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You are advocating for crypto insurance. With regard to banks, if a thief withdraws cash from your ATM card, that money is gone. The bank has lost it. An outsid

You are advocating for crypto insurance. With regard to banks, if a thief withdraws cash from your ATM card, that money is gone. The bank has lost it. An outside insurer (or, if a large enough bank, self insurance) pays out the bank the amount they lost. Same is true if a thief is able to do a wire. ACH transfers may be a bit easier because typically the receiving bank won't allow withdrawals before the sending bank's chargeback period, but if they do, then their insurance will compensate for the loss. I agree that crypto doesn't have a solid financial system backing it and that is necessary to be a replacement for the current one. I'm not a huge crypto-believer, but I do think your criticism here is ultimately not really a criticism of crypto itself, but the financial system around it. Plenty of real-world currency suffers from the same lack of solid financial system. For example, I imagine you would be hard-pressed to find the same guarantees from banks dealing with venezuelan bolivars. That being said, I think the best use case for crypto is still not one where every single person runs their own wallet. Rather, most people would use depository institutions who could run settlement on the blockchain. The main contribution and innovation is removal of red tape that is typically incurred when one wants to become a depository institution (mainly obtuse technical interfaces, slow clearing houses, etc).

slg 7y ago
I think you are focusing on the specifics of that complaint and not the general reasoning behind it. It is a problem if cryptocurrencies need a mature financial system built around them to be usable when one of the primary selling points that people were hyping about cryptocurrencies was the ability to circumvent the current financial system.
- deleted 7y ago
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- qes 7y ago
  > one of the primary selling points that people were hyping about cryptocurrencies was the ability to circumvent the current financial system Perhaps you primarily heard relatively uninformed people. "circumvent the current financial system" would probably be called some out of touch with reality woo-woo by many. Many would instead say decentralization is the primary selling point. Specifically, the inability of a small group to affect monetary policy, particularly the inflation rate, or to prevent access to the system.
veritse33 7y ago
The exisiting settlement system serves the banking, regulatory and foreign policy interests of the US better than a distributed ledger would, so those institutions have no incentive to switch. The only people who have reason to use Bitcoin (or have ever used it) are individuals wanting uncensorable transactions. Bitcoin isn't intended to be used for carrying your life savings around on your smartphone. It's a fast, cheap and secure way to send money over long distances.

slg 7y ago

I think you are focusing on the specifics of that complaint and not the general reasoning behind it. It is a problem if cryptocurrencies need a mature financial system built around them to be usable when one of the primary selling points that people were hyping about cryptocurrencies was the ability to circumvent the current financial system.

deleted 7y ago
[deleted]
qes 7y ago
> one of the primary selling points that people were hyping about cryptocurrencies was the ability to circumvent the current financial system Perhaps you primarily heard relatively uninformed people. "circumvent the current financial system" would probably be called some out of touch with reality woo-woo by many. Many would instead say decentralization is the primary selling point. Specifically, the inability of a small group to affect monetary policy, particularly the inflation rate, or to prevent access to the system.

veritse33 7y ago

The exisiting settlement system serves the banking, regulatory and foreign policy interests of the US better than a distributed ledger would, so those institutions have no incentive to switch. The only people who have reason to use Bitcoin (or have ever used it) are individuals wanting uncensorable transactions. Bitcoin isn't intended to be used for carrying your life savings around on your smartphone. It's a fast, cheap and secure way to send money over long distances.