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The "future of money revolution" is one user story. It offers a place to express angst in monetary policy, no different than startup founders talking about disr

The "future of money revolution" is one user story. It offers a place to express angst in monetary policy, no different than startup founders talking about disrupting whatever, it's the same wave. It offers some utility in that regard and is still growing at a noteworthy pace. (capital is bypassing bitcoin and going straight into stablecoins which settle on bitcoin and ether. bitcoin and ether are becoming primarily used as fuel. check the marketcap growth of stablecoins over the last 6 months, it is new capital.) I completely understand how to hold seizure-free assets, some of that involves the discretion of a judge with cash and physical property held in trust's name, some of that involves the permissionless nature of crypto, stored properly. Its just a tool and it's actually pretty okay at what it does. In other areas, 10 years ago I couldn't convert an international wire transfer into a domestic wire transfer, now I can and it avoids greater compliance scrutiny and speed, while retaining unlimited amounts, and inherits same day settlement. (corporate transaction another country paid in crypto, converted to fiat in local bank, transferred to local brokerage account, 6-7 figures or higher.) Without crypto, I as of recently have transferwise and now Revolut to do the same thing, which both have an extremely long list of unsupported businesses and transfer limits that are pretty decent but not as good. There is a slower regulatory process of making any of this practical, which is still happening, such as the processes that allowed Kraken to get that bank charter. Wyoming's laws were passed in 2018, went into force 2019, and Kraken was in regulatory approval since then. On the federal level, of OCC just gave its gracings to national banks to custody digital assets, this year! This will be challenged, primarily by Wyoming lobbyists, who wants Congress to make that order or not. Only Bitcoin has risk management financial products, not even Ethereum yet, in 2020. There is also a large market of customers in the crypto arena, and high margin business models that don't require that many customers in order to book 7 figures of revenue.

anon9001 6y ago
Another thing that's exciting about crypto is that it lets users participate in more fair borrowing/lending. As it stands today, you can lend at your coins at a yield rate close to the borrow's lending rate. That effectively makes all lenders, collectively, "the bank". It also means that borrowers will get a competitive rate for borrowing against their collateral. This will end the days of getting 0% in your savings accounts while the bank is getting 10% lending out your money once people realize they can lend out their dollars themselves for a much higher yield. It also lets you lend out your speculative crypto investments. Imagine if you could buy AMZN or NFLX and also lend it out to other people on margin. That's exactly how a margin account works, but of course your brokerage isn't going to let you do it. Crypto lets you play the role of issuing the margin rather than borrowing it, if you so choose. People that are dismissing crypto have no idea what a revolution in finance this is going to cause.
- notahacker 6y ago
  People have been able to lend actual coins since before the banking system existed and there's a vast ecosystem of financial products and intermediaries that will allow you to get higher yields than bank accounts from lending directly to specific companies or people (or buying their debt) without touching crypto. And you can't buy and hold but also lend AMZN or NFLX with crypto. Sure, you can buy assets that don't have real profit streams attached and lend them to short sellers, but I have no idea why anyone would think that revolution would be a net benefit to them....
  - anon9001 6y ago
    How many people are involved in processing that vast ecosystem of intermediaries? It's a wild amount of inefficiency. Every major city has giant buildings filled with people pushing numbers on spreadsheets to make those products work. They're extremely inefficient. And to interact with those systems, you need to go through a middleman like a brokerage. I think the analogue is Ally bank, which is known to give the largest returns on savings accounts, currently yielding a whopping 2%. Compare that with a crypto-ecosystem lender like Nexo which is yielding 8-10% on the same asset (USD). > Sure, you can buy assets that don't have real profit streams attached and lend them to short sellers, but I have no idea why anyone would think that revolution would be a net benefit to them... That's one of the profit streams my stock broker uses. Why shouldn't it be available to me? The reason why you don't have access to any of these money-making "institutional" products (like lending stocks, underwriting insurance, or serving as a market-maker) is because they require a lot of administrative overhead. When you replace them with smart contracts, you democratize all of these services. In a few years, it will be common for people to buy/sell/lend/insure all kinds of assets (physical, virtual, derivatives) from their phone without a middleman. You can do it today if you're an advanced user with enough money to overcome the currently high transaction costs.
    - notahacker 6y ago
      > It's a wild amount of inefficiency. Only if you think that due diligence and actually collecting the repayments is inefficient. Someone like LendingClub will do all that for a 1% overhead with plain old fiat though if you don't want maturity transformation and deposit insurance. I'd say it's a bug rather than a feature of the crypto ecosystem that people who sneer at 'numbers on spreadsheets' can 'earn 10% interest' if they buy enough tokens from a website whose 'institution license' page tells you what a license is but doesn't tell you which country they're headquartered in, never mind what licenses they actually hold. It's not removed the middleman so much as anonymised him and made it more likely he's running a Ponzi scheme.

anon9001 6y ago

Another thing that's exciting about crypto is that it lets users participate in more fair borrowing/lending. As it stands today, you can lend at your coins at a yield rate close to the borrow's lending rate. That effectively makes all lenders, collectively, "the bank". It also means that borrowers will get a competitive rate for borrowing against their collateral. This will end the days of getting 0% in your savings accounts while the bank is getting 10% lending out your money once people realize they can lend out their dollars themselves for a much higher yield. It also lets you lend out your speculative crypto investments. Imagine if you could buy AMZN or NFLX and also lend it out to other people on margin. That's exactly how a margin account works, but of course your brokerage isn't going to let you do it. Crypto lets you play the role of issuing the margin rather than borrowing it, if you so choose. People that are dismissing crypto have no idea what a revolution in finance this is going to cause.

notahacker 6y ago
People have been able to lend actual coins since before the banking system existed and there's a vast ecosystem of financial products and intermediaries that will allow you to get higher yields than bank accounts from lending directly to specific companies or people (or buying their debt) without touching crypto. And you can't buy and hold but also lend AMZN or NFLX with crypto. Sure, you can buy assets that don't have real profit streams attached and lend them to short sellers, but I have no idea why anyone would think that revolution would be a net benefit to them....
- anon9001 6y ago
  How many people are involved in processing that vast ecosystem of intermediaries? It's a wild amount of inefficiency. Every major city has giant buildings filled with people pushing numbers on spreadsheets to make those products work. They're extremely inefficient. And to interact with those systems, you need to go through a middleman like a brokerage. I think the analogue is Ally bank, which is known to give the largest returns on savings accounts, currently yielding a whopping 2%. Compare that with a crypto-ecosystem lender like Nexo which is yielding 8-10% on the same asset (USD). > Sure, you can buy assets that don't have real profit streams attached and lend them to short sellers, but I have no idea why anyone would think that revolution would be a net benefit to them... That's one of the profit streams my stock broker uses. Why shouldn't it be available to me? The reason why you don't have access to any of these money-making "institutional" products (like lending stocks, underwriting insurance, or serving as a market-maker) is because they require a lot of administrative overhead. When you replace them with smart contracts, you democratize all of these services. In a few years, it will be common for people to buy/sell/lend/insure all kinds of assets (physical, virtual, derivatives) from their phone without a middleman. You can do it today if you're an advanced user with enough money to overcome the currently high transaction costs.
  - notahacker 6y ago
    > It's a wild amount of inefficiency. Only if you think that due diligence and actually collecting the repayments is inefficient. Someone like LendingClub will do all that for a 1% overhead with plain old fiat though if you don't want maturity transformation and deposit insurance. I'd say it's a bug rather than a feature of the crypto ecosystem that people who sneer at 'numbers on spreadsheets' can 'earn 10% interest' if they buy enough tokens from a website whose 'institution license' page tells you what a license is but doesn't tell you which country they're headquartered in, never mind what licenses they actually hold. It's not removed the middleman so much as anonymised him and made it more likely he's running a Ponzi scheme.