4 ms·

The hardest pill to swallow is that we already had a very low cost of moving money around between hostile nation-states. And it's been around since the 8th cent

The hardest pill to swallow is that we already had a very low cost of moving money around between hostile nation-states. And it's been around since the 8th century - read 700ACE-800ACE. https://en.wikipedia.org/wiki/Hawala https://en.wikipedia.org/wiki/Hawala Its money dealer to money dealer, and the money dealers keep scrips. Average fees are from 0.2% to 0.5% . It's definitely un-sexy since its not technology based. No chains of blocks or programmers needed. Fees are low, so the money transferrers can make a living, but not allow speculation or other hazardous acts. And the only reason why it's not more massively used is because of the US's adherence that it's "terrorism". I'd imagine that the terrorism angle is more of a "allows people to ignore central banks ran by USA and Europe"... as the US didn't much care when HSBC was financing drug cartels, terrorists, and the like ( https://www.forbes.com/sites/afontevecchia/2012/07/16/hsbc-helped-terrorists-iran-mexican-drug-cartels-launder-money-senate-report-says/?sh=498c27545712 https://www.forbes.com/sites/afontevecchia/2012/07/16/hsbc-h... )

lotsofpulp 6y ago
>And the only reason why it's not more massively used is because of the US's adherence that it's "terrorism". I don’t think so. A system with clear record keeping, auditable by third parties, and subject to the judiciary is far better than below: > Trust and extensive use of connections are the components that distinguish it from other remittance systems. Hawaladar networks are often based on membership in the same family, village, clan, or ethnic group, and cheating is punished by effective excommunication and "loss of honour"—leading to severe economic hardship.[3] Technology has obviated the need for unnecessary levels of allegiance to your tribe, as required in the above system.
- duckfang 6y ago
  > I don’t think so. A system with clear record keeping, auditable by third parties, and subject to the judiciary is far better than below: And we've learned that record-keeping has its own very strong negative side. It alone can establish ties between people, and serve to eliminate privacy all in the names of "transparency". (And I can hear it now too - "Why want privacy if you have done nothing wrong?"). I think we're only at the beginning of crypto-fraud arrests, because the ledger is the log - and that's a liability. And the auditability is primarily a governmental requirement, usually based around fraud, financing terrorists, or the like. If cheating occurs, the excommunication from the network is the punishment - you are removed from your position of power. And frankly, we can look at our systems of how auditability doesnt stop the various failure modes: blatant financing of terrorism/HBSC, billions of $ transferred away from citizens with usurious fines, overleveraging finance side affecting savings/loan. In the end, auditability is just a way to assign blame. And that blame is never directed towards those at the top who manufacture and use illegal techniques - it is used to blame the rank and file; the cashier, the teller, the engineer, the low middle manager. And subject to the judiciary is an interesting case you bring up... Because transfers in (I believe) all cryptocurrency is not subject to the judiciary. And in many more popular cryptosystems, that is seen as a strong anti-government bonus, and not a malus. And Point being, is that the Hawala is the last millenium's Bitcoin.. And when compared to BTC or ETH now, is still strictly better. (And we haven't discussed the barrier to entry, wasted electrical power, e-waste, etc.)
  - lotsofpulp 6y ago
    >And we've learned that record-keeping has its own very strong negative side. It alone can establish ties between people, and serve to eliminate privacy all in the names of "transparency". Hawala people can establish ties too, unless they are somehow incorruptible. And electronic money transfer systems and SWIFT and whatnot aren't perfect, but my contention is they are more preferable to almost all people than Hawala. I am aware of the corruption with regards to HSBC, but I can't agree with >billions of $ transferred away from citizens with usurious fines, overleveraging finance side affecting savings/loan Keeping funds secure and moving money has never been so easy and so cheap for almost all people. Yes, you can get screwed if the government deems you a terrorist, and a more distributed system like Hawala might be more resilient to that kind of attack, but there's other costs to Hawala that the current system doesn't have. >Point being, is that the Hawala is the last millenium's Bitcoin.. And when compared to BTC or ETH now, is still strictly better. (And we haven't discussed the barrier to entry, wasted electrical power, e-waste, etc.) I can't comment on this since I don't know enough about BTC or ETH or Hawala.
- iso8859-1 6y ago
  Technology doesn't imply a good civil society (where you can, on average, trust people. Aka "social capital"). But does technology imply social capital? I don't think so. So if you set up the dichotomy, and had to choose, I'd choose "social capital" every time. I know, you didn't use this phrasing. But when I read "allegiance to your tribe", what does that even mean? If you're American and you support your troops, isn't that "allegiance to your tribe"?
  - lotsofpulp 6y ago
    Technology removes the need for middlemen, and hence any trust needed for the middlemen. Allegiance to the tribe means following the customs/social ordering/rules of the tribe. For example, how well would a gay/non religious/etc person fare in tribes that don't believe in civil liberties?
    - duckfang 6y ago
      > Technology removes the need for middlemen, and hence any trust needed for the middlemen. Unfortunately, I see what happens when 'We' use technology to remove middlemen... Apple: https://www.macrumors.com/2021/01/02/amphetamine-app-store-removal-threat/ https://www.macrumors.com/2021/01/02/amphetamine-app-store-r... Google: https://news.ycombinator.com/item?id=22348568 https://news.ycombinator.com/item?id=22348568 (person 17h ago on HN talking about google acct ban remediation https://news.ycombinator.com/item?id=26218795 https://news.ycombinator.com/item?id=26218795 ) https://www.businessinsider.com/google-users-locked-out-after-years-2020-10 https://www.businessinsider.com/google-users-locked-out-afte... That's what technology has gotten us. Accounts get closed down due to automated systems. Something gets flagged as "fraud" and you lose access/money. Your previous business selling apps gets cancelled when your app is deregistered and removed. At least, the recourse is "Complain on HN or Twitter". Worst case is you file a lawsuit against a multi-billion dollar company (hah!). Now, what do you do to file a dispute against Ethereum or Bitcoin? Well, nobody. There is no clearinghouse and no masters - that's the selling point! But what about fraud or likewise? Too bad, so sad. With the hawaladars, their word, ethics, and livelihood is on the line. You have a real human who can handle the squishy and nigh-unautmatable parts. And they can talk with the person trying to transfer money in case there is problems unforseen. > Allegiance to the tribe means following the customs/social ordering/rules of the tribe. Well, yes. > For example, how well would a gay/non religious/etc person fare in tribes that don't believe in civil liberties? But this seems like a veiled way to attack a way of moving money around solely because the name is Islamic. And hate crimes happen nearly everywhere. And there was the Kentucky county clerk who refused to sign marriage certificates because a couple was gay.... And unlike the hawaladars whom you can go to a different one, these people in the county had no such choice. It's easy to set up a strawman that someone may not support your beliefs, but it's a false narrative to think that only those people do it.
lifeisstillgood 6y ago
Kinda ... Far more likely that money dealers held powerful positions, ensuring some very conservative social constructs stayed in place. People just routed around this by using "modern" technology. And so the percentage of legitimate uses of the system dwindle, and the percentage of less legitimate increase till at some point you are no longer a useful social service but a money launderer for criminals who occasionally helps the diaspora send money home.
tgsovlerkhgsel 6y ago
Cryptocurrencies can take the role of a settlement network between the money dealers. This allows money dealers who either don't fully trust each other, or simply need to settle debt internationally because the transaction flow is asymmetric, to make these transactions. It also allows for a new kind of system where the money dealers act as access points to the network, and customers trust their local money dealer, but you don't need trust connections between the money dealers: If I want to send money to you from my remote village to yours, I ask you which money dealer you trust, go to my trusted money dealer, give him cash, and tell him that it is to go to your trusted money dealer. The two money dealers don't have to trust each other for the transaction to work, and the transactions are much harder to disrupt than classic banking transactions.
- MrMan 6y ago
  FX dealers I have dealt with definitely want to know who they are trading with. The information is extremely useful. It's not better for them not to know. If you lose trust in a counterparty, there is a reason. Exchanges all over the world have membership comprised of people who voluntarily group together to create and enforce trust. Using a different denominator for transactions wont take away the forces that cause this state of affairs.
  - tgsovlerkhgsel 6y ago
    How do you build initial trust though?

lotsofpulp 6y ago

>And the only reason why it's not more massively used is because of the US's adherence that it's "terrorism". I don’t think so. A system with clear record keeping, auditable by third parties, and subject to the judiciary is far better than below: > Trust and extensive use of connections are the components that distinguish it from other remittance systems. Hawaladar networks are often based on membership in the same family, village, clan, or ethnic group, and cheating is punished by effective excommunication and "loss of honour"—leading to severe economic hardship.[3] Technology has obviated the need for unnecessary levels of allegiance to your tribe, as required in the above system.

duckfang 6y ago
> I don’t think so. A system with clear record keeping, auditable by third parties, and subject to the judiciary is far better than below: And we've learned that record-keeping has its own very strong negative side. It alone can establish ties between people, and serve to eliminate privacy all in the names of "transparency". (And I can hear it now too - "Why want privacy if you have done nothing wrong?"). I think we're only at the beginning of crypto-fraud arrests, because the ledger is the log - and that's a liability. And the auditability is primarily a governmental requirement, usually based around fraud, financing terrorists, or the like. If cheating occurs, the excommunication from the network is the punishment - you are removed from your position of power. And frankly, we can look at our systems of how auditability doesnt stop the various failure modes: blatant financing of terrorism/HBSC, billions of $ transferred away from citizens with usurious fines, overleveraging finance side affecting savings/loan. In the end, auditability is just a way to assign blame. And that blame is never directed towards those at the top who manufacture and use illegal techniques - it is used to blame the rank and file; the cashier, the teller, the engineer, the low middle manager. And subject to the judiciary is an interesting case you bring up... Because transfers in (I believe) all cryptocurrency is not subject to the judiciary. And in many more popular cryptosystems, that is seen as a strong anti-government bonus, and not a malus. And Point being, is that the Hawala is the last millenium's Bitcoin.. And when compared to BTC or ETH now, is still strictly better. (And we haven't discussed the barrier to entry, wasted electrical power, e-waste, etc.)
- lotsofpulp 6y ago
  >And we've learned that record-keeping has its own very strong negative side. It alone can establish ties between people, and serve to eliminate privacy all in the names of "transparency". Hawala people can establish ties too, unless they are somehow incorruptible. And electronic money transfer systems and SWIFT and whatnot aren't perfect, but my contention is they are more preferable to almost all people than Hawala. I am aware of the corruption with regards to HSBC, but I can't agree with >billions of $ transferred away from citizens with usurious fines, overleveraging finance side affecting savings/loan Keeping funds secure and moving money has never been so easy and so cheap for almost all people. Yes, you can get screwed if the government deems you a terrorist, and a more distributed system like Hawala might be more resilient to that kind of attack, but there's other costs to Hawala that the current system doesn't have. >Point being, is that the Hawala is the last millenium's Bitcoin.. And when compared to BTC or ETH now, is still strictly better. (And we haven't discussed the barrier to entry, wasted electrical power, e-waste, etc.) I can't comment on this since I don't know enough about BTC or ETH or Hawala.
iso8859-1 6y ago
Technology doesn't imply a good civil society (where you can, on average, trust people. Aka "social capital"). But does technology imply social capital? I don't think so. So if you set up the dichotomy, and had to choose, I'd choose "social capital" every time. I know, you didn't use this phrasing. But when I read "allegiance to your tribe", what does that even mean? If you're American and you support your troops, isn't that "allegiance to your tribe"?
- lotsofpulp 6y ago
  Technology removes the need for middlemen, and hence any trust needed for the middlemen. Allegiance to the tribe means following the customs/social ordering/rules of the tribe. For example, how well would a gay/non religious/etc person fare in tribes that don't believe in civil liberties?
  - duckfang 6y ago
    > Technology removes the need for middlemen, and hence any trust needed for the middlemen. Unfortunately, I see what happens when 'We' use technology to remove middlemen... Apple: https://www.macrumors.com/2021/01/02/amphetamine-app-store-removal-threat/ https://www.macrumors.com/2021/01/02/amphetamine-app-store-r... Google: https://news.ycombinator.com/item?id=22348568 https://news.ycombinator.com/item?id=22348568 (person 17h ago on HN talking about google acct ban remediation https://news.ycombinator.com/item?id=26218795 https://news.ycombinator.com/item?id=26218795 ) https://www.businessinsider.com/google-users-locked-out-after-years-2020-10 https://www.businessinsider.com/google-users-locked-out-afte... That's what technology has gotten us. Accounts get closed down due to automated systems. Something gets flagged as "fraud" and you lose access/money. Your previous business selling apps gets cancelled when your app is deregistered and removed. At least, the recourse is "Complain on HN or Twitter". Worst case is you file a lawsuit against a multi-billion dollar company (hah!). Now, what do you do to file a dispute against Ethereum or Bitcoin? Well, nobody. There is no clearinghouse and no masters - that's the selling point! But what about fraud or likewise? Too bad, so sad. With the hawaladars, their word, ethics, and livelihood is on the line. You have a real human who can handle the squishy and nigh-unautmatable parts. And they can talk with the person trying to transfer money in case there is problems unforseen. > Allegiance to the tribe means following the customs/social ordering/rules of the tribe. Well, yes. > For example, how well would a gay/non religious/etc person fare in tribes that don't believe in civil liberties? But this seems like a veiled way to attack a way of moving money around solely because the name is Islamic. And hate crimes happen nearly everywhere. And there was the Kentucky county clerk who refused to sign marriage certificates because a couple was gay.... And unlike the hawaladars whom you can go to a different one, these people in the county had no such choice. It's easy to set up a strawman that someone may not support your beliefs, but it's a false narrative to think that only those people do it.

lifeisstillgood 6y ago

Kinda ... Far more likely that money dealers held powerful positions, ensuring some very conservative social constructs stayed in place. People just routed around this by using "modern" technology. And so the percentage of legitimate uses of the system dwindle, and the percentage of less legitimate increase till at some point you are no longer a useful social service but a money launderer for criminals who occasionally helps the diaspora send money home.

tgsovlerkhgsel 6y ago

Cryptocurrencies can take the role of a settlement network between the money dealers. This allows money dealers who either don't fully trust each other, or simply need to settle debt internationally because the transaction flow is asymmetric, to make these transactions. It also allows for a new kind of system where the money dealers act as access points to the network, and customers trust their local money dealer, but you don't need trust connections between the money dealers: If I want to send money to you from my remote village to yours, I ask you which money dealer you trust, go to my trusted money dealer, give him cash, and tell him that it is to go to your trusted money dealer. The two money dealers don't have to trust each other for the transaction to work, and the transactions are much harder to disrupt than classic banking transactions.

MrMan 6y ago
FX dealers I have dealt with definitely want to know who they are trading with. The information is extremely useful. It's not better for them not to know. If you lose trust in a counterparty, there is a reason. Exchanges all over the world have membership comprised of people who voluntarily group together to create and enforce trust. Using a different denominator for transactions wont take away the forces that cause this state of affairs.
- tgsovlerkhgsel 6y ago
  How do you build initial trust though?