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Check cashing, wire transfer, western union style money transfer are all overpriced because competition doesn't really exist. Lots of derivatives are only avai

Check cashing, wire transfer, western union style money transfer are all overpriced because competition doesn't really exist. Lots of derivatives are only available to people on Wall Street or connected to wall street and also are very expensive. Coinbase providing retail people the ability to lend in scenarios with high yield. This is where crypto has actual value. Providing better financial services at lower costs. Coins going up in value just because they are scarce or first movers, is just like Pets.com being valuable because they have a good domain name. Cash flow and actual value are better investments in the long run over guessing what the next collector's items will be.

lottin 5y ago
> Providing better financial services at lower costs. How can anything than runs a blockchain offer a service at a lower cost? It can't. The only competitive advantage that crypto has over the financial sector is that crypto is by and large operating with disregard for financial regulations. Let's see how long it's gonna last.
- carlosdp 5y ago
  It very much can, because these protocols can do the same things the traditional equivalents can (trading, lending, etc.) fully-automated with smart contracts. When you don't have to pay a ton of salaries to push paper around, you can make things extremely efficient. And like OP said, a lot of the prices for financial services are artificially high due to lack of competition as it is.
  - lottin 5y ago
    A "smart contract" is nothing new, it's simply a computer program, and computer programs are already widely used in the financial sector. So that cannot be it.
    - nybble41 5y ago
      A smart contract is much more than "simply a computer program". It's a computer program which is intimately linked to a distributed ledger such that the output of the program directly determines who is allowed to make use of the assets. The "distributed" part is important since it means that you're not dependent on particular party to enforce the contract—the entire distributed system does that.
      - lottin 5y ago
        Yes, we already know that. The point is everything that can be automated with a smart contract can also be automated with a computer program in conventional finance. Therefore "smart contracts" do not provide a competitive advantage, contrary to what the other poster suggested.
  - pavlov 5y ago
    > “A lot of the prices for financial services are artificially high due to lack of competition as it is.” But this is completely independent of any cryptocurrency solutions. Look at retail stock trading. We now have zero-fee trading, but it’s not because some wonderful blockchain thing happened — new competitors like Robinhood made it the standard across the industry. It wasn’t a technological problem. Some high-cost services in the USA that seem like technological problems are actually due to insufficient regulation. For example, wire transfers can cost $25 here, whereas they’re free and instant in Europe+UK. This is not because Europe has a magic blockchain — it’s simply the result of EU-level regulation that forced banks to interoperate. (Apparently the Fed is finally doing something similar now, decades late.) The problems that exist can be solved by markets and regulation. The technology layer of cryptocurrencies is a useless substrate and primarily serves to reenact financial scams from the 20th century.
    - matthewdgreen 5y ago
      It is hard to look at the state of today's financial services and say everything is optimal: even in the EU, most of the regulation you mention (free wire transfers, low-fee credit cards) was a reaction to egregious inefficiencies that a more dynamic and competitive industry would have squashed by itself, without the need for a years-long process of regulation and legislation. There is absolutely a place for disruptive technical experiments like cryptocurrency in a small part of the system, and to have good regulation of the rest of the financial system. It seems to me that the current balance is doing exactly that. Why are people dogmatically assured that technical advances in payments can only be driven by governments, when technical advances in virtually every other IT-adjacent industry have not worked like this?
      - pavlov 5y ago
        > "There is absolutely a place for disruptive technical experiments like cryptocurrency in a small part of the system, and to have good regulation of the rest of the financial system. It seems to me that the current balance is doing exactly that." Sure, I agree in principle. But the crypto science experiment is out of hand. It's providing negligible actual value to the system while consuming more energy than a mid-size European nation. This is an egregious failure. If Bitcoin and Ethereum mining were shut down today, nobody would lose access to any necessary financial service, and we (mankind) would be at least 1% closer to the fossil fuel reduction goals we absolutely must meet. Seems like a no-brainer in the current state of emergency. There are many other things we need to do, but it's distressing that we're not even able to stop this novel waste that didn't exist ten years ago.
  - lxgr 5y ago
    > these protocols can do the same things the traditional equivalents can (trading, lending, etc.) fully-automated with smart contracts. This very much remains to be seen. Much of the complexity of finance (and the value being provided) arises from the need to quantify risks of many different kinds. Not nearly all of that information is available on-chain, and for many scenarios I can't imagine it ever will be.
- BLKNSLVR 5y ago
  Regulation has worked pretty well so far to ensure the 99% don't get screwed over by the hedge fund managers at JP Morgan and Goldman Sachs, and that a big stick is wielded when rules are broken. /s Cryptocurrency, namely bitcoin, has lasted 13 years and only looks to be getting stronger and more widely adopted. Bitcoin's theory, based on its white paper, is that Blockchain offers to remove the middleman, or at least decentralise the middleman. Maybe it won't lower the cost, but it will hopefully spread those costs over a larger group of participants.
- wavefunction 5y ago
  There's a lot of overhead in the traditional finance system which leads to gatekeeping by those interested parties. I'd rather pay some crypto fees "to the system" than pay fees that ultimately end up in the pockets of overcompensated executives at a middle-man rent-seeking org.
didroe 5y ago
Decentralised systems are always more inefficient. If certain kinds of transactions are currently cheaper, it's due to lack of regulation (lack of competition in many cases is sadly a symptom of regulation). When the inevitable economic crises present themselves (assuming it ever gets used for anything serious), regulators won't stand by and do nothing. > Coins going up in value just because they are scarce or first movers, is just like Pets.com being valuable because they have a good domain name. Isn't scarcity baked in to Bitcoin? Any investments made using it will have to return more than the deflation / speculative-hoarding rate, which means useful things won't get funded.
- BLKNSLVR 5y ago
  > If certain kinds of transactions are currently cheaper, it's due to lack of regulation I just can't see any truth in that statement, but admittedly I'm probably looking at it from a different angle to you. Cryptocurrency cuts out the middleman in a transaction, or at least minimises the cost and 'touch' of a middleman, and that's where the cheaper-ness comes from - no vampiric-squid-encircling-the-globe sized multi-national taking its monopolistic percentage. That's my angle. The behaviour of said percentage-takers over the last century haven't exactly made regulation the saviour of the common citizenry either.
  - dragontamer 5y ago
    > no vampiric-squid-encircling-the-globe sized multi-national taking its monopolistic percentage What do you think about the Gigawatts of energy + transaction fees that are going to miners? Because your hyperbolic statement is what I think of the miners in the cryptocurrency world. They do nothing but buy up critical parts (GPUs, ASICs, etc. etc.), use up rare resources (energy / coal / etc. etc.) and then are paid to do so (mining rewards, transaction fees), without offering much innovation on their own. Doubling the number of miners in the world for the BTC network won't improve the speed of the network, nor would it improve the rewards. All it would do, is double the energy usage.
    - BLKNSLVR 5y ago
X6S1x6Okd1st 5y ago
I've been participating in DeFi and so far most of my plays have lost relative to just holding ETH.
- lxgr 5y ago
  That old saying about selling shovels in a gold rush comes to mind.
- andreilys 5y ago
  You can participate in DeFi and hold ETH, they aren't mutually exclusive. https://alchemix.fi https://alchemix.fi lets you get a self-paying loan on your ETH which you can invest in... more ETH
  - X6S1x6Okd1st 5y ago
    Yeah I like ALCX, I am yield farming their token at the moment. Given how hard it is to really be safe from hack & rug risk in this space I've generally only put large portions of my portfolio into highly trusted projects like AAVE, uni, sushi etc
dgudkov 5y ago
>because competition doesn't really exist. It does exist, just hasn't reached some corners of the world. Neobanks are a great example. I had great experience with TransferWise (renamed recently to Wise). Transfers, checking accounts, wire transfers are several times less expensive than with traditional banks. Works like a charm.
mbesto 5y ago
> Check cashing, wire transfer, western union style money transfer are all overpriced because competition doesn't really exist. And competition doesn't exist, because in many parts of the world in order to transfer/manage large sums of money you need to have political influence (read -> bribes) to operate at scale. This is the "hush hush" secret of any money transfer service that operates worldwide, and why you don't see many people try to enter the space. Source - friend ran a P&L at WU in a high risk area. > Coins going up in value just because they are scarce or first movers, is just like Pets.com being valuable because they have a good domain name. Not true. Pets.com goes up in value because it has utility: i.e. tangible business/economic value associated with marketing and driving customers to your business.

lottin 5y ago

> Providing better financial services at lower costs. How can anything than runs a blockchain offer a service at a lower cost? It can't. The only competitive advantage that crypto has over the financial sector is that crypto is by and large operating with disregard for financial regulations. Let's see how long it's gonna last.

carlosdp 5y ago
It very much can, because these protocols can do the same things the traditional equivalents can (trading, lending, etc.) fully-automated with smart contracts. When you don't have to pay a ton of salaries to push paper around, you can make things extremely efficient. And like OP said, a lot of the prices for financial services are artificially high due to lack of competition as it is.
- lottin 5y ago
  A "smart contract" is nothing new, it's simply a computer program, and computer programs are already widely used in the financial sector. So that cannot be it.
  - nybble41 5y ago
    A smart contract is much more than "simply a computer program". It's a computer program which is intimately linked to a distributed ledger such that the output of the program directly determines who is allowed to make use of the assets. The "distributed" part is important since it means that you're not dependent on particular party to enforce the contract—the entire distributed system does that.
    - lottin 5y ago
      Yes, we already know that. The point is everything that can be automated with a smart contract can also be automated with a computer program in conventional finance. Therefore "smart contracts" do not provide a competitive advantage, contrary to what the other poster suggested.
- pavlov 5y ago
  > “A lot of the prices for financial services are artificially high due to lack of competition as it is.” But this is completely independent of any cryptocurrency solutions. Look at retail stock trading. We now have zero-fee trading, but it’s not because some wonderful blockchain thing happened — new competitors like Robinhood made it the standard across the industry. It wasn’t a technological problem. Some high-cost services in the USA that seem like technological problems are actually due to insufficient regulation. For example, wire transfers can cost $25 here, whereas they’re free and instant in Europe+UK. This is not because Europe has a magic blockchain — it’s simply the result of EU-level regulation that forced banks to interoperate. (Apparently the Fed is finally doing something similar now, decades late.) The problems that exist can be solved by markets and regulation. The technology layer of cryptocurrencies is a useless substrate and primarily serves to reenact financial scams from the 20th century.
  - matthewdgreen 5y ago
    It is hard to look at the state of today's financial services and say everything is optimal: even in the EU, most of the regulation you mention (free wire transfers, low-fee credit cards) was a reaction to egregious inefficiencies that a more dynamic and competitive industry would have squashed by itself, without the need for a years-long process of regulation and legislation. There is absolutely a place for disruptive technical experiments like cryptocurrency in a small part of the system, and to have good regulation of the rest of the financial system. It seems to me that the current balance is doing exactly that. Why are people dogmatically assured that technical advances in payments can only be driven by governments, when technical advances in virtually every other IT-adjacent industry have not worked like this?
    - pavlov 5y ago
      > "There is absolutely a place for disruptive technical experiments like cryptocurrency in a small part of the system, and to have good regulation of the rest of the financial system. It seems to me that the current balance is doing exactly that." Sure, I agree in principle. But the crypto science experiment is out of hand. It's providing negligible actual value to the system while consuming more energy than a mid-size European nation. This is an egregious failure. If Bitcoin and Ethereum mining were shut down today, nobody would lose access to any necessary financial service, and we (mankind) would be at least 1% closer to the fossil fuel reduction goals we absolutely must meet. Seems like a no-brainer in the current state of emergency. There are many other things we need to do, but it's distressing that we're not even able to stop this novel waste that didn't exist ten years ago.
- lxgr 5y ago
  > these protocols can do the same things the traditional equivalents can (trading, lending, etc.) fully-automated with smart contracts. This very much remains to be seen. Much of the complexity of finance (and the value being provided) arises from the need to quantify risks of many different kinds. Not nearly all of that information is available on-chain, and for many scenarios I can't imagine it ever will be.
BLKNSLVR 5y ago
Regulation has worked pretty well so far to ensure the 99% don't get screwed over by the hedge fund managers at JP Morgan and Goldman Sachs, and that a big stick is wielded when rules are broken. /s Cryptocurrency, namely bitcoin, has lasted 13 years and only looks to be getting stronger and more widely adopted. Bitcoin's theory, based on its white paper, is that Blockchain offers to remove the middleman, or at least decentralise the middleman. Maybe it won't lower the cost, but it will hopefully spread those costs over a larger group of participants.
wavefunction 5y ago
There's a lot of overhead in the traditional finance system which leads to gatekeeping by those interested parties. I'd rather pay some crypto fees "to the system" than pay fees that ultimately end up in the pockets of overcompensated executives at a middle-man rent-seeking org.

didroe 5y ago

Decentralised systems are always more inefficient. If certain kinds of transactions are currently cheaper, it's due to lack of regulation (lack of competition in many cases is sadly a symptom of regulation). When the inevitable economic crises present themselves (assuming it ever gets used for anything serious), regulators won't stand by and do nothing. > Coins going up in value just because they are scarce or first movers, is just like Pets.com being valuable because they have a good domain name. Isn't scarcity baked in to Bitcoin? Any investments made using it will have to return more than the deflation / speculative-hoarding rate, which means useful things won't get funded.

BLKNSLVR 5y ago
> If certain kinds of transactions are currently cheaper, it's due to lack of regulation I just can't see any truth in that statement, but admittedly I'm probably looking at it from a different angle to you. Cryptocurrency cuts out the middleman in a transaction, or at least minimises the cost and 'touch' of a middleman, and that's where the cheaper-ness comes from - no vampiric-squid-encircling-the-globe sized multi-national taking its monopolistic percentage. That's my angle. The behaviour of said percentage-takers over the last century haven't exactly made regulation the saviour of the common citizenry either.
- dragontamer 5y ago
  > no vampiric-squid-encircling-the-globe sized multi-national taking its monopolistic percentage What do you think about the Gigawatts of energy + transaction fees that are going to miners? Because your hyperbolic statement is what I think of the miners in the cryptocurrency world. They do nothing but buy up critical parts (GPUs, ASICs, etc. etc.), use up rare resources (energy / coal / etc. etc.) and then are paid to do so (mining rewards, transaction fees), without offering much innovation on their own. Doubling the number of miners in the world for the BTC network won't improve the speed of the network, nor would it improve the rewards. All it would do, is double the energy usage.
  - BLKNSLVR 5y ago

X6S1x6Okd1st 5y ago

I've been participating in DeFi and so far most of my plays have lost relative to just holding ETH.

lxgr 5y ago
That old saying about selling shovels in a gold rush comes to mind.
andreilys 5y ago
You can participate in DeFi and hold ETH, they aren't mutually exclusive. https://alchemix.fi https://alchemix.fi lets you get a self-paying loan on your ETH which you can invest in... more ETH
- X6S1x6Okd1st 5y ago
  Yeah I like ALCX, I am yield farming their token at the moment. Given how hard it is to really be safe from hack & rug risk in this space I've generally only put large portions of my portfolio into highly trusted projects like AAVE, uni, sushi etc

dgudkov 5y ago

>because competition doesn't really exist. It does exist, just hasn't reached some corners of the world. Neobanks are a great example. I had great experience with TransferWise (renamed recently to Wise). Transfers, checking accounts, wire transfers are several times less expensive than with traditional banks. Works like a charm.

mbesto 5y ago

> Check cashing, wire transfer, western union style money transfer are all overpriced because competition doesn't really exist. And competition doesn't exist, because in many parts of the world in order to transfer/manage large sums of money you need to have political influence (read -> bribes) to operate at scale. This is the "hush hush" secret of any money transfer service that operates worldwide, and why you don't see many people try to enter the space. Source - friend ran a P&L at WU in a high risk area. > Coins going up in value just because they are scarce or first movers, is just like Pets.com being valuable because they have a good domain name. Not true. Pets.com goes up in value because it has utility: i.e. tangible business/economic value associated with marketing and driving customers to your business.