4 ms·

Well, L2 systems aren't on a blockchain at all, so do they even count? If we get to cherry-pick from whatever money transfer systems exist, it's worth remember

by pavlov 4y ago

Well, L2 systems aren't on a blockchain at all, so do they even count? If we get to cherry-pick from whatever money transfer systems exist, it's worth remembering that bank transfers within the Eurozone area are free and practically immediate. What crypto can beat that? Clearly you don't need cryptocurrency to deliver a service that's ideal for consumers, as regulation has achieved it in Europe.

hericium 4y ago
> it's worth remembering that bank transfers within the Eurozone area are free and practically immediate In theory. Many banks are not using this system and stayed on old SEPA wire transfers: charges split between sender and receiver or covered by sender, 3 work days to process, ability to pay more to speed-up the process by two days etc. It's slow and/or costly.
sumy23 4y ago
I think the right way to look at a block chain is to think about it as a global computer that enables trusted execution on untrusted hardware. At present, this global computer is very weak. Cryptocurrencies are a good first program to implement on this computer because each transaction is essentially just adding and subtracting a few numbers. So yes, in some sense, it's crazy that the cost of adding and subtracting a few numbers costs $20. However, even though these global computers are currently very weak computationally, the new computational model allows for new things to be built. For instance, smart contracts. Using smart contracts and cryptocurrencies, you could easily implement almost every facet of the global financial system. From bank accounts, to money transfers, to bonds, to securities, brokerage services, margin services, options, credit default swaps, etc. Yes, many of these things can be implemented some other way, but blockchains allow anyone with a computer to build something along these lines. And yes, it's nice that the Eurozone regulated free money transfers. But how much work went into building the Eurozone and passing the required regulations? What if you want to write your own options contract? How long would it take to get regulation passed in the EU to allow free options contracts? Blockchains allow you to build a system akin to the entire EU banking infrastructure from your laptop. Even if it's not quite as good as the current system, I think it's still a cool idea.
- Nursie 4y ago
  > Yes, many of these things can be implemented some other way, but blockchains allow anyone with a computer to build something along these lines. Any fraudster that wants to! There are more reasons than technical why such things are limited.
criddell 4y ago
I don't understand why L2 systems are even necessary. There's a relatively well known email exchange between Nakamoto and Mike Hearn in which Nakamoto says: > The existing Visa credit card network processes about 15 million Internet purchases per day worldwide. Bitcoin can already scale much larger than that with existing hardware for a fraction of the cost. If the original design of Bitcoin anticipated Visa-scale transactions for a fraction of the cost, what's the motivation for a L2? I'm assuming Nakamoto wasn't being cheeky when he wrote fraction of the cost. Afterall, 1000/1 is a fraction...
- pavlov 4y ago
  Or maybe Nakamoto was simply full of crap, like people talking up their cryptocurrency schemes tend to be?
  - toolz 4y ago
    I just don't understand why crypto discussions seems to draw out so many rude comments. If satoshi wanted fame and fortune he could have both easily, but there are a ton of early bitcoins that haven't moved - so obviously he wasn't in it for the money or he would've used those coins.
    - shkkmo 4y ago
      Or they lost the key to the wallet before the tokens were worth cashing out.
      - toolz 4y ago
        this is evidence that he wasn't in it for the money. If you came up with an elaborate scam with intentions of hustling people - how likely are you to be wildly successful, but accidentally lose access to the funds you worked so hard for?
        shkkmo 4y ago
        This seems like a post hoc rationalization to support a narrative. Key management is hard and just because people mess it up, it doesn't meam that they weren't serious about using that key. Designing and building novel software is a different skill set than keeping your stuff organized enough to not lose things. I could just as easily come up with a post hoc story that says that the reason that he has never come forward to claim credit is out of extreme embarrassment about the size of the fortune he lost, and that this is evidence that he does care about the money.
DennisP 4y ago
> L2 systems aren't on a blockchain at all The leading L2s on Ethereum are rollups, which store all transactions on chain in compressed form.
randomran01234 4y ago
ZK Rollups are definitely “on a blockchain” and exist as any other smart contract application, like USDC. What they move off-chain is the computation and data storage of a transaction, but verified zk proofs result in the same security guarantees as any other contract on the underlying L1.
forum_ghost 4y ago
Bitcoin solves the problem of frozen fx reserves and seized assets. It's a neutral store of value. the TAM is 400+ trillion. Payments are low margin, low value business. Often even subsidized by the systemic banks. Do you really think it costs zero to secure the entire GDP, and the entire wealth, of an entire economy? zero cost SEPA transactions don't secure the EU economy. The US military and their nuclear weapons do, and they don't cost zero, like a SEPA transactions for a coffee. What's the cost to secure 10 trillion? 100 trillion?
- lottin 4y ago
  A virtual token is literally useless. It's only worth something, so far as it can be traded for actual goods, so the availability of "secured" goods is quite essential as far as the value of cryptographic tokens go.
  - forum_ghost 4y ago
    > availability of "secured" goods What do you mean by that? Backing?
    - lottin 4y ago
      By that I mean not easy to steal by anyone at gunpoint. The point is that money is not wealth. Wealth is the ability to consume goods and services. If you got stranded on a deserted island with a suitcase full of millions you'd still live in extreme poverty despite all your millions. Therefore securing crypto-currencies doesn't replace the need for securing actual wealth. On the contrary, it's an extra cost that its users have to bear, in addition to the costs of securing GDP and the entire economy.
      - forum_ghost 4y ago
        Note that should you be rescued the suit case full of millions will still worth millions. The suitcase, stuffed with medium of exchange, holds value across time. This is the key concept to understand the issue at hand. For a medium of exchange to become useful, it must first become able to hold value, preferably long term, months/years. The only way an asset can do that, if there is demand to hold the asset for long durations, committed long term investors. Bitcoin is an experiment in bootstrapping a neutral money system from scratch. If you look at bitcoins money velocity, it’s much closer to M2, than M1. Thus comparing it to investment assets, or bonds, is much more relevant today than to payment systems. It’s a store of value for now, maybe a little speculative, sure. Once it grows large enough and value becomes more stable, it can become a decent medium of exchange then. This implies market capitalisation in many trillions, and if it proves to be successful: displacement of many other store of value. Negative yield bonds, gold. Maybe even real estate and rental yields on that are actually negative in real terms in many markets. We will see. As such it would represents a cloud economy of sorts with large amounts of wealth stored in it, trillions of dollars. That would require a correspondingly sizeable security budget to protect.

by pavlov 4y ago

hericium 4y ago

> it's worth remembering that bank transfers within the Eurozone area are free and practically immediate In theory. Many banks are not using this system and stayed on old SEPA wire transfers: charges split between sender and receiver or covered by sender, 3 work days to process, ability to pay more to speed-up the process by two days etc. It's slow and/or costly.

sumy23 4y ago

I think the right way to look at a block chain is to think about it as a global computer that enables trusted execution on untrusted hardware. At present, this global computer is very weak. Cryptocurrencies are a good first program to implement on this computer because each transaction is essentially just adding and subtracting a few numbers. So yes, in some sense, it's crazy that the cost of adding and subtracting a few numbers costs $20. However, even though these global computers are currently very weak computationally, the new computational model allows for new things to be built. For instance, smart contracts. Using smart contracts and cryptocurrencies, you could easily implement almost every facet of the global financial system. From bank accounts, to money transfers, to bonds, to securities, brokerage services, margin services, options, credit default swaps, etc. Yes, many of these things can be implemented some other way, but blockchains allow anyone with a computer to build something along these lines. And yes, it's nice that the Eurozone regulated free money transfers. But how much work went into building the Eurozone and passing the required regulations? What if you want to write your own options contract? How long would it take to get regulation passed in the EU to allow free options contracts? Blockchains allow you to build a system akin to the entire EU banking infrastructure from your laptop. Even if it's not quite as good as the current system, I think it's still a cool idea.

Nursie 4y ago
> Yes, many of these things can be implemented some other way, but blockchains allow anyone with a computer to build something along these lines. Any fraudster that wants to! There are more reasons than technical why such things are limited.

criddell 4y ago

I don't understand why L2 systems are even necessary. There's a relatively well known email exchange between Nakamoto and Mike Hearn in which Nakamoto says: > The existing Visa credit card network processes about 15 million Internet purchases per day worldwide. Bitcoin can already scale much larger than that with existing hardware for a fraction of the cost. If the original design of Bitcoin anticipated Visa-scale transactions for a fraction of the cost, what's the motivation for a L2? I'm assuming Nakamoto wasn't being cheeky when he wrote fraction of the cost. Afterall, 1000/1 is a fraction...

pavlov 4y ago
Or maybe Nakamoto was simply full of crap, like people talking up their cryptocurrency schemes tend to be?
- toolz 4y ago
  I just don't understand why crypto discussions seems to draw out so many rude comments. If satoshi wanted fame and fortune he could have both easily, but there are a ton of early bitcoins that haven't moved - so obviously he wasn't in it for the money or he would've used those coins.
  - shkkmo 4y ago
    Or they lost the key to the wallet before the tokens were worth cashing out.
    - toolz 4y ago
      this is evidence that he wasn't in it for the money. If you came up with an elaborate scam with intentions of hustling people - how likely are you to be wildly successful, but accidentally lose access to the funds you worked so hard for?
      - shkkmo 4y ago
        This seems like a post hoc rationalization to support a narrative. Key management is hard and just because people mess it up, it doesn't meam that they weren't serious about using that key. Designing and building novel software is a different skill set than keeping your stuff organized enough to not lose things. I could just as easily come up with a post hoc story that says that the reason that he has never come forward to claim credit is out of extreme embarrassment about the size of the fortune he lost, and that this is evidence that he does care about the money.

DennisP 4y ago

> L2 systems aren't on a blockchain at all The leading L2s on Ethereum are rollups, which store all transactions on chain in compressed form.

randomran01234 4y ago

ZK Rollups are definitely “on a blockchain” and exist as any other smart contract application, like USDC. What they move off-chain is the computation and data storage of a transaction, but verified zk proofs result in the same security guarantees as any other contract on the underlying L1.

forum_ghost 4y ago

Bitcoin solves the problem of frozen fx reserves and seized assets. It's a neutral store of value. the TAM is 400+ trillion. Payments are low margin, low value business. Often even subsidized by the systemic banks. Do you really think it costs zero to secure the entire GDP, and the entire wealth, of an entire economy? zero cost SEPA transactions don't secure the EU economy. The US military and their nuclear weapons do, and they don't cost zero, like a SEPA transactions for a coffee. What's the cost to secure 10 trillion? 100 trillion?

lottin 4y ago
A virtual token is literally useless. It's only worth something, so far as it can be traded for actual goods, so the availability of "secured" goods is quite essential as far as the value of cryptographic tokens go.
- forum_ghost 4y ago
  > availability of "secured" goods What do you mean by that? Backing?
  - lottin 4y ago
    By that I mean not easy to steal by anyone at gunpoint. The point is that money is not wealth. Wealth is the ability to consume goods and services. If you got stranded on a deserted island with a suitcase full of millions you'd still live in extreme poverty despite all your millions. Therefore securing crypto-currencies doesn't replace the need for securing actual wealth. On the contrary, it's an extra cost that its users have to bear, in addition to the costs of securing GDP and the entire economy.
    - forum_ghost 4y ago
      Note that should you be rescued the suit case full of millions will still worth millions. The suitcase, stuffed with medium of exchange, holds value across time. This is the key concept to understand the issue at hand. For a medium of exchange to become useful, it must first become able to hold value, preferably long term, months/years. The only way an asset can do that, if there is demand to hold the asset for long durations, committed long term investors. Bitcoin is an experiment in bootstrapping a neutral money system from scratch. If you look at bitcoins money velocity, it’s much closer to M2, than M1. Thus comparing it to investment assets, or bonds, is much more relevant today than to payment systems. It’s a store of value for now, maybe a little speculative, sure. Once it grows large enough and value becomes more stable, it can become a decent medium of exchange then. This implies market capitalisation in many trillions, and if it proves to be successful: displacement of many other store of value. Negative yield bonds, gold. Maybe even real estate and rental yields on that are actually negative in real terms in many markets. We will see. As such it would represents a cloud economy of sorts with large amounts of wealth stored in it, trillions of dollars. That would require a correspondingly sizeable security budget to protect.