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Decentralised currencies just open up a whole new can of worms. How do you reverse fraudulent transactions? What happens if your wallet is stolen? Who do you

Decentralised currencies just open up a whole new can of worms. How do you reverse fraudulent transactions? What happens if your wallet is stolen? Who do you speak to when you need help setting up an account? On a macroeconomic level, it prevents the government from setting certain types of monetary policy that benefit the economy as a whole (although I may be biased there, as the Australian government bailed out the economy as a whole through economic stimulus in 2008 and prevented the spread of the GFC to here). This is all assuming it's pegged to a stable asset like the USD. Bitcoin's average annual inflation over the past 5 years is around 3,000%. For comparison, Zimbabwe's inflation rate in the early 00's was around 500%.

xvector 5y ago
> How do you reverse fraudulent transactions? How do you reverse paying someone with cash? You don't. You can ask for a refund and hope they give it to you. If you're transacting with a trusted business, you can expect them to adhere to the law and reverse the payment. In this sense, crypto transactions are no different than how humans have transacted for thousands of years. Chargebacks and reversals are a convenience - they are not necessary. > What happens if your wallet is stolen? What happens when your wallet is stolen in real life? You lose the cash inside. So you keep most money secure in a cold wallet, airgapped and password-protected, and some money secure in a hot wallet, PIN-protected. Usually losing a hardware wallet isn't a big deal anyways, since they wipe themselves after a few PIN tries. The UX around securing wallets will get better over time, but if you pick up a Ledger X today it's actually already quite easy to use. > Who do you speak to when you need help setting up an account? Just like using a wallet with cash in a secure manner took time to become cultural knowledge, using a hardware wallet with cryptocurrency will to. Obviously, there are places where it could become easier to use, but using a Ledger these days is already pretty damn easy. You just connect it to your phone via Bluetooth and you're ready to go. > it prevents the government from setting certain types of monetary policy that benefit the economy as a whole For some, lowering government control over your finances is a pro, not a con, but I can understand that this is up for debate. > This is all assuming it's pegged to a stable asset like the USD. I can agree with this, I think currently the price of cryptocurrency is volatile due to rampant speculation. Eventually it will settle into something stable, and if it doesn't, we can just use alogrithmic stablecoins like DAI that track the value of the dollar to within +/-1% and don't need to be backed by a central institution.
- ivalm 5y ago
  I feel like you make a better argument against using cash rather than for using crypto. I don’t use cash anymore because I do want transaction reversibility and fraud/theft/loss protection. You say it isn’t “necessary” but in the same vein nothing that crypto offers is “necessary.”
  - xvector 5y ago
    I am just not willing to give up my privacy and financial freedom for a tiny bit of purchase protection that I have literally never needed. I know I’m not the only one. Cash is still pretty commonly used, anyways.
- AussieWog93 5y ago
  >How do you reverse paying someone with cash? You don't. Exactly, that's why centralised systems with moneyback guarantees (PayPal, Stripe) exist for online payments where you can't see the goods in person - online fraud is still a concern in 2021. >So you keep most money secure in a cold wallet, airgapped and password-protected, and some money secure in a hot wallet, PIN-protected. I'll admit I'm not super familiar with crypto technology, but this cold wallet basically sounds similar to stashing your life savings under your mattress (or, at least, in a safe in your house). Nobody in their right mind would do this. >Just like using a wallet with cash in a secure manner took time to become cultural knowledge, using a hardware wallet with cryptocurrency will to Makes sense, honestly. Everyone understands credit cards/WeChat. Regardless of the individual arguments, though, I think the overall point is whether or not the risk of being screwed over by the machinations of a giant corporation outweighs the risk of being screwed over in the "wild west" world of crypto. For the average person, I think (well-regulated) central institutions are the lesser of the two evils.
  - xvector 5y ago
    > online fraud is still a concern in 2021. Sure, but this is why you transact with trusted people and businesses, just like you would when using cash. To be honest, I don't know a single person that relies on PayPal's protection when making a purchase online from an individual or business. Every single person I know that uses PayPal does their due diligence on the seller before buying. None of them assume that PayPal disputes will actually work. The same would be true with crypto. You'd do your due diligence before buying, just like you do today, if you're buying from a random. > this cold wallet basically sounds similar to stashing your life savings under your mattress (or, at least, in a safe in your house). You would use a social recovery wallet, in which, say, your trusted family members could secure your life savings as a group. Vitalik Buterin, the founder of Ethereum, has a great article [1] on this. Even if you don't trust a multisig/social-recovery wallet, you can store your money on an insured exchange. It still comes out ahead of banks and PayPal in that your transactions themselves are private and cannot be censored. > I think the overall point is whether or not the risk of being screwed over by the machinations of a giant corporation outweighs the risk of being screwed over in the "wild west" world of crypto. Just like online payments and credit cards had their "wild west" period, crypto has its own. I don't see a big deal here. This is a field in its infancy with staggeringly rapid development. Over time the UX will get better. I'm not expecting your average Joe to move their savings to Monero tomorrow, but I wouldn't be surprised if they did (to whatever Monero-equivalent exists) 10, 20 years down the road, when social recovery wallets are easy to use and crypto prices have algorithmically stabilized itself (ala DAI) or have naturally fallen into an equilibrium. [1]: https://vitalik.ca/general/2021/01/11/recovery.html https://vitalik.ca/general/2021/01/11/recovery.html
mannerheim 5y ago
You have inflation and deflation mixed up.
- AussieWog93 5y ago
  You're right, I did get that backwards. The overall point about stability remains, though.
  - reedjosh 5y ago
    I think this misses the nuance that makes BTC so great. BTC has a limited supply. It's designed to hold value. Zimbabwe's currency was used to print it's way out of debts. With BTC you don't have to worry about someone siphoning value from your currency. It's not just coincidence that BTC increases in value YOY. Bitcoiners call this 'number go up' technology. When all central banks are tripping over themselves to devalue their currencies, BTC's value rises.
reedjosh 5y ago
> Bitcoin's average annual inflation over the past 5 years is around 3,000%. I think you meant deflation? If you held Zimbabwe's currency then you became poor. If you held BTC over the past 5 years you became rich. These are two _very_ different scenarios.
reedjosh 5y ago
> Australian government bailed out the economy as a whole through economic stimulus in 2008 and prevented the spread of the GFC to here How was this bailout done? In the US, the bailout was done primarily by giving funds to over leveraged banks that had every right to collapse. CEOs took home record bonuses, and everyday citizen's lost their homes. They tried to spin the story in the US as saving the economy too, but most people didn't fall for the obvious wealthy get wealthier, poor get poorer trick. This actually birthed the Occupy Wall Street movement.
- AussieWog93 5y ago
  Not an expert, but from what I recall it was a mix of direct stimulus (I think every adult got $900 and were encouraged to spend it) and a huge amount of public sector construction. There was also strong Chinese demand for our resources. Our economy had one quarter of negative growth but we recovered almost immediately. The banks didn't get bailed out at all - they didn't need to be because the financial sector had strict regulations that prevented them from engaging in the systemic risk that ruined Europe and the US.

xvector 5y ago

> How do you reverse fraudulent transactions? How do you reverse paying someone with cash? You don't. You can ask for a refund and hope they give it to you. If you're transacting with a trusted business, you can expect them to adhere to the law and reverse the payment. In this sense, crypto transactions are no different than how humans have transacted for thousands of years. Chargebacks and reversals are a convenience - they are not necessary. > What happens if your wallet is stolen? What happens when your wallet is stolen in real life? You lose the cash inside. So you keep most money secure in a cold wallet, airgapped and password-protected, and some money secure in a hot wallet, PIN-protected. Usually losing a hardware wallet isn't a big deal anyways, since they wipe themselves after a few PIN tries. The UX around securing wallets will get better over time, but if you pick up a Ledger X today it's actually already quite easy to use. > Who do you speak to when you need help setting up an account? Just like using a wallet with cash in a secure manner took time to become cultural knowledge, using a hardware wallet with cryptocurrency will to. Obviously, there are places where it could become easier to use, but using a Ledger these days is already pretty damn easy. You just connect it to your phone via Bluetooth and you're ready to go. > it prevents the government from setting certain types of monetary policy that benefit the economy as a whole For some, lowering government control over your finances is a pro, not a con, but I can understand that this is up for debate. > This is all assuming it's pegged to a stable asset like the USD. I can agree with this, I think currently the price of cryptocurrency is volatile due to rampant speculation. Eventually it will settle into something stable, and if it doesn't, we can just use alogrithmic stablecoins like DAI that track the value of the dollar to within +/-1% and don't need to be backed by a central institution.

ivalm 5y ago
I feel like you make a better argument against using cash rather than for using crypto. I don’t use cash anymore because I do want transaction reversibility and fraud/theft/loss protection. You say it isn’t “necessary” but in the same vein nothing that crypto offers is “necessary.”
- xvector 5y ago
  I am just not willing to give up my privacy and financial freedom for a tiny bit of purchase protection that I have literally never needed. I know I’m not the only one. Cash is still pretty commonly used, anyways.
AussieWog93 5y ago
>How do you reverse paying someone with cash? You don't. Exactly, that's why centralised systems with moneyback guarantees (PayPal, Stripe) exist for online payments where you can't see the goods in person - online fraud is still a concern in 2021. >So you keep most money secure in a cold wallet, airgapped and password-protected, and some money secure in a hot wallet, PIN-protected. I'll admit I'm not super familiar with crypto technology, but this cold wallet basically sounds similar to stashing your life savings under your mattress (or, at least, in a safe in your house). Nobody in their right mind would do this. >Just like using a wallet with cash in a secure manner took time to become cultural knowledge, using a hardware wallet with cryptocurrency will to Makes sense, honestly. Everyone understands credit cards/WeChat. Regardless of the individual arguments, though, I think the overall point is whether or not the risk of being screwed over by the machinations of a giant corporation outweighs the risk of being screwed over in the "wild west" world of crypto. For the average person, I think (well-regulated) central institutions are the lesser of the two evils.
- xvector 5y ago
  > online fraud is still a concern in 2021. Sure, but this is why you transact with trusted people and businesses, just like you would when using cash. To be honest, I don't know a single person that relies on PayPal's protection when making a purchase online from an individual or business. Every single person I know that uses PayPal does their due diligence on the seller before buying. None of them assume that PayPal disputes will actually work. The same would be true with crypto. You'd do your due diligence before buying, just like you do today, if you're buying from a random. > this cold wallet basically sounds similar to stashing your life savings under your mattress (or, at least, in a safe in your house). You would use a social recovery wallet, in which, say, your trusted family members could secure your life savings as a group. Vitalik Buterin, the founder of Ethereum, has a great article [1] on this. Even if you don't trust a multisig/social-recovery wallet, you can store your money on an insured exchange. It still comes out ahead of banks and PayPal in that your transactions themselves are private and cannot be censored. > I think the overall point is whether or not the risk of being screwed over by the machinations of a giant corporation outweighs the risk of being screwed over in the "wild west" world of crypto. Just like online payments and credit cards had their "wild west" period, crypto has its own. I don't see a big deal here. This is a field in its infancy with staggeringly rapid development. Over time the UX will get better. I'm not expecting your average Joe to move their savings to Monero tomorrow, but I wouldn't be surprised if they did (to whatever Monero-equivalent exists) 10, 20 years down the road, when social recovery wallets are easy to use and crypto prices have algorithmically stabilized itself (ala DAI) or have naturally fallen into an equilibrium. [1]: https://vitalik.ca/general/2021/01/11/recovery.html https://vitalik.ca/general/2021/01/11/recovery.html

mannerheim 5y ago

You have inflation and deflation mixed up.

AussieWog93 5y ago
You're right, I did get that backwards. The overall point about stability remains, though.
- reedjosh 5y ago
  I think this misses the nuance that makes BTC so great. BTC has a limited supply. It's designed to hold value. Zimbabwe's currency was used to print it's way out of debts. With BTC you don't have to worry about someone siphoning value from your currency. It's not just coincidence that BTC increases in value YOY. Bitcoiners call this 'number go up' technology. When all central banks are tripping over themselves to devalue their currencies, BTC's value rises.

reedjosh 5y ago

> Bitcoin's average annual inflation over the past 5 years is around 3,000%. I think you meant deflation? If you held Zimbabwe's currency then you became poor. If you held BTC over the past 5 years you became rich. These are two _very_ different scenarios.

reedjosh 5y ago

> Australian government bailed out the economy as a whole through economic stimulus in 2008 and prevented the spread of the GFC to here How was this bailout done? In the US, the bailout was done primarily by giving funds to over leveraged banks that had every right to collapse. CEOs took home record bonuses, and everyday citizen's lost their homes. They tried to spin the story in the US as saving the economy too, but most people didn't fall for the obvious wealthy get wealthier, poor get poorer trick. This actually birthed the Occupy Wall Street movement.

AussieWog93 5y ago
Not an expert, but from what I recall it was a mix of direct stimulus (I think every adult got $900 and were encouraged to spend it) and a huge amount of public sector construction. There was also strong Chinese demand for our resources. Our economy had one quarter of negative growth but we recovered almost immediately. The banks didn't get bailed out at all - they didn't need to be because the financial sector had strict regulations that prevented them from engaging in the systemic risk that ruined Europe and the US.