything that can be traded for value can be considered a currency, so you could theoretically trade equities with other people for goods and services. But usually, that is much less practical than exchanging local fiat currency. Same goes for virtual currencies. Instead, you'll perhaps use virtual currencies as an intermediate currency for simplified financial transfers, or perhaps for storing some of your investments, or for utility reasons (such as tokens which are the utility fee tokens for some exchanges), or perhaps as a form of startup investment (as with ICOs). I do wonder if the effectiveness of bitcoin as a transfer currency was any motivation behind the recent improvement in EU bank to bank transfers. What previously took one or maybe two business days for SEPA transfers has recently been improved to be near instant (so I've read; I haven't paid attention lately). Maybe the banks felt pressure to keep up? Meanwhile, US banking customers are still passing handwritten pieces of paper around. Once US customers get verified accounts with some of the cryptocurrency money exchangers, quick USD->bitcoin->bitcoin->USD transfers are nice and fast and relatively inexpensive (with the recent dramatic drop in bitcoin mining fees).
- ghthor 9y ago
  Day to day transactions are actually the most likely to be disrupted by crypto when the UX & education hit the right point. The reason for this is crypto can trade with almost zero fees, which compared to card transaction fees make paying in crypto better for merchants, like taking cash.
  - dmitriid 9y ago
    So that’s why most crypto currencies have exhorbitant (compared to credit card transactions) fees?
    - blunte 9y ago
      Which ones do you include in your "most" category? Bitcoin fees, for example, are based partly on the amount of data in the transaction. It's not really a percent of amount sent factor. Whether you send 100 BTC (which is a lot of money) or 0.001 BTC, you'll pay about the same fee assuming the same number of input and output addresses. Also, while bitcoin fees had gotten quite high toward the end of 2017 and early 2018, lately they have reset back down to a very low level. I routinely send batch payments from a dozen input addresses to some output addresses with a value total of a few thousand dollars, paying less than $1 in fees. And anyway, you can't send people money to their credit card. UPDATE: It appears bitcoin fees are back on the rise..., 10x what they were a day ago.
quadcore 9y ago
He doesn't see people being willing, en masse, to convert the currency they receive (in a paycheck, for example) I think he meant in the short term, didnt he? In the long term, this is obviously wrong. For two reasons. 1) You dont get a craze like we are witnessing when people dont like the technology. At some point, you have to stop making things complicated: people want it, they are not afraid of it, they are damn excited about it. It's the new gold rush. 2) Cryptocurrencies, once mature, will offer a significant increase in banking quality, innovation and competition. Your current banking system and VISA are 19th-century in comparison of what's coming. In short, we have: people-love-it + old-system. I call the result of that equation obvious on the long term.
- spiralx 9y ago
  I look forward to that glorious day when Bitcoin, now mature, has crushed the global financial system and established a new era of whale dominance. I'm just not sure that I have enough years left in me to wait until the impossible future arrives...
csomar 9y ago
We'll need two things in a crypto-utopia 1. Decentralized derivative adjusted assets. Basically you are holding a contract of 100 Units (instead of 100USD) that represent a decentralized smart contract which trades against other cryptos. Crypto goes up or down but your contract holds a stable value. 2. Automatic search for gateways and routing of transactions. The merchant just shows you the amount in the universal unit (ie: 35 Units) and a QR Code. You scan the QR code and the merchant is paid. The applications and blockchains figure out the rest and connects the different blockchains together.
- kimi 9y ago
  Yes, or a bunch of coins in your pocket. Not so utopic, but they don't require data access and require no electricity.

blunte 9y ago

It's nice that they take a positive approach to management and regulation, but it's too bad they're so strict about who they let in. I believe if you're an EU citizen you have a path to get in and start a business, but if you're American it seems you're not welcome (unless you start with a lot of funding and basically buy your way in). The Netherlands will let an American come start a business with only (about) 5,000 € and a bit of paperwork, plus another 1,400 in fees. NL isn't making a great effort to attract blockchain businesses, but they do benefit from the generally calm EU regulatory approach to the new technologies.

tomascot 9y ago

Switzerland wants people to spend the money from cryptocurrencies there. There's a lot of money to attract.

tehlike 9y ago
not as big as you think it is. current market is mostly manipulated, and liquidity is not as much.

thisisit 9y ago

A cynical way to look at this will be that Switzerland had enabled people - corrupt politicians, dictators etc, especially from third world countries, hide money. They refused to divulge bank details citing privacy concerns. But in recent years details have come to light - either through leaked data or country actions. This has led to weakening of their infamous privacy rules. With cryptocurrency's rise, it offers Switzerland a new way to continue their privacy bs. So, obviously they are going to embrace and enable.

m_mueller 9y ago
> privacy bs Privacy is always BS until the lack of it bites you personally. Privacy (i.e. 4th amendment) is to Swiss what 2nd and 4th amendment is to conservative Americans: Our insurance against government overreach. The problem is of course that not every place is as democratic (i.e. ruled by the people as a whole) and low in crime, therefore privacy creates unwanted side effects in form of illegitimate uses. What exactly is illegitimate is up for discussion though - e.g. I consider tax hiding as simply a symptom of governments failing to create stringent market places where taxes flow automatically and fairly. As long as you don't have a world- (solar system?) wide government with total control, you'll never eliminate the availability of tax havens, they just get shifted around - currently the easiest place to hide is probably Delaware. I see cryptocurrency as a nice opportunity to introduce a much more stringent monetary system where it's trivial to trace back the origin of money and track whether it has been earned in a legitimate way, including the deduction of taxes. People will still have the same options in general: (a) store it in a personal offline wallet - somewhat dangerous due to potential loss and/or forgetting access codes (b) give access codes to a trusted bank who will have an interest in tracing whether everything is in order (due to regulations) (c) store it somewhere off-shore, risking fraud What crypto enables is basically a clean separation of (b) and (c), which would make life easier for Swiss banks in the current landscape, i.e. allow them to once again deal freely with foreign nationals, especially Americans.
- thisisit 9y ago
  It seems it is true - you read what you believe and rest is all lost. So thank you for quoting a misused qualifier from my post for your counter. I don't expect people who have not lived or experienced what people like me in the developing countries have to go through because of the Swiss privacy bs. Though I do expect them to hem and haw when stuff like Panama papers are revealed. Additionally, it seems you don't really understand how cryptocurrency work. Bitcoin is pseudo-anonymous and hence, it allows stuff like this: > I see cryptocurrency as a nice opportunity to introduce a much more stringent monetary system where it's trivial to trace back the origin of money and track whether it has been earned in a legitimate way, including the deduction of taxes. True anonymity which you want from the 4th Amendment, happens in cryptocurrencies like Monero. Those are resistant to blockchain analysis and you can't trace it back to origin.

ymse 9y ago

This is somewhat off-topic, but I think the cryptocurrency craze came at the worst possible time. Here we are, amidst an ecological crisis, the poles are melting, and people are using insane amounts of energy on...mining digital "currencies". Yes, blockchains are useful, cryptocurrency has its place, but if the current (ecological) trend continues, even fiat money will be worthless in many parts of the world in 20 years. Please consider the environment before buying a $3000 mining rig with expected profits of $100/month.

arglebarnacle 9y ago
I guess you could argue it's ironic or hypocritical in some way to squander electricity in the era of climate change, but it's completely wrong to identify cryptocurrency as a serious contributor to climate change. We can even set aside the fact that renewable sources of electricity can be and are used to mine cryptocurrency (e.g. the vast bitcoin mines co-located with Chinese hydro dams). The real problem with this argument is it represents the same fallacy you see with "violent video games are driving kids to be more violent" Even if it were true, it tackles the social problem in question backwards. Instead of asking "do video games make kids more violent" we should be asking "what are the main drivers of violence in our society?" Climate change is caused by fossil-fuel power generation, trucking, personal automobiles, greenhouse gas emitting industry, and agriculture. It's not caused by bitcoin, even if bitcoin mining contributes to it in some minuscule way by comparison to the real drivers.
- grzm 9y ago
  It is very much relevant. In the oft-recited "Reduce. Reuse. Recycle.", they're ranked in order of descending effectiveness: it's most effective to look for ways to reduce energy consumption. Yes, we need to look at which sources we're getting energy from, but just like the most bug-free code is the code that's never written, not needing the energy in the first place makes the first question moot. Of course, this is important across all energy consumption, but that doesn't make it irrelevant or hypocritical to discuss in the context of cryptocurrency mining.
tlrobinson 9y ago

malthaus 9y ago

Switzerland does not 'embrace' digital currencies per se. We (or rather: our politicians and ecosystem shovel-sellers) are looking desperately for a new focus area after having lost most of the historical wealth management appeal and since some of the early crypto companies settled here they kind of ran with it. The robust political system and wealthy quite egalitarian society is a nice environment to run your company in but is also the reason that the next step of the cryptocurrency revolution will not happen here. Cryptocurrencies are still 100% hype & speculation; a solution in search of a problem. Unless it delivers some real-world applicability i'm not very happy about the reputational risk we expose our country too as i'm strictly in the camp of that it will all come crashing down in a big bang soon.

scalesolved 9y ago
Whilst there is a lot of hype and speculation I think you are mistaken about there being no real-world applicability. My bank has so many fees and loopholes for sending money even within the EU and they can take days. I owed a friend some money and I sent him BTC which arrived in a couple of hours with fees that were about 10% of what I pay using the banking system. Real-world applicability and a satisfied user.
- pjc50 9y ago
  > so many fees and loopholes for sending money even within the EU Get yourself a bank which does SEPA properly.
  - scalesolved 9y ago
    Easier said than done at least in Spain. Poor opening hours and poor customer service. It's one of the reasons I'm a fan of crypto for the ease of transferring.
    - bkor 9y ago
      But the issue is lack of competition, not something that can only be solved by crypto currency. The original statement was that crypto is still looking for an actual problem to solve. Lack of competition and slow transfers isn't something related to crypto. Meaning, at a point Bitcoin took hours to work as well which a really high fee. SEPA apparently is 1 EUR and 10 seconds. Ease of transferring seems dubious as well, crypto can also be slow or quick.

hjkm 9y ago

I've heard that, in Switzerland, you can buy Bitcoin at train station ticket machines.

buckthundaz 9y ago
I'm not sure you can buy Bitcoin, but you can buy public transit tickets with Bitcoin (from kiosks) in Zurich and likely elsewhere in Switzerland.