3 ms·

> Doesn't it seem weird that through this complex system of interactions, we can recreate all of that in Code? All of these systems are already software. > If

> Doesn't it seem weird that through this complex system of interactions, we can recreate all of that in Code? All of these systems are already software. > If there was no value in it, why did we create all those institutions in the first place? Centralization makes them massively more efficient than crypto. If there was a way to make them more efficient that did not involve throwing risk models out the window or regulatory arbitrage, someone could just do that in the traditional economy without crypto. This is a lot like the programmer tendency to want to re-write instead of refactor because to understand a system is way harder than to set out on a quest to build a new one. Although they always end up the same way: at best what you started with. To me this falls squarely under Spolsky's "things you should never do." [1] There hasn't been a single actual competitive business built on top of crypto in fourteen years. That's because they're all hamstrung by the massive inefficiencies they boat-anchor to their solutions. Decentralization and trustlessness and permissionlessness don't matter at all to 99.9% of humans. Attempting to offer these is incredibly inefficient and makes it totally uncompetitive with centralized solutions for every legal use case. I would argue it fails Occam's razor to try and add miners to a monetary system. The simplest, most efficient, most economical solution to moving value around is centralization. If there's a better way to solve any of the given problems with crypto, there's an easy way to optimize it further: get rid of crypto. [1] https://www.joelonsoftware.com/2000/04/06/things-you-should-never-do-part-i/ https://www.joelonsoftware.com/2000/04/06/things-you-should-...

tevon 5y ago
I completely agree with this; the prior example given for bitcoins value (that it is used in defi for flash loans, etc) is literally deriving its value from moving value around (internal to the crypto ecosystem). Flash loans are used to arbitrage across exchanges, not create any extrinsic value.
- RustyConsul 5y ago
  Yeah! Isn't it fantastic? You solve the double spend problem you have in traditional finance! Due to this emergent phenomena of smart contracts you can have very low slippage between exchanges, high liquidity and high yields. A.K.A Every stock market financiers dream.
RustyConsul 5y ago
Do you think we will forever be organized and segregated by governments? Do you ever think a human being can be a sovereign individual in his own right, without owing fealty, taxes and morality to a government in some future? The current financial system is not all software. When i pay in crypto, i give you my money. When i pay in the current financial system I am giving you every bit of information to rob me blind and hoping you don't take it all. My currency(Value i produce) is not my own and at any moment in time some outside entity can cause rapid inflation, devaluing of my currency or take everything i own straight out of my bank account. My contracts are not upheld by code, but by courts of law. I have to do a credit check to outside entity's to ensure you've got the collateral to extend you a loan. I have to physically go into a bank, have a minimum balance, an address, a phone number in order to even have a bank account. That doesn't sound like all code to me. Also, you're right. POW as a consensus method is flawed. But again, all V3 cryptos have essentially transitioned to delegated proof of stake at this point. Lastly, in a generation of cancel culture gone wild and as an avid reader of history, I'm glad crypto is available to me as the nation-state that we've all known and loved is looking more and more stressed. If you still claim there's absolutely no value in any of it, then me and you have very different definitions of the term. Edit: There are 104 protocols/coins that have over $1B market cap. Value isn't a personal judgement, it's a group one.
- foxylad 5y ago
  > When i pay in the current financial system I am giving you every bit of information to rob me blind and hoping you don't take it all. I don't understand this. You're saying if I send you $0.01 via internet banking, you can somehow take everything in the account? It doesn't work this way in NZ, where it is common to put your bank account details on invoices so people can pay you directly.
  - RustyConsul 5y ago
    When i pay for something online, I am giving away my credit card/ debit card/ ACH information away for them to subtract the total amount of my transaction (Or debit it). I am trusting that outside entity in a number of different ways; To only take the required amount, b.) encrypt my information to prevent my information from leaking. Credit card data is leaked regularly in mass uploads for pennys on the dollar. Credit card fraud is mediated by the credit companies themselves and is just an insurance issue to them. Crypto, I sign the transaction to send it to you. You don't get anything but my public id, amount and block time.
AnthonyMouse 5y ago
> If there was a way to make them more efficient that did not involve throwing risk models out the window or regulatory arbitrage, someone could just do that in the traditional economy without crypto. This is assuming there is no value in regulatory arbitrage, which is wrong. The value of this is proportional to the dysfunction of the existing system in any given country. In countries that impose currency exchange limitations or other authoritarian policies enforced through the financial system, cryptocurrency has more value. You could capture that value by reforming the laws and governments in those countries, but that hasn't happened. And one of the benefits of cryptocurrencies is encouraging those reforms. If you can't use the financial system to impose authoritarian policies because people will just use cryptocurrency instead, you might as well not try to use the financial system to impose authoritarian policies, at which point people can use the more efficient ordinary banking system instead of cryptocurrencies. But we're not there yet, are we?
- graeme 5y ago
  You’re shifting the argument, which was about financial institutions in functional markets.
  - AnthonyMouse 5y ago
    The argument is that cryptocurrency is useless under the assumption that the traditional financial market is functioning perfectly, i.e. that there is no regulatory inefficiency at all. There currently exist countries where this is not the case, so that assumption is incorrect and cryptocurrency is useful until such time as that is no longer the case.
tremarley 5y ago
The only people that have no issues with centralisation are the people who are benefiting from it. World Bank estimates 31 percent of people globally do not have a bank account. Decentralisation helps these people. When you deposit money into a bank account, it is not your money. It is the bank's money. You aren't allowed to use it, or spend it how you like without the permission of your bank. Crypto doesn't have this issue. There are financial tools that only people with net worths of over $100 million have access to, such as market making, arbitrage, liquidations, insurance lending etc. Crypto solves this. 99.9% of banks in traditional finance run their systems on outdated, closed source, barely maintained and bug ridden software. Contracts, money and agreements than can happen in seconds in crypto, takes weeks and months in centralised finance. If centralised finance had the potential to be more efficient, there should have been more innovation decades ago. Centralised finance needs to catch up.
- ryan_lane 5y ago
  The lack of a bank account doesn't have to do with centralization, for the most part, and decentralization doesn't matter if you can't spend the decentralized "money" without turning it into the local currency, because to do that, you need to have a bank account. Crypto doesn't help bank the unbanked.
- arcticbull 5y ago
  > World Bank estimates 31 percent of people globally do not have a bank account. Decentralisation helps these people. Banking helps these people. Remember a fully-realized BTC transaction fee (pricing in electricity and mining hardware) is right around $250 each. That's a non-trivial amount of the GDP per capita of a lot of these countries you're alluding to. Poor folks are also the most vulnerable to the massive volatilities of this so-called currency. Real, centralized solutions help these people. Solutions like M-Pesa [1]. And Postal Banking, which a hundred years of legacy solving exactly these problems. [2] > There are financial tools that only people with net worths of over $100 million have access to, such as market making, arbitrage, liquidations, insurance lending etc. Crypto solves this. It certainly does not haha. It makes them less efficient, which is why not a single crypto-powered business in the last 14 years is competitive with any centralized solutions except in the areas of regulatory arbitrage or by throwing risk models out the window. > If centralised finance had the potential to be more efficient, there should have been more innovation decades ago. Centralised finance needs to catch up. It's obviously more efficient, and pretending otherwise doesn't change that. [1] https://en.wikipedia.org/wiki/M-Pesa https://en.wikipedia.org/wiki/M-Pesa [2] https://en.wikipedia.org/wiki/Postal_savings_system https://en.wikipedia.org/wiki/Postal_savings_system
usehackernews 5y ago
My friend's family lives in Bosnia. He lives in the United States. He supports his family with his income, and frequently sends money from the United States to Bosnia. Best case scenario, using Paypal (Xoom), a centralized company, this takes him two days. Two days is the best case scenario! With Bitcoin it is almost instant. They switched to cryptocurrency after a near disastrous situation with the length of time the transfer took. How is Bitcoin less efficient here? Sure, it's one use case, but just because something doesn't benefit you does not mean it's not beneficial for anyone.
- arcticbull 5y ago
  His best case scenario is opening a Wise multi-currency account, with supporting instant transfers free of charge in many cases. Bitcoin is not accepted anywhere, practically speaking. As such you're only looking at a small fraction of the transaction. You actually need to (1) transfer money into a crypto exchange for a 1-2% fee and whatever delay the domestic transfer takes (2) purchase Bitcoin for whatever fee the exchange charges (3) transfer it for $0.50-50 depending on the fee du jour (4) hope the market doesn't collapse out from under you while all this is happening (5) sell it at the destination unregulated exchange for whatever fee they charge and hope they don't flee with your money (6) transfer to the destination bank account, waiting as long as a domestic transfer takes. This is probably a few days total, with severe counter-party risk, forex risk, and substantial transaction fees. Or you can use Wise for a very low fee directly bank-to-bank, or open a Wise multi-currency account and support almost-free instant transactions. They're also super, duper regulated by a number of world regulators. I know which I'd do, but to each their own.
  - mrep 5y ago
    Yeah, usehackernews@ can you detail which exchanges he is using on both ends because I'm guessing your standard ACH transfer to an exchange to make the initial USD->Bitcoin transfer would probably make the supposed time speedup moot.
gazzini 5y ago
> This is a lot like the programmer tendency to want to re-write instead of refactor because to understand a system is way harder than to set out on a quest to build a new one. And what if they did want to refactor the existing system. Can they? What does that iteration process look like? Is the system currently evolving to fit everyone’s needs? Remember, RMS actually did want to refactor the printer. He just wasn’t allowed to. [0] Contrast that with how fast things are moving in DeFi. It’s permissionless innovation at its best and worst. We can barely even wrap our heads around OHM, but nobody needs permission to fork it into SPELL. Systemic refactors happen faster. [1] When somebody in the future doesn’t like a piece of decentralized infrastructure, they can _literally_ fork all of it and just make their change. With fewer black-boxes, we share more intellectual property. [0] https://www.fsf.org/blogs/community/201cthe-printer-story201d-redux-a-testimonial-about-the-injustice-of-proprietary-firmware https://www.fsf.org/blogs/community/201cthe-printer-story201... [1] https://thedefiant.io/olympusdao-forks/ https://thedefiant.io/olympusdao-forks/

tevon 5y ago

I completely agree with this; the prior example given for bitcoins value (that it is used in defi for flash loans, etc) is literally deriving its value from moving value around (internal to the crypto ecosystem). Flash loans are used to arbitrage across exchanges, not create any extrinsic value.

RustyConsul 5y ago
Yeah! Isn't it fantastic? You solve the double spend problem you have in traditional finance! Due to this emergent phenomena of smart contracts you can have very low slippage between exchanges, high liquidity and high yields. A.K.A Every stock market financiers dream.

RustyConsul 5y ago

Do you think we will forever be organized and segregated by governments? Do you ever think a human being can be a sovereign individual in his own right, without owing fealty, taxes and morality to a government in some future? The current financial system is not all software. When i pay in crypto, i give you my money. When i pay in the current financial system I am giving you every bit of information to rob me blind and hoping you don't take it all. My currency(Value i produce) is not my own and at any moment in time some outside entity can cause rapid inflation, devaluing of my currency or take everything i own straight out of my bank account. My contracts are not upheld by code, but by courts of law. I have to do a credit check to outside entity's to ensure you've got the collateral to extend you a loan. I have to physically go into a bank, have a minimum balance, an address, a phone number in order to even have a bank account. That doesn't sound like all code to me. Also, you're right. POW as a consensus method is flawed. But again, all V3 cryptos have essentially transitioned to delegated proof of stake at this point. Lastly, in a generation of cancel culture gone wild and as an avid reader of history, I'm glad crypto is available to me as the nation-state that we've all known and loved is looking more and more stressed. If you still claim there's absolutely no value in any of it, then me and you have very different definitions of the term. Edit: There are 104 protocols/coins that have over $1B market cap. Value isn't a personal judgement, it's a group one.

foxylad 5y ago
> When i pay in the current financial system I am giving you every bit of information to rob me blind and hoping you don't take it all. I don't understand this. You're saying if I send you $0.01 via internet banking, you can somehow take everything in the account? It doesn't work this way in NZ, where it is common to put your bank account details on invoices so people can pay you directly.
- RustyConsul 5y ago
  When i pay for something online, I am giving away my credit card/ debit card/ ACH information away for them to subtract the total amount of my transaction (Or debit it). I am trusting that outside entity in a number of different ways; To only take the required amount, b.) encrypt my information to prevent my information from leaking. Credit card data is leaked regularly in mass uploads for pennys on the dollar. Credit card fraud is mediated by the credit companies themselves and is just an insurance issue to them. Crypto, I sign the transaction to send it to you. You don't get anything but my public id, amount and block time.

AnthonyMouse 5y ago

> If there was a way to make them more efficient that did not involve throwing risk models out the window or regulatory arbitrage, someone could just do that in the traditional economy without crypto. This is assuming there is no value in regulatory arbitrage, which is wrong. The value of this is proportional to the dysfunction of the existing system in any given country. In countries that impose currency exchange limitations or other authoritarian policies enforced through the financial system, cryptocurrency has more value. You could capture that value by reforming the laws and governments in those countries, but that hasn't happened. And one of the benefits of cryptocurrencies is encouraging those reforms. If you can't use the financial system to impose authoritarian policies because people will just use cryptocurrency instead, you might as well not try to use the financial system to impose authoritarian policies, at which point people can use the more efficient ordinary banking system instead of cryptocurrencies. But we're not there yet, are we?

graeme 5y ago
You’re shifting the argument, which was about financial institutions in functional markets.
- AnthonyMouse 5y ago
  The argument is that cryptocurrency is useless under the assumption that the traditional financial market is functioning perfectly, i.e. that there is no regulatory inefficiency at all. There currently exist countries where this is not the case, so that assumption is incorrect and cryptocurrency is useful until such time as that is no longer the case.

tremarley 5y ago

The only people that have no issues with centralisation are the people who are benefiting from it. World Bank estimates 31 percent of people globally do not have a bank account. Decentralisation helps these people. When you deposit money into a bank account, it is not your money. It is the bank's money. You aren't allowed to use it, or spend it how you like without the permission of your bank. Crypto doesn't have this issue. There are financial tools that only people with net worths of over $100 million have access to, such as market making, arbitrage, liquidations, insurance lending etc. Crypto solves this. 99.9% of banks in traditional finance run their systems on outdated, closed source, barely maintained and bug ridden software. Contracts, money and agreements than can happen in seconds in crypto, takes weeks and months in centralised finance. If centralised finance had the potential to be more efficient, there should have been more innovation decades ago. Centralised finance needs to catch up.

ryan_lane 5y ago
The lack of a bank account doesn't have to do with centralization, for the most part, and decentralization doesn't matter if you can't spend the decentralized "money" without turning it into the local currency, because to do that, you need to have a bank account. Crypto doesn't help bank the unbanked.
arcticbull 5y ago
> World Bank estimates 31 percent of people globally do not have a bank account. Decentralisation helps these people. Banking helps these people. Remember a fully-realized BTC transaction fee (pricing in electricity and mining hardware) is right around $250 each. That's a non-trivial amount of the GDP per capita of a lot of these countries you're alluding to. Poor folks are also the most vulnerable to the massive volatilities of this so-called currency. Real, centralized solutions help these people. Solutions like M-Pesa [1]. And Postal Banking, which a hundred years of legacy solving exactly these problems. [2] > There are financial tools that only people with net worths of over $100 million have access to, such as market making, arbitrage, liquidations, insurance lending etc. Crypto solves this. It certainly does not haha. It makes them less efficient, which is why not a single crypto-powered business in the last 14 years is competitive with any centralized solutions except in the areas of regulatory arbitrage or by throwing risk models out the window. > If centralised finance had the potential to be more efficient, there should have been more innovation decades ago. Centralised finance needs to catch up. It's obviously more efficient, and pretending otherwise doesn't change that. [1] https://en.wikipedia.org/wiki/M-Pesa https://en.wikipedia.org/wiki/M-Pesa [2] https://en.wikipedia.org/wiki/Postal_savings_system https://en.wikipedia.org/wiki/Postal_savings_system

usehackernews 5y ago

My friend's family lives in Bosnia. He lives in the United States. He supports his family with his income, and frequently sends money from the United States to Bosnia. Best case scenario, using Paypal (Xoom), a centralized company, this takes him two days. Two days is the best case scenario! With Bitcoin it is almost instant. They switched to cryptocurrency after a near disastrous situation with the length of time the transfer took. How is Bitcoin less efficient here? Sure, it's one use case, but just because something doesn't benefit you does not mean it's not beneficial for anyone.

arcticbull 5y ago
His best case scenario is opening a Wise multi-currency account, with supporting instant transfers free of charge in many cases. Bitcoin is not accepted anywhere, practically speaking. As such you're only looking at a small fraction of the transaction. You actually need to (1) transfer money into a crypto exchange for a 1-2% fee and whatever delay the domestic transfer takes (2) purchase Bitcoin for whatever fee the exchange charges (3) transfer it for $0.50-50 depending on the fee du jour (4) hope the market doesn't collapse out from under you while all this is happening (5) sell it at the destination unregulated exchange for whatever fee they charge and hope they don't flee with your money (6) transfer to the destination bank account, waiting as long as a domestic transfer takes. This is probably a few days total, with severe counter-party risk, forex risk, and substantial transaction fees. Or you can use Wise for a very low fee directly bank-to-bank, or open a Wise multi-currency account and support almost-free instant transactions. They're also super, duper regulated by a number of world regulators. I know which I'd do, but to each their own.
- mrep 5y ago
  Yeah, usehackernews@ can you detail which exchanges he is using on both ends because I'm guessing your standard ACH transfer to an exchange to make the initial USD->Bitcoin transfer would probably make the supposed time speedup moot.

gazzini 5y ago

> This is a lot like the programmer tendency to want to re-write instead of refactor because to understand a system is way harder than to set out on a quest to build a new one. And what if they did want to refactor the existing system. Can they? What does that iteration process look like? Is the system currently evolving to fit everyone’s needs? Remember, RMS actually did want to refactor the printer. He just wasn’t allowed to. [0] Contrast that with how fast things are moving in DeFi. It’s permissionless innovation at its best and worst. We can barely even wrap our heads around OHM, but nobody needs permission to fork it into SPELL. Systemic refactors happen faster. [1] When somebody in the future doesn’t like a piece of decentralized infrastructure, they can _literally_ fork all of it and just make their change. With fewer black-boxes, we share more intellectual property. [0] https://www.fsf.org/blogs/community/201cthe-printer-story201d-redux-a-testimonial-about-the-injustice-of-proprietary-firmware https://www.fsf.org/blogs/community/201cthe-printer-story201... [1] https://thedefiant.io/olympusdao-forks/ https://thedefiant.io/olympusdao-forks/