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This gets asked often, but in case something changed recently - what are the use cases of cryptocurrencies that are not: - Attempts to side-step the law (how

• dantillberg 8y ago
  > Attempts to side-step the law (however misguided the law is) There are a lot of people in the world that live in places where the law is far more gone than "misguided." For these people, it's not a question of "whether" to side-step the law but "how." You may not care, but they do.
  • puranjay 8y ago
    These people are already so far removed from the crypto infrastructure that it's a trivial case. People who bring this up are almost always people who have never lived anywhere near real poverty or conflict. Barring individual cases, the vast majority of the world's less privileged have neither the means nor the knowledge to buy crypto in any shape
    • scartracs 8y ago
      DASH and NANO had several initiatives this past year to achieve adoption in Venezuela due to their humanitarian crisis. It was small, but there were some good results especially by DASH if we believe the media they produced. There was a movement to donate DASH/NANO and get merchants to accept it in exchange for goods. All merchants need is a sticker that displays their QR code and a terminal that can confirm the transaction, which can be done by any smartphone/tablet/computer/IOT with minimal effort. Keep in mind, this happened while DASH and NANO are quite unknown and all crypto was in a bear market, meaning there were few people following the projects that could donate and promote the events. The hard part is not adoption within poverty-stricken nations, rather adoption in developed nations with complicated tax codes and lack of incentives for merchants to invest in more payment processing tech is the true challenge ahead.
      • puranjay 8y ago
        Venezuela is an interesting case in the sense that it is an otherwise well-off, decently well educated country going through a crisis. My country - India - has the world's largest number of poor. Even if these people were to get smartphones, there are already deeply entrenched players (PayTM, Google Pay) who offer free and instant transactions. This is true for a lot of African countries as well. No reason for anyone to use a new currency when there's already M-Pesa and UPI and PayTM that use the currency they already know and trust.
• DickingAround 8y ago
  It depends on what you consider "side-step the law". If you encrypt your communication so no one can't read it, but the government didn't demand you not encrypt it.. are you side stepping the law? That's kind of what crypto is like buying regular stuff; you're protecting your money (it's value and your right to trade it as you see fit) even though no one is trying to take it at this particular moment.
  • Swenrekcah 8y ago
    Well, people don’t have the unconditional right to trade their money as they see fit.
  • DenisM 8y ago
    I'm trying to find mainstream adoption drivers. Securing your money against possible future government intrusion is akin to prepping, hardly a mainstream way of life. Even the prepper community itself is more likely to stockpile gold and ammo instead of crypto currency. There isn't much room left in between the regulars and the preppers to provide demand for crypto currency.
    • DickingAround 8y ago
      The mainstream driver is going to be some form of 'disaster'. it can be as mild as 1970s style inflation or a 2008 style crash. It can be as severe as a long-ailing Brazilian Cruzeiro or 1998 Russian debt crisis. (People will bring up Germany or Austria after WWII but that really was a unique situation with reparations, occupation, and bad decision making). Prepping makes sense to the mainstream once they experience a disaster. And those disasters are being manufactured even now by mis-management of debt.
• lixtra 8y ago
  Banks are highly regulated and risk averse. They won’t transfer 100 USD to some country when it takes them more than some percentage of the transfer to do compliance for it. So the transfer is legal but banks can not do it compliant and efficient. I know of Ukrainian developers being paid in ETH for that reason. Adult cam models in some countries are another example.
  • ovi256 8y ago
    >to do compliance for it FWIW, complianceless payments are dejure illegal by definition. So any economic activity being made possible by them is roadkill of the current regulatory environment, legally speaking. A nice example of Bastiat's "That which is not seen".
    • lixtra 8y ago
      This is just wrong. A kiosk merchant may accept cash payments legally. If she wants to accept cards she has to go through the stricter compliance rules of the card processors. Same applies for crypto. A transaction does not become illegal just because some class of players do not want to become part of it.
  • DenisM 8y ago
    Your use case #1 is money transfer where no centralized database can not be bothered because the overall volume is so small. Long tail of sorts. I think that's a good use case, not sure how much volume overall.
    • kragen 8y ago
      Hopefully not more than 7–10 transactions per second.
• eastendguy 8y ago
  My favorite future use case is electronic cash with privacy. There are many LEGAL activities that people do not want to show up in a central database. For example, think of many things related to love and relationships. "tantamount to waiting for a greater fool to buy out the current players" <= this is like investing works in general, or? ;-)
  • pjc50 8y ago
    > many LEGAL activities that people do not want to show up in a central database Unfortunately cryptocurrencies aren't just a central database they're a distributed database - all transactions are public. You can try using a tumbler service but since these are obviously money laundering havens they're not going to last long.
    • pepesza 8y ago
      Monero, Zcash, Grin. Three designs that are based on different cryptography - all three giving user full privacy.
    • DINKDINK 8y ago
      >all transactions are public Not the case, see payment channels.
  • jackfraser 8y ago
    There are also plenty of legal efforts (e.g. free political speech) that are actively being shut down by payment processors of all sorts; these need some means of sustainment and crypto has provided what is needed.
• neokantian 8y ago
  Imagine 3 parties: buyer, seller and third-party shipper. When the buyer has paid to a specific address, he will also email an irrefutable, digital proof of payment to the shipper, who will then ship the goods. It is trivial to look up the signed transaction to the specific address in the digital currency's blockchain. Hence, the shipping company can handle that situation. On the other hand, try to get an irrefutable digital proof of payment from a bank. For example, get them to email you anything to you, anything at all, that you can use as proof that you paid last month's rent. A bank cannot do that, not even to save themselves from drowning.
  • pjc50 8y ago
    Why does the shipper care that you've paid a third party?
    • neokantian 8y ago
      Escrow situations work like that. You cannot use a bank in an escrow situation, because they are not capable of providing digital proof of payment. Whenever you need to digitally prove payment to a third party, you need to use a payment method that can provide such proof.
      • DenisM 8y ago
        How did we manage to ship anything so far? In practice that hasn't been a problem. Or has it?
        • neokantian 8y ago
          That is also what horse-and-cart sellers said when they saw the first car. The lack of digital proof of payment is obviously not felt when you don't have it in the first place. The same for multi-signature contracts. The same for atomic swaps. None of these things are needed if they do not exist in the first place. People did not even need a roof over their heads until they built the first one.
• smokeyj 8y ago
  I don't know if you've realized this, but HN is religiously against crypto and anything that rhymes with it. Like, irrationally mad. If you want to explore the utility of crypto go check out different online communities that focus on that, some decent ones on reddit. The level of discussion on HN is usually "crypto baaad, centralized goood". As an economist I'm sure you expect more. Unless you want those ideas reinforced, keep the discussion here!
  • deleted 8y ago
    [deleted]
  • notyourwork 8y ago
    I think you are conflating bad with unjustified. They aren’t the same but can appear similarly themed. HN is skeptical of the utility and validity of crypto.
    • smokeyj 8y ago
      That's what I thought too! But no - HN is against crypto at the moral level. One day the almighty father Paul Krugman declared crypto as thought-crime, and ever since, progressives have dutifully towed that line. It's tiring. I think they subconsciously see it as an attack on state-sovereignty or something like that. The ability to tax and redistribute. That's just me reading between the lines.
      • deleted 8y ago
        [deleted]
  • DenisM 8y ago
    You have a valid point, but I just don't have the strength in me to do the original research. I rather like the level of discourse on HN in general - it's not unusual to find someone providing a high-level though-out response on various subjects. Asking the right question is also hard, but not as hard.
• hrdwdmrbl 8y ago
  A few uses: - micropayments: the products that that enables - web-native currency: Makes it easier for apps to integrate money. Games, chat, maybe torrents we're told - easier to transfer money between institutions (maybe easy in the US but it's super hard in Canada)
• deleted 8y ago
  [deleted]
• jcfrei 8y ago
  One possible use case: A notary for digital goods. Crypto currencies have a built-in incentive mechanism that keeps a ledger running and verifiable. This allows for a decentralized way to verify ownership of digital goods. More concrete, you could verify that you are the owner of a very rare sword you obtained in an online RPG. Even when the company goes out of business or stops the servers you could still prove that you own it. In other words, owners of valuable digital items might want their ownership to be stored on a public blockchain rather than a database by a private entity.
  • petertodd 8y ago
    You don't need a cryptocurrency specifically to do this. Rather you can piggy back on a different consensus system: https://petertodd.org/2017/scalable-single-use-seal-asset-transfer https://petertodd.org/2017/scalable-single-use-seal-asset-tr... For example, while it'd be a bit of a hack, you could fairly easily re-use even the various Certificate Transparency blockchains to trade stocks. Also, I wouldn't say that the incentive mechanisms keep the ledger running. Rather they keep the PoW consensus mechanism running; in all existing trustless decentralized currencies it's your node that verifies the ledger is working correctly, and other people are voluntarily distributing the data without a reward.
    • smokeyj 8y ago
      I've never heard of Proof-of-Publication ledgers. Any resources I should look at?
• pepesza 8y ago
  Visa is very expensive. How about that?
  • orthecreedence 8y ago
    And extremely censorious.
• threwawasy1228 8y ago
  I'm genuinely curious why you post this in nearly every single thread about the topic that comes up without fail. It feels like you aren't actually interested in an answer and are instead interested in rather disingenuous in asking the question. I am curious why you think that those 3 cases are somehow not valid or interesting enough in their own right?
• mindcandy 8y ago
  Cryptocurrencies are definitely an “Innovator’s Dilema” situation when it comes to general use. It’s much worse than the established solutions. It’s confusing, error-prone, unreliable, cheap and janky. It’s also not a great business case for the establishment who are currently making billions and billions serving very rich customers. But... it also brings financial service options to people who have no opinions or only truly awful options. If you are a non-homeless American, you don’t need crypto. American banks are bending over backwards to serve you. But, if you are a homeless American. Or if you are one of the unbanked billions around the world. Or, if you are a Venezuelan, Nigerian, etc... then the establishment is either dismissing you or actively working to screw you. Crypto can bring tremendous value to all of them while bringing very little to the establishment by simply acting as a PayPal alternative for the extreme poor. If it manages to survive that, it will get better and better. Eventually it will creep up to becoming useful for rich westerners.
  • DenisM 8y ago
    > if you are one of the unbanked billions around the world. I think I can buy that. The unbanked could become centrally-banked like all of us as their countries develop, but there is a competition between that and the cryptocurrency which could wedge itself in at this point and outcompete the local government simply because the government is small and lacks in experience (maybe corrupt too). Another contender here is WeChat and similar centralized payment technologies, but they too are hamstrung by their own current governments (I'm sure that Payapal is) giving breathing room to competition. It is not obvious to me which one of the three will win among the unbanked.
    • tim333 8y ago
      Crypto is a pain to use even if you have a bank account, passport to scan and so on. I doubt many of the unbanked will use it to join the financial system. There is more promise from payment systems like M-Pesa, or new semi banks like Revolute I think. In the long run I think banks will win amongst the unbanked.
      • 8y ago
• lukifer 8y ago
  It's a very good question. There's an interesting argument that the greatest value is not in the ledger, but in a mechanism for reliable, unalterable history: https://www.ribbonfarm.com/2017/05/25/blockchains-never-forget/ https://www.ribbonfarm.com/2017/05/25/blockchains-never-forg... It's also worth considering that crypto is effectively the greatest experiment the world has ever seen in free banking: https://en.wikipedia.org/wiki/Free_banking https://en.wikipedia.org/wiki/Free_banking. Hypothetically, this could be done with paper+metal currencies, or centralized digital currencies; but for whatever reason, crypto is getting a regulatory pass where past "experiments" have been shut down hard by states who claim a monopoly on issuing currency, for better or worse. Rather than viewing blockchains through the narrow lens of "Money 2.0", I think it's more relevant to view both money and blockchains as social technologies to solve coordination problems, and then inquire about those technologies' performance characteristics, incentives, externalities, and moral hazards. I think there's longterm potential for blockchain use cases to find traction; but at the same time, it may be that centralized solutions simply achieve superior results, in the same way that Amazon out-competes mom-and-pop retail, and Netflix out-competes buying DVDs. (The market lessons of the last twenty years seem to indicate that consumers value cost and convenience vastly more than abstract notions of freedom.)
  • sireat 8y ago
    One could make an argument that Tether is one big experiment in free banking. Only question is when it will end.
  • iamwil 8y ago
    What about those with a mimblewimble implementation? As I understand it, those cryptocurrencies know how much was mined, and how much each address owns now, but the intermediate transactions are purged.
• 0xdxdt 8y ago
  (Edited) Let me ask you why do you use cash? For anything? Is it for?: - Attempts to side-step the law (however misguided the law is) - Trivial to do using a typical centralized database (e.g. Federal Reserver or VISA) - Tantamount to waiting for a greater fool to buy out the current players The 3rd point is the same for any fiat currency on forex and many governments are the same as the ICO shills. I'm not justifying them just stating that in many cases the gamble on currency is the same. You did present a nice Strawman but I'll bite. Ok. I get asked about cryptos quite often also. So if not a digital currency like BTC then what? Why use cash? Only criminals use cash! Really! If LE should catch you having more than x,xxx.00 in cash they should arrest you? Why? Because obviously you are trying to do something illegal. (civil forfeiture) Trivial to do tx with 3rd parties???? What with what? PayPal? There have been no alternatives, or equivalent to cash in the electronic age to date. Including BTC. Although BTC is an attempt to provide similar means as cash (fiat) in a global digital sense. Then again there is this which is perfectly good: https://en.wikipedia.org/wiki/Contaminated_currency https://en.wikipedia.org/wiki/Contaminated_currency
  • audunw 8y ago
    > Let me ask you why do you use cash? For anything? Is it for? In areas that are ahead in digital payments technologies, cash is dying out very fast. In the US, you may want to use cash (as a seller) to avoid transaction fees. But in countries like Norway that has implemented a cheap national debit payment system (BankAxept), that's not been a big issue. Now the banks in Norway has implemented a common payment app as well (Vipps), which is free for transactions between individuals.. this has started to kill off cash in all the areas it held out before (sales of used items, buying cookies from scouts, etc) > What with what? PayPal? There have been no alternatives, or equivalent to cash in the electronic age to date. If you ask me, that's because making payment systems is actually extremely hard. It's just that cryptocurrencies pretend it's not, by simply ignoring a whole lot of real-world issues that you would address if you were making a payment system that wasn't trying to make blockchains fit the problem. Most of the challenges with payment systems are social. Challenges related to what happens if there's an error, a scam, a theft, etc. Cryptocurrencies just avoid it all by saying there is never any errors, even when any reasonable person would say there is. If you think there's no alternatives, I'd say you're very US-centric. Outside the US there are lots of places that are already most of the way there.
• EGreg 8y ago
  I can only speak for our project, Intercoin. The goal isn’t to sidestep anything. It is to provide: Security that no third party can just take your money anytime, without your explicit signature. Liquidity for new tokens issued by projects / communities without great access to global markets and exchanges. Programmable money that follows rules you can rely on when you invest in a project / deposit money into a community / donate to Haiti. UBI on a community level funded by community members or donors Analytics on how money is flowing around available to everyone and not just stored in a central database with information asymmetry. These can be combined. For example Analytics can help you figure out the cost of food in your community, then vote for a level of UBI that eliminates food insecurity, and adjust this amount on a daily basis through direct democracy (Provably Random Polling.) Intercoin’s mission is to make access to local fintech more available to local communities and online projects, without having to rely on central banks for monetary policy or the IRS for collecting taxes and being able to calculate eg the Consumer Price Index on the community level More info at https://intercoin.org https://intercoin.org see the presentations and whitepaper.
• colordrops 8y ago
  Fast international transfers have been a clear win. Besides that, just because something is illegal doesn't make it wrong. Many nations restrict transactions that are not reasonable to restrict. So what's wrong with side-stepping bad laws (but also monopolistic players in the financial space such as PayPal and Western Union)? Your second bullet point is mutually exclusive with the first.
• SkyMarshal 8y ago
  The original use case for cryptocurrency (eg digital sound money, not world computers and the like) is as a long-term (and hopefully independent and uncorrrelated enough) hedge against mis-management and failure of national currency regimes. That remains a legit use case but will take years or decades to materialize. Given that the tech is still in the early stages of its maturity curve and needs more time to robustify, that’s a good thing. But national currencies are getting increasingly shaky, even the USD where it appears Congress has no political will to control the US national debt and deficit, and where the GOP blows bigger deficit holes with tax cuts and the Dems are talking about MMT. Not to mention the risks to the Euro and Yuan, along with the many smaller countries with distressed currencies. It’s interesting to me that cryptocurrrency skeptics and critics seem to regularly ignore this as a use case, when in fact it is the most important one (maybe even the only one). It seems many people can’t bring themselves to believe that modern national currencies can fail and don’t need an independent hedge, even though the 1800s and 1900s were full of exactly that.
  • woah 8y ago
    That wasn't the original use case for crypto. In the bitcoin white paper he mostly talks about micropayments, which bitcoin has ironically failed at.
    • SkyMarshal 8y ago
      He covered his bases and talked about everything, but micropayments don’t need expensive decentralization to implement. Incorruptible digital money does.
    • Qasaur 8y ago
      This is wrong. Satoshi Nakamoto was incredibly well-read in the Austrian school and mentions central bank controlled credit bubbles in his whitepaper as well as in many of his online posts on forums. The genesis block is even dedicated to this goal: https://en.bitcoin.it/wiki/Genesis_block https://en.bitcoin.it/wiki/Genesis_block "The coinbase parameter (seen above in hex) contains, along with the normal data, the following text: The Times 03/Jan/2009 Chancellor on brink of second bailout for banks"
• buboard 8y ago
  bank settlements are already using supra-national / supposedly neutral settlers.
• cherafel 8y ago
  Anonymity. There are some cases you may want to be identified by a random wallet address (with your payment proxied around to make identification very difficult), where the payment is not an attempt to sidestep the law. First example that comes to mind would be memberships to explicit content. Course, you could just use Visa gift cards for these kinds of usages. It's probably a bit more convenient to do it this way, rather than keep topping up a card. Some other use cases noting that cryptocurrencies tend to have public ledgers.
• kragen 8y ago
  Rather than sidestepping the law, you can be sidestepping official corruption or crime. There are lots of cases where people who are supposed to be enforcing the law instead use their law-enforcement powers for their own benefit, sometimes in ways that are illegal, officially speaking, but in an unenforced way. It's perfectly legal for me to, for example, donate money to WikiLeaks. But Visa and Mastercard aggressively canceled every merchant account that allowed people to donate to WikiLeaks through the Visa and Mastercard systems, apparently because of secret pressure from US government officials who were unhappy about some of the things that WikiLeaks revealed. The Snowden revelations — which may not have been legal, so they are peripheral to your question — very likely wouldn't have happened without WikiLeaks being able to support him, which they could only do because they could receive Bitcoin. Similarly, many Patreon accounts are getting canceled because their owners have published things that are embarrassing to Patreon, but not illegal (typically, racist remarks). If Bitcoin becomes mainstream, there won't be a centralized authority like Patreon that is in a position to end people's livelihoods because they publish politically undesirable viewpoints. (Right now, those viewpoints are viewpoints that are odious to you, but there's no guarantee that that will be the case in the future; it's easy to imagine Patreon bending to Chinese government pressure to censor people who talk about Falun Dafa persecution or Tiananmen Square, for example, even in countries where that is legal.) As another example, many Venezuelans are having difficulty fleeing the country, even though fleeing the country is technically legal, due to both official corruption and armed gangs. You could argue that it's not clear what is and isn't legal in Venezuela right now because there are two competing governments, but neither of those governments authorizes demanding bribes from would-be émigrés. As yet another example, it's perfectly legal in Iran and France for French companies to do business with Iranian companies. But, because much of the world financial system is controlled by the US, it can be difficult in practice; see https://www.washingtonpost.com/world/europe/europe-says-it-will-stick-with-the-iran-deal-defying-a-us-demand/2019/02/15/032923ee-2fac-11e9-8781-763619f12cb4_story.html https://www.washingtonpost.com/world/europe/europe-says-it-w... for more details. Regardless of whether US law is misguided or not, under well-established principles of international law dating back to the Peace of Westphalia, it certainly does not apply to French companies doing business in France with Iranian companies in Iran. So, in a sense, I think you're right that the main purpose of cryptocurrencies is to sidestep violent coercion. I think you're terribly naïve about how much illegal violent coercion is actually "the law", although that's understandable if you've never lived outside a developed country. There are other uses as well; it's a dramatically better way to send money overseas, for example. Last time someone sent me money via Western Union, I had to go to three different locations, stand in line for twenty minutes, hand over a massive amount of personal information (perfectly suited for identity fraud or targeted home robbery) to an unaccountable third party, sign a false statement, and walk out the door into a dangerous neighborhood with a pocket full of small bills. For this "service", WU charged me/them about 10% of the money sent, and also didn't inform me when it arrived. Bitcoin transactions require none of this nonsense and cost much less; the last Bitcoin payment I received from overseas cost 0.3%, and I received a notification in a few minutes in my Bitcoin client of the transaction.
• pas 8y ago
  The goal I think is worthwhile is bootstrapping a semi-anonymous Sybil-attack resistant identity system. Web of Trust, etc.
• zhoujianfu 8y ago
  Think of crypto as outsourced anti-fraud. If you run a web hosting business, easily >50% of your attempted signups are with stolen identities/credit cards. It’s hard work catching them before the chargebacks come in. With crypto you know with 100% certainty when you receive a payment that you at least have the money!
• scartracs 8y ago
  1 - Attempts to side-step the law (however misguided the law is) -> Most are attempting to side-step credit card service fees while remaining open to transact across the world in real-time. Most popular CC's fail at the real-time part and cause unnecessary resource usage, but hopefully that will change. Actually, most CC's fail at trying to side-step the law given all transactions and account balances are public for most coins. You could say tax-avoiders prefer money they can hide through sketchy banks or cash rather than CC. 2 - Trivial to do using a typical centralized database (e.g. Federal Reserve or VISA) -> Bitcoin, Ethereum and others can do Smart Contracts which means delayed sending, multi-sender transactions that serve as escrow and in the case of Ethereum programmable using it's own language to do any number of actions/apps. The important feature is that this is handled by the network using your own transaction, you don't have to set up the escrow through a company like VISA, Paypal, etc. 3- Tantamount to waiting for a greater fool to buy out the current players -> This is true of all CC because it's an open, yet small market. The earlier you get in, the better your outcome. However, it's not like CC's NEED to explode in price to be useful, competitive or solve a real-world problem. Getting rich is a secondary effect of having a functional CC reach adoption. Look at MemeCoins like Doge and Banano to see adoption is easier when everyone abandons the idea of getting rich off a coin.
• tim333 8y ago
  Maybe raising money for ventures. A huge amount was raised in ICOs and mostly they were scammy and are heading to zero but there may be a future for more legit versions. There is a bit of law sidestepping about it but you can run them in jurisdictions where they are legal. And there's no real reason for them to be illegal if you are not screwing the investors. CZ of Binance was saying similar recently https://ambcrypto.com/binance-ceo-changpeng-zhao-cryptos-killer-app-has-arrived/ https://ambcrypto.com/binance-ceo-changpeng-zhao-cryptos-kil...
• SilasX 8y ago
  Donate to Wikileaks when the US government is pressuring every centralized payment processor not to process payments but won't outright ban them. Does that pass? And I don't see why you dismiss the importance of the first one. What if I'm trying to flee the country with something to my name, like Venezuela. Tough luck?