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I continue to be convinced that the only valid use cases for crypto are scams and money laundering -- chalk up this one to the latter. Can anyone name an appli

I continue to be convinced that the only valid use cases for crypto are scams and money laundering -- chalk up this one to the latter. Can anyone name an application besides those two things that traditional finance doesn't handle better?

logicchains 2y ago
>Can anyone name an application besides those two things that traditional finance doesn't handle better? Buying drugs is an obvious thing that crypto's much better for. Similarly sending money to people in countries the US government doesn't like.
- smoothbenny 2y ago
  The former seems much riskier to transact in crypto vs. buying locally in cash from a known entity
indy 2y ago
1. Sending money to dangerous people like Julian Assange. 2. Sending money to relatives in the third world 3. Keeping your savings when the currency of your nation is going through hyperinflation
- 0dayz 2y ago
  Point 3 is bad advice, historically it's been the Swiss franks that is the gold standard for saving up in case of hyperinflation.
  - indy 2y ago
    Agreed, but someone in say Argentina or Nigeria will use crypto as that is more attainable.
  - dagw 2y ago
    Getting your money into a crypto coin that tracks a stable currency can in some cases be cheaper and easier than getting your money into that currency.
    - FabHK 2y ago
      Yeah, like Liberty Reserve back in 2006. A centralised stable coin, which was shut down by the US government a few years later for the usual reasons: money laundering, crime, etc. Crypto, being permissionless, is just a bit harder to shut down; but not any more legal.
- wslh 2y ago
  There is a 4: working in an inflationary and non-free market country such as Argentina. That is not only about savings (3) but business transactions.
  - freddie_mercury 2y ago
    Crypto isn't the answer to this. "Use literally any other currency, of which crypto is merely one among many" is the answer. Argentines adopted the US Dollar, not any cryptocurrency, to solve their problems.
    - wslh 2y ago
      Completely incorrect. I am Argentinian and perfectly know that Argentines of multiple social classes use crypto. It is even public information!
- smoothbenny 2y ago
  > 3. Keeping your savings when the currency of your nation is going through hyperinflation What crypto has shown long term stability and isn’t subject to the same forces that cause volatility in any currency?
- purge 2y ago
  I send money to 'the third world' a lot and it's extremely easy without having to resort to crypto nonsense. Hearing these implausible points repeated every time this question comes up just seems desperate now.
- freddie_mercury 2y ago
  I live in a third world country and nobody uses crypto to send money. The existing remittance system works fine. Crypto's claim in this area is that could be cheaper than remittances in the traditional banking system. But remittance fees using traditional banking are already only 1.5% so we're not talking about saving massive amounts of money in most circumstances. Which is probably why virtually nobody has switched to it for remittances.
  - freedomben 2y ago
    Indeed, the fees involved in sending in the vast majority of crypto, certainly Bitcoin and ethereum, are complete non-starters for this use case. In my opinion, it's a shame, because this is something that crypto could do extremely well. But here we are. I do believe that it will be solved at some point, as long as regulation doesn't make that impossible. It is making it much more difficult for new coins to get started. Obviously that is needed to some extent because we saw all the shit coins over the last several years that ripped people off, but finding a happy medium is essential and challenging.
    - freddie_mercury 2y ago
      Yeah, the last time I looked I would pay the equivalent of 1% to buy USDT (i.e. they are selling for 1% higher than the current spot price) and then another 1-1.3% to sell it and get fiat back out. So 2-2.5% roundtrip versus 1.5% for a regular remittance. So crypto is actually more expensive that the traditional banking system on top of just being weirder. Like, you have to use Binance's P2P in my country which is just way more complicated than the traditional remittance system of "give us their bank account details".
- mrtksn 2y ago
  1) That's a valid moral use IMHO but not necessarily a legal use case 2) Have you actually done it? There are many services that do this for cheap and fast. Your relatives don't have to open a crypto trading account and use banking to convert the money back into a currency they can use to purchase stuff, they can simply take cash from a chain store, the post office or a local bank branch. 3) When the local currency goes through hyperinflation people store their money in USD, EUR or GOLD. Putting money into crypto is an extra step that don't have to be there doesn't add any value because needs to go through a digital channel like a bank and when shits the fan banks can be PIA. Your local Change office in the mall or the guy at the street who sells and buys USD/EUR/GOLD tend to be more reliable.
dist1ll 2y ago
Assuming we're talking about low-cost chains that can actually be used for high-speed payment (which basically rules out L1 ETH/BTC) * Sending money without paying an obscene amount of settlement fees and having to wait in some cases half a week. International transfers are an absolute UX nightmare for many banking providers. * Being able to secure your account with proper OpsSec, i.e. identity/account management with proper hardware-based 2FA without any SMS loopholes. To date, I haven't found a bank that actually completely disables SMS 2FA as an option. * Being able to pay without giving away your credentials. The credit card system is completely backwards. If you're online shopping regularly, your financial info and home address probably get leaked once a year. I feel 10x more safe with self-custody than any banking solution I've used in the last decade. Traditional finance imo has been an absolute nightmare compared to crypto. Trad finance services bleed you out left and right, not to mention the hidden CC transaction fees people conveniently leave out of these discussions.
- eterm 2y ago
  None of those things require crypto. They are essentially solved problems. The UK banking system has had chip&pin for 20+ years, has had (Europe-wide?) instant payments for at least a decade. Banking numbers in the UK are push not pull, you cannot take someone else's money just because you have their bank number. * Payments require CVV (and have done for almost 30 years) and often additional 2fa verification through an app for larger payments. "Card not present" transactions are particular guarded against. The regularatory framework is such that the banks must absorb the cost of fraud, unless they can demonstrate the customer has been particular negligent. The average banking customer in the UK does not live in fear of "identity theft", and does not own "identity insurance" or similar protection packages, the legal framework provides protection. Solving the problem for international transfers simply requires greater international cooperation, not a different technical solution. It is a particular shame of Brexit that the UK has lost it's ability to lead in this area, because Europe generally has had a similar transformation over the past 20 years. Expanding that banking cooperation to bring in more trusted countries would further reduce the cost of international remittance. Someone trying to sell a technical solution to a social problem ought to always be treated with extra skepticism. * Some pedant will point out direct debits, but that is only available to trusted providers, and is backed up by the Direct Debit Guarentee, so the risk won't fall to the customer if things do go wrong.
jonahbenton 2y ago
T+0 settlement is something blockchain has solved that tradfi has not. Asset tokenization is another big one- getting solved, at least. And inflation hedging. Regulatory def has not caught up but in 10-20 years you individually will definitely have some portion of your financial transactions, whether payments or investments, settling on blockchain.
- dagw 2y ago
  T+0 settlement is something blockchain has solved that tradfi has not The reason 'tradfi' doesn't offer T+0 has nothing to do with technology (or lack of). It's an intentional policy choice and not due to technical limitations.
  - yieldcrv 2y ago
    The market is choosing T+0 America just moved to T+1 down from T+2. If you want T+0 now instead of a decade or two from now, you have an option
  - freedomben 2y ago
    Policy choice is a good example. If you disagree with the policy choice of traditional finance, you can opt for a system that is more in alignment with you.
    - FabHK 2y ago
      Sure. And if you disagree with money laundering choices and tax dodging choices and terrorist financing choices of traditional finance, you can opt for a system that is more in alignment with you. The question is: why should we let you do that?
- FabHK 2y ago
  > Asset tokenization LOL. Here's a novel idea: take debt, and chop it into fungible pieces that can be traded (a process we could call "securitisation"). Let's call it a bond. Or: Take equity, and chop it into fungible pieces that can be traded. Let's call it a share. That's impossible to do without crypto. Right? Right???
AtlasBarfed 2y ago
Hedge on money printing... Ahem "monetary policy" Otherwise I agree, although special purpose ones like helium I can see encoding interesting rewards.
nonameiguess 2y ago
The other guy that said this has been downvoted because Hacker News for whatever reason seems to be out of the loop on how this works, but buying illegal drugs on the Internet is a perfectly valid answer. It's more or less the most accepted way short of a corrupt physician writing bullshit prescriptions of getting steroids and any other performance enhancing drug for athletes. And it's far safer and more effective to do this on the Internet than from some "locally known" source that transacts in cash. Sources on the Internet are illegal but otherwise entirely legitimate businesses. There are large web communities of people who buy and review their products. There are trusted third-party labs that do chemical analysis to prove the purity of a product, and reputable sources advertise that they will and, in fact, actually do reimburse purchasers who randomly send samples to these labs and post the results publicly on known review forums. The fact that the non-athlete universe seems entirely unaware of this quite well-functioning parallel economy does not mean it doesn't exist.
- caeril 2y ago
  > because Hacker News for whatever reason HN is largely pro-status-quo. Deferring to parasitic gatekeepers is how things get done in the worldview of the HN mindset, so this reaction shouldn't surprise you. When evaluating a given action from the HN zeitgeist, a decent rubric is: if a Western government authorizes it, it is universally good. If a Western government discourages it, it is Hitler. Further, and importantly: if the action in question is determined to be Hitler, it is not merely bad; it is unthinkable (because the mere act of considering it would make you, the thinker, also Hitler), and therefore not worthy of being considered an option in the first place.
caeril 2y ago
Any type of transaction that "traditional finance" or the governments behind them don't approve of. Controlled substances, firearms, sex work, gambling, funding politically unpopular movements, etc. The mindset that can't understand the valid use cases of cryptocurrencies is approximately the same mindset that believes the status quo is acceptable, and that smashing the boot of the State into the necks of private citizens' ability to transact is a moral good. If world governments and traditional finance were far less oppressive and moralistic about the freedom to transact, then you'd have a solid point. (Although depending on the jurisdiction in question, I'd say money laundering may be a valid use case, as well).
JumpinJack_Cash 2y ago
> > Can anyone name an application besides those two things that traditional finance doesn't handle better? People who want to subtract themselves to what Central Bankers (who are de-facto unelected Sovreigns) are doing have no other option if not for crypto and gold. In general what you say about scams and money laundering could also be concomitant...how do you think Goldman Sachs and JPMorgan arrived to be the companies they are today? They were pulling so many scams and laundring especially during the 1880-2011 period. And quite frankly also after the touted post GFC regulations they keep laundering and breaking laws (Credit Suisse, Wells Fargo, JPMorgan etc, they all had a major multi billion dollar scandal or more in the aftermath of the GFC) People aren't stupid, they can see how nowadays Central Banks, Governments, big Commercial Banks, big tech are all about stability AKA the winners realize that they won and want to prevent other spins at the roulette, actually ideally they want to close all the tables in the Casino so they'd be the perpetual winners from now on. If you zoom out and see the picture from 30.000ft you might guess how some scams and laundering option for the common person isn't the worst thing that can happen when the powers that be want to freeze everything in place and sit on their winnings (while also continuing to break the law , scamming and laundering money)
tim333 2y ago
Speculation / gambling. Crypto is the greatest casino ever.
- latchkey 2y ago
  The stock market is far larger than crypto, and RoaringKitty is proving that it is the greatest casino ever.
  - tim333 2y ago
    The stock market is too tied to reality. Where other than crypto can you stick a dog meme on a joke coin and have a $23bn market cap out of it?
    - latchkey 2y ago
      > The stock market is too tied to reality. That's where your premise is wrong.
      - tim333 2y ago
        Well each to their own. I'm enthusiastic as I just bought some dumb meme thing that 5xed. Coinmarketcap has daily trading volume at $92bn so there's quite a lot of punting going on.

logicchains 2y ago

>Can anyone name an application besides those two things that traditional finance doesn't handle better? Buying drugs is an obvious thing that crypto's much better for. Similarly sending money to people in countries the US government doesn't like.

smoothbenny 2y ago
The former seems much riskier to transact in crypto vs. buying locally in cash from a known entity

indy 2y ago

1. Sending money to dangerous people like Julian Assange. 2. Sending money to relatives in the third world 3. Keeping your savings when the currency of your nation is going through hyperinflation

0dayz 2y ago
Point 3 is bad advice, historically it's been the Swiss franks that is the gold standard for saving up in case of hyperinflation.
- indy 2y ago
  Agreed, but someone in say Argentina or Nigeria will use crypto as that is more attainable.
- dagw 2y ago
  Getting your money into a crypto coin that tracks a stable currency can in some cases be cheaper and easier than getting your money into that currency.
  - FabHK 2y ago
    Yeah, like Liberty Reserve back in 2006. A centralised stable coin, which was shut down by the US government a few years later for the usual reasons: money laundering, crime, etc. Crypto, being permissionless, is just a bit harder to shut down; but not any more legal.
wslh 2y ago
There is a 4: working in an inflationary and non-free market country such as Argentina. That is not only about savings (3) but business transactions.
- freddie_mercury 2y ago
  Crypto isn't the answer to this. "Use literally any other currency, of which crypto is merely one among many" is the answer. Argentines adopted the US Dollar, not any cryptocurrency, to solve their problems.
  - wslh 2y ago
    Completely incorrect. I am Argentinian and perfectly know that Argentines of multiple social classes use crypto. It is even public information!
smoothbenny 2y ago
> 3. Keeping your savings when the currency of your nation is going through hyperinflation What crypto has shown long term stability and isn’t subject to the same forces that cause volatility in any currency?
purge 2y ago
I send money to 'the third world' a lot and it's extremely easy without having to resort to crypto nonsense. Hearing these implausible points repeated every time this question comes up just seems desperate now.
freddie_mercury 2y ago
I live in a third world country and nobody uses crypto to send money. The existing remittance system works fine. Crypto's claim in this area is that could be cheaper than remittances in the traditional banking system. But remittance fees using traditional banking are already only 1.5% so we're not talking about saving massive amounts of money in most circumstances. Which is probably why virtually nobody has switched to it for remittances.
- freedomben 2y ago
  Indeed, the fees involved in sending in the vast majority of crypto, certainly Bitcoin and ethereum, are complete non-starters for this use case. In my opinion, it's a shame, because this is something that crypto could do extremely well. But here we are. I do believe that it will be solved at some point, as long as regulation doesn't make that impossible. It is making it much more difficult for new coins to get started. Obviously that is needed to some extent because we saw all the shit coins over the last several years that ripped people off, but finding a happy medium is essential and challenging.
  - freddie_mercury 2y ago
    Yeah, the last time I looked I would pay the equivalent of 1% to buy USDT (i.e. they are selling for 1% higher than the current spot price) and then another 1-1.3% to sell it and get fiat back out. So 2-2.5% roundtrip versus 1.5% for a regular remittance. So crypto is actually more expensive that the traditional banking system on top of just being weirder. Like, you have to use Binance's P2P in my country which is just way more complicated than the traditional remittance system of "give us their bank account details".
mrtksn 2y ago
1) That's a valid moral use IMHO but not necessarily a legal use case 2) Have you actually done it? There are many services that do this for cheap and fast. Your relatives don't have to open a crypto trading account and use banking to convert the money back into a currency they can use to purchase stuff, they can simply take cash from a chain store, the post office or a local bank branch. 3) When the local currency goes through hyperinflation people store their money in USD, EUR or GOLD. Putting money into crypto is an extra step that don't have to be there doesn't add any value because needs to go through a digital channel like a bank and when shits the fan banks can be PIA. Your local Change office in the mall or the guy at the street who sells and buys USD/EUR/GOLD tend to be more reliable.

dist1ll 2y ago

Assuming we're talking about low-cost chains that can actually be used for high-speed payment (which basically rules out L1 ETH/BTC) * Sending money without paying an obscene amount of settlement fees and having to wait in some cases half a week. International transfers are an absolute UX nightmare for many banking providers. * Being able to secure your account with proper OpsSec, i.e. identity/account management with proper hardware-based 2FA without any SMS loopholes. To date, I haven't found a bank that actually completely disables SMS 2FA as an option. * Being able to pay without giving away your credentials. The credit card system is completely backwards. If you're online shopping regularly, your financial info and home address probably get leaked once a year. I feel 10x more safe with self-custody than any banking solution I've used in the last decade. Traditional finance imo has been an absolute nightmare compared to crypto. Trad finance services bleed you out left and right, not to mention the hidden CC transaction fees people conveniently leave out of these discussions.

eterm 2y ago
None of those things require crypto. They are essentially solved problems. The UK banking system has had chip&pin for 20+ years, has had (Europe-wide?) instant payments for at least a decade. Banking numbers in the UK are push not pull, you cannot take someone else's money just because you have their bank number. * Payments require CVV (and have done for almost 30 years) and often additional 2fa verification through an app for larger payments. "Card not present" transactions are particular guarded against. The regularatory framework is such that the banks must absorb the cost of fraud, unless they can demonstrate the customer has been particular negligent. The average banking customer in the UK does not live in fear of "identity theft", and does not own "identity insurance" or similar protection packages, the legal framework provides protection. Solving the problem for international transfers simply requires greater international cooperation, not a different technical solution. It is a particular shame of Brexit that the UK has lost it's ability to lead in this area, because Europe generally has had a similar transformation over the past 20 years. Expanding that banking cooperation to bring in more trusted countries would further reduce the cost of international remittance. Someone trying to sell a technical solution to a social problem ought to always be treated with extra skepticism. * Some pedant will point out direct debits, but that is only available to trusted providers, and is backed up by the Direct Debit Guarentee, so the risk won't fall to the customer if things do go wrong.

jonahbenton 2y ago

T+0 settlement is something blockchain has solved that tradfi has not. Asset tokenization is another big one- getting solved, at least. And inflation hedging. Regulatory def has not caught up but in 10-20 years you individually will definitely have some portion of your financial transactions, whether payments or investments, settling on blockchain.

dagw 2y ago
T+0 settlement is something blockchain has solved that tradfi has not The reason 'tradfi' doesn't offer T+0 has nothing to do with technology (or lack of). It's an intentional policy choice and not due to technical limitations.
- yieldcrv 2y ago
  The market is choosing T+0 America just moved to T+1 down from T+2. If you want T+0 now instead of a decade or two from now, you have an option
- freedomben 2y ago
  Policy choice is a good example. If you disagree with the policy choice of traditional finance, you can opt for a system that is more in alignment with you.
  - FabHK 2y ago
    Sure. And if you disagree with money laundering choices and tax dodging choices and terrorist financing choices of traditional finance, you can opt for a system that is more in alignment with you. The question is: why should we let you do that?
FabHK 2y ago
> Asset tokenization LOL. Here's a novel idea: take debt, and chop it into fungible pieces that can be traded (a process we could call "securitisation"). Let's call it a bond. Or: Take equity, and chop it into fungible pieces that can be traded. Let's call it a share. That's impossible to do without crypto. Right? Right???

AtlasBarfed 2y ago

Hedge on money printing... Ahem "monetary policy" Otherwise I agree, although special purpose ones like helium I can see encoding interesting rewards.

nonameiguess 2y ago

The other guy that said this has been downvoted because Hacker News for whatever reason seems to be out of the loop on how this works, but buying illegal drugs on the Internet is a perfectly valid answer. It's more or less the most accepted way short of a corrupt physician writing bullshit prescriptions of getting steroids and any other performance enhancing drug for athletes. And it's far safer and more effective to do this on the Internet than from some "locally known" source that transacts in cash. Sources on the Internet are illegal but otherwise entirely legitimate businesses. There are large web communities of people who buy and review their products. There are trusted third-party labs that do chemical analysis to prove the purity of a product, and reputable sources advertise that they will and, in fact, actually do reimburse purchasers who randomly send samples to these labs and post the results publicly on known review forums. The fact that the non-athlete universe seems entirely unaware of this quite well-functioning parallel economy does not mean it doesn't exist.

caeril 2y ago
> because Hacker News for whatever reason HN is largely pro-status-quo. Deferring to parasitic gatekeepers is how things get done in the worldview of the HN mindset, so this reaction shouldn't surprise you. When evaluating a given action from the HN zeitgeist, a decent rubric is: if a Western government authorizes it, it is universally good. If a Western government discourages it, it is Hitler. Further, and importantly: if the action in question is determined to be Hitler, it is not merely bad; it is unthinkable (because the mere act of considering it would make you, the thinker, also Hitler), and therefore not worthy of being considered an option in the first place.

caeril 2y ago

Any type of transaction that "traditional finance" or the governments behind them don't approve of. Controlled substances, firearms, sex work, gambling, funding politically unpopular movements, etc. The mindset that can't understand the valid use cases of cryptocurrencies is approximately the same mindset that believes the status quo is acceptable, and that smashing the boot of the State into the necks of private citizens' ability to transact is a moral good. If world governments and traditional finance were far less oppressive and moralistic about the freedom to transact, then you'd have a solid point. (Although depending on the jurisdiction in question, I'd say money laundering may be a valid use case, as well).

JumpinJack_Cash 2y ago

> > Can anyone name an application besides those two things that traditional finance doesn't handle better? People who want to subtract themselves to what Central Bankers (who are de-facto unelected Sovreigns) are doing have no other option if not for crypto and gold. In general what you say about scams and money laundering could also be concomitant...how do you think Goldman Sachs and JPMorgan arrived to be the companies they are today? They were pulling so many scams and laundring especially during the 1880-2011 period. And quite frankly also after the touted post GFC regulations they keep laundering and breaking laws (Credit Suisse, Wells Fargo, JPMorgan etc, they all had a major multi billion dollar scandal or more in the aftermath of the GFC) People aren't stupid, they can see how nowadays Central Banks, Governments, big Commercial Banks, big tech are all about stability AKA the winners realize that they won and want to prevent other spins at the roulette, actually ideally they want to close all the tables in the Casino so they'd be the perpetual winners from now on. If you zoom out and see the picture from 30.000ft you might guess how some scams and laundering option for the common person isn't the worst thing that can happen when the powers that be want to freeze everything in place and sit on their winnings (while also continuing to break the law , scamming and laundering money)

tim333 2y ago

Speculation / gambling. Crypto is the greatest casino ever.

latchkey 2y ago
The stock market is far larger than crypto, and RoaringKitty is proving that it is the greatest casino ever.
- tim333 2y ago
  The stock market is too tied to reality. Where other than crypto can you stick a dog meme on a joke coin and have a $23bn market cap out of it?
  - latchkey 2y ago
    > The stock market is too tied to reality. That's where your premise is wrong.
    - tim333 2y ago
      Well each to their own. I'm enthusiastic as I just bought some dumb meme thing that 5xed. Coinmarketcap has daily trading volume at $92bn so there's quite a lot of punting going on.