5 ms·

> Largely agree with this. The big promise of defi was to “bank the unbanked” The un-banked aren't un-banked because there are no banks, or even because banks

> Largely agree with this. The big promise of defi was to “bank the unbanked” The un-banked aren't un-banked because there are no banks, or even because banks are inaccessible. They are un-banked because they do not have money. This is a social problem characterized by folks falling through the cracks. It's a lack of social safety net, a lack of unionization, a lack of inflation-adjusted minimum wage, a lack of healthcare. Broadly, a lack of of social programs. I've never met a single person who had money but couldn't get a bank account* - have you? What good is a bank account to someone with no money anyways? What are they going to put into it? Just opening a bank account doesn't make you magically any less poor. You can grab one at ally.com free of charge right now with no minimum deposit. They'll even pay interest on your checking accounts which of course stablecoins will not unless you put them at massive risk. Not to mention for the poor, a massively volatile speculative asset with astronomical fees is literally the worst thing they could put all their money into. * outside people on the OFAC list, which, I would argue, is a good thing.

krainboltgreene 5y ago
> I've never met a single person who had money but couldn't get a bank account* - have you? I don't agree with defi but this is absolutely a problem in a lot of rural america. People with money, who get paid, but without a bank so they have to take their checks to gas stations who take huge fees. That you haven't met someone like this isn't surprising at all.
- jbergens 5y ago
  This sounds like parts of the US has a problem with checks and a lack of good, digital bank services. I can transfer money and pay my bills with my phone. I can even transfer money to people not having the same bank as I have. I did it today, it took 30s or so and the recipient could immediately see the money on her phone. Where I live we also tend to use cards a LOT. I can pay in almost any store with my debit card and the money is drawn from my bank account right away. It was decades since I've saw a check.
  - krainboltgreene 5y ago
    That's a long winded way of saying that you live in New York.
- arcticbull 5y ago
  Why can't they open an online checking account like Ally which will allow them to deposit a photo of their check free of charge? My understanding is a lot of low-income folks have smartphones as desktop replacements. Is this not a strictly better solution than anything in crypto? I'm also open to postal banking as a solution to this problem, but I'm not really clear on where the system is actually currently failing folks who have money. Are they banned by ChexSystems or something? I get it, "Bank the Unbanked!" is a compelling narrative, but folks seem not to be asking the relevant questions: (1) who are the unbanked exactly and (2) why aren't they banked - specifically - when there's a ton of banks out there, a bunch of which charge nothing.
  - krainboltgreene 5y ago
    > Why can't they open an online checking account like Ally which will allow them to deposit a photo of their check free of charge? You have an incredible amount of optimism for both Ally's marketing department and also rural internet. Furthermore, this doesn't solve the cash problem unless you want to pay upwards of $5 just to pull out of an ATM. > folks seem not to be asking the relevant questions This is an incredibly well researched situation affecting a lot of americans. You not knowing isn't the same as this not being well understood.
  - JoshTriplett 5y ago
    Many banks, both historically and presently, have pervasive and capricious fees that disproportionately impact people with less money. Both because those fees are large relative to the amount of money they have, and because those fees arise in situations more likely to occur with less money (e.g. overdraft fees, policies that intentionally do withdrawals before deposits to cause overdraft fees, minimum balances, ATM fees, and many others). And furthermore, the institutions more likely to be friendlier to customers with less money are sometimes also institutions on a smaller scale that may have a harder time offering some of the services of larger institutions (e.g. branch/ATM locations, compelling variety of credit and account instruments, investment arms, better online banking experiences). To the extent this is changing, it also has to change in people's perceptions, in a fashion that makes it easier to predict and feel confident in.
CryptoPunk 5y ago
>>It's a lack of social safety net, a lack of unionization, a lack of inflation-adjusted minimum wage, a lack of healthcare. Broadly, a lack of of social programs. Social spending has risen at unprecedented rates since the 1950s: https://ourworldindata.org/grapher/social-spending-oecd-longrun https://ourworldindata.org/grapher/social-spending-oecd-long... If the social democratic narrative were true, we would have seen the rate of wage growth rise. The opposite has happened. It turns out social democracy benefits only the public sector unions. A couple anecdotes illuminates the kind of power these unions wield: New York has nearly 300,000 unionized public sector employees receiving over $100,000 a year: https://archive.md/JnJQY https://archive.md/JnJQY In California, emergency workers can retire at 55 with 90% of their pension, that averages $108,000 per year. California now has $1 trillion in pension obligations for its unionized public sector workers. That is where all the social welfare spending is going. >>Not to mention for the poor, a massively volatile speculative asset with astronomical fees is literally the worst thing they could put all their money into. No, the worst thing is lottery tickets: https://www.theatlantic.com/business/archive/2012/03/amazing-the-poorest-households-spend-9-of-their-income-on-lottery-tickets/255304/ https://www.theatlantic.com/business/archive/2012/03/amazing... Tokens on the blockchain on the other hand provide hundreds of thousands of people in the Philippines with a way to make a living, and literally saved many from death during the mass-unemployment created by the lockdown. See the rise of Axie Infinity. And there are plenty of crypto platforms that offer zero/near-zero fees, like Axie's Ronin, which is a near-zero-fee Ethereum sidechain. >>outside people on the OFAC list, which, I would argue, is a good thing. What about innocent people from countries on the OFAC list. Do you think that is a good thing? Acceptable collateral damage? What about WikiLeaks, which was blockaded by the credit card companies, under pressure from US government agencies, after it revealed war crimes? Good thing too? You speak from a position of privilege, to reinforce centralized structures of control that perpetuate that privilege.
- ramchip 5y ago
  > Tokens on the blockchain on the other hand provide hundreds of thousands of people in the Philippines with a way to make a living, and literally saved many from death during the mass-unemployment created by the lockdown. See the rise of Axie Infinity. It's clearly a Ponzi scheme, where new entrants pay a large entry fee ($1k+), which funds the returns of the existing players. Poor people borrowing money to fund other poor people, until the last to join are stuck with the bill (earnings are already crashing). More details in: - https://news.ycombinator.com/item?id=29725845 https://news.ycombinator.com/item?id=29725845 - https://twitter.com/larsiusprime/status/1459191090100244483 https://twitter.com/larsiusprime/status/1459191090100244483 - https://ambcrypto.com/axie-infinity-ronin-blockchain-see-declining-daily-transaction-volumes-sales/ https://ambcrypto.com/axie-infinity-ronin-blockchain-see-dec... - https://www.reddit.com/r/AxieInfinity/comments/odmdrk/how_does_the_whole_axie_infinity_economy_works/h42te41/ https://www.reddit.com/r/AxieInfinity/comments/odmdrk/how_do...
specialist 5y ago
I agree that the biggest problem poor people have is lack of money. > I've never met a single person who had money but couldn't get a bank account... This is an exhaustively documented problem. There absolutely are banking deserts (riffing on the "food desert" phrase). Those pay day loan and 3rd party check cashing services exist (to exploit) those communities which don't have banks, credit unions.
hestefisk 5y ago
I agree with your views in a country like the US where banks are widespread and people have Internet access. However in a country like Indonesia it’s quite different. Only 50% of the population have a bank account, and even if they have a bank account they might not have sufficient credit history to apply for a loan for their business or a home. Banking is much more than just a checking or savings account with a debit card. DeFi theoretically has a lot of potential to disrupt in these countries (as many people own a mobile phone), but it looks like it will be up to the horizontal platforms like Grab and Gojek.
- arcticbull 5y ago
  > Banking is much more than just a checking or savings account with a debit card. DeFi theoretically has a lot of potential to disrupt in these countries (as many people own a mobile phone) You dont need DeFi for that. See M-Pesa.

krainboltgreene 5y ago

> I've never met a single person who had money but couldn't get a bank account* - have you? I don't agree with defi but this is absolutely a problem in a lot of rural america. People with money, who get paid, but without a bank so they have to take their checks to gas stations who take huge fees. That you haven't met someone like this isn't surprising at all.

jbergens 5y ago
This sounds like parts of the US has a problem with checks and a lack of good, digital bank services. I can transfer money and pay my bills with my phone. I can even transfer money to people not having the same bank as I have. I did it today, it took 30s or so and the recipient could immediately see the money on her phone. Where I live we also tend to use cards a LOT. I can pay in almost any store with my debit card and the money is drawn from my bank account right away. It was decades since I've saw a check.
- krainboltgreene 5y ago
  That's a long winded way of saying that you live in New York.
arcticbull 5y ago
Why can't they open an online checking account like Ally which will allow them to deposit a photo of their check free of charge? My understanding is a lot of low-income folks have smartphones as desktop replacements. Is this not a strictly better solution than anything in crypto? I'm also open to postal banking as a solution to this problem, but I'm not really clear on where the system is actually currently failing folks who have money. Are they banned by ChexSystems or something? I get it, "Bank the Unbanked!" is a compelling narrative, but folks seem not to be asking the relevant questions: (1) who are the unbanked exactly and (2) why aren't they banked - specifically - when there's a ton of banks out there, a bunch of which charge nothing.
- krainboltgreene 5y ago
  > Why can't they open an online checking account like Ally which will allow them to deposit a photo of their check free of charge? You have an incredible amount of optimism for both Ally's marketing department and also rural internet. Furthermore, this doesn't solve the cash problem unless you want to pay upwards of $5 just to pull out of an ATM. > folks seem not to be asking the relevant questions This is an incredibly well researched situation affecting a lot of americans. You not knowing isn't the same as this not being well understood.
- JoshTriplett 5y ago
  Many banks, both historically and presently, have pervasive and capricious fees that disproportionately impact people with less money. Both because those fees are large relative to the amount of money they have, and because those fees arise in situations more likely to occur with less money (e.g. overdraft fees, policies that intentionally do withdrawals before deposits to cause overdraft fees, minimum balances, ATM fees, and many others). And furthermore, the institutions more likely to be friendlier to customers with less money are sometimes also institutions on a smaller scale that may have a harder time offering some of the services of larger institutions (e.g. branch/ATM locations, compelling variety of credit and account instruments, investment arms, better online banking experiences). To the extent this is changing, it also has to change in people's perceptions, in a fashion that makes it easier to predict and feel confident in.

CryptoPunk 5y ago

>>It's a lack of social safety net, a lack of unionization, a lack of inflation-adjusted minimum wage, a lack of healthcare. Broadly, a lack of of social programs. Social spending has risen at unprecedented rates since the 1950s: https://ourworldindata.org/grapher/social-spending-oecd-longrun https://ourworldindata.org/grapher/social-spending-oecd-long... If the social democratic narrative were true, we would have seen the rate of wage growth rise. The opposite has happened. It turns out social democracy benefits only the public sector unions. A couple anecdotes illuminates the kind of power these unions wield: New York has nearly 300,000 unionized public sector employees receiving over $100,000 a year: https://archive.md/JnJQY https://archive.md/JnJQY In California, emergency workers can retire at 55 with 90% of their pension, that averages $108,000 per year. California now has $1 trillion in pension obligations for its unionized public sector workers. That is where all the social welfare spending is going. >>Not to mention for the poor, a massively volatile speculative asset with astronomical fees is literally the worst thing they could put all their money into. No, the worst thing is lottery tickets: https://www.theatlantic.com/business/archive/2012/03/amazing-the-poorest-households-spend-9-of-their-income-on-lottery-tickets/255304/ https://www.theatlantic.com/business/archive/2012/03/amazing... Tokens on the blockchain on the other hand provide hundreds of thousands of people in the Philippines with a way to make a living, and literally saved many from death during the mass-unemployment created by the lockdown. See the rise of Axie Infinity. And there are plenty of crypto platforms that offer zero/near-zero fees, like Axie's Ronin, which is a near-zero-fee Ethereum sidechain. >>outside people on the OFAC list, which, I would argue, is a good thing. What about innocent people from countries on the OFAC list. Do you think that is a good thing? Acceptable collateral damage? What about WikiLeaks, which was blockaded by the credit card companies, under pressure from US government agencies, after it revealed war crimes? Good thing too? You speak from a position of privilege, to reinforce centralized structures of control that perpetuate that privilege.

ramchip 5y ago
> Tokens on the blockchain on the other hand provide hundreds of thousands of people in the Philippines with a way to make a living, and literally saved many from death during the mass-unemployment created by the lockdown. See the rise of Axie Infinity. It's clearly a Ponzi scheme, where new entrants pay a large entry fee ($1k+), which funds the returns of the existing players. Poor people borrowing money to fund other poor people, until the last to join are stuck with the bill (earnings are already crashing). More details in: - https://news.ycombinator.com/item?id=29725845 https://news.ycombinator.com/item?id=29725845 - https://twitter.com/larsiusprime/status/1459191090100244483 https://twitter.com/larsiusprime/status/1459191090100244483 - https://ambcrypto.com/axie-infinity-ronin-blockchain-see-declining-daily-transaction-volumes-sales/ https://ambcrypto.com/axie-infinity-ronin-blockchain-see-dec... - https://www.reddit.com/r/AxieInfinity/comments/odmdrk/how_does_the_whole_axie_infinity_economy_works/h42te41/ https://www.reddit.com/r/AxieInfinity/comments/odmdrk/how_do...

specialist 5y ago

I agree that the biggest problem poor people have is lack of money. > I've never met a single person who had money but couldn't get a bank account... This is an exhaustively documented problem. There absolutely are banking deserts (riffing on the "food desert" phrase). Those pay day loan and 3rd party check cashing services exist (to exploit) those communities which don't have banks, credit unions.

hestefisk 5y ago

I agree with your views in a country like the US where banks are widespread and people have Internet access. However in a country like Indonesia it’s quite different. Only 50% of the population have a bank account, and even if they have a bank account they might not have sufficient credit history to apply for a loan for their business or a home. Banking is much more than just a checking or savings account with a debit card. DeFi theoretically has a lot of potential to disrupt in these countries (as many people own a mobile phone), but it looks like it will be up to the horizontal platforms like Grab and Gojek.

arcticbull 5y ago
> Banking is much more than just a checking or savings account with a debit card. DeFi theoretically has a lot of potential to disrupt in these countries (as many people own a mobile phone) You dont need DeFi for that. See M-Pesa.