13 ms·

> I'm certain this technology will find a place in the future after it has matured Why? It doesn’t solve any real problem that anyone has ever had.

radicalbyte 5y ago
It solves the problem of: how can I start a pyramid scheme relatively anonymously.
haolez 5y ago
While you wrote this, your country's Central Bank printed a few billions (or trillions, if you are american) in your currency, so that your money now is worth a lot less than before.
- arcticbull 5y ago
  This is a dramatic misunderstanding of economics. Inflation is a function of both supply and velocity. Velocity is low because US savings are at an all-time high. The central bank has a number of tools to contract the supply once velocity increases. [1] Your statement that an increase in supply leads to a commensurate reduction in the value of each unit is strictly false. And something you can measure by going to the grocery store and checking if your bill is 100% higher this year than last. [1] https://www.stlouisfed.org/on-the-economy/2014/september/what-does-money-velocity-tell-us-about-low-inflation-in-the-us https://www.stlouisfed.org/on-the-economy/2014/september/wha...
  - o_p 5y ago
    You are obfuscating with technical terms the fact that the central bank haves the power to devaluate your cash savings.
    - arcticbull 5y ago
      No, that's not what I'm doing. What I'm telling you is that supply is simply half the picture, and you're neglecting the other half of the picture. If you print a $10 trillion dollar coin, then give it to me and I throw it into a vault, has that increased the price of goods? No. Supply went up, velocity went down commensurately. This is what you're seeing in a macro scale. Yes the central bank actively manages the money supply, and maintains a consistent 2% inflation rate. Inflation is good for debtors (i.e. most people) as debts are denominated in the currency of the year of issue and repaid with inflated money. So long as wages keep pace (they do [1]) it's generally a benefit. Money isn't long-term savings. It's a short-term store of value that only needs to be fungible, cheap to transact, and retain the bulk of its value for as long as you hold it. Above all, it just needs to be predictable. Anything else is honestly a non-goal. Your job as a participant in the economy is to spend that money on basic needs or invest it productively. [1] https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us-workers-real-wages-have-barely-budged-for-decades/ https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us...
      - o_p 5y ago
        But the central bank doesnt print money to throw it into a vault. The commercial banks borrow that money to lend it themselves to the people for consumption and investing, so printing money definitely haves an effect on your buying power even if its not 1 to 1. Maybe you live in a country with a independent central bank but many countries are far more corrupt and the goverments make their central bank print money for themselves and have huge inflation rates. Cryptocurrency gives them a way to protect their savings from that.
        arcticbull 5y ago
        > But the central bank doesnt print money to throw it into a vault. Correct, however US personal savings rates are at all-time highs. [1] So, you are correct, the banks aren't taking the money and locking it into vaults. However, people are taking their money and locking it up in savings accounts and investment accounts. This is reducing velocity. The "printing" was to offset this reduction in velocity and avoid a deflationary spiral. Through lending, so they can be used for productive things. This also explains how asset prices spiked without actually causing inflation. > Cryptocurrency gives them a way to protect their savings from that. I don't want to get too far down this rabbit hole, but literally everything that isn't currency is inflation-proof. Inflation only affects currency. So, if you buy real estate, or stocks, or even un-productive assets like gold, silver or cryptocurrencies, you're equally protected from inflation. It may underperform, but now we're talking about rate of return in constant-dollar terms. Cryptocurrencies do protect you from inflation, yes, but they have massive deficiencies that make them a poor choice relative to their peer investments, in my opinion. Such as the rampant fraud in the space. This hinders price discovery, and makes it impossible to determine a real value. It also causes massive swings of 27% week-to-date. That's an annualized inflation rate of 25,000,000% when measuring the value of a bitcoin against CPI. [1] https://fred.stlouisfed.org/series/PSAVERT https://fred.stlouisfed.org/series/PSAVERT
  - haolez 5y ago
    Time will tell. Let's come back here in five years.
    - deleted 5y ago
      [deleted]
- anyfoo 5y ago
  https://en.wikipedia.org/wiki/Deflation#Effects https://en.wikipedia.org/wiki/Deflation#Effects
- deleted 5y ago
  [deleted]
- Yizahi 5y ago
  Government printing press can be abused and often is. But it can be used responsibly (for economy long term). On the other hand crypto apologists propose us currencies which are uncontrollably printed by some anonymous guys in the non extradition offshore. Just last year 75% of all Tethers were printed out of thin air, since USDT trading amount is 14 times bigger than USD (not even counting tricks like Bitfinex listing USD while actually trading tethers behind the scenes) we can assume that whole crypto community is propped up by a lot of hot air and cut paper. tl;dr - Look, USD currency management looks bad (or suboptimal). - Let's replace it with even worse scheme! HODL!
Kinrany 5y ago
It does solve the problem of being unable to get a bank account. In theory, once the scaling problems are solved and the transactiom fees go down.
- hoppyhoppy2 5y ago
  >It does solve the problem of being unable to get a bank account. In theory, once the scaling problems are solved and the transactiom fees go down. You could say the same thing about Walmart's money orders and check-cashing services, but that doesn't use an entire country's worth of electricity, suck up the world's supply of GPUs, or support the same number of scammers.
nyolfen 5y ago
how about this: https://i.imgur.com/lSfdTfK.jpg https://i.imgur.com/lSfdTfK.jpg
- arcticbull 5y ago
  This chart affects 0.35% of the global population. This one is far more representative [1]. Notice how after Bretton-Woods ended, things got really nice and stable? That's successful active management. Venezuela's problem isn't inflation - that's a symptom. Venezuela's problem is the Maduro government. Solve the latter and you solve the former. [1] https://fred.stlouisfed.org/series/FPCPITOTLZGUSA https://fred.stlouisfed.org/series/FPCPITOTLZGUSA
  - arberx 5y ago
    "If only they did this!" -- that's not a solution. The goal is to prevent this from even being possible in the first place. There are very real challenges from inflationary monetary supplies in countries like Argentina, Turkey, Venezuela and notably Zimbabwe.
    - arcticbull 5y ago
      When you have a bad government, the currency is the least of your problems. When you resolve the government, the currency is no longer a problem. Seriously, in Venezuela there have been recently shortages of: milk, meat, coffee, rice, oil, precooked flour, butter, toilet paper, personal hygiene products and medicines. Some Venezuelans have resorted to eating wild fruit and garbage [1]. Somehow resolving inflation through a cryptocurrency with $50 transaction fees that loses 27% of its value in one week every few months doesn't change any of that. It's just a different set of problems. However, overthrowing the government will resolve both issues. Sometimes there are no easy answers. [1] https://en.wikipedia.org/wiki/Shortages_in_Venezuela https://en.wikipedia.org/wiki/Shortages_in_Venezuela
      - deleted 5y ago
        [deleted]
_Microft 5y ago
Crypto technologically solves the social problem of trust. I‘ll leave the interpretation of this statement up to you ;)
- zepto 5y ago
  Crypto really has nothing to do with trust. It provides a mechanism that enables distant parties to be confident that they hold copies of the same document. That’s all.
  - Udik 5y ago
    Enables distant parties to be confident that there is only one specific version of the document that is valid, even when each of the parties could have an interest in creating and spreading its own version.
    - zepto 5y ago
      Valid for what?
  - _Microft 5y ago
    The blockchain, consensus algorithms and the whole shebang are only needed because cryptocurrencies do not want transactions to be mediated by a central authority that would need to be trusted. Crypto is about trust, or rather a lack thereof.
    - zepto 5y ago
      Crypto users may be distrustful, but crypto doesn’t create trust or solve any problems to do with it. It’s just currency for the distrustful.
    - Hjfrf 5y ago
      Despite all that, people mostly trade crypto on centralized exchanges. The users really hate the decentralized aspect of crypto, as shown by immediately giving away their wallet to some "trusted" third party if it reduces fees.
FDSGSG 5y ago
It solved the problem of paying for drugs which you ordered online. It solved the problem of ransomware payments, before winlockers used to ask for gift cards which didn't scale well. It solved the liberty reserve problem where the US government shuts down your sketchy no-KYC money transfer platform. At a very general level cryptocurrency has solved the "anonymous online payments"-problem. These are all very real problems solved by cryptocurrency.
- oblio 5y ago
  So what you're saying is that it solves a set of problems for a bunch of very problematic people for which we'd rather have a better solution? (maybe jail?)
  - FDSGSG 5y ago
    What's your point? Those people have money.
base698 5y ago
Ever want your money to earn interest? Banks used to do this, and you could get good returns on savings. You can earn interest parking your crypto here: https://compound.finance/ https://compound.finance/
- aphextron 5y ago
  You can also do this with the stock market by investing in revenue generating companies that are innovative and creating value. This is literally no different than investing in gold.
  - rawtxapp 5y ago
    But then you need to research and understand the companies you're investing in. If you're busy with your daytime job, you might not have as much time for this research. The parent comment is talking about interest, which is "risk-free" money (risk-free if the smart contract doesn't have any bugs, etc).
    - aphextron 5y ago
      >But then you need to research and understand the companies you're investing in. If you're busy with your daytime job, you might not have as much time for this research. Then just invest in a Vanguard ETF. There's no such thing as "risk free" money short of US treasuries or an FDIC insured CD, and those don't require any research.
  - o_p 5y ago
    Unless you are participating in an IPO. Buying stocks its not investing in the true sense you mention, you are just transfering ownership of stocks but that money doesnt fund any enterprise.
    - 8192kjshad09- 5y ago
      But the share price going up enables the company to raise money easier by offering more shares. See TSLA for example.
o_p 5y ago
I hoped HN to have a more informed take but I guess not. Blockchains solve the problem of having a decentralized public database, currency is just a particular use
- dilyevsky 5y ago
  So like git?
  - o_p 5y ago
    But you host git on a centralized server, blockchain git when
    - dilyevsky 5y ago
      That’s github model, you can host it on many “servers” if you so choose
      - Udik 5y ago
        It's not guaranteed to be unique. Blockchains are.
- Nasrudith 5y ago
  A decentralized public database is a solution, not a problem (snark aside about bitcoin). The question is "What is the purpose of it being decentralized and public?".
- oblio 5y ago
  > Blockchains solve the problem of having a decentralized public database. That's not a problem. A problem is something like this: "as a video editor/doctor/..., I need something that helps me...". Yours is just a tech description.
- bryananderson 5y ago
  What problem does a decentralized public database solve? As far as I can tell, over a decade in, blockchain is still hunting for one.
SavantIdiot 5y ago
Un-alterable ledgers like blockchain are incredibly useful for legal and economic applications. Unfortunately there are a lot of caveats that need to be worked out, and crypto is finding them at scale.

radicalbyte 5y ago

It solves the problem of: how can I start a pyramid scheme relatively anonymously.

haolez 5y ago

While you wrote this, your country's Central Bank printed a few billions (or trillions, if you are american) in your currency, so that your money now is worth a lot less than before.

arcticbull 5y ago
This is a dramatic misunderstanding of economics. Inflation is a function of both supply and velocity. Velocity is low because US savings are at an all-time high. The central bank has a number of tools to contract the supply once velocity increases. [1] Your statement that an increase in supply leads to a commensurate reduction in the value of each unit is strictly false. And something you can measure by going to the grocery store and checking if your bill is 100% higher this year than last. [1] https://www.stlouisfed.org/on-the-economy/2014/september/what-does-money-velocity-tell-us-about-low-inflation-in-the-us https://www.stlouisfed.org/on-the-economy/2014/september/wha...
- o_p 5y ago
  You are obfuscating with technical terms the fact that the central bank haves the power to devaluate your cash savings.
  - arcticbull 5y ago
    No, that's not what I'm doing. What I'm telling you is that supply is simply half the picture, and you're neglecting the other half of the picture. If you print a $10 trillion dollar coin, then give it to me and I throw it into a vault, has that increased the price of goods? No. Supply went up, velocity went down commensurately. This is what you're seeing in a macro scale. Yes the central bank actively manages the money supply, and maintains a consistent 2% inflation rate. Inflation is good for debtors (i.e. most people) as debts are denominated in the currency of the year of issue and repaid with inflated money. So long as wages keep pace (they do [1]) it's generally a benefit. Money isn't long-term savings. It's a short-term store of value that only needs to be fungible, cheap to transact, and retain the bulk of its value for as long as you hold it. Above all, it just needs to be predictable. Anything else is honestly a non-goal. Your job as a participant in the economy is to spend that money on basic needs or invest it productively. [1] https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us-workers-real-wages-have-barely-budged-for-decades/ https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us...
    - o_p 5y ago
      But the central bank doesnt print money to throw it into a vault. The commercial banks borrow that money to lend it themselves to the people for consumption and investing, so printing money definitely haves an effect on your buying power even if its not 1 to 1. Maybe you live in a country with a independent central bank but many countries are far more corrupt and the goverments make their central bank print money for themselves and have huge inflation rates. Cryptocurrency gives them a way to protect their savings from that.
      - arcticbull 5y ago
        > But the central bank doesnt print money to throw it into a vault. Correct, however US personal savings rates are at all-time highs. [1] So, you are correct, the banks aren't taking the money and locking it into vaults. However, people are taking their money and locking it up in savings accounts and investment accounts. This is reducing velocity. The "printing" was to offset this reduction in velocity and avoid a deflationary spiral. Through lending, so they can be used for productive things. This also explains how asset prices spiked without actually causing inflation. > Cryptocurrency gives them a way to protect their savings from that. I don't want to get too far down this rabbit hole, but literally everything that isn't currency is inflation-proof. Inflation only affects currency. So, if you buy real estate, or stocks, or even un-productive assets like gold, silver or cryptocurrencies, you're equally protected from inflation. It may underperform, but now we're talking about rate of return in constant-dollar terms. Cryptocurrencies do protect you from inflation, yes, but they have massive deficiencies that make them a poor choice relative to their peer investments, in my opinion. Such as the rampant fraud in the space. This hinders price discovery, and makes it impossible to determine a real value. It also causes massive swings of 27% week-to-date. That's an annualized inflation rate of 25,000,000% when measuring the value of a bitcoin against CPI. [1] https://fred.stlouisfed.org/series/PSAVERT https://fred.stlouisfed.org/series/PSAVERT
- haolez 5y ago
  Time will tell. Let's come back here in five years.
  - deleted 5y ago
    [deleted]
anyfoo 5y ago
https://en.wikipedia.org/wiki/Deflation#Effects https://en.wikipedia.org/wiki/Deflation#Effects
deleted 5y ago
[deleted]
Yizahi 5y ago
Government printing press can be abused and often is. But it can be used responsibly (for economy long term). On the other hand crypto apologists propose us currencies which are uncontrollably printed by some anonymous guys in the non extradition offshore. Just last year 75% of all Tethers were printed out of thin air, since USDT trading amount is 14 times bigger than USD (not even counting tricks like Bitfinex listing USD while actually trading tethers behind the scenes) we can assume that whole crypto community is propped up by a lot of hot air and cut paper. tl;dr - Look, USD currency management looks bad (or suboptimal). - Let's replace it with even worse scheme! HODL!

Kinrany 5y ago

It does solve the problem of being unable to get a bank account. In theory, once the scaling problems are solved and the transactiom fees go down.

hoppyhoppy2 5y ago
>It does solve the problem of being unable to get a bank account. In theory, once the scaling problems are solved and the transactiom fees go down. You could say the same thing about Walmart's money orders and check-cashing services, but that doesn't use an entire country's worth of electricity, suck up the world's supply of GPUs, or support the same number of scammers.

nyolfen 5y ago

how about this: https://i.imgur.com/lSfdTfK.jpg https://i.imgur.com/lSfdTfK.jpg

arcticbull 5y ago
This chart affects 0.35% of the global population. This one is far more representative [1]. Notice how after Bretton-Woods ended, things got really nice and stable? That's successful active management. Venezuela's problem isn't inflation - that's a symptom. Venezuela's problem is the Maduro government. Solve the latter and you solve the former. [1] https://fred.stlouisfed.org/series/FPCPITOTLZGUSA https://fred.stlouisfed.org/series/FPCPITOTLZGUSA
- arberx 5y ago
  "If only they did this!" -- that's not a solution. The goal is to prevent this from even being possible in the first place. There are very real challenges from inflationary monetary supplies in countries like Argentina, Turkey, Venezuela and notably Zimbabwe.
  - arcticbull 5y ago
    When you have a bad government, the currency is the least of your problems. When you resolve the government, the currency is no longer a problem. Seriously, in Venezuela there have been recently shortages of: milk, meat, coffee, rice, oil, precooked flour, butter, toilet paper, personal hygiene products and medicines. Some Venezuelans have resorted to eating wild fruit and garbage [1]. Somehow resolving inflation through a cryptocurrency with $50 transaction fees that loses 27% of its value in one week every few months doesn't change any of that. It's just a different set of problems. However, overthrowing the government will resolve both issues. Sometimes there are no easy answers. [1] https://en.wikipedia.org/wiki/Shortages_in_Venezuela https://en.wikipedia.org/wiki/Shortages_in_Venezuela
    - deleted 5y ago
      [deleted]

_Microft 5y ago

Crypto technologically solves the social problem of trust. I‘ll leave the interpretation of this statement up to you ;)

zepto 5y ago
Crypto really has nothing to do with trust. It provides a mechanism that enables distant parties to be confident that they hold copies of the same document. That’s all.
- Udik 5y ago
  Enables distant parties to be confident that there is only one specific version of the document that is valid, even when each of the parties could have an interest in creating and spreading its own version.
  - zepto 5y ago
    Valid for what?
- _Microft 5y ago
  The blockchain, consensus algorithms and the whole shebang are only needed because cryptocurrencies do not want transactions to be mediated by a central authority that would need to be trusted. Crypto is about trust, or rather a lack thereof.
  - zepto 5y ago
    Crypto users may be distrustful, but crypto doesn’t create trust or solve any problems to do with it. It’s just currency for the distrustful.
  - Hjfrf 5y ago
    Despite all that, people mostly trade crypto on centralized exchanges. The users really hate the decentralized aspect of crypto, as shown by immediately giving away their wallet to some "trusted" third party if it reduces fees.

FDSGSG 5y ago

It solved the problem of paying for drugs which you ordered online. It solved the problem of ransomware payments, before winlockers used to ask for gift cards which didn't scale well. It solved the liberty reserve problem where the US government shuts down your sketchy no-KYC money transfer platform. At a very general level cryptocurrency has solved the "anonymous online payments"-problem. These are all very real problems solved by cryptocurrency.

oblio 5y ago
So what you're saying is that it solves a set of problems for a bunch of very problematic people for which we'd rather have a better solution? (maybe jail?)
- FDSGSG 5y ago
  What's your point? Those people have money.

base698 5y ago

Ever want your money to earn interest? Banks used to do this, and you could get good returns on savings. You can earn interest parking your crypto here: https://compound.finance/ https://compound.finance/

aphextron 5y ago
You can also do this with the stock market by investing in revenue generating companies that are innovative and creating value. This is literally no different than investing in gold.
- rawtxapp 5y ago
  But then you need to research and understand the companies you're investing in. If you're busy with your daytime job, you might not have as much time for this research. The parent comment is talking about interest, which is "risk-free" money (risk-free if the smart contract doesn't have any bugs, etc).
  - aphextron 5y ago
    >But then you need to research and understand the companies you're investing in. If you're busy with your daytime job, you might not have as much time for this research. Then just invest in a Vanguard ETF. There's no such thing as "risk free" money short of US treasuries or an FDIC insured CD, and those don't require any research.
- o_p 5y ago
  Unless you are participating in an IPO. Buying stocks its not investing in the true sense you mention, you are just transfering ownership of stocks but that money doesnt fund any enterprise.
  - 8192kjshad09- 5y ago
    But the share price going up enables the company to raise money easier by offering more shares. See TSLA for example.

o_p 5y ago

I hoped HN to have a more informed take but I guess not. Blockchains solve the problem of having a decentralized public database, currency is just a particular use

dilyevsky 5y ago
So like git?
- o_p 5y ago
  But you host git on a centralized server, blockchain git when
  - dilyevsky 5y ago
    That’s github model, you can host it on many “servers” if you so choose
    - Udik 5y ago
      It's not guaranteed to be unique. Blockchains are.
Nasrudith 5y ago
A decentralized public database is a solution, not a problem (snark aside about bitcoin). The question is "What is the purpose of it being decentralized and public?".
oblio 5y ago
> Blockchains solve the problem of having a decentralized public database. That's not a problem. A problem is something like this: "as a video editor/doctor/..., I need something that helps me...". Yours is just a tech description.
bryananderson 5y ago
What problem does a decentralized public database solve? As far as I can tell, over a decade in, blockchain is still hunting for one.

SavantIdiot 5y ago

Un-alterable ledgers like blockchain are incredibly useful for legal and economic applications. Unfortunately there are a lot of caveats that need to be worked out, and crypto is finding them at scale.