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Stablecoins came close to moving as much value as visa in 2022 [1]. The use case for crypto has always been clear. There is a lot of demand for digital cash, s

Stablecoins came close to moving as much value as visa in 2022 [1]. The use case for crypto has always been clear. There is a lot of demand for digital cash, some from people who operate outside of the law, but also from people who lack access to good banking and payments infrastructure (think activists, sex workers, citizens of nations with unreliable monetary systems). Now that the speculative mania finally seems to have died down, what remains is what actually provides real value: a robust, modern and reliable financial infrastructure that provides privacy and does not make arbitrary decisions about who has access. 1: https://cryptopotato.com/stablecoins-settled-as-much-value-as-visa-in-2022-analysis/ https://cryptopotato.com/stablecoins-settled-as-much-value-a...

kkielhofner 3y ago
Visa has at least 343 million cardholders worldwide. Of course trying to determine crypto "users" is essentially impossible but even the most bloated and inflated estimates (users unique per chain, address = user) put the number somewhere around 300 million. Personally I think it's more like 50-100 million by the time you factor in users on different chains, different wallets, etc. I've spent a lot of time analyzing chains to come to that number, it's not difficult. Nearly every crypto user participates on more than one chain and often uses at least two addresses (hot and cold wallet, for example). Sure enough, the quote is right there in the report: "over 25 million blockchain addresses held over $1 in stablecoins" 25 million addresses, which absolutely don't equal users. Even if they did, that's .05% of global internet users (5.2 billion). With the threshold for inclusion at $1... Of course you say "moving as much value" which doesn't necessarily correlate directly to users or their activity but I would venture to guess (if the report is accurate at all) that a substantial portion of that stablecoin "value" volume isn't anything resembling the economic activity of Visa where every swipe is in exchange for a good or service. At best settlement between exchanges but also wash trading and all kinds of weird hijinx that are basically just swapping tokens around with no other meaningful economic activity. Just look at chain analysis breakdowns on the latest crypto heist and watch them tumble it through stablecoins at least once (often many more). I guess that's "value" but I certainly wouldn't be touting it. The crypto narrative of helping the unbanked is essentially PR damage control spin to try to counter all of the obvious evils that crypto is directly involved in and often responsible for. This volume (if even accurate) has nothing to do with helping regular people, the oppressed, the unbanked, whatever.
- tkz1312 3y ago
  visa very clearly much more users who transact much lower amounts than stablecoins, I never claimed otherwise. The fact remains that substantial amounts of people are using crypto rails to move very economically significant sums of money. The fact that something can be used by bad people does not make the thing itself bad. Very similar arguments are often levelled at tools like Tor or Signal, but very few of the hacker news crowd see those viewpoints as valid. Uncensorable and private digital cash is important in the same way that uncensorable and private digital communications are.
- olalonde 3y ago
  While Visa is often mentioned in discussions about cryptocurrencies, it's important to understand that it's not a direct counterpart. Visa is not a currency. Visa serves as a payment network, akin to Paypal. These platforms can, and in some instances such as Paypal, do support transactions in cryptocurrencies alongside fiat currencies. In the realm of fiat currency, the closest analogue to owning a Bitcoin or Ethereum account might be holding physical cash or digitally, maintaining an account at a Federal Reserve Bank. However, the latter is rare and nearly impossible to establish, making it accessible only to exceptionally large banking institutions. A more common comparison might be that having a regular bank account is similar to having a custodial cryptocurrency account (e.g. on an exchange, PayPal, RobinHood, etc.), as it represents a method of holding without possessing the currency directly. Regarding the 25 million figure, it's difficult to know with certainty but it is very likely that the figure understates the amount of users, as custodial accounts tend to be more common and they do not result in new on-chain addresses. Also, I'm not sure where the figure comes from because for Bitcoin alone, there are over 40 million addresses with at least 1$[0]. > has nothing to do with helping regular people, the oppressed, the unbanked, whatever. As someone who was unbanked for a long time, and having talked to many people in that situation (most recently a couple of Russian immigrants), you are talking out of your ass here. [0] https://bitinfocharts.com/top-100-richest-bitcoin-addresses.html https://bitinfocharts.com/top-100-richest-bitcoin-addresses....
  - kkielhofner 3y ago
    > As someone who was unbanked for a long time, and having talked to many people in that situation (most recently a couple of Russian immigrants), you are talking out of your ass here. I think you missed my overall point. What I'm saying is that a transaction settlement value nearly equal to Visa is not primarily made up of these kinds of use cases. Obviously it's impossible to get real data on it but as a portion of transaction volume and value this valid (to me) use case almost certainly makes up infinitesimally small fractions of a percent of these transactions and value. I have several friends that have fled civil wars and extremely unfavorable conditions. The (unfortunately) classic story of fleeing a country for your safety, leaving everything behind, and having to economically start over from zero in the US. In one example, I have a friend who's family was very wealthy in a country experiencing a brutal civil war in the 1980s. When their parents got to the US they were forced to take minimum wage jobs and the family lived in what was essentially poverty. They're alive but I cannot imagine what that must have been like. They talk about how jarring and terrible it was to this day and it was clearly one of the more traumatic aspects of the experience. Do we all wish cryptocurrencies were available to them 40 years ago? I know I do. However, this runs into at least two gigantic problems in practice. Let's say I flee from Ukraine today and get to the US with $100k of crypto currencies after I was (somehow) able to liquidate some portion of my wealth and get it on chain. Now I'm in the US. How, exactly, am I going to get it into the financial system? Once I get my documents, etc, in order I would imagine showing up to an off-ramp (like Coinbase) as a recent immigrant/refugee/asylum seeker and trying to end up with even $10k in a US bank account is going to be challenging to say the least. Again assuming I could somehow get this value on chain in the first place... Granted this isn't an inherent fault of cryptocurrencies but it is how the real world works today in terms of the absolutely necessary on-ramps and off-ramps to the larger financial system where funds can actually be utilized. There's only so much you're going to be able to get out of a shady gas station bitcoin ATM with 15% fees. Is even $1 better than $0? Yes. Is a bank, the IRS, etc going to take issue with more significant amounts? Absolutely. Is that fair? Unfortunately, kind of. Ideally there would be some kind of program to validate this use case and source of funds similar to the process used for people to claim asylum. However, talk to anyone who has gone through that... Just being able to get into and stay in the country is a long and arduous process when you're not also bringing funds in some cryptocurrency long associated with criminality, fraud, etc. What should/would be the process for validating the source of these funds to ensure I'm not actually some part of that oppressive government, a warlord, "terrorist", etc? It's a valid use case in theory but given the lack of ability to use cryptocurrencies directly for nearly all daily needs I'm very skeptical of the real utility. Back to my concluding point: it's touted a lot by cryptocurrency proponents but mentioning it at the same time as pointing to a source talking about settling 11 trillion dollars of transactions is bizarre to say the least. The people pointing to this use case are, as you say, "talking out of their ass" and repeating a talking point used by cryptocurrency proponents as reference to one valid use case that is sympathetic to the rest of the population who otherwise generally has a very negative view of cryptocurrencies.
rrdharan 3y ago
> some from people who operate outside of the law... also from people who lack access to good banking and payments infrastructure What do you suppose that ratio to be in terms of e.g. transaction volume? Personally I think it's >90 : <10 (scams : sympathetic). Others seem to think the balance is very different, or that it _could_ be different some day and that alone is a reason to "leave it alone".
- tkz1312 3y ago
  I personally don’t have an opinion on the ratio, but there are many reports estimating that the illicit to legal ratio is much lower than you suspect. Either way I actually don’t care that much, I think access to the financial system is a human right, and not one that governments or US corporates should be able to arbitrarily remove. Crypto is the only thing we have that is remotely close to preserving the rights that we have with cash in the digital realm, and that makes it OK in my book.
  - rrdharan 3y ago
    > preserving the rights that we have with cash in the digital realm I think it goes quite a bit beyond that, or rather, the digital and physical realm are not mere 1:1 mirror images of each other. For example in the physical realm it is really difficult to move millions of dollars of cash from one place to another particularly across prominent geographic or national boundaries (oceans, mountains, countries); the difficulty scales with the amount. Do people have this "right"? Sure, I guess, but in practice and as history has shown us, they've never been able to exercise it. It's more or less trivial to move huge sums with crypto.
    - tkz1312 3y ago
      Certainly they are not 1-1 the same. Cash has better privacy properties, crypto lets you move large sums more easily. In general, when it comes to a monetary technology, I view being able to quickly and easily make transfers as a feature not a bug.
  - mvdtnz 3y ago

kkielhofner 3y ago

Visa has at least 343 million cardholders worldwide. Of course trying to determine crypto "users" is essentially impossible but even the most bloated and inflated estimates (users unique per chain, address = user) put the number somewhere around 300 million. Personally I think it's more like 50-100 million by the time you factor in users on different chains, different wallets, etc. I've spent a lot of time analyzing chains to come to that number, it's not difficult. Nearly every crypto user participates on more than one chain and often uses at least two addresses (hot and cold wallet, for example). Sure enough, the quote is right there in the report: "over 25 million blockchain addresses held over $1 in stablecoins" 25 million addresses, which absolutely don't equal users. Even if they did, that's .05% of global internet users (5.2 billion). With the threshold for inclusion at $1... Of course you say "moving as much value" which doesn't necessarily correlate directly to users or their activity but I would venture to guess (if the report is accurate at all) that a substantial portion of that stablecoin "value" volume isn't anything resembling the economic activity of Visa where every swipe is in exchange for a good or service. At best settlement between exchanges but also wash trading and all kinds of weird hijinx that are basically just swapping tokens around with no other meaningful economic activity. Just look at chain analysis breakdowns on the latest crypto heist and watch them tumble it through stablecoins at least once (often many more). I guess that's "value" but I certainly wouldn't be touting it. The crypto narrative of helping the unbanked is essentially PR damage control spin to try to counter all of the obvious evils that crypto is directly involved in and often responsible for. This volume (if even accurate) has nothing to do with helping regular people, the oppressed, the unbanked, whatever.

tkz1312 3y ago
visa very clearly much more users who transact much lower amounts than stablecoins, I never claimed otherwise. The fact remains that substantial amounts of people are using crypto rails to move very economically significant sums of money. The fact that something can be used by bad people does not make the thing itself bad. Very similar arguments are often levelled at tools like Tor or Signal, but very few of the hacker news crowd see those viewpoints as valid. Uncensorable and private digital cash is important in the same way that uncensorable and private digital communications are.
olalonde 3y ago
While Visa is often mentioned in discussions about cryptocurrencies, it's important to understand that it's not a direct counterpart. Visa is not a currency. Visa serves as a payment network, akin to Paypal. These platforms can, and in some instances such as Paypal, do support transactions in cryptocurrencies alongside fiat currencies. In the realm of fiat currency, the closest analogue to owning a Bitcoin or Ethereum account might be holding physical cash or digitally, maintaining an account at a Federal Reserve Bank. However, the latter is rare and nearly impossible to establish, making it accessible only to exceptionally large banking institutions. A more common comparison might be that having a regular bank account is similar to having a custodial cryptocurrency account (e.g. on an exchange, PayPal, RobinHood, etc.), as it represents a method of holding without possessing the currency directly. Regarding the 25 million figure, it's difficult to know with certainty but it is very likely that the figure understates the amount of users, as custodial accounts tend to be more common and they do not result in new on-chain addresses. Also, I'm not sure where the figure comes from because for Bitcoin alone, there are over 40 million addresses with at least 1$[0]. > has nothing to do with helping regular people, the oppressed, the unbanked, whatever. As someone who was unbanked for a long time, and having talked to many people in that situation (most recently a couple of Russian immigrants), you are talking out of your ass here. [0] https://bitinfocharts.com/top-100-richest-bitcoin-addresses.html https://bitinfocharts.com/top-100-richest-bitcoin-addresses....
- kkielhofner 3y ago
  > As someone who was unbanked for a long time, and having talked to many people in that situation (most recently a couple of Russian immigrants), you are talking out of your ass here. I think you missed my overall point. What I'm saying is that a transaction settlement value nearly equal to Visa is not primarily made up of these kinds of use cases. Obviously it's impossible to get real data on it but as a portion of transaction volume and value this valid (to me) use case almost certainly makes up infinitesimally small fractions of a percent of these transactions and value. I have several friends that have fled civil wars and extremely unfavorable conditions. The (unfortunately) classic story of fleeing a country for your safety, leaving everything behind, and having to economically start over from zero in the US. In one example, I have a friend who's family was very wealthy in a country experiencing a brutal civil war in the 1980s. When their parents got to the US they were forced to take minimum wage jobs and the family lived in what was essentially poverty. They're alive but I cannot imagine what that must have been like. They talk about how jarring and terrible it was to this day and it was clearly one of the more traumatic aspects of the experience. Do we all wish cryptocurrencies were available to them 40 years ago? I know I do. However, this runs into at least two gigantic problems in practice. Let's say I flee from Ukraine today and get to the US with $100k of crypto currencies after I was (somehow) able to liquidate some portion of my wealth and get it on chain. Now I'm in the US. How, exactly, am I going to get it into the financial system? Once I get my documents, etc, in order I would imagine showing up to an off-ramp (like Coinbase) as a recent immigrant/refugee/asylum seeker and trying to end up with even $10k in a US bank account is going to be challenging to say the least. Again assuming I could somehow get this value on chain in the first place... Granted this isn't an inherent fault of cryptocurrencies but it is how the real world works today in terms of the absolutely necessary on-ramps and off-ramps to the larger financial system where funds can actually be utilized. There's only so much you're going to be able to get out of a shady gas station bitcoin ATM with 15% fees. Is even $1 better than $0? Yes. Is a bank, the IRS, etc going to take issue with more significant amounts? Absolutely. Is that fair? Unfortunately, kind of. Ideally there would be some kind of program to validate this use case and source of funds similar to the process used for people to claim asylum. However, talk to anyone who has gone through that... Just being able to get into and stay in the country is a long and arduous process when you're not also bringing funds in some cryptocurrency long associated with criminality, fraud, etc. What should/would be the process for validating the source of these funds to ensure I'm not actually some part of that oppressive government, a warlord, "terrorist", etc? It's a valid use case in theory but given the lack of ability to use cryptocurrencies directly for nearly all daily needs I'm very skeptical of the real utility. Back to my concluding point: it's touted a lot by cryptocurrency proponents but mentioning it at the same time as pointing to a source talking about settling 11 trillion dollars of transactions is bizarre to say the least. The people pointing to this use case are, as you say, "talking out of their ass" and repeating a talking point used by cryptocurrency proponents as reference to one valid use case that is sympathetic to the rest of the population who otherwise generally has a very negative view of cryptocurrencies.

rrdharan 3y ago

> some from people who operate outside of the law... also from people who lack access to good banking and payments infrastructure What do you suppose that ratio to be in terms of e.g. transaction volume? Personally I think it's >90 : <10 (scams : sympathetic). Others seem to think the balance is very different, or that it _could_ be different some day and that alone is a reason to "leave it alone".

tkz1312 3y ago
I personally don’t have an opinion on the ratio, but there are many reports estimating that the illicit to legal ratio is much lower than you suspect. Either way I actually don’t care that much, I think access to the financial system is a human right, and not one that governments or US corporates should be able to arbitrarily remove. Crypto is the only thing we have that is remotely close to preserving the rights that we have with cash in the digital realm, and that makes it OK in my book.
- rrdharan 3y ago
  > preserving the rights that we have with cash in the digital realm I think it goes quite a bit beyond that, or rather, the digital and physical realm are not mere 1:1 mirror images of each other. For example in the physical realm it is really difficult to move millions of dollars of cash from one place to another particularly across prominent geographic or national boundaries (oceans, mountains, countries); the difficulty scales with the amount. Do people have this "right"? Sure, I guess, but in practice and as history has shown us, they've never been able to exercise it. It's more or less trivial to move huge sums with crypto.
  - tkz1312 3y ago
    Certainly they are not 1-1 the same. Cash has better privacy properties, crypto lets you move large sums more easily. In general, when it comes to a monetary technology, I view being able to quickly and easily make transfers as a feature not a bug.
- mvdtnz 3y ago