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But that's the point, crypto is a coordination mechanism that in most cases serves as an alternative when you don't have effective and trustworthy centralized i
by dcolkitt 4y ago
But that's the point, crypto is a coordination mechanism that in most cases serves as an alternative when you don't have effective and trustworthy centralized institutions. It's pretty clear that (in this case) European financial regulators did a good job coordinating an effective and efficient electronic money transmission system.
But the whole world is not Sweden. Even in America, which is relatively first world with relatively decent institutions, our regulators failed to coordinate a decent electronic money transmission system. Now imagine being in Turkey or LatAm or Sri Lanka. (Or even just being in Europe and needing to interface with anywhere outside the European utopia.) Agree that decentralized protocols come with many inherent inefficiencies and frictions. But when institutions fail, the only alternative are decentralized protocols.
In many ways I see the pro- vs. anti- crypto division coming down to how much people believe in institutions. Most crypto criticisms come down to an appeal to just focus on building better institutions rather than waste mountains of talent on overly complex decentralized protocols. "Instead of all this on-chain stablecoin nonsense, why don't we focus our efforts on electing better financial regulators, who can bring European like money transfers to North America and eventually the globe?"
Whereas I think pro-crypto people (myself included), tend to think of any attempts to change public policy as /dev/null. Most of the world is saddled with horribly dysfunctional institutions, and it's not easy to fix. I have much more confidence in our ability to engineer solutions than mustering the necessary political and social coordination necessary to fix governments, policy, regulators and institutions.
- FabHK 4y agoGood analysis, and you are right. I think purely technical attempts to solve current political/social problems are doomed, while better institutions can and have been built. Now, what makes you think that the regulators in well-run countries will continue to accept this inefficient and unregulated money alternative full of scams? Crypto currencies could be banned to quite an extent (mining, on/off ramps, maybe even the network traffic, which is unencrypted, if I am not mistaken.)
- junofan 4y agoIt’s banned in China AFAIK and people seem to use it there all the time.
- aeternum 4y agoThose countries that ban it will miss out on the economic value. Just as those countries that banned or did not invest in early internet infrastructure (for similar reasons) are now significantly behind.
- TrapLord_Rhodo 4y ago> Now, what makes you think that the regulators in well-run countries will continue to accept this inefficient and unregulated money alternative full of scams? You can always count on one thing in government. Profit Motive! Gerry ginsler was the professor of crypto at MIT for crying out loud. I'm sure US politicians have tons of BTC.
- yunohn 4y agoIf it’s mainly about transferring money between participants, what is the point of each token having its own speculative value? Shouldn’t crypto be just stablecoins then?
- notyourav 4y agoI’m currently in Turkey. I can transfer funds from any bank account to another in about 1 sec., for a very low or no fee, 7/24. I can even withdraw money from an ATM w/o a card just by scanning a QR code from banks app. All merchants have adapted contactless visa etc.. payments. I honestly don’t see how crypto has a sliver of chance as payment alternative.
- whatisweb3 4y agoWhat is your preferred way to transfer funds that can be received instantly in Canada, US, South America, UK and Europe? Transferability is a basic primitive of crypto but not the only feature. Others like decentralized escrow and multi-signatory wallets achieve new functionality that is non trivial in traditional banking system.
- CaptainZapp 4y ago> Others like decentralized escrow and multi-signatory wallets Uhh, multi-signatory bank accounts are about as old as banking.
- whatisweb3 4y agoOld and clunky. Try setting up a multisig on the weekend with a few friends around the world, who all use different banks. It usually involves a lot of time, paperwork, lock-in to a single bank, monthly fees, sharing private data, and strict limitations on use. In comparison you and several friends can set up a m-of-n account in a couple of transactions, closer to the flow and ease of setting up a new WhatsApp group.
- beepbeepcabbage 4y agoI pay friends in the us regularly via Wise and PayPal and it arrives within seconds every time - all while crypto is folding, doing layoffs, running away with people's money etc.. it's not even a competition. I will take wise + Ideal any day over any crypto or US bank I have ever used.
- gjvnq 4y agoSince you mentioned Latin America... Brazil has had same business day electronic transfers (TED) since 2002 and next day electronic transfers (DOC) since 2001 or earlier. However people often didn't want to use them for small amounts because of the flat fee. Brazilian also rarely use checks to pay rent, utilities and other similar stuff. Since 1993, we have a thing called boleto bancário which is like an invoice that has its own number and bar code ao that people can pay them at any bank (with some rare exceptions). Brazil's Central Bank (BCB) recently-ish introduced Pix, a digital and near instantaneous electronic transfer scheme that is free for natural persons and that is supported by every bank and bank-like financial organizations due to a BCB imposition. So overall I would say that banking in Brazil is way more standardized and practical than in the US.