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Crypto's biggest friction point imo has been that people are used to interacting [primarily with centralized services. Average people don't want to manage their

Crypto's biggest friction point imo has been that people are used to interacting [primarily with centralized services. Average people don't want to manage their own crypto wallet because they aren't used to being the sole person responsible for managing things like that. They don't want all their money to be tied to a single computer, or QR code, or device, they want it tied to an account held by a big company, where all they have to do is prove who they are to access their stuff. Because of this habit it feels like decentralized services will always end up as a collection of siloed centralized services. And with centralized services you get things like this data selling. Unless there's a paradigm shift in how non-technical people interact with decentralized services things like this are going to keep happening. That said, they're saying they're only providing publicly available data to ICE, but if it's publicly available and non-identifiable, why does ICE even need it, and why wouldn't they be able to get it themselves? (I'm actually asking, if you know I'd love to hear).

cortesoft 4y ago
I think you are wrong to say this is just because of a ‘habit’ people have around managing their money; I would say it is more of a preference. It isn’t that people are just USED to those things, they actually want them.
tomc1985 4y ago
Why must we in software constantly cater to "average people"? Screw them. The everyman ruined crypto just like the everyman ruined software.
bombcar 4y ago
People are used to "manage it myself money" - it's called cash and most people do not want to carry large amounts of it around or have it at home. And cash has significant security advantages over crypto in that it's very hard to remotely steal the dollars from someone's physical wallet or mattress; even if it is relatively easy to just walk up and take them.
- deleted 4y ago
  [deleted]
- wyager 4y ago
  Are you joking, or do you really think that cash has superior security properties to asymmetric key management? It's a lot easier to steal my cash, or my bank balance, or my securities, or any other physical or fiat asset I own, than it is to steal even moderately-secured Bitcoins.
- deleted 4y ago
  [deleted]
- ryanmcbride 4y ago
  When I was writing my comment initially I wrote a comparison between individual crypto wallets and cash, and how centralized banks spawned from people not wanting to be the only one responsible for their large amounts of cash, hence banks, but I removed it because my comment was already running long. We're totally on the same page. Edit: Also, I know cash is the governmental evolution of bank notes which didn't exist before banks, and that the original decentralized currency would be like, pinches of gold or whatever.
- azov 4y ago
  On the other hand it’s hard (and illegal) to create backup copies of cash :)
  - bombcar 4y ago
    There's a 51% defense that's available, however; if you have 51% of the bill or such you can get it replaced! https://www.frbservices.org/assets/financial-services/cash/federal-reserve-fitness-guidelines.pdf https://www.frbservices.org/assets/financial-services/cash/f... https://www.moneyfactory.gov/services/currencyredemption.html https://www.moneyfactory.gov/services/currencyredemption.htm... (If the government had a sense of humor that would be moneyprinter.gov heh)
    - nybble41 4y ago
madeofpalk 4y ago
> why does ICE even need it, and why wouldn't they be able to get it themselves? (I'm actually asking, if you know I'd love to hear). ICE doesn't know how to get it and Coinbase does, probably. HTML is free, yet it's common for companies to hire other companies to build with it.
- rodgerd 4y ago
  US law enforcement have been using data brokers to do an end run around requirements for warrants and other elements of due process for a while, as well as getting the data cheaply; I wouldn't be surprised if those drivers exist here.
babypuncher 4y ago
It's bigger than that. I think for most people, decentralization is an anti-feature. People do not want all their money to disappear because they lost their laptop on the subway. Being able to call your bank or credit union and have them freeze your cards, reverse fraudulent charges, and restore access to your account is a good thing.
- wyager 4y ago
  No one leaves all their Bitcoin on a laptop. Even casual users today most likely have a backup of some kind. The process is easy now; buy a hardware wallet or use a phone app, write down the backup words, done. > Being able to call your bank or credit union and have them freeze your cards, reverse fraudulent charges The only reason I've ever had to do this is because traditional payments security is so shitty. Forgive me if I'm not impressed that the fiat payments system has measures to deal with problems that it created. No one can make a fraudulent charge on my Bitcoin wallet. The last time Chase detected a fraudulent charge on my credit card, they helpfully did a chargeback on a bunch of other random non-fraudulent transactions without asking me, which led to many hours of bullshit for me to deal with. I had to move insurance companies because progressive stopped letting me pay with a credit card.
- czhu12 4y ago
  Well the promise of crypto is that it can prevent nefarious government surveillance, censorship, inflationary policies, etc. If the HN crowd could temporarily look past how crypto is used today to what it could theoretically be, I wonder if more productive conversations could be had.
- mbesto 4y ago
  This is just more evidence that crypto is just re-realizing 200 years of the development of modern finance.
  - shreyshnaccount 4y ago
    and remaking scams from before banking
TrapLord_Rhodo 4y ago
Mr. Gensler put it succinctly; Every large system trends towards centralization. The crypto economy has slowly started to work its way into the traditional finance system. The only thing that crypto is really good for is having an auditable system of account, which isn't possible in the current financial system with centralized creation of debt. >where all they have to do is prove who they are to access their stuff. My prediction is that crypto does indeed become centralized between a few wallets & those centralized wallets can have some form of 'Verification' for reinstating lost keys. > it's publicly available and non-identifiable, Because they can combine it with their massive databases and make it identifiable is my guess.
- bendtheblock 4y ago
  agreed, but consolidation in this way is a property of _capitalism_, not of tech
  - TrapLord_Rhodo 4y ago
    I would disagree tremendously based on the centralization of tech in search, storage, social & hardware.
    - bendtheblock 4y ago
      What about JP Morgan and the Railroad Trusts? The big 4 accounting firms? Big pharma? The Magic Circle of Law Firms? I could keep going.
      - TrapLord_Rhodo 4y ago
        That all of those systems are extremely centralized? i don't get your point on this one as it seems to reaffirm my comment.
        bendtheblock 4y ago
        The centralized nature of these oligopolies is a property of capitalism, i.e. capital consolidates power. You are saying that search, storage etc are centralised because of the tech? Why are they any more centralised than the other (pre-internet) examples I mentioned?
bogomipz 4y ago
>" That said, they're saying they're only providing publicly available data to ICE, but if it's publicly available and non-identifiable, why does ICE even need it, and why wouldn't they be able to get it themselves?" From the linked Intercept article: >"Homeland Security Investigations, the division of ICE that purchased the Coinbase tool, is tasked not only with immigration-related matters, aiding migrant raids and deportation operations, but broader transnational crimes as well,..." One possibility is that ICE could use this to trace the source of remittances being sent back to undocumented worker's home countries. The wire transfer fees are known to be extortionate and there's many crypto exchanges that see an opportunity in disrupting wire transfers for remittances.[1] If this happens then I could see this of being of interest to ICE. As to "Why wouldn't they be able to get it themselves", it's probably just pure convenience. It's probably more attractive to just spend tax payer money on some expensive off the shelf solution Incidentally I found this paragraph from the linked Intercept piece pretty damning: >"The Coinbase Tracer tool itself was birthed in controversy. In 2019, Motherboard reported that Neutrino, a blockchain-analysis firm the company acquired in order to create Coinbase Tracer, “was founded by three former employees of Hacking Team, a controversial Italian surveillance vendor that was caught several times selling spyware to governments with dubious human rights records, such as Ethiopia, Saudi Arabia, and Sudan.” Following public outcry, Coinbase announced these staffers would “transition out” of the company." [1] https://www.coindesk.com/layer2/paymentsweek/2022/04/27/mexican-remittances-are-the-continents-largest-crypto-companies-want-a-cut/ https://www.coindesk.com/layer2/paymentsweek/2022/04/27/mexi...
- mandevil 4y ago
  Almost certainly the is the OTHER half of ICE: ICE is two organizations, Enforcement and Removal Operations (what is widely thought of as ICE, they focus on civil deportations) and Homeland Security Investigations (HSI). HSI is targeting actual crimes that occur across borders, not deportations. So international money laundering, plus smuggling goods, drugs, people, etc. As a quirk, they are the agency that brings the most possession and distribution of underage sexual materials charges against US citizens (because so much of that involves bouncing to foreign servers etc.). They are a legitimate law enforcement agency that focuses on crime that goes across borders, and their interest in the blockchain should be obvious and clear- pretty much every crime I listed above is currently being done on the blockchain. HSI has wanted to separate from ERO for years, because they feel that no one outside of ICE understands the difference, but it has not happened. I only understand the difference because I spent a few months supporting HSI (and only HSI) as a government contractor, and everyone I interacted with from HSI went to great pains to differentiate themselves from ERO, and clearly considered themselves better than ERO.
opportune 4y ago
Decentralized just means that you can roll your own if you want to. IIRC coinbase is just selling a chainalysis tool. ICE is stupid, they aren't going to be able to convert a blockchain into a graph of transactions that lets them track payments from one wallet to another on their own - they are going to buy a tool off the shelf to help them do that.
- px43 4y ago
  It would probably be more stupid if they tried to build their own.
  - dieselgate 4y ago
    yeah just from a bottom line perspective this seems valid, think the article says it was $29,000 for the software? doesn't seem too high
zimbatm 4y ago
Even technical people. Look how quickly we rushed to re-centralize Git.
luxuryballs 4y ago
That seems fine to me, it’s well worth it to have the option for freedom and control even if it means also having the option of a third party service for the less adventurous types.
ErikVandeWater 4y ago
The biggest friction point for me was being required to verify my ID to create an account for most crypto services. If I can't be anonymous with crypto, I see no reason to go through the hassle of adding a new payment method to my wallet. The fact that it is so difficult to avoid disclosing my personal information tells me just about everyone getting into crypto right now is a speculator.
bpicolo 4y ago
] had to close the bracket
idiotsecant 4y ago
There is definitely a level in between 'all my stuff is owned by coinbase' and 'all my stuff is owned by me, behind a private key I have to manage'. For example, there are non-custodial wallets where the wallet is still yours and can't be claimed or blocked by some third party that do have social recovery mechanisms that just require you to trust a few people in your life to cooperate to help you if you lose your wallet. I think these kinds of services are going to be very useful if crypto achieves wide adoption. https://www.argent.xyz/faq/ https://www.argent.xyz/faq/
- thinkmassive 4y ago
  One very interesting technology for semi-trusted setups in the Bitcoin space is federated Chaumian mints[0]. This provides the best of both worlds: positive user experience (especially for less technical users) and reduction of overall centralization. An implementation called MiniMint[1] is already in the works. 0: https://fedimint.org/ https://fedimint.org/ 1: https://github.com/fedimint/minimint https://github.com/fedimint/minimint
whatisweb3 4y ago
It is easier to build centralized on top of decentralized than the other way around. This is the whole idea. People trend to centralization but it doesn’t mean: let’s give up on decentralization and just give one company, or a select few, the keys to the entire kingdom. besides, as uximproves it will be easy to just use the blockchain directly. like using an on-chain long or short position, or staking some value, rather than only doing it on a centralized exchange.
- bendtheblock 4y ago
  but why? what advantage is there to using the slowest ledger ever created?
  - int_19h 4y ago
    Not having a single country control the currency that underpins all global markets, for starters.
  - whatisweb3 4y ago
    Zk rollups are about as fast as visa network - and recursive zk snarks can scale further if needed. The benefit is that they inherit the security of the main network - users can withdraw tokens from them trustlessly, and at no point can the rollup owner steal user funds or block them from withdrawal. For financial services like lending and swaps this is great and avoids some of the CeFi and CEX problems we are seeing. For other apps like art sales, public groups, and ENS domain name aliases, it allows ownership of assets to be held non custodially rather than a single company’s servers and records.
lewisl9029 4y ago
This really is the eternal struggle of all decentralized technology: They all eventually gravitate towards centralization as they gain mainstream appeal, as the very tangible competitive advantages from networks effects and economies of scale win over the mostly philosophical benefits of decentralization that have always failed to sway the masses. We see this play out time and again, with email, git, and are already starting to see the same pattern emerge with cryptocurrencies. Though that is not to say there is no benefit to having decentralized technologies. The fact remains that centralized platforms built on top of decentralized technology have a much harder time locking users in due to the low switching costs enabled by the underlying tech. This is why products like BitBucket and GitLab are still viable today despite the undeniable dominance of GitHub, and similarly alternative email providers like Fastmail and Outlook in the age of Gmail. We rarely see this in markets built on top of centralized tech. In social networks, for instance, there really isn't any viable competitor to platforms like Facebook and Twitter because switching isn't possible without losing all of your investments in the product. This low switching cost makes upstarts more viable alternatives compared to in markets built on top of centralized tech, and keeps incumbents on their toes and forces them to keep innovating in order to stay dominant instead of just simply riding high on the strength of their moats. As such I do still think the pursuit of decentralized technology is worthwhile, even if a large degree of centralization in itself might be all but inevitable in the long term.

cortesoft 4y ago

I think you are wrong to say this is just because of a ‘habit’ people have around managing their money; I would say it is more of a preference. It isn’t that people are just USED to those things, they actually want them.

tomc1985 4y ago

Why must we in software constantly cater to "average people"? Screw them. The everyman ruined crypto just like the everyman ruined software.

bombcar 4y ago

People are used to "manage it myself money" - it's called cash and most people do not want to carry large amounts of it around or have it at home. And cash has significant security advantages over crypto in that it's very hard to remotely steal the dollars from someone's physical wallet or mattress; even if it is relatively easy to just walk up and take them.

deleted 4y ago
[deleted]
wyager 4y ago
Are you joking, or do you really think that cash has superior security properties to asymmetric key management? It's a lot easier to steal my cash, or my bank balance, or my securities, or any other physical or fiat asset I own, than it is to steal even moderately-secured Bitcoins.
deleted 4y ago
[deleted]
ryanmcbride 4y ago
When I was writing my comment initially I wrote a comparison between individual crypto wallets and cash, and how centralized banks spawned from people not wanting to be the only one responsible for their large amounts of cash, hence banks, but I removed it because my comment was already running long. We're totally on the same page. Edit: Also, I know cash is the governmental evolution of bank notes which didn't exist before banks, and that the original decentralized currency would be like, pinches of gold or whatever.
azov 4y ago
On the other hand it’s hard (and illegal) to create backup copies of cash :)
- bombcar 4y ago
  There's a 51% defense that's available, however; if you have 51% of the bill or such you can get it replaced! https://www.frbservices.org/assets/financial-services/cash/federal-reserve-fitness-guidelines.pdf https://www.frbservices.org/assets/financial-services/cash/f... https://www.moneyfactory.gov/services/currencyredemption.html https://www.moneyfactory.gov/services/currencyredemption.htm... (If the government had a sense of humor that would be moneyprinter.gov heh)
  - nybble41 4y ago

madeofpalk 4y ago

> why does ICE even need it, and why wouldn't they be able to get it themselves? (I'm actually asking, if you know I'd love to hear). ICE doesn't know how to get it and Coinbase does, probably. HTML is free, yet it's common for companies to hire other companies to build with it.

rodgerd 4y ago
US law enforcement have been using data brokers to do an end run around requirements for warrants and other elements of due process for a while, as well as getting the data cheaply; I wouldn't be surprised if those drivers exist here.

babypuncher 4y ago

It's bigger than that. I think for most people, decentralization is an anti-feature. People do not want all their money to disappear because they lost their laptop on the subway. Being able to call your bank or credit union and have them freeze your cards, reverse fraudulent charges, and restore access to your account is a good thing.

wyager 4y ago
No one leaves all their Bitcoin on a laptop. Even casual users today most likely have a backup of some kind. The process is easy now; buy a hardware wallet or use a phone app, write down the backup words, done. > Being able to call your bank or credit union and have them freeze your cards, reverse fraudulent charges The only reason I've ever had to do this is because traditional payments security is so shitty. Forgive me if I'm not impressed that the fiat payments system has measures to deal with problems that it created. No one can make a fraudulent charge on my Bitcoin wallet. The last time Chase detected a fraudulent charge on my credit card, they helpfully did a chargeback on a bunch of other random non-fraudulent transactions without asking me, which led to many hours of bullshit for me to deal with. I had to move insurance companies because progressive stopped letting me pay with a credit card.
czhu12 4y ago
Well the promise of crypto is that it can prevent nefarious government surveillance, censorship, inflationary policies, etc. If the HN crowd could temporarily look past how crypto is used today to what it could theoretically be, I wonder if more productive conversations could be had.
mbesto 4y ago
This is just more evidence that crypto is just re-realizing 200 years of the development of modern finance.
- shreyshnaccount 4y ago
  and remaking scams from before banking

TrapLord_Rhodo 4y ago

Mr. Gensler put it succinctly; Every large system trends towards centralization. The crypto economy has slowly started to work its way into the traditional finance system. The only thing that crypto is really good for is having an auditable system of account, which isn't possible in the current financial system with centralized creation of debt. >where all they have to do is prove who they are to access their stuff. My prediction is that crypto does indeed become centralized between a few wallets & those centralized wallets can have some form of 'Verification' for reinstating lost keys. > it's publicly available and non-identifiable, Because they can combine it with their massive databases and make it identifiable is my guess.

bendtheblock 4y ago
agreed, but consolidation in this way is a property of _capitalism_, not of tech
- TrapLord_Rhodo 4y ago
  I would disagree tremendously based on the centralization of tech in search, storage, social & hardware.
  - bendtheblock 4y ago
    What about JP Morgan and the Railroad Trusts? The big 4 accounting firms? Big pharma? The Magic Circle of Law Firms? I could keep going.
    - TrapLord_Rhodo 4y ago
      That all of those systems are extremely centralized? i don't get your point on this one as it seems to reaffirm my comment.
      - bendtheblock 4y ago
        The centralized nature of these oligopolies is a property of capitalism, i.e. capital consolidates power. You are saying that search, storage etc are centralised because of the tech? Why are they any more centralised than the other (pre-internet) examples I mentioned?

bogomipz 4y ago

>" That said, they're saying they're only providing publicly available data to ICE, but if it's publicly available and non-identifiable, why does ICE even need it, and why wouldn't they be able to get it themselves?" From the linked Intercept article: >"Homeland Security Investigations, the division of ICE that purchased the Coinbase tool, is tasked not only with immigration-related matters, aiding migrant raids and deportation operations, but broader transnational crimes as well,..." One possibility is that ICE could use this to trace the source of remittances being sent back to undocumented worker's home countries. The wire transfer fees are known to be extortionate and there's many crypto exchanges that see an opportunity in disrupting wire transfers for remittances.[1] If this happens then I could see this of being of interest to ICE. As to "Why wouldn't they be able to get it themselves", it's probably just pure convenience. It's probably more attractive to just spend tax payer money on some expensive off the shelf solution Incidentally I found this paragraph from the linked Intercept piece pretty damning: >"The Coinbase Tracer tool itself was birthed in controversy. In 2019, Motherboard reported that Neutrino, a blockchain-analysis firm the company acquired in order to create Coinbase Tracer, “was founded by three former employees of Hacking Team, a controversial Italian surveillance vendor that was caught several times selling spyware to governments with dubious human rights records, such as Ethiopia, Saudi Arabia, and Sudan.” Following public outcry, Coinbase announced these staffers would “transition out” of the company." [1] https://www.coindesk.com/layer2/paymentsweek/2022/04/27/mexican-remittances-are-the-continents-largest-crypto-companies-want-a-cut/ https://www.coindesk.com/layer2/paymentsweek/2022/04/27/mexi...

mandevil 4y ago
Almost certainly the is the OTHER half of ICE: ICE is two organizations, Enforcement and Removal Operations (what is widely thought of as ICE, they focus on civil deportations) and Homeland Security Investigations (HSI). HSI is targeting actual crimes that occur across borders, not deportations. So international money laundering, plus smuggling goods, drugs, people, etc. As a quirk, they are the agency that brings the most possession and distribution of underage sexual materials charges against US citizens (because so much of that involves bouncing to foreign servers etc.). They are a legitimate law enforcement agency that focuses on crime that goes across borders, and their interest in the blockchain should be obvious and clear- pretty much every crime I listed above is currently being done on the blockchain. HSI has wanted to separate from ERO for years, because they feel that no one outside of ICE understands the difference, but it has not happened. I only understand the difference because I spent a few months supporting HSI (and only HSI) as a government contractor, and everyone I interacted with from HSI went to great pains to differentiate themselves from ERO, and clearly considered themselves better than ERO.

opportune 4y ago

Decentralized just means that you can roll your own if you want to. IIRC coinbase is just selling a chainalysis tool. ICE is stupid, they aren't going to be able to convert a blockchain into a graph of transactions that lets them track payments from one wallet to another on their own - they are going to buy a tool off the shelf to help them do that.

px43 4y ago
It would probably be more stupid if they tried to build their own.
- dieselgate 4y ago
  yeah just from a bottom line perspective this seems valid, think the article says it was $29,000 for the software? doesn't seem too high

zimbatm 4y ago

Even technical people. Look how quickly we rushed to re-centralize Git.

luxuryballs 4y ago

That seems fine to me, it’s well worth it to have the option for freedom and control even if it means also having the option of a third party service for the less adventurous types.

ErikVandeWater 4y ago

The biggest friction point for me was being required to verify my ID to create an account for most crypto services. If I can't be anonymous with crypto, I see no reason to go through the hassle of adding a new payment method to my wallet. The fact that it is so difficult to avoid disclosing my personal information tells me just about everyone getting into crypto right now is a speculator.

bpicolo 4y ago

] had to close the bracket

idiotsecant 4y ago

There is definitely a level in between 'all my stuff is owned by coinbase' and 'all my stuff is owned by me, behind a private key I have to manage'. For example, there are non-custodial wallets where the wallet is still yours and can't be claimed or blocked by some third party that do have social recovery mechanisms that just require you to trust a few people in your life to cooperate to help you if you lose your wallet. I think these kinds of services are going to be very useful if crypto achieves wide adoption. https://www.argent.xyz/faq/ https://www.argent.xyz/faq/

thinkmassive 4y ago
One very interesting technology for semi-trusted setups in the Bitcoin space is federated Chaumian mints[0]. This provides the best of both worlds: positive user experience (especially for less technical users) and reduction of overall centralization. An implementation called MiniMint[1] is already in the works. 0: https://fedimint.org/ https://fedimint.org/ 1: https://github.com/fedimint/minimint https://github.com/fedimint/minimint

whatisweb3 4y ago

It is easier to build centralized on top of decentralized than the other way around. This is the whole idea. People trend to centralization but it doesn’t mean: let’s give up on decentralization and just give one company, or a select few, the keys to the entire kingdom. besides, as uximproves it will be easy to just use the blockchain directly. like using an on-chain long or short position, or staking some value, rather than only doing it on a centralized exchange.

bendtheblock 4y ago
but why? what advantage is there to using the slowest ledger ever created?
- int_19h 4y ago
  Not having a single country control the currency that underpins all global markets, for starters.
- whatisweb3 4y ago
  Zk rollups are about as fast as visa network - and recursive zk snarks can scale further if needed. The benefit is that they inherit the security of the main network - users can withdraw tokens from them trustlessly, and at no point can the rollup owner steal user funds or block them from withdrawal. For financial services like lending and swaps this is great and avoids some of the CeFi and CEX problems we are seeing. For other apps like art sales, public groups, and ENS domain name aliases, it allows ownership of assets to be held non custodially rather than a single company’s servers and records.

lewisl9029 4y ago

This really is the eternal struggle of all decentralized technology: They all eventually gravitate towards centralization as they gain mainstream appeal, as the very tangible competitive advantages from networks effects and economies of scale win over the mostly philosophical benefits of decentralization that have always failed to sway the masses. We see this play out time and again, with email, git, and are already starting to see the same pattern emerge with cryptocurrencies. Though that is not to say there is no benefit to having decentralized technologies. The fact remains that centralized platforms built on top of decentralized technology have a much harder time locking users in due to the low switching costs enabled by the underlying tech. This is why products like BitBucket and GitLab are still viable today despite the undeniable dominance of GitHub, and similarly alternative email providers like Fastmail and Outlook in the age of Gmail. We rarely see this in markets built on top of centralized tech. In social networks, for instance, there really isn't any viable competitor to platforms like Facebook and Twitter because switching isn't possible without losing all of your investments in the product. This low switching cost makes upstarts more viable alternatives compared to in markets built on top of centralized tech, and keeps incumbents on their toes and forces them to keep innovating in order to stay dominant instead of just simply riding high on the strength of their moats. As such I do still think the pursuit of decentralized technology is worthwhile, even if a large degree of centralization in itself might be all but inevitable in the long term.