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The past twelve years of cryptocurrencies is clear evidence that we can have open source permissionless infrastructure that’s utterly inadequate to support actu

by pavlov 4y ago

The past twelve years of cryptocurrencies is clear evidence that we can have open source permissionless infrastructure that’s utterly inadequate to support actual banking transactions on a global scale, or we can have centralized architectures that pretend to be permissionless and decentralized through a series of shell games and vague lies thus delivering the worst imaginable hybrid of banking and multi-level marketing. Faced with these choices, the status quo isn’t so bad after all. The other day I saw a news report that Wise (formerly Transferwise) does over $100 billion in money transfer volume annually. A classic startup seems to have been able to fix the problem of expensive international transfers much better than crypto-anything.

jcbrand 4y ago
People love to talk as if the current situation is frozen in time, particularly when it comes to open source software. I've seen people complain about certain open source software based on their experience in 2016, as if nothing might have changed in the intervening years. There is continuous work being done on scaling. Things take time. We didn't have broadband internet immediately, there was a very long period of dialup, then slow DSL, ADSL and then eventually fast broadband. There was no way you could stream video on the early Internet. I wonder whether people back then also complained that it will never be able to replace television, actually... I'm pretty sure those people existed.
- colesantiago 4y ago
  It has been almost 15 to 20 years of Bitcoin and it is still very slow for payments. The supposed lightning network tends to centralisation inevitably which defeats the purpose of Bitcoin being decentralised. All the while the current system has been working very well.
  - jcbrand 4y ago
    Bitcoin is 13 years old. Dialup internet was used for more than 20 years.
    - colesantiago 4y ago
      So what has Bitcoin actually solved since it has been created if not only create rampant speculation, emboldening ransomware authors to get paid and contribute to burning the planet?
    - arcticbull 4y ago
      That’s actually an argument against bitcoin - not against the internet. The internets adoption was bottlenecked on real physical infrastructure that had to be developed and deployed to every corner of the planet. Bitcoin being built on top of this infrastructure has only self imposed synthetic ideological limitations, lack of product market fit and lack of utility holding it back. There’s no reason to think that the two should take anywhere close to the same length of time to reach adoption. Just look at the iPhone and Android that came out in the same year as bitcoin. If something’s good and useful you don’t need to proselytize and make excuses.
      - jcbrand 4y ago
        > That’s actually an argument against bitcoin - not against the internet I'm not making an argument against the Internet. :) The internet already had utility back when everyone used dialup, and Bitcoin already has utility now and is in many respects a massive success, especially given all the eulogies it's received over the years. Incumbents have moved on from ignoring, and then laughing to now fighting.
        arcticbull 4y ago
        Why are fewer people using it now than EOY 2017? [1] [1] https://ycharts.com/indicators/bitcoin_transactions_per_day https://ycharts.com/indicators/bitcoin_transactions_per_day
  - rglullis 4y ago
    I can concede that Bitcoin has failed as a currency and that as an alternative for payments. But can we stop talking about crypto and thinking that Bitcoin is the only thing that matters? > The supposed lightning network tends to centralisation Well, let's put Bitcoin aside. The argument you are using here can also apply to Ethereum scaling solutions, and it is misguided at best and dishonest at worst. Yes, scaling solutions sacrifice some decentralization in favor of performance. But to argue that it "defeats the purpose" is like saying "the Internet is not decentralized because most people access it through a handful of service providers" and that the only "right" way to access the Internet is by mesh networks. Decentralization by itself is not a goal. The goal is to have a system that is censorship resistant and that can be an alternative to the status quo. If most people achieve these goals by using (regulated and well-managed) exchanges, or if smaller communities pool their resources to participate in the economy, you are still "centralizing" but you are not "defeating the purpose". Another way to put it: say that you want to serve a community that is not served on underserved by the main banks. What would be the cost to fund and operate a credit cooperative? On the other hand, what would be the cost to setup and operate a Raiden or a Hub20 node to give people a custodial wallet?
rglullis 4y ago
> Faced with these choices, the status quo isn’t so bad after all. Have you considered the possibility that the status quo only improved because it started facing pressure from an outside force, namely a decentralized system that could transfer value without having banks acting as middlemen? I'm always here saying that the important thing about crypto is that it gives people alternatives. Consider crypto as an insurance policy against (potentially) corrupt institutions. The cost of this policy is high at the moment, but it will come down to the point where it will make sense to be more widely adopted, even if just as an insurance.
- pjc50 4y ago
  Not really? The payments system has been improving both due to conventional "challenger" bank startups and centralized regulatory effort, such as instant central clearing: https://www.ecb.europa.eu/paym/integration/retail/instant_payments/html/index.en.html https://www.ecb.europa.eu/paym/integration/retail/instant_pa... Americans need better financial consumer policy, but that's their problem.
  - rglullis 4y ago
    Is there an European equivalent to the concept of "Ugly American"? You do understand that there is a whole 6 billion people living outside of Europe and North America?
    - pjc50 4y ago
      One point four billion or so of whom are Chinese, who have WeChat Pay as the default quick and easy payment system. And are banned from using crypto, although undoubtedly there are still lots of people using it for capital flight.
      - rglullis 4y ago
        > the default quick and easy payment system You misspelled "the most efficient state surveillance mechanism ever deployed". If that is your idea of "acceptable solution from the status quo", then it is easy to justify anything.
jcbrand 4y ago
> The other day I saw a news report that Wise (formerly Transferwise) does over $100 billion in money transfer volume annually. 15.8 Trillion dollars worth of Bitcoin was transferred between 2020 and 2021. https://www.nasdaq.com/articles/bitcoin-transfer-volume-now-exceeds-%2415.8-trillion-2021-07-24 https://www.nasdaq.com/articles/bitcoin-transfer-volume-now-...
- arcticbull 4y ago
  Not really. A lot of that was just exchanges sending the same coins back and forth to each other. Centralized exchanges that are permission, censorable and potentially even fractionally reserved. This is only happening because the L1 is so utterly inadequate people can’t use it. This volume isn’t at all comparable to the actual usage Wise sees.
  - jcbrand 4y ago
    The quoted amount transferred is onchain, not offchain. It's all L1.
    - arcticbull 4y ago
      I’m aware but they’re just net settlement roll ups of actual transactions happening off chain. And likely just wash trades and arbitrage at that, not transactions of actual economic utility.
  - koheripbal 4y ago
    You have no idea why those money transfers happened either on BTC network or Wise system. You are making a baseless assumption on the intent of transfers to push an argument without merit.
    - arcticbull 4y ago
      Ok so in that case the null hypothesis is that they’re not the same and it is actually up to parent to justify the similarity and comparability of the flows.

by pavlov 4y ago

jcbrand 4y ago

People love to talk as if the current situation is frozen in time, particularly when it comes to open source software. I've seen people complain about certain open source software based on their experience in 2016, as if nothing might have changed in the intervening years. There is continuous work being done on scaling. Things take time. We didn't have broadband internet immediately, there was a very long period of dialup, then slow DSL, ADSL and then eventually fast broadband. There was no way you could stream video on the early Internet. I wonder whether people back then also complained that it will never be able to replace television, actually... I'm pretty sure those people existed.

colesantiago 4y ago
It has been almost 15 to 20 years of Bitcoin and it is still very slow for payments. The supposed lightning network tends to centralisation inevitably which defeats the purpose of Bitcoin being decentralised. All the while the current system has been working very well.
- jcbrand 4y ago
  Bitcoin is 13 years old. Dialup internet was used for more than 20 years.
  - colesantiago 4y ago
    So what has Bitcoin actually solved since it has been created if not only create rampant speculation, emboldening ransomware authors to get paid and contribute to burning the planet?
  - arcticbull 4y ago
    That’s actually an argument against bitcoin - not against the internet. The internets adoption was bottlenecked on real physical infrastructure that had to be developed and deployed to every corner of the planet. Bitcoin being built on top of this infrastructure has only self imposed synthetic ideological limitations, lack of product market fit and lack of utility holding it back. There’s no reason to think that the two should take anywhere close to the same length of time to reach adoption. Just look at the iPhone and Android that came out in the same year as bitcoin. If something’s good and useful you don’t need to proselytize and make excuses.
    - jcbrand 4y ago
      > That’s actually an argument against bitcoin - not against the internet I'm not making an argument against the Internet. :) The internet already had utility back when everyone used dialup, and Bitcoin already has utility now and is in many respects a massive success, especially given all the eulogies it's received over the years. Incumbents have moved on from ignoring, and then laughing to now fighting.
      - arcticbull 4y ago
        Why are fewer people using it now than EOY 2017? [1] [1] https://ycharts.com/indicators/bitcoin_transactions_per_day https://ycharts.com/indicators/bitcoin_transactions_per_day
- rglullis 4y ago
  I can concede that Bitcoin has failed as a currency and that as an alternative for payments. But can we stop talking about crypto and thinking that Bitcoin is the only thing that matters? > The supposed lightning network tends to centralisation Well, let's put Bitcoin aside. The argument you are using here can also apply to Ethereum scaling solutions, and it is misguided at best and dishonest at worst. Yes, scaling solutions sacrifice some decentralization in favor of performance. But to argue that it "defeats the purpose" is like saying "the Internet is not decentralized because most people access it through a handful of service providers" and that the only "right" way to access the Internet is by mesh networks. Decentralization by itself is not a goal. The goal is to have a system that is censorship resistant and that can be an alternative to the status quo. If most people achieve these goals by using (regulated and well-managed) exchanges, or if smaller communities pool their resources to participate in the economy, you are still "centralizing" but you are not "defeating the purpose". Another way to put it: say that you want to serve a community that is not served on underserved by the main banks. What would be the cost to fund and operate a credit cooperative? On the other hand, what would be the cost to setup and operate a Raiden or a Hub20 node to give people a custodial wallet?

rglullis 4y ago

> Faced with these choices, the status quo isn’t so bad after all. Have you considered the possibility that the status quo only improved because it started facing pressure from an outside force, namely a decentralized system that could transfer value without having banks acting as middlemen? I'm always here saying that the important thing about crypto is that it gives people alternatives. Consider crypto as an insurance policy against (potentially) corrupt institutions. The cost of this policy is high at the moment, but it will come down to the point where it will make sense to be more widely adopted, even if just as an insurance.

pjc50 4y ago
Not really? The payments system has been improving both due to conventional "challenger" bank startups and centralized regulatory effort, such as instant central clearing: https://www.ecb.europa.eu/paym/integration/retail/instant_payments/html/index.en.html https://www.ecb.europa.eu/paym/integration/retail/instant_pa... Americans need better financial consumer policy, but that's their problem.
- rglullis 4y ago
  Is there an European equivalent to the concept of "Ugly American"? You do understand that there is a whole 6 billion people living outside of Europe and North America?
  - pjc50 4y ago
    One point four billion or so of whom are Chinese, who have WeChat Pay as the default quick and easy payment system. And are banned from using crypto, although undoubtedly there are still lots of people using it for capital flight.
    - rglullis 4y ago
      > the default quick and easy payment system You misspelled "the most efficient state surveillance mechanism ever deployed". If that is your idea of "acceptable solution from the status quo", then it is easy to justify anything.

jcbrand 4y ago

> The other day I saw a news report that Wise (formerly Transferwise) does over $100 billion in money transfer volume annually. 15.8 Trillion dollars worth of Bitcoin was transferred between 2020 and 2021. https://www.nasdaq.com/articles/bitcoin-transfer-volume-now-exceeds-%2415.8-trillion-2021-07-24 https://www.nasdaq.com/articles/bitcoin-transfer-volume-now-...

arcticbull 4y ago
Not really. A lot of that was just exchanges sending the same coins back and forth to each other. Centralized exchanges that are permission, censorable and potentially even fractionally reserved. This is only happening because the L1 is so utterly inadequate people can’t use it. This volume isn’t at all comparable to the actual usage Wise sees.
- jcbrand 4y ago
  The quoted amount transferred is onchain, not offchain. It's all L1.
  - arcticbull 4y ago
    I’m aware but they’re just net settlement roll ups of actual transactions happening off chain. And likely just wash trades and arbitrage at that, not transactions of actual economic utility.
- koheripbal 4y ago
  You have no idea why those money transfers happened either on BTC network or Wise system. You are making a baseless assumption on the intent of transfers to push an argument without merit.
  - arcticbull 4y ago
    Ok so in that case the null hypothesis is that they’re not the same and it is actually up to parent to justify the similarity and comparability of the flows.