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Crypto market is really sad. It's a novel technical solution. But it can't find a problem where it fits as a good alternative. It's not a good alternative to b

by dudus 5y ago

Crypto market is really sad. It's a novel technical solution. But it can't find a problem where it fits as a good alternative. It's not a good alternative to banks, art collections or web hosting. But Bitcoin is still worth billions, NFT are all the rage and Web3 went from new concept to "trend" in the span of what feels like a week. But even with all the success they don't seem to be convincing many they have any intrinsic value. So here we go again a clearly horrible solution to a problem most don't care about, but I'm sure will make some early adopters rich, and inevitably end in disaster for most.

sergiomattei 5y ago
Yes, completely glossing over the usefulness of digital-native money: instant, verifiable transactions from anywhere in the world, programmable money and low fees. Oh, and how it disrupts the remittances industry, something extremely useful to vulnerable communities with families abroad. I agree that Web3 is mostly a grift, but cryptocurrencies are quite useful already.
- discardedrefuse 5y ago
  It's not instant and the fees aren't always low. I was trying to transfer $10 USD in Bitcoin last May, when the BTC market was going insane, and it was impossible.
  - deleted 5y ago
    [deleted]
  - emerongi 5y ago
    Additionally: can you make cryptocurrency transactions offline? In my opinion that is a crucial part of the "digital cash" idea. I don't know the technical details so it would be nice if someone more knowledgeable could answer. I'll even throw in a scenario that I've encountered: the card readers in a store aren't working, because there is a connection issue. Instead of using cash in my literal physical wallet, I'd like to pay with my digital wallet. Can I conduct my transaction offline with the store?
    - sergiomattei 5y ago
      My perspective: I don’t see bitcoin replacing fiat anytime soon, so for day-to-day transactions, cash works all good! No need to replace it completely. They can coexist. In the scenario you mention, I’d just reach for cash. However, as a protocol for payments/value in the digital world, it’s very compelling.
      - emerongi 5y ago
        If we are aiming to re-think currencies and use cryptocurrencies as the new building block, I feel like it should handle these cases, otherwise we will need to re-do the whole thing again in the future. I'm too lazy to do this multiple times.
    - 37 5y ago
      AFAIK, the blockchain is online, so I can't conceive of a way for an offline transaction. I suppose you could write down your wallet service and/or ID on a piece of paper, then when the store goes back online they trustfully transfer the digital money, but even then one of the parties must be online.
    - macrolime 5y ago
      You can do an offline transaction, but there's no way to prevent double spend until it's online. If you gave some crypto to someone offline, you could double spend it until the recipient is online and publishes the transaction.
  - lukeramsden 5y ago
    Then you can use Bitcoin Lightning, a micropayments network layered on top of Bitcoin, and settled on-chain. There are solutions to these things, it's still just an early market.
    - Yizahi 5y ago
      Oh yeah, that technological marvel/crutch when every single participant must lock permanently a big sums of tokens in advance to each other, and then the system will solve that little easy CS problem called "traveling salesman" in realtime on millions of paths and clients simultaneously. That one? Amazing and really enticing proposal but I'll stick with predatory mastecard for now, tyvm.
- hooande 5y ago
  The remittances industry seems to have doubled since 2017. crypto has done nothing in ten years in terms of disruption https://www.statista.com/outlook/dmo/fintech/digital-payments/digital-remittances/worldwide https://www.statista.com/outlook/dmo/fintech/digital-payment...
- gitfan86 5y ago
  It is exactly the same situation as the Dot Com bubble. Enormous amounts of money and hype are being poured into a new promising technology. So you end up with people convincing themselves that WebVan and Pets.com will be the future of grocery delivery or buying pet products. And today it is "BTC is the ONLY internet Money", "Ethereum will be the ONLY way people can execute smart contracts in the future". Invest Now!
  - smt88 5y ago
    I completely agree with you, but the dotcom ideas you used as examples were ironically great ideas. Grocery delivery is the future (or at least a huge, lucrative chunk of it) and a lot of people do buy pet products online and sometimes even in a subscription model. Chewy.com is a huge business.
    - gitfan86 5y ago
      Right, and public ledgers, digital money, smart contracts will be used by the people in the future, but BTC and ETH prices are as important as WebVan/Pets.com stock prices for that to happen.
      - smt88 5y ago
        Smart contracts are just software, so I agree. Software will be used in the future. I still don't know the value of public, distributed, cryptographic ledgers. They don't seem to solve real-world problems because there is no way to tie them to the real world. They preserve lies just as well as they preserve truths. Digital money is useful, but fiar is already digital.
        gitfan86 5y ago
        BTC is used for bypassing government controls (drugs, money laundering, currency export controls, remittance) There will most likely be demand for that in the future. I'm not saying anyone should invest in crypto, I'm just saying those use cases exist.
- rockatanescu 5y ago
  > Yes, completely glossing over the usefulness of digital-native money: instant, verifiable transactions from anywhere in the world, programmable money and low fees. However, these properties are not exactly specific to "digital-native money": * Instant: banks can transfer money instantly between accounts as long as both accounts belong to the same bank. In Europe I can name Raiffeisen and ING as two examples and I believe that Wells Fargo in the US has instant transfers as long as both accounts are opened at the same bank and probably there are more. And in most case there are no "gas" fees for those transfers. * Verifiable: all bank transactions are verifiable (at least internally, banks are forced to have an audit department) and in all cases you receive a receipt for your transaction. If you want to verify all the transactions yourself, glossing over the severe privacy issues that a blockchain will introduce (once you know the real ID of a wallet, you'll know all the finances of a person), it's not that easy to validate crypto transactions "from anywhere in the world": Ethereum requires more than a TB of space and Solana validator requirements basically point to an expensive server running in a datacenter (at least 128GB of RAM and 300Mbit symmetrical network bandwidth). Even Bitcoin's blockchain is several GB large which is very unwieldy to sync in areas with slow or bad internet connection (yes, DSL is still a thing). * Programmable money: I'm guessing this would be the take on "smart contracts", but this is far for being perfect because you still need to trust that the code in the smart contract triggers the right action. For example, if I were to buy a laptop from somebody using a smart contract I will still need to trust that the smart contract will trigger the entire flow of sending the correct laptop using a courier to my place. A way around it would be to have the owner send the laptop to a third-party and the third-party would have some sort of reputation for correctly implementing the outcome of smart contracts, but we're back again at trusting a central authority and the entire flow could be implemented using regular code, so what's the point of smart contracts? * Low fees: there are a lot of fees associated with cryptocurrency transactions on top of several "blockchain fees" like Ethereum's gas. For example, the service fee for using MetaMask is 0.875% of the transaction, or if I move $1000 from one account to another using MetaMask will cost me $8.75. I currently pay $0 for moving from one account to another one as long as they are opened the same bank. Cryptocurrencies can have some legitimate benefits in specific situations (I'd imagine that transactions between parties in areas with no or very bad/expensive Internet access can be more trustworthy using cryptocurrencies), but I doubt these cases are as frequent as many people claim they are. I'd argue that by far the most interesting use would be to use cryptocurrencies as stores of value and have them regulate as some sort of equity because this would allow Wall Street to do all kinds of funky things with them :-) The best take I've heard was from Michael Saylor of MicroStrategy, who was explaining a couple of months ago how it's much better to invest into Bitcoin because you can easily split it and move it to another country should the tax be too high, while buying a lot of land in New York requires paying a property tax and can even be devalued based on the zoning.
kkjjkgjjgg 5y ago
"problem most don't care about" Just as Chinese citizens seem to be mostly happy about the politics in their country. Maybe that is the actual problem, people not caring about issues like free speech until it is too late. (Julian Assange is still imprisoned in the UK and almost nobody cares)
- cmeacham98 5y ago
  Even if I assume you're completely correct and that is a problem, they're still totally correct that cryptocurrencies are solving problems that almost nobody cares about.
  - kkjjkgjjgg 5y ago
    And the problem is centralization, which facilitates censorship and totalitarian control. That nobody cares does not imply that it doesn't matter. I don't want to bash China specifically, it just happens to be the first example that comes to my mind. So for example nobody cares that millions of Uyghurs are being enslaved in China, but that does not imply that it is not important. (Or take the example of Assange I mentioned - nobody cares that the UK locked him away without good cause). Also most people don't really care about economics or how money or the stock market works. They just find themselves suddenly with a devalued currency or out of a job.
    - acdha 5y ago
      > And the problem is centralization, which facilitates censorship and totalitarian control. This is a gross misunderstanding of both the current banking system (which is decentralized) and the degree to which using a slow database doesn’t prevent legal actions. Blockchains are very easy to monitor and censor: ideal for an authoritarian government to get a signed confession for every disapproved transaction you make, and a high-volume always-on network is trivially blocked should they care to.
      - fullstackchris 5y ago

by dudus 5y ago

sergiomattei 5y ago

Yes, completely glossing over the usefulness of digital-native money: instant, verifiable transactions from anywhere in the world, programmable money and low fees. Oh, and how it disrupts the remittances industry, something extremely useful to vulnerable communities with families abroad. I agree that Web3 is mostly a grift, but cryptocurrencies are quite useful already.

discardedrefuse 5y ago
It's not instant and the fees aren't always low. I was trying to transfer $10 USD in Bitcoin last May, when the BTC market was going insane, and it was impossible.
- deleted 5y ago
  [deleted]
- emerongi 5y ago
  Additionally: can you make cryptocurrency transactions offline? In my opinion that is a crucial part of the "digital cash" idea. I don't know the technical details so it would be nice if someone more knowledgeable could answer. I'll even throw in a scenario that I've encountered: the card readers in a store aren't working, because there is a connection issue. Instead of using cash in my literal physical wallet, I'd like to pay with my digital wallet. Can I conduct my transaction offline with the store?
  - sergiomattei 5y ago
    My perspective: I don’t see bitcoin replacing fiat anytime soon, so for day-to-day transactions, cash works all good! No need to replace it completely. They can coexist. In the scenario you mention, I’d just reach for cash. However, as a protocol for payments/value in the digital world, it’s very compelling.
    - emerongi 5y ago
      If we are aiming to re-think currencies and use cryptocurrencies as the new building block, I feel like it should handle these cases, otherwise we will need to re-do the whole thing again in the future. I'm too lazy to do this multiple times.
  - 37 5y ago
    AFAIK, the blockchain is online, so I can't conceive of a way for an offline transaction. I suppose you could write down your wallet service and/or ID on a piece of paper, then when the store goes back online they trustfully transfer the digital money, but even then one of the parties must be online.
  - macrolime 5y ago
    You can do an offline transaction, but there's no way to prevent double spend until it's online. If you gave some crypto to someone offline, you could double spend it until the recipient is online and publishes the transaction.
- lukeramsden 5y ago
  Then you can use Bitcoin Lightning, a micropayments network layered on top of Bitcoin, and settled on-chain. There are solutions to these things, it's still just an early market.
  - Yizahi 5y ago
    Oh yeah, that technological marvel/crutch when every single participant must lock permanently a big sums of tokens in advance to each other, and then the system will solve that little easy CS problem called "traveling salesman" in realtime on millions of paths and clients simultaneously. That one? Amazing and really enticing proposal but I'll stick with predatory mastecard for now, tyvm.
hooande 5y ago
The remittances industry seems to have doubled since 2017. crypto has done nothing in ten years in terms of disruption https://www.statista.com/outlook/dmo/fintech/digital-payments/digital-remittances/worldwide https://www.statista.com/outlook/dmo/fintech/digital-payment...
gitfan86 5y ago
It is exactly the same situation as the Dot Com bubble. Enormous amounts of money and hype are being poured into a new promising technology. So you end up with people convincing themselves that WebVan and Pets.com will be the future of grocery delivery or buying pet products. And today it is "BTC is the ONLY internet Money", "Ethereum will be the ONLY way people can execute smart contracts in the future". Invest Now!
- smt88 5y ago
  I completely agree with you, but the dotcom ideas you used as examples were ironically great ideas. Grocery delivery is the future (or at least a huge, lucrative chunk of it) and a lot of people do buy pet products online and sometimes even in a subscription model. Chewy.com is a huge business.
  - gitfan86 5y ago
    Right, and public ledgers, digital money, smart contracts will be used by the people in the future, but BTC and ETH prices are as important as WebVan/Pets.com stock prices for that to happen.
    - smt88 5y ago
      Smart contracts are just software, so I agree. Software will be used in the future. I still don't know the value of public, distributed, cryptographic ledgers. They don't seem to solve real-world problems because there is no way to tie them to the real world. They preserve lies just as well as they preserve truths. Digital money is useful, but fiar is already digital.
      - gitfan86 5y ago
        BTC is used for bypassing government controls (drugs, money laundering, currency export controls, remittance) There will most likely be demand for that in the future. I'm not saying anyone should invest in crypto, I'm just saying those use cases exist.
rockatanescu 5y ago
> Yes, completely glossing over the usefulness of digital-native money: instant, verifiable transactions from anywhere in the world, programmable money and low fees. However, these properties are not exactly specific to "digital-native money": * Instant: banks can transfer money instantly between accounts as long as both accounts belong to the same bank. In Europe I can name Raiffeisen and ING as two examples and I believe that Wells Fargo in the US has instant transfers as long as both accounts are opened at the same bank and probably there are more. And in most case there are no "gas" fees for those transfers. * Verifiable: all bank transactions are verifiable (at least internally, banks are forced to have an audit department) and in all cases you receive a receipt for your transaction. If you want to verify all the transactions yourself, glossing over the severe privacy issues that a blockchain will introduce (once you know the real ID of a wallet, you'll know all the finances of a person), it's not that easy to validate crypto transactions "from anywhere in the world": Ethereum requires more than a TB of space and Solana validator requirements basically point to an expensive server running in a datacenter (at least 128GB of RAM and 300Mbit symmetrical network bandwidth). Even Bitcoin's blockchain is several GB large which is very unwieldy to sync in areas with slow or bad internet connection (yes, DSL is still a thing). * Programmable money: I'm guessing this would be the take on "smart contracts", but this is far for being perfect because you still need to trust that the code in the smart contract triggers the right action. For example, if I were to buy a laptop from somebody using a smart contract I will still need to trust that the smart contract will trigger the entire flow of sending the correct laptop using a courier to my place. A way around it would be to have the owner send the laptop to a third-party and the third-party would have some sort of reputation for correctly implementing the outcome of smart contracts, but we're back again at trusting a central authority and the entire flow could be implemented using regular code, so what's the point of smart contracts? * Low fees: there are a lot of fees associated with cryptocurrency transactions on top of several "blockchain fees" like Ethereum's gas. For example, the service fee for using MetaMask is 0.875% of the transaction, or if I move $1000 from one account to another using MetaMask will cost me $8.75. I currently pay $0 for moving from one account to another one as long as they are opened the same bank. Cryptocurrencies can have some legitimate benefits in specific situations (I'd imagine that transactions between parties in areas with no or very bad/expensive Internet access can be more trustworthy using cryptocurrencies), but I doubt these cases are as frequent as many people claim they are. I'd argue that by far the most interesting use would be to use cryptocurrencies as stores of value and have them regulate as some sort of equity because this would allow Wall Street to do all kinds of funky things with them :-) The best take I've heard was from Michael Saylor of MicroStrategy, who was explaining a couple of months ago how it's much better to invest into Bitcoin because you can easily split it and move it to another country should the tax be too high, while buying a lot of land in New York requires paying a property tax and can even be devalued based on the zoning.

kkjjkgjjgg 5y ago

"problem most don't care about" Just as Chinese citizens seem to be mostly happy about the politics in their country. Maybe that is the actual problem, people not caring about issues like free speech until it is too late. (Julian Assange is still imprisoned in the UK and almost nobody cares)

cmeacham98 5y ago
Even if I assume you're completely correct and that is a problem, they're still totally correct that cryptocurrencies are solving problems that almost nobody cares about.
- kkjjkgjjgg 5y ago
  And the problem is centralization, which facilitates censorship and totalitarian control. That nobody cares does not imply that it doesn't matter. I don't want to bash China specifically, it just happens to be the first example that comes to my mind. So for example nobody cares that millions of Uyghurs are being enslaved in China, but that does not imply that it is not important. (Or take the example of Assange I mentioned - nobody cares that the UK locked him away without good cause). Also most people don't really care about economics or how money or the stock market works. They just find themselves suddenly with a devalued currency or out of a job.
  - acdha 5y ago
    > And the problem is centralization, which facilitates censorship and totalitarian control. This is a gross misunderstanding of both the current banking system (which is decentralized) and the degree to which using a slow database doesn’t prevent legal actions. Blockchains are very easy to monitor and censor: ideal for an authoritarian government to get a signed confession for every disapproved transaction you make, and a high-volume always-on network is trivially blocked should they care to.
    - fullstackchris 5y ago