7 ms·

This is the best answer here so far (and also a reasonably good explanation of why, at least in my opinion, crypto is still completely non-viable as a real medi

This is the best answer here so far (and also a reasonably good explanation of why, at least in my opinion, crypto is still completely non-viable as a real medium of exchange). The key is that there is a process for reconciliation. It IS NOT ENOUGH to simply have a ledger - you also need a mechanism for enforcing that the ledger matches reality. And reality is complicated, filled with reasonable disputes over terms and deals (in the best case) and outright fraud and theft (in the worst case). A given party may be able to temporarily pull money from you with two numbers, but the process around reconciliation makes it so that you, the customer, are protected from the actions of the mediary (because at the end of the day, they're selling this service, and are responsible for their actions in relation to providing credit). This incentivizes those institutions to be careful, protect their reputation, and avoid taking on obvious risks. Essentially - the system is structured in a way where incentives align to prevent abuse. And entry into the playing field is expensive and limited enough that institutional reputation matters.

yuvadam 4y ago
There are valid use cases for both types of transactions: those that require an option for chargeback as well as those that must be settled with finality. The difference is that while crypto can do both, the legacy finance system cannot.
- Asafp 4y ago
  Can you share some examples or use cases of transactions that must be settled with finality?
  - brewdad 4y ago
    Hiring a hitman?
  - sp332 4y ago
    If I sell someone a meal and they eat it, I really don't want that money to leave my account, because I have no recourse on my side.
    - tehlike 4y ago
      İf the meal is bought with stolen funds...
      - cowtools 4y ago
        then the cook should be left uncompensated for their work? There is no "fair" outcome in this situation, so you should at least make the system fail in a reliable way.
        tehlike 4y ago
        Normally, with credit cards and stuff, the onus is on the vendor that made the sale, technically they should verify the Id of the user match with the name on the card and stuff. Most don't do because convenience wins for the user and increases the value. The user knows if something is wrong (like stolen funds, accounts etc) they will get their money back, and trusts the system so spends more. İf you don't provide this trust system, they won't spend as much as they do. You will get less volume.
    - edgyquant 4y ago
      Okay so what if you give them the wrong meal and they want money back?
      - cowtools 4y ago
        Then the dissatisfied customer throws a fit and warns their peers that the vendor isn't trustworthy. There is an asymmetry here because anyone can be a customer but not everyone can be a vendor- that requires a certain level of reputation and upfront investment. So it is more risky for a vendor to scam a customer than the other way around.
        josephh 4y ago
        Thank goodness that the merchants that I do deals with do not force me to pay with cryptocurrency.
  - grlthng 4y ago
    If you are a merchant selling goods and services for money, and had the choice between transactions with finality and without, you will always chose transactions with finality.
    - dllthomas 4y ago
      Not always. If customer fraud is low and customer wariness is high, you might well find that providing customers the safety of the option to reverse the charge gets you enough more money that it nets you more overall. Even more so if "finality" of the technology means that users instead turn to the courts to dispute your charges. There is a narrow sense in which the merchant "always prefers finality" but it isn't the relevant sense.
    - kube-system 4y ago
      If customers demand reversible transactions, you will choose reversible transactions or you will not have customers. There are, for instance, no longer many mainstream online merchants who accept only irreversible transactions. There once was a time when online transactions were primarily paid via money order, but PayPal and credit card processing has made that obsolete.
      - scarface_74 4y ago
        When was this time that online payments were done with money orders? Some of the earliest online merchants that were associated with AOL and Prodigy accepted credit cards. Amazon definitely accepted credit cards from day one.
        kube-system 4y ago
        In the mid to late 90s many retailers online operated like mail-order catalogs with catalogs delivered via http. Many of them were mail-order businesses first, and so they accepted payments for online purchases the same way they did for their majority of their customers. This was also normal for eBay payments at the time. There were, of course, a few that did accept credit cards, but many people were weary about using those features because very little of the web used HTTPS at the time. Even Amazon accepted money orders (and personal checks!) for this reason.
  - cowtools 4y ago
    The Silk Road. But in all seriousness, if you are a vendor then any purchase by a customer that is not associated with a legally accountable entity must be settled with finality, because you have no way of preventing charge-back fraud yourself. In cryptocurrency marketplaces, the customers vet the vendors, not the other way around. This is because the vendors have a higher upfront investment in their business and reputation. The customers are not expected to maintain a reputation (for sake of their privacy) or an investment (outside of an multisig escrow) so any attempt to vet them is prone to sybil attack. The process of vetting customers is usually assumed by some monopolistic intermediary like PayPal. These companies are able to vet customers by implementing a mass surveillance system.
  - rlpb 4y ago
    Twice I've sold an old car to somebody who answered my ad. I wanted cash on collection only, because I was selling the car to someone I didn't know, couldn't reliably trace and therefore could not trust. If they'd reversed the payment afterwards, I'd have been down a car. Both parties to this kind of transaction understand why finality is required, and don't have a problem with it. It's a second hand "sold as seen" transaction. The buyer knows where the seller likely lives. The seller doesn't know anything about the buyer. Neither party typically carry that kind of cash around, so there are two trips to the bank (with their own risks) that could be saved if there were some sort of easier digital equivalent.
    - sverhagen 4y ago
      If they'd have turned the corner to see the engine fall out from underneath the car, while you'd have already strolled off the scene with the money, they suddenly wouldn't be so happy with finality. I think finality in transactions is more something about "the nominal case". If I'm a transaction processor with significant volume, I would like to reach some final state without too much intervention, but I can still handle the exceedingly-rare exceptions with (expensive) humans. Where that point lies differs per application, also dependent on what kind of service I'm wanting to deliver.
      - rlpb 4y ago
        > If they'd have turned the corner to see the engine fall out from underneath the car, while you'd have already strolled off the scene with the money, they suddenly wouldn't be so happy with finality. Maybe, but since I also wouldn't be too happy if they reversed the transaction after taking the car, we both agree in advance that the sale will not be reversible. For the payment, that's done by using cash (and the possession of it), and for the car, also just possession. I give the buyer the opportunity to inspect the car before committing to the sale, and then it is "sold as seen". Unless I committed fraud, the engine falling out from underneath the car will be the buyer's problem, including in law. It is always possible to seek redress through the courts whether the financial transaction itself was reversible or not, so that's not relevant here. Neither is the fact that to do that knowledge of identity and evidence is required; those concerns also exist regardless of transaction reversibility.
  - insane_dreamer 4y ago
    Buying a house. This is why title companies will only accept wire transfers, not ACH.
    - cortesoft 4y ago
      Buying a house does not have 'finality' in that sense. This is why you buy title insurance - many things can happen where it turns out you don't own the house like you thought.
- blatherard 4y ago
  I think wire transfers are generally irreversible.
- oarsinsync 4y ago
  How do you do a chargeback with Bitcoin? Or is that a different cryptocurrency feature?
  - cowtools 4y ago
    There is a feature in bitcoin called replace-by-fee (https://en.bitcoin.it/wiki/Replace_by_fee https://en.bitcoin.it/wiki/Replace_by_fee). But that is not completely analogous to a refund because vendors will wait many blocks before accepting a transaction (to prevent finney attack). If you want to have a third party mediate the exchange, you can use a multi-signature transaction (https://monerodocs.org/multisignature/ https://monerodocs.org/multisignature/). For example you send the cryptocurrency to a 2-of-3 address where the mediator, the vendor, and the customer each hold a key and two of them are needed to move the funds (the mediator sides with either vendor or customer, or the vendor and customer both side against the mediator). Or you can send the cryptocurrency to a 2-of-2 address, which allows the customer to permanently withhold the funds from the vendor at the cost of withholding some funds from themself that they put down ahead of time, like an escrow that is locked in case of dispute.
  - DennisP 4y ago
    One way to get something like chargeback is 2-of-3 multisig. The transaction has to be signed by any two of: sender, receiver, and a neutral arbitrator. If sender and receiver agree, the arbitrator never has to hear about the transaction.
    - fl0id 4y ago
      That is nothing like chargeback. It would be like chargeback if you could rescind a signature, once you notice a mistake.
      - DennisP 4y ago
        That wouldn't be chargeback either. You have to get the bank to do the chargeback, you can't just do it yourself. If you wanted something more like that, you could pay via a smart contract that holds the funds in escrow for a while, with the arbitrator key able to refund the money to you.
- kube-system 4y ago
  Yes, there are valid use cases for irreversible payments, like closing on a home. Banks do have solutions for this: wire transfers. Which is what you’ll use if you buy a house in the US.
  - mbreese 4y ago
    I was going to suggest “cash” as the other option.
  - snotrockets 4y ago
    Wire transfers are just as reversible. Nothing in banking is un-undoable. Some just require more effort to undo.
    - kube-system 4y ago
      Only in the case of a mistake or fraud. So if the recipient got the right amount in their account: it’s a done deal, same day. As opposed to ACH which could bounce or you could issue a stop payment.
      - snotrockets 4y ago
        The definition of mistake is quite broad. Not all parties may agree to what is and isn’t, requiring litigation, but the transfer itself isn’t a done deal until a very lengthy process has been exhausted.
    - riking 4y ago
      Zelle can't be undone if it's done from your account. They just take the money.
      - snotrockets 4y ago
        Of course it can. Zelle and your bank may not be keen on doing it, but it’s no less reversible than any other transfer. And for fraudulent transfers, Zelle’s trying to pin them on the customer is them hoping you’d give up rather than remind them that regulation E governs it as well, and they used to acknowledge that on their web site.
kevin_nisbet 4y ago
> And reality is complicated, filled with reasonable disputes over terms and deals (in the best case) and outright fraud and theft (in the worst case). Yep, and also methods to bring forward and rectify those disputes, as in the courts. I always wonder how many court orders each day need to go through the banks for enforcement, through wage garnishment, sheriff's auctions, power of attorney, etc.
- theonething 4y ago
  What about international ACH transfers? What if an overseas bank just claims they didn't receive your transfer when they did?
  - erincandescent 4y ago
    ACH is a US dollar bank transfer system between US registered and regulated banks. "Overseas ACH" isn't a thing; anything which looks like it is fronted by a US institution
    - melenaboija 4y ago
      Moreover, not even overseas transfer exists in the "ACH sense". Money is moved between ledgers of the same currency so what you will have is a correspondent bank holding your position in that currency.
    - honkdaddy 4y ago
      Am I misunderstanding the Wikipedia article? >There are various ACH systems around the world. The World Bank identified 87 systems in their 2010 Survey Seems to me like there are many different ACH systems, but perhaps the one referred to colloquially as ACH is specifically FedACH, the American system. https://en.wikipedia.org/wiki/Automated_clearing_house https://en.wikipedia.org/wiki/Automated_clearing_house
      - ValentineC 4y ago
        > Seems to me like there are many different ACH systems, but perhaps the one referred to colloquially as ACH is specifically FedACH, the American system. Giro might be the other, possibly broader term for something similar: https://en.wikipedia.org/wiki/Giro_(banking) https://en.wikipedia.org/wiki/Giro_(banking)
mistrial9 4y ago
> careful, protect their reputation, and avoid taking on obvious risks what you say is true, but system-wide, this gate-guarding by reputable parties costs unimaginable numbers of dollars in fees and delay. Everything you list is obviously desirable except.. it has gone far in the other direction -- disproportionally expensive, too much gatekeeping. For the two billion new customers in global trade that have emerged in the last twenty years, for commodity transactions.. why pay? For those that want to tie together dubious foreign agenda with market regulation (oil & gas markets), keep your own credit records and regulators.. but dont hold the rest of the world hostage. crypto is inevitable with these networks, so make some interesting and useful ones. Of course the old system will object.
22c 4y ago
> crypto is still completely non-viable as a real medium of exchange There are some projects which are attempting to fill in the "TradFi" gaps and support clawback at the protocol level. I am aware of at least this project but I believe there are others. https://developers.stellar.org/docs/glossary/clawback https://developers.stellar.org/docs/glossary/clawback (disclosure: I have like $10 of XLM).
- rvz 4y ago
  Maybe that explains why Moneygram, Stripe and many others have ignored Bitcoin, and Ethereum for their use case in payments and remittances and instead have chosen cryptocurrency technologies and chains like Stellar. This tells me that there are some that are more useful than others and will survive regulations and there are some that won’t. So the regular outcry about “crypto is still completely non-viable as a real medium of exchange” is just complete nonsense; parroted here once again.
  - 22c 4y ago
    I'd say it's mostly a lack of understanding. Cryptocurrency != (bitcoin || ether). Problems that have been solved in a "Traditional Finance" setting (eg. clawback, chargeback, dispute resolution) are either solved or being worked on by many different cryptocurrency projects. The question which remains to be answered is whether or not cryptocurrency can solve problems that TradFi can't solve or can it solve them in a better way, or more efficiently, etc.
    - rvz 4y ago
      > The question which remains to be answered is whether or not cryptocurrency can solve problems that TradFi can't solve or can it solve them in a better way, or more efficiently, etc. The Stellar Network (and to some extent Algorand) seems to be more efficient than the current system and they aim to work with it as their solution(s) works faster, globally and cheaply, hence why Moneygram chose Stellar for its new product and why Stripe removed Bitcoin payments and re-entered again until regulations were clearer and more cryptocurrencies were available. Not all cryptocurrency technologies are the same.
raffy 4y ago
>and also a reasonably good explanation of why, at least in my opinion, crypto is still completely non-viable as a real medium of exchange I understand HN is a shit-on-crypto echo chamber but it's naive to think crypto is just settlement. Settlement is simply a low-level primitive. With smart contracts, you can build whatever mechanism you want before making something final. Multisig, clawbacks, timed-delays, time-locks, escrow, recovery wallets, etc.
jongjong 4y ago
>> a reasonably good explanation of why, at least in my opinion, crypto is still completely non-viable as a real medium of exchange The way I see it, the reversibility of ACH is mostly a 'workaround' of ACH's security flaws. If a crypto does not have security flaws, then it does not require such workarounds. The only drawback is that it cannot correct for human error. But IMO, I don't see human error as a major issue since it's a reality of life that people should be responsible for their mistakes. There are an infinite number of ways in which a person can ruin their lives within the space of a minute, sending money to the wrong address is just one more of them.
- urthor 4y ago
  > it's a reality of life that people should be responsible for their mistakes. Society has absolutely zero sympathy for this point of view. Eventually society will give genuine, serious consideration to crypto. "No ability for the legal system to reverse transactions in the case of fraud you say?" And that will be that. No-one in the majority of the populace actually wants an ungovernable financial system.
- endominus 4y ago
  So, what happened with the DAO?
eric_cc 4y ago
> a reasonably good explanation of why, at least in my opinion, crypto is still completely non-viable as a real medium of exchange). The key is that there is a process for reconciliation. It IS NOT ENOUGH to simply have a ledger - you also need a mechanism for enforcing that the ledger matches reality. And reality is complicated, filled with reasonable disputes over terms and deals (in the best case) and outright fraud and theft (in the worst case). You do realize crypto can be wrapped up in a settlement layer, right? Cash has the same problems until you introduce a settlement system.
deleted 4y ago
[deleted]

yuvadam 4y ago

There are valid use cases for both types of transactions: those that require an option for chargeback as well as those that must be settled with finality. The difference is that while crypto can do both, the legacy finance system cannot.

Asafp 4y ago
Can you share some examples or use cases of transactions that must be settled with finality?
- brewdad 4y ago
  Hiring a hitman?
- sp332 4y ago
  If I sell someone a meal and they eat it, I really don't want that money to leave my account, because I have no recourse on my side.
  - tehlike 4y ago
    İf the meal is bought with stolen funds...
    - cowtools 4y ago
      then the cook should be left uncompensated for their work? There is no "fair" outcome in this situation, so you should at least make the system fail in a reliable way.
      - tehlike 4y ago
        Normally, with credit cards and stuff, the onus is on the vendor that made the sale, technically they should verify the Id of the user match with the name on the card and stuff. Most don't do because convenience wins for the user and increases the value. The user knows if something is wrong (like stolen funds, accounts etc) they will get their money back, and trusts the system so spends more. İf you don't provide this trust system, they won't spend as much as they do. You will get less volume.
  - edgyquant 4y ago
    Okay so what if you give them the wrong meal and they want money back?
    - cowtools 4y ago
      Then the dissatisfied customer throws a fit and warns their peers that the vendor isn't trustworthy. There is an asymmetry here because anyone can be a customer but not everyone can be a vendor- that requires a certain level of reputation and upfront investment. So it is more risky for a vendor to scam a customer than the other way around.
      - josephh 4y ago
        Thank goodness that the merchants that I do deals with do not force me to pay with cryptocurrency.
- grlthng 4y ago
  If you are a merchant selling goods and services for money, and had the choice between transactions with finality and without, you will always chose transactions with finality.
  - dllthomas 4y ago
    Not always. If customer fraud is low and customer wariness is high, you might well find that providing customers the safety of the option to reverse the charge gets you enough more money that it nets you more overall. Even more so if "finality" of the technology means that users instead turn to the courts to dispute your charges. There is a narrow sense in which the merchant "always prefers finality" but it isn't the relevant sense.
  - kube-system 4y ago
    If customers demand reversible transactions, you will choose reversible transactions or you will not have customers. There are, for instance, no longer many mainstream online merchants who accept only irreversible transactions. There once was a time when online transactions were primarily paid via money order, but PayPal and credit card processing has made that obsolete.
    - scarface_74 4y ago
      When was this time that online payments were done with money orders? Some of the earliest online merchants that were associated with AOL and Prodigy accepted credit cards. Amazon definitely accepted credit cards from day one.
      - kube-system 4y ago
        In the mid to late 90s many retailers online operated like mail-order catalogs with catalogs delivered via http. Many of them were mail-order businesses first, and so they accepted payments for online purchases the same way they did for their majority of their customers. This was also normal for eBay payments at the time. There were, of course, a few that did accept credit cards, but many people were weary about using those features because very little of the web used HTTPS at the time. Even Amazon accepted money orders (and personal checks!) for this reason.
- cowtools 4y ago
  The Silk Road. But in all seriousness, if you are a vendor then any purchase by a customer that is not associated with a legally accountable entity must be settled with finality, because you have no way of preventing charge-back fraud yourself. In cryptocurrency marketplaces, the customers vet the vendors, not the other way around. This is because the vendors have a higher upfront investment in their business and reputation. The customers are not expected to maintain a reputation (for sake of their privacy) or an investment (outside of an multisig escrow) so any attempt to vet them is prone to sybil attack. The process of vetting customers is usually assumed by some monopolistic intermediary like PayPal. These companies are able to vet customers by implementing a mass surveillance system.
- rlpb 4y ago
  Twice I've sold an old car to somebody who answered my ad. I wanted cash on collection only, because I was selling the car to someone I didn't know, couldn't reliably trace and therefore could not trust. If they'd reversed the payment afterwards, I'd have been down a car. Both parties to this kind of transaction understand why finality is required, and don't have a problem with it. It's a second hand "sold as seen" transaction. The buyer knows where the seller likely lives. The seller doesn't know anything about the buyer. Neither party typically carry that kind of cash around, so there are two trips to the bank (with their own risks) that could be saved if there were some sort of easier digital equivalent.
  - sverhagen 4y ago
    If they'd have turned the corner to see the engine fall out from underneath the car, while you'd have already strolled off the scene with the money, they suddenly wouldn't be so happy with finality. I think finality in transactions is more something about "the nominal case". If I'm a transaction processor with significant volume, I would like to reach some final state without too much intervention, but I can still handle the exceedingly-rare exceptions with (expensive) humans. Where that point lies differs per application, also dependent on what kind of service I'm wanting to deliver.
    - rlpb 4y ago
      > If they'd have turned the corner to see the engine fall out from underneath the car, while you'd have already strolled off the scene with the money, they suddenly wouldn't be so happy with finality. Maybe, but since I also wouldn't be too happy if they reversed the transaction after taking the car, we both agree in advance that the sale will not be reversible. For the payment, that's done by using cash (and the possession of it), and for the car, also just possession. I give the buyer the opportunity to inspect the car before committing to the sale, and then it is "sold as seen". Unless I committed fraud, the engine falling out from underneath the car will be the buyer's problem, including in law. It is always possible to seek redress through the courts whether the financial transaction itself was reversible or not, so that's not relevant here. Neither is the fact that to do that knowledge of identity and evidence is required; those concerns also exist regardless of transaction reversibility.
- insane_dreamer 4y ago
  Buying a house. This is why title companies will only accept wire transfers, not ACH.
  - cortesoft 4y ago
    Buying a house does not have 'finality' in that sense. This is why you buy title insurance - many things can happen where it turns out you don't own the house like you thought.
blatherard 4y ago
I think wire transfers are generally irreversible.
oarsinsync 4y ago
How do you do a chargeback with Bitcoin? Or is that a different cryptocurrency feature?
- cowtools 4y ago
  There is a feature in bitcoin called replace-by-fee (https://en.bitcoin.it/wiki/Replace_by_fee https://en.bitcoin.it/wiki/Replace_by_fee). But that is not completely analogous to a refund because vendors will wait many blocks before accepting a transaction (to prevent finney attack). If you want to have a third party mediate the exchange, you can use a multi-signature transaction (https://monerodocs.org/multisignature/ https://monerodocs.org/multisignature/). For example you send the cryptocurrency to a 2-of-3 address where the mediator, the vendor, and the customer each hold a key and two of them are needed to move the funds (the mediator sides with either vendor or customer, or the vendor and customer both side against the mediator). Or you can send the cryptocurrency to a 2-of-2 address, which allows the customer to permanently withhold the funds from the vendor at the cost of withholding some funds from themself that they put down ahead of time, like an escrow that is locked in case of dispute.
- DennisP 4y ago
  One way to get something like chargeback is 2-of-3 multisig. The transaction has to be signed by any two of: sender, receiver, and a neutral arbitrator. If sender and receiver agree, the arbitrator never has to hear about the transaction.
  - fl0id 4y ago
    That is nothing like chargeback. It would be like chargeback if you could rescind a signature, once you notice a mistake.
    - DennisP 4y ago
      That wouldn't be chargeback either. You have to get the bank to do the chargeback, you can't just do it yourself. If you wanted something more like that, you could pay via a smart contract that holds the funds in escrow for a while, with the arbitrator key able to refund the money to you.
kube-system 4y ago
Yes, there are valid use cases for irreversible payments, like closing on a home. Banks do have solutions for this: wire transfers. Which is what you’ll use if you buy a house in the US.
- mbreese 4y ago
  I was going to suggest “cash” as the other option.
- snotrockets 4y ago
  Wire transfers are just as reversible. Nothing in banking is un-undoable. Some just require more effort to undo.
  - kube-system 4y ago
    Only in the case of a mistake or fraud. So if the recipient got the right amount in their account: it’s a done deal, same day. As opposed to ACH which could bounce or you could issue a stop payment.
    - snotrockets 4y ago
      The definition of mistake is quite broad. Not all parties may agree to what is and isn’t, requiring litigation, but the transfer itself isn’t a done deal until a very lengthy process has been exhausted.
  - riking 4y ago
    Zelle can't be undone if it's done from your account. They just take the money.
    - snotrockets 4y ago
      Of course it can. Zelle and your bank may not be keen on doing it, but it’s no less reversible than any other transfer. And for fraudulent transfers, Zelle’s trying to pin them on the customer is them hoping you’d give up rather than remind them that regulation E governs it as well, and they used to acknowledge that on their web site.

kevin_nisbet 4y ago

> And reality is complicated, filled with reasonable disputes over terms and deals (in the best case) and outright fraud and theft (in the worst case). Yep, and also methods to bring forward and rectify those disputes, as in the courts. I always wonder how many court orders each day need to go through the banks for enforcement, through wage garnishment, sheriff's auctions, power of attorney, etc.

theonething 4y ago
What about international ACH transfers? What if an overseas bank just claims they didn't receive your transfer when they did?
- erincandescent 4y ago
  ACH is a US dollar bank transfer system between US registered and regulated banks. "Overseas ACH" isn't a thing; anything which looks like it is fronted by a US institution
  - melenaboija 4y ago
    Moreover, not even overseas transfer exists in the "ACH sense". Money is moved between ledgers of the same currency so what you will have is a correspondent bank holding your position in that currency.
  - honkdaddy 4y ago
    Am I misunderstanding the Wikipedia article? >There are various ACH systems around the world. The World Bank identified 87 systems in their 2010 Survey Seems to me like there are many different ACH systems, but perhaps the one referred to colloquially as ACH is specifically FedACH, the American system. https://en.wikipedia.org/wiki/Automated_clearing_house https://en.wikipedia.org/wiki/Automated_clearing_house
    - ValentineC 4y ago
      > Seems to me like there are many different ACH systems, but perhaps the one referred to colloquially as ACH is specifically FedACH, the American system. Giro might be the other, possibly broader term for something similar: https://en.wikipedia.org/wiki/Giro_(banking) https://en.wikipedia.org/wiki/Giro_(banking)

mistrial9 4y ago

> careful, protect their reputation, and avoid taking on obvious risks what you say is true, but system-wide, this gate-guarding by reputable parties costs unimaginable numbers of dollars in fees and delay. Everything you list is obviously desirable except.. it has gone far in the other direction -- disproportionally expensive, too much gatekeeping. For the two billion new customers in global trade that have emerged in the last twenty years, for commodity transactions.. why pay? For those that want to tie together dubious foreign agenda with market regulation (oil & gas markets), keep your own credit records and regulators.. but dont hold the rest of the world hostage. crypto is inevitable with these networks, so make some interesting and useful ones. Of course the old system will object.

22c 4y ago

> crypto is still completely non-viable as a real medium of exchange There are some projects which are attempting to fill in the "TradFi" gaps and support clawback at the protocol level. I am aware of at least this project but I believe there are others. https://developers.stellar.org/docs/glossary/clawback https://developers.stellar.org/docs/glossary/clawback (disclosure: I have like $10 of XLM).

rvz 4y ago
Maybe that explains why Moneygram, Stripe and many others have ignored Bitcoin, and Ethereum for their use case in payments and remittances and instead have chosen cryptocurrency technologies and chains like Stellar. This tells me that there are some that are more useful than others and will survive regulations and there are some that won’t. So the regular outcry about “crypto is still completely non-viable as a real medium of exchange” is just complete nonsense; parroted here once again.
- 22c 4y ago
  I'd say it's mostly a lack of understanding. Cryptocurrency != (bitcoin || ether). Problems that have been solved in a "Traditional Finance" setting (eg. clawback, chargeback, dispute resolution) are either solved or being worked on by many different cryptocurrency projects. The question which remains to be answered is whether or not cryptocurrency can solve problems that TradFi can't solve or can it solve them in a better way, or more efficiently, etc.
  - rvz 4y ago
    > The question which remains to be answered is whether or not cryptocurrency can solve problems that TradFi can't solve or can it solve them in a better way, or more efficiently, etc. The Stellar Network (and to some extent Algorand) seems to be more efficient than the current system and they aim to work with it as their solution(s) works faster, globally and cheaply, hence why Moneygram chose Stellar for its new product and why Stripe removed Bitcoin payments and re-entered again until regulations were clearer and more cryptocurrencies were available. Not all cryptocurrency technologies are the same.

raffy 4y ago

>and also a reasonably good explanation of why, at least in my opinion, crypto is still completely non-viable as a real medium of exchange I understand HN is a shit-on-crypto echo chamber but it's naive to think crypto is just settlement. Settlement is simply a low-level primitive. With smart contracts, you can build whatever mechanism you want before making something final. Multisig, clawbacks, timed-delays, time-locks, escrow, recovery wallets, etc.

jongjong 4y ago

>> a reasonably good explanation of why, at least in my opinion, crypto is still completely non-viable as a real medium of exchange The way I see it, the reversibility of ACH is mostly a 'workaround' of ACH's security flaws. If a crypto does not have security flaws, then it does not require such workarounds. The only drawback is that it cannot correct for human error. But IMO, I don't see human error as a major issue since it's a reality of life that people should be responsible for their mistakes. There are an infinite number of ways in which a person can ruin their lives within the space of a minute, sending money to the wrong address is just one more of them.

urthor 4y ago
> it's a reality of life that people should be responsible for their mistakes. Society has absolutely zero sympathy for this point of view. Eventually society will give genuine, serious consideration to crypto. "No ability for the legal system to reverse transactions in the case of fraud you say?" And that will be that. No-one in the majority of the populace actually wants an ungovernable financial system.
endominus 4y ago
So, what happened with the DAO?

eric_cc 4y ago

> a reasonably good explanation of why, at least in my opinion, crypto is still completely non-viable as a real medium of exchange). The key is that there is a process for reconciliation. It IS NOT ENOUGH to simply have a ledger - you also need a mechanism for enforcing that the ledger matches reality. And reality is complicated, filled with reasonable disputes over terms and deals (in the best case) and outright fraud and theft (in the worst case). You do realize crypto can be wrapped up in a settlement layer, right? Cash has the same problems until you introduce a settlement system.

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