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We hate the central banks! We're going to take away the power from them and the government! slight inconveniences, fraud happens We need a place to store our co

by a2tech 6y ago

We hate the central banks! We're going to take away the power from them and the government! slight inconveniences, fraud happens We need a place to store our coin and help securely move it! recreates central banks with even less regulation and security Profit!

ceejayoz 6y ago
I once saw crytpocurrency described as "speedrunning the evolution of the modern financial system".
- lvs 6y ago
  With more carbon dioxide.
- fnord77 6y ago
  in reverse. the evolution of the modern financial system is less and less friction for each transaction, lower costs. crypto: more friction, slower transactions, higher transaction costs. And wicked exchange volatility. Plus no way to expand or contract the supply to prevent economic shocks. I like my fiat and central banks, thank you very much.
  - bhupy 6y ago
    > I like my fiat and central banks, thank you very much. I do too! But some people don't. And it appears that there are now options for everyone, which seems...good?
    - grey-area 6y ago
      Entirely unregulated markets are not good, they are awful, and they can go on for quite a while before blowing up, taking the life savings of lots of ordinary people with them.
      - bhupy 6y ago
        I mean, no disagreements that unregulated markets can turn out disastrously (and hurt ordinary people). But regulated currencies can also turn out disastrously bad (see: Venezuela, Zimbabwe hyperinflation, Nigeria, Argentina). This hurts ordinary people too. There's an Argentinian in this very thread that's chimed in with their personal experience. I won't pretend one approach is strictly superior to the other, nor am I suggesting that one ought to put 100% of their life savings into BTC or US T-bonds, but having options allows the ordinary person to hedge. That's the point. Optionality is good, and because BTC isn't legal tender (nor will it ever be), nobody is forced to use it anyway.
        grey-area 6y ago
        Very true some jurisdictions are very risky, I’m just sceptical than Bitcoin is a) a viable currency and b) not riddled with fraud.
  - mirekrusin 6y ago
    Cars are not replacement for horses. You have to have factories, they break, you need to rely on fuel supply, they also pollute and go too fast - they can kill you. I like my horses, thank you very much!
  - Galanwe 6y ago
    > the evolution of the modern financial system is less and less friction for each transaction Still, buying shares of a company is much more "friction" than buying coins. > crypto: more friction Can you elaborate? > slower transactions Huh, even bitcoin will settle with 6 confirmations in an hour. Settlement to buy a share or FX is 2/3 days. > higher transaction costs Hmm, no. > And wicked exchange volatility. Volatility is a property of the underlying currency, not to "crypto currencies" in general. The volatility of USDTxUSD is zero. > Plus no way to expand or contract the supply to prevent economic shocks. You are mixing "crypto currency" and "bitcoin".
    - spamalot159 6y ago
      You are comparing crypto currencies to stocks. In that case what you said is true. But I think the fairer comparison is crypto currency to a fiat currency. There is more friction involved in using crypto currency to make a purchase. It does take longer to processes a bitcoin transaction than it would for visa to processes a transaction in usd. And the transaction costs for a typical transaction are usually higher for bitcoin (maybe not all crypto currencies though). I think the fact that a lot of people compare crypto currencies to stocks is telling that they are not being used for their intended purpose.
      - eurasiantiger 6y ago
        One could get a crypto credit card and spend transparently in fiat. No friction involved.
        freeone3000 6y ago
        That's spending a Bitcoin balance, not Bitcoin. You might as well hold a Bitcoin index, and sell that. Or sell a Satoshi and transfer out the fiat, which is what it is. It has nothing to do with the transfer of Bitcoin: the same person holds your Bitcoin balance and your fractional fiat balance and decides the exchange rate. There's no blockchain there.
      - Galanwe 6y ago
  - charcircuit 6y ago
    >more friction, slower transactions, higher transaction costs. And wicked exchange volatility. You are taking a look at the start of the speedrun and claiming that it's already over. All of those issues will eventually be solved. >Plus no way to expand or contract the supply This is simply not true. It is entirely possible to make it possible to mint new coins. You can burn coins by buying them back and sending them to a wallet owned by no one.
    - wpietri 6y ago
      > All of those issues will eventually be solved. When does "eventually" arrive? For 12 years I've been hearing that all of the problems of cryptocurrency will be solved very soon. But merchant adoption peaked years ago and has notably declined. Most of the problems are still problems. At this point, I'm pretty sure "eventually" means what I mean by "soon" as a teen when my parents asked me to clean my room. That is, "not now and I'd like to keep ignoring the topic please".
  - koonsolo 6y ago
    I'm in EU, you in US? Send me $50.000 in the weekend through your bank. Let's see how fast it goes. I'll send you any amount you want with Nano: <1 second transaction, 0 fee. Try to beat that!
    - ceejayoz 6y ago
      It'll presumably take more than one second to convert it to a usable currency, i.e. Euros. How often do you need $50k without being able to wait a business day?
      - koonsolo 6y ago
        Ok, then send me a $0.001 micro transaction. Same deal.
        ceejayoz 6y ago
        How are you going to convert $0.001 to Euros? Why is receiving $0.001 a matter of urgency that can't wait until tomorrow?
        koonsolo 6y ago
        Funny how this conversation started how crypto is slow and expensive, and now turned into slow and expensive is OK :P. In a crypto world, you don't need to convert to Euros. Are we in a crypto world yet? No. Will we live in crypto world in the future? Maybe, when it's faster and cheaper ;).
        ceejayoz 6y ago
        It's a bit of both. For the common transactions people make, crypto is both slow and expensive. I can Zelle someone instantly, for free. In the EU, Australia, etc., bank-to-bank transfers are similarly instant. I don't know that Bitcoin etc. ever get to totally free in this fashion, and it's probably 99.9% of most people's money transfer usage. For the uncommon transactions - like the $50k international transfer you mention - slow tends to be OK, and it's likely gonna have some expense either way. Short version: In contrived scenarios, Bitcoin may come out on top, but that's not likely to convince many people.
  - pcthrowaway 6y ago
    > more friction, slower transactions, higher transaction costs. Bitcoin, sure. Plenty of other cryptocurrencies which don't have these issues. Cardano has faster transactions than any monetary transfer method (besides cash), with low fees. You also get Bitcoin cash has negligible transactions fees with 10-20 minute transactions. Nano has fee-less, near-instant transactions (could actually compete with cash for p2p transactions)
    - koonsolo 6y ago
      Everything you said is true, yet still getting downvoted. HN doesn't like crypto. Say anything pro crypto (even when it's true) and get downvoted. very sad.
  - godelzilla 6y ago
    Pretty sure central banks have never intentionally or significantly "contracted" their pyramid schemes. https://www.investopedia.com/articles/investing/051315/what-deflation-and-how-do-central-banks-fight-it.asp https://www.investopedia.com/articles/investing/051315/what-...
- dpflan 6y ago
  Ha! Sounds like an interesting perspective: do you perhaps have a link to the source?
  - benplumley 6y ago
    It's not the source of that quote, but it's from the same perspective: "Tether" subheading of https://www.bloomberg.com/opinion/articles/2021-02-24/the-vaccine-is-not-a-competition https://www.bloomberg.com/opinion/articles/2021-02-24/the-va...
  - ceejayoz 6y ago
    Either Reddit or Twitter, years ago. I'm fairly sure they were cribbing off someone else at the time.
bhupy 6y ago
This conflates "Central Banks" with ordinary "banks" that hold assets in vaults. The two are comparable in the same way that Java is comparable to JavaScript. The steel-man argument is that the monetary policy of central banks can cause hyper-inflation of a fiat currency, and holding onto an asset that is immune to that, and potentially even being able to transact with that asset is a reliable way to break free from the monetary policy of the central bank. The fact that one may place this transferable asset into a centralized institution that we may call a (lower case b) "bank" isn't at odds with the aforementioned principle. Put another way, the dollar doesn't depreciate because of my credit union, it depreciates because of the Fed.
- xadhominemx 6y ago
  Most money is created by normal banks, not the central bank. If you Google “money creation” you will find this helpful link: https://en.m.wikipedia.org/wiki/Money_creation#Role_of_banks_in_money_creation https://en.m.wikipedia.org/wiki/Money_creation#Role_of_banks...
  - bhupy 6y ago
    Yes, but that's only possible because of the underlying monetary policy, which is controlled by the Fed. In contrast, there is no way you can do this with (most) cryptocurrencies. The monetary policy of Bitcoin is dictated by the physical bounds of the proof-of-work algorithm. There is absolutely nothing that Coinbase can do to "create" more Bitcoin outside of just mining it like everyone else.
    - xadhominemx 6y ago
      No money creation at banks is not controlled by central bank monetary policy. And it’s very easy to create new crypto assets. Bitcoin has gone from 100% to 60% of crypto market cap in the past 5 years - that’s 10% “inflation”
      - bhupy 6y ago
        If it is, then that means Coinbase can create new "Bitcoin" on demand; which we both know that it cannot do. In your own source, the banks ability to increase money supply through the multiplier effect is capped by the capital adequacy ratios, which are defined by the Fed. It is also an inevitability of any currency that isn't backed by an asset. To be clear, I don't have problems with the concept of fiat currencies, but we have to be honest about what it actually is and how it works, and how Bitcoin is different.
agumonkey 6y ago
I don't know about you guys since the web 2.0 / social network boom, I tend to see this 'new' world as an eldorado run toward some kind of digital heaven where people will enjoy the freedom for a while, while recreating the same system (almost) without realizing it. But it will be their new system so they'll love it. Childish regression in a bubble.
mumblemumble 6y ago
Not exactly central banks in this case, but we've at least made it as far as fractional reserve banking. Matt Levine covered this well in a recent column[1]. It reminds me a bit of the argument for why anarchy probably can't work that Robert Nozick laid out in Anarchy, State and Utopia. In a nutshell, the social forces are such that the simple, minimalist way of doing things represents an unstable equilibrium point, and the stable equilibrium point is much closer to the status quo. That said, I wouldn't call armchair philosophy or armchair financial jurisprudence particularly ironclad. It's hard to blame people for wanting to actually try a thing. And it hasn't been entirely unsuccessful. While it's true that a lot of modern financial system trappings have built up around Bitcoin, the currency itself remains nominally independent. [1]: https://www.bloomberg.com/opinion/articles/2021-02-24/the-vaccine-is-not-a-competition https://www.bloomberg.com/opinion/articles/2021-02-24/the-va...
dang 6y ago
Please don't post snarky dismissals to HN. It's not what this site is for and degrades the culture considerably. Since entropy already does more than enough of that, we need to spend energy going the other way. If you wouldn't mind reviewing https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html and taking the spirit of the site more to heart, we'd be grateful. You can make your substantive points thoughtfully. As far as that goes, though, this comment doesn't say anything that the parent didn't already say.

by a2tech 6y ago

ceejayoz 6y ago

I once saw crytpocurrency described as "speedrunning the evolution of the modern financial system".

lvs 6y ago
With more carbon dioxide.
fnord77 6y ago
in reverse. the evolution of the modern financial system is less and less friction for each transaction, lower costs. crypto: more friction, slower transactions, higher transaction costs. And wicked exchange volatility. Plus no way to expand or contract the supply to prevent economic shocks. I like my fiat and central banks, thank you very much.
- bhupy 6y ago
  > I like my fiat and central banks, thank you very much. I do too! But some people don't. And it appears that there are now options for everyone, which seems...good?
  - grey-area 6y ago
    Entirely unregulated markets are not good, they are awful, and they can go on for quite a while before blowing up, taking the life savings of lots of ordinary people with them.
    - bhupy 6y ago
      I mean, no disagreements that unregulated markets can turn out disastrously (and hurt ordinary people). But regulated currencies can also turn out disastrously bad (see: Venezuela, Zimbabwe hyperinflation, Nigeria, Argentina). This hurts ordinary people too. There's an Argentinian in this very thread that's chimed in with their personal experience. I won't pretend one approach is strictly superior to the other, nor am I suggesting that one ought to put 100% of their life savings into BTC or US T-bonds, but having options allows the ordinary person to hedge. That's the point. Optionality is good, and because BTC isn't legal tender (nor will it ever be), nobody is forced to use it anyway.
      - grey-area 6y ago
        Very true some jurisdictions are very risky, I’m just sceptical than Bitcoin is a) a viable currency and b) not riddled with fraud.
- mirekrusin 6y ago
  Cars are not replacement for horses. You have to have factories, they break, you need to rely on fuel supply, they also pollute and go too fast - they can kill you. I like my horses, thank you very much!
- Galanwe 6y ago
  > the evolution of the modern financial system is less and less friction for each transaction Still, buying shares of a company is much more "friction" than buying coins. > crypto: more friction Can you elaborate? > slower transactions Huh, even bitcoin will settle with 6 confirmations in an hour. Settlement to buy a share or FX is 2/3 days. > higher transaction costs Hmm, no. > And wicked exchange volatility. Volatility is a property of the underlying currency, not to "crypto currencies" in general. The volatility of USDTxUSD is zero. > Plus no way to expand or contract the supply to prevent economic shocks. You are mixing "crypto currency" and "bitcoin".
  - spamalot159 6y ago
    You are comparing crypto currencies to stocks. In that case what you said is true. But I think the fairer comparison is crypto currency to a fiat currency. There is more friction involved in using crypto currency to make a purchase. It does take longer to processes a bitcoin transaction than it would for visa to processes a transaction in usd. And the transaction costs for a typical transaction are usually higher for bitcoin (maybe not all crypto currencies though). I think the fact that a lot of people compare crypto currencies to stocks is telling that they are not being used for their intended purpose.
    - eurasiantiger 6y ago
      One could get a crypto credit card and spend transparently in fiat. No friction involved.
      - freeone3000 6y ago
        That's spending a Bitcoin balance, not Bitcoin. You might as well hold a Bitcoin index, and sell that. Or sell a Satoshi and transfer out the fiat, which is what it is. It has nothing to do with the transfer of Bitcoin: the same person holds your Bitcoin balance and your fractional fiat balance and decides the exchange rate. There's no blockchain there.
    - Galanwe 6y ago
- charcircuit 6y ago
  >more friction, slower transactions, higher transaction costs. And wicked exchange volatility. You are taking a look at the start of the speedrun and claiming that it's already over. All of those issues will eventually be solved. >Plus no way to expand or contract the supply This is simply not true. It is entirely possible to make it possible to mint new coins. You can burn coins by buying them back and sending them to a wallet owned by no one.
  - wpietri 6y ago
    > All of those issues will eventually be solved. When does "eventually" arrive? For 12 years I've been hearing that all of the problems of cryptocurrency will be solved very soon. But merchant adoption peaked years ago and has notably declined. Most of the problems are still problems. At this point, I'm pretty sure "eventually" means what I mean by "soon" as a teen when my parents asked me to clean my room. That is, "not now and I'd like to keep ignoring the topic please".
- koonsolo 6y ago
  I'm in EU, you in US? Send me $50.000 in the weekend through your bank. Let's see how fast it goes. I'll send you any amount you want with Nano: <1 second transaction, 0 fee. Try to beat that!
  - ceejayoz 6y ago
    It'll presumably take more than one second to convert it to a usable currency, i.e. Euros. How often do you need $50k without being able to wait a business day?
    - koonsolo 6y ago
      Ok, then send me a $0.001 micro transaction. Same deal.
      - ceejayoz 6y ago
        How are you going to convert $0.001 to Euros? Why is receiving $0.001 a matter of urgency that can't wait until tomorrow?
        koonsolo 6y ago
        Funny how this conversation started how crypto is slow and expensive, and now turned into slow and expensive is OK :P. In a crypto world, you don't need to convert to Euros. Are we in a crypto world yet? No. Will we live in crypto world in the future? Maybe, when it's faster and cheaper ;).
        ceejayoz 6y ago
        It's a bit of both. For the common transactions people make, crypto is both slow and expensive. I can Zelle someone instantly, for free. In the EU, Australia, etc., bank-to-bank transfers are similarly instant. I don't know that Bitcoin etc. ever get to totally free in this fashion, and it's probably 99.9% of most people's money transfer usage. For the uncommon transactions - like the $50k international transfer you mention - slow tends to be OK, and it's likely gonna have some expense either way. Short version: In contrived scenarios, Bitcoin may come out on top, but that's not likely to convince many people.
- pcthrowaway 6y ago
  > more friction, slower transactions, higher transaction costs. Bitcoin, sure. Plenty of other cryptocurrencies which don't have these issues. Cardano has faster transactions than any monetary transfer method (besides cash), with low fees. You also get Bitcoin cash has negligible transactions fees with 10-20 minute transactions. Nano has fee-less, near-instant transactions (could actually compete with cash for p2p transactions)
  - koonsolo 6y ago
    Everything you said is true, yet still getting downvoted. HN doesn't like crypto. Say anything pro crypto (even when it's true) and get downvoted. very sad.
- godelzilla 6y ago
  Pretty sure central banks have never intentionally or significantly "contracted" their pyramid schemes. https://www.investopedia.com/articles/investing/051315/what-deflation-and-how-do-central-banks-fight-it.asp https://www.investopedia.com/articles/investing/051315/what-...
dpflan 6y ago
Ha! Sounds like an interesting perspective: do you perhaps have a link to the source?
- benplumley 6y ago
  It's not the source of that quote, but it's from the same perspective: "Tether" subheading of https://www.bloomberg.com/opinion/articles/2021-02-24/the-vaccine-is-not-a-competition https://www.bloomberg.com/opinion/articles/2021-02-24/the-va...
- ceejayoz 6y ago
  Either Reddit or Twitter, years ago. I'm fairly sure they were cribbing off someone else at the time.

bhupy 6y ago

This conflates "Central Banks" with ordinary "banks" that hold assets in vaults. The two are comparable in the same way that Java is comparable to JavaScript. The steel-man argument is that the monetary policy of central banks can cause hyper-inflation of a fiat currency, and holding onto an asset that is immune to that, and potentially even being able to transact with that asset is a reliable way to break free from the monetary policy of the central bank. The fact that one may place this transferable asset into a centralized institution that we may call a (lower case b) "bank" isn't at odds with the aforementioned principle. Put another way, the dollar doesn't depreciate because of my credit union, it depreciates because of the Fed.

xadhominemx 6y ago
Most money is created by normal banks, not the central bank. If you Google “money creation” you will find this helpful link: https://en.m.wikipedia.org/wiki/Money_creation#Role_of_banks_in_money_creation https://en.m.wikipedia.org/wiki/Money_creation#Role_of_banks...
- bhupy 6y ago
  Yes, but that's only possible because of the underlying monetary policy, which is controlled by the Fed. In contrast, there is no way you can do this with (most) cryptocurrencies. The monetary policy of Bitcoin is dictated by the physical bounds of the proof-of-work algorithm. There is absolutely nothing that Coinbase can do to "create" more Bitcoin outside of just mining it like everyone else.
  - xadhominemx 6y ago
    No money creation at banks is not controlled by central bank monetary policy. And it’s very easy to create new crypto assets. Bitcoin has gone from 100% to 60% of crypto market cap in the past 5 years - that’s 10% “inflation”
    - bhupy 6y ago
      If it is, then that means Coinbase can create new "Bitcoin" on demand; which we both know that it cannot do. In your own source, the banks ability to increase money supply through the multiplier effect is capped by the capital adequacy ratios, which are defined by the Fed. It is also an inevitability of any currency that isn't backed by an asset. To be clear, I don't have problems with the concept of fiat currencies, but we have to be honest about what it actually is and how it works, and how Bitcoin is different.

agumonkey 6y ago

I don't know about you guys since the web 2.0 / social network boom, I tend to see this 'new' world as an eldorado run toward some kind of digital heaven where people will enjoy the freedom for a while, while recreating the same system (almost) without realizing it. But it will be their new system so they'll love it. Childish regression in a bubble.

mumblemumble 6y ago

Not exactly central banks in this case, but we've at least made it as far as fractional reserve banking. Matt Levine covered this well in a recent column[1]. It reminds me a bit of the argument for why anarchy probably can't work that Robert Nozick laid out in Anarchy, State and Utopia. In a nutshell, the social forces are such that the simple, minimalist way of doing things represents an unstable equilibrium point, and the stable equilibrium point is much closer to the status quo. That said, I wouldn't call armchair philosophy or armchair financial jurisprudence particularly ironclad. It's hard to blame people for wanting to actually try a thing. And it hasn't been entirely unsuccessful. While it's true that a lot of modern financial system trappings have built up around Bitcoin, the currency itself remains nominally independent. [1]: https://www.bloomberg.com/opinion/articles/2021-02-24/the-vaccine-is-not-a-competition https://www.bloomberg.com/opinion/articles/2021-02-24/the-va...

dang 6y ago

Please don't post snarky dismissals to HN. It's not what this site is for and degrades the culture considerably. Since entropy already does more than enough of that, we need to spend energy going the other way. If you wouldn't mind reviewing https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html and taking the spirit of the site more to heart, we'd be grateful. You can make your substantive points thoughtfully. As far as that goes, though, this comment doesn't say anything that the parent didn't already say.