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I'm sick of hearing about what crypto "could" do. I used BTC to pay for a few lunches back when transaction fees were in the cents rather than hundreds (?) of d

I'm sick of hearing about what crypto "could" do. I used BTC to pay for a few lunches back when transaction fees were in the cents rather than hundreds (?) of dollars or worse, and it was pretty neat, but it's clear today that the crypto ecosystem has largely become a paradise for grifters, scammers, fraudsters, and straight-up criminals, and (more generally) just another way for the rich and sophisticated to get richer at the expense of the poor and unsophisticated. Using it as a payment processor for amounts < tens of thousands of dollars seems grossly wasteful at best^[1], and using it as a wealth store for any length of time is impractical due to the volatility. Bitcoin turned heads and got adoption because it was a proof of concept that proved the concept. Nobody would have given a shit if it was just a whitepaper without a deployed implementation that worked, and nobody should give a shit about crypto claims now until they are made material in a form whose harms don't outweigh its benefits. In short, crypto needs to grow up. But I'm afraid most of the people throwing their weight behind it today prefer it in its current state. ^[1] Yes, "gas" (barf) fees are down today. No, I don't consider that representative of the current crypto ecosystem in a "healthy" state. See also: GPU prices.

jbaczuk 4y ago
paradise for people who don't like regulation. Criminals, and people with a criminal government/monopolies.
- candiodari 4y ago
  Really? Do you think the US "unbanked" don't fall into this category, for example? Hell, these days US women who want abortions could fall into this category. There are a LOT of people excluded, or effectively excluded from the banking system either through outright exclusion, their location, or the fees. All of them would benefit.
- CrazyPyroLinux 4y ago
  > and people with a criminal government/monopolies So...everyone?
this_user 4y ago
For every proposed crypto use case, there already exists a better solution that does not use crypto currency technology.
- AnonC 4y ago
  Transferring money across countries without the government seizing or controlling it. Can you list what non-cryptocurrency technology provides a better solution for that? There are several countries with permanent or temporary restrictions (I think Russia and Ukraine are recent examples).
  - arcticbull 4y ago
    Changing that is very much a non-goal. Just ask Treasury. Countries on the up-and-up are welcome to use Wise. [1] The ones that aren't are broadly cut off from the global financial networks for very good reasons. Either way, if you disagree with those reasons you're free to lobby for changes - but the ability to exclude them is overwhelmingly a good thing. [1] https://wise.com/ https://wise.com/
    - AnonC 4y ago
      This is not relevant, since the comment I replied to said any use case. I just picked one that’s a need for certain people in certain places. It’s not a non-goal for them, and what governments want or push for may not be as good as you believe.
      - arcticbull 4y ago
        They meant a use case other than crime. I mean look, it's not really even good for that. You have a public ledger of all your illegal transactions that you then share directly with law enforcement for them to feed into their automatic crime detection engines. Why bother with pro forma warrants? Just email your transactions directly to the FBI and have them make sure you didn't do anything wrong, I always say. Dr Nicholas Weaver from UC Berkeley referred to such transactions as prosecution futures. I agree. After all, you're not even defending against current deanonymization tooling, you're defending against all future such tooling. Pepperidge Farm remembers Tornado Cash. [edit] If I were in an authoritarian state capable of oppressing me, the last thing I'd do is use Bitcoin lol.
AnonC 4y ago
I’m scratching my head after reading this. Bitcoin doesn’t have “gas fees”. That’s an Ethereum thing (the term and the fee being very high). I’ve read online that Bitcoin transaction fees are in cents. Perhaps someone more knowledgeable can confirm how it is nowadays.
- devoutsalsa 4y ago
  Bitcoin transaction fees can get high on a busy day if you pay to get your transaction faster consideration. Paying the standard amount will usually work, but it can sometimes take hours for the transfer to complete, which is suboptimal if you’re trying to pay for something that only guarantees the price in Bitcoin for a certain period of time. That is been my personal experience anyway.
- babypuncher 4y ago
  The fee is based on transaction volume. At it's height bitcoin transaction fees hit $62 last year. Right now it's down to $1.60.
- caconym_ 4y ago
  I prefer to call them "transaction fees" myself. I believe that's what "gas" refers to; people apparently call it "gas" these days so I have adopted that terminology so that everybody knows what I'm talking about. IIUC Bitcoin, Ethereum, and other PoW-based crypto "coins" all require transaction fees to function, so that's what I'm referring to, regardless of what people associated with any particular "coin" choose to call them.
TheDudeMan 4y ago
> "most of the people throwing their weight behind it today prefer it in its current state." Based on what? The lightning network is new and growing. And that's just one legitimate project out of dozens in active development (not just Bitcoin). Yes, there are scams. Only scams? No.
127 4y ago
I wonder how much of this work to make "crypto" part of the economy is regulatory instead of computer science.
arcticbull 4y ago
Lightning isn't disrupting anything. It'll take 75 years, the better part of a trillion dollars of power and all the remaining block reward (assuming 100% saturation of block space) to simply open channels for everyone on the planet. It would take months just to open a channel for the folks in the Bay Area. Once you do, it has quadratic routing complexity meaning it wouldn't even work in the first place. Move along, nothing to see here.
jitl 4y ago
The lightning network described in this post explicitly solves both the speed and cost problems with Bitcoin transactions. This still leaves the scam/grifter problem in the ecosystem, but your dismissal is ignorant of the major content of the article. I encourage you to read it and then update your comment. I’m not a crypto enthusiast, just someone who prefers higher quality discussion on HN.
- caconym_ 4y ago
  I have been hearing about Lightning as a solution for Bitcoin's scaling issues for _years_. Far from being "ignorant of the major content of the article", I think my comment in fact echoes the article's admission of exactly the same problems I described. Reproduced here: > Developer tooling still needs to be built out to enable more user friendly applications. With most still treating BTC as an investment, we’re yet to see broad demand to use it for payments (use of Lightning rails for fiat payments remains a compelling opportunity). Despite progress from infrastructure companies, Lightning is still cumbersome for new users and merchants. Additionally, onboarding low income users in developing countries remains a major challenge to fulfilling the promise of Lightning remittances. And, somewhat humorously and very tellingly, Coinbase itself calls out its own lack of support for Lightning: > This article should not be construed as an indication that Coinbase has imminent plans to add support for Lightning. Rather, a few employees at the company simply found its potential compelling enough to research, write, and share. --- If you "prefer high quality discussion on HN", I "encourage" you to address the substance of my comment, which I will not be updating. Where is Lightning? How can I use it to pay for things I need today? Why are we still talking about solutions to these eminently obvious scaling problems in largely theoretical terms after a decade-plus during which the crypto ecosystem might have focused on solving them, but instead largely went in the opposite direction, toward a model of consumers as marks rather than as first-class users? As an aside, from a personal (i.e. me) usability perspective, the volatility issue is a way bigger deal than the criminality issue. Even if Lightning works out, if I can't reliably store value in BTC, then it can only really serve as a fiat pipe whose endpoints will doubtless be controlled by fintech rent-seekers analogous to today's monolithic payment processors. It's possible, even likely, that they will be the same rent-seekers. And all of this is not even touching on the energy usage issue. I've been hearing about alternatives to proof-of-work for years (seems to be a theme here); where are they? Are they even realistic, or are they just a fig leaf for an inconvenient truth about crypto's efficiency? Because if I have a choice between rent-seeking payment processors and rent-seeking payment processors with a vast and ever-growing environmental footprint, I'm going to choose the former. I said it before, and I will say it again: the crypto ecosystem needs to grow up. If they can be better, and have the will to be better, they need to be better.
acdha 4y ago
The other key point the sales people tend to leave out is pricing. The average person and especially business won’t care about cryptocurrency unless it’s a better deal. Historically the pitch has been “pay higher fees, wait longer, take on all of the fraud risks yourself”. Lightning addresses transaction speed, and might partially address cost but conversion into real money is still a big factor, especially given Bitcoin’s volatility, and it doesn’t help with fraud much at all. It’s unclear when that starts to look like a good deal to anyone who isn’t a speculator trying to drum up demand for their random numbers. If I’m a small business owner, my rent, wages, supplies, taxes, etc. all need local currency and there are statistically no potential customers who don’t buy from me now but will if I accept Bitcoin. The prospect of avoiding credit card fees is appealing but only if it’s actually cheaper – Square Cash exists and is way more widespread but that’s a marginal incremental improvement, not something transformative, and if someone did start seriously chipping away the most likely outcome is that Visa would take a point off of their rate and nothing else would change. Now, companies like Western Union and PayPal are certainly exploitative so I’d like to see them face a serious threat but again it seems like the most likely outcome is that they lower rates slightly if a cryptocurrency alternative starts taking any real fraction of their business. Maybe they’re staid dinosaurs and can’t react in time - good riddance! - but knocking a couple points off of the cost of a service most people don’t use isn’t going to transform the global economy or even support the current costs of the Bitcoin network.

jbaczuk 4y ago

paradise for people who don't like regulation. Criminals, and people with a criminal government/monopolies.

candiodari 4y ago
Really? Do you think the US "unbanked" don't fall into this category, for example? Hell, these days US women who want abortions could fall into this category. There are a LOT of people excluded, or effectively excluded from the banking system either through outright exclusion, their location, or the fees. All of them would benefit.
CrazyPyroLinux 4y ago
> and people with a criminal government/monopolies So...everyone?

this_user 4y ago

For every proposed crypto use case, there already exists a better solution that does not use crypto currency technology.

AnonC 4y ago
Transferring money across countries without the government seizing or controlling it. Can you list what non-cryptocurrency technology provides a better solution for that? There are several countries with permanent or temporary restrictions (I think Russia and Ukraine are recent examples).
- arcticbull 4y ago
  Changing that is very much a non-goal. Just ask Treasury. Countries on the up-and-up are welcome to use Wise. [1] The ones that aren't are broadly cut off from the global financial networks for very good reasons. Either way, if you disagree with those reasons you're free to lobby for changes - but the ability to exclude them is overwhelmingly a good thing. [1] https://wise.com/ https://wise.com/
  - AnonC 4y ago
    This is not relevant, since the comment I replied to said any use case. I just picked one that’s a need for certain people in certain places. It’s not a non-goal for them, and what governments want or push for may not be as good as you believe.
    - arcticbull 4y ago
      They meant a use case other than crime. I mean look, it's not really even good for that. You have a public ledger of all your illegal transactions that you then share directly with law enforcement for them to feed into their automatic crime detection engines. Why bother with pro forma warrants? Just email your transactions directly to the FBI and have them make sure you didn't do anything wrong, I always say. Dr Nicholas Weaver from UC Berkeley referred to such transactions as prosecution futures. I agree. After all, you're not even defending against current deanonymization tooling, you're defending against all future such tooling. Pepperidge Farm remembers Tornado Cash. [edit] If I were in an authoritarian state capable of oppressing me, the last thing I'd do is use Bitcoin lol.

AnonC 4y ago

I’m scratching my head after reading this. Bitcoin doesn’t have “gas fees”. That’s an Ethereum thing (the term and the fee being very high). I’ve read online that Bitcoin transaction fees are in cents. Perhaps someone more knowledgeable can confirm how it is nowadays.

devoutsalsa 4y ago
Bitcoin transaction fees can get high on a busy day if you pay to get your transaction faster consideration. Paying the standard amount will usually work, but it can sometimes take hours for the transfer to complete, which is suboptimal if you’re trying to pay for something that only guarantees the price in Bitcoin for a certain period of time. That is been my personal experience anyway.
babypuncher 4y ago
The fee is based on transaction volume. At it's height bitcoin transaction fees hit $62 last year. Right now it's down to $1.60.
caconym_ 4y ago
I prefer to call them "transaction fees" myself. I believe that's what "gas" refers to; people apparently call it "gas" these days so I have adopted that terminology so that everybody knows what I'm talking about. IIUC Bitcoin, Ethereum, and other PoW-based crypto "coins" all require transaction fees to function, so that's what I'm referring to, regardless of what people associated with any particular "coin" choose to call them.

TheDudeMan 4y ago

> "most of the people throwing their weight behind it today prefer it in its current state." Based on what? The lightning network is new and growing. And that's just one legitimate project out of dozens in active development (not just Bitcoin). Yes, there are scams. Only scams? No.

127 4y ago

I wonder how much of this work to make "crypto" part of the economy is regulatory instead of computer science.

arcticbull 4y ago

Lightning isn't disrupting anything. It'll take 75 years, the better part of a trillion dollars of power and all the remaining block reward (assuming 100% saturation of block space) to simply open channels for everyone on the planet. It would take months just to open a channel for the folks in the Bay Area. Once you do, it has quadratic routing complexity meaning it wouldn't even work in the first place. Move along, nothing to see here.

jitl 4y ago

The lightning network described in this post explicitly solves both the speed and cost problems with Bitcoin transactions. This still leaves the scam/grifter problem in the ecosystem, but your dismissal is ignorant of the major content of the article. I encourage you to read it and then update your comment. I’m not a crypto enthusiast, just someone who prefers higher quality discussion on HN.

caconym_ 4y ago
I have been hearing about Lightning as a solution for Bitcoin's scaling issues for _years_. Far from being "ignorant of the major content of the article", I think my comment in fact echoes the article's admission of exactly the same problems I described. Reproduced here: > Developer tooling still needs to be built out to enable more user friendly applications. With most still treating BTC as an investment, we’re yet to see broad demand to use it for payments (use of Lightning rails for fiat payments remains a compelling opportunity). Despite progress from infrastructure companies, Lightning is still cumbersome for new users and merchants. Additionally, onboarding low income users in developing countries remains a major challenge to fulfilling the promise of Lightning remittances. And, somewhat humorously and very tellingly, Coinbase itself calls out its own lack of support for Lightning: > This article should not be construed as an indication that Coinbase has imminent plans to add support for Lightning. Rather, a few employees at the company simply found its potential compelling enough to research, write, and share. --- If you "prefer high quality discussion on HN", I "encourage" you to address the substance of my comment, which I will not be updating. Where is Lightning? How can I use it to pay for things I need today? Why are we still talking about solutions to these eminently obvious scaling problems in largely theoretical terms after a decade-plus during which the crypto ecosystem might have focused on solving them, but instead largely went in the opposite direction, toward a model of consumers as marks rather than as first-class users? As an aside, from a personal (i.e. me) usability perspective, the volatility issue is a way bigger deal than the criminality issue. Even if Lightning works out, if I can't reliably store value in BTC, then it can only really serve as a fiat pipe whose endpoints will doubtless be controlled by fintech rent-seekers analogous to today's monolithic payment processors. It's possible, even likely, that they will be the same rent-seekers. And all of this is not even touching on the energy usage issue. I've been hearing about alternatives to proof-of-work for years (seems to be a theme here); where are they? Are they even realistic, or are they just a fig leaf for an inconvenient truth about crypto's efficiency? Because if I have a choice between rent-seeking payment processors and rent-seeking payment processors with a vast and ever-growing environmental footprint, I'm going to choose the former. I said it before, and I will say it again: the crypto ecosystem needs to grow up. If they can be better, and have the will to be better, they need to be better.

acdha 4y ago

The other key point the sales people tend to leave out is pricing. The average person and especially business won’t care about cryptocurrency unless it’s a better deal. Historically the pitch has been “pay higher fees, wait longer, take on all of the fraud risks yourself”. Lightning addresses transaction speed, and might partially address cost but conversion into real money is still a big factor, especially given Bitcoin’s volatility, and it doesn’t help with fraud much at all. It’s unclear when that starts to look like a good deal to anyone who isn’t a speculator trying to drum up demand for their random numbers. If I’m a small business owner, my rent, wages, supplies, taxes, etc. all need local currency and there are statistically no potential customers who don’t buy from me now but will if I accept Bitcoin. The prospect of avoiding credit card fees is appealing but only if it’s actually cheaper – Square Cash exists and is way more widespread but that’s a marginal incremental improvement, not something transformative, and if someone did start seriously chipping away the most likely outcome is that Visa would take a point off of their rate and nothing else would change. Now, companies like Western Union and PayPal are certainly exploitative so I’d like to see them face a serious threat but again it seems like the most likely outcome is that they lower rates slightly if a cryptocurrency alternative starts taking any real fraction of their business. Maybe they’re staid dinosaurs and can’t react in time - good riddance! - but knocking a couple points off of the cost of a service most people don’t use isn’t going to transform the global economy or even support the current costs of the Bitcoin network.