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A lot of us are not really deep into the finance space. Maybe there's a good reason it's left unsaid, but the question I came away with after reading that page

• nisegami 1y ago
  In the case of Argentina, and similarly for my country, access to USD is fraught and often involves off-market transactions.
  • bloggie 1y ago
    So transactions are difficult because they are illegal, and blockchain helps to facilitate crime? Are there other uses? Surely a large and legitimate operation like Stripe and the companies they mention in the blog post would have found additional use cases?
    • jdminhbg 1y ago
      > Surely a large and legitimate operation like Stripe and the companies they mention in the blog post would have found additional use cases? You are literally in a thread whose top post is the Stripe founder describing use cases.
      • bloggie 1y ago
        I don't think he does...? He says companies have found utility but doesn't say what that utility is.
        • jdminhbg 1y ago
          The sentences that follow “found utility” say what that utility is: > For example, Bridge (a stablecoin orchestration platform that Stripe acquired) is used by SpaceX for managing money in long-tail markets. Another big customer, DolarApp, is providing banking services to customers in Latin America.
    • Izikiel43 1y ago
      > So transactions are difficult because they are illegal, and blockchain helps to facilitate crime? Let's say I make drinking water illegal, would you still do it? Sure you would, you need it to live, laws be damned. In Argentina it was a similar situation, financially speaking, but with USD, as Argentina had like 1000% accumulated inflation since 2019, so basically the ARS melted in your hands, and the USD/Euros/crypto where your only safe havens. So yes, the government made the transactions illegal, but the alternative was becoming poor (we ended up the previous government with around 55% poverty).
      • bloggie 1y ago
        I'm certainly not going to moralize against breaking the law, just curious why an American company would (apparently) build a business off of facilitating it.
        • Izikiel43 1y ago
          They aren’t breaking any American laws
        • dragonwriter 1y ago
          American companies of all sizes do that a lot; its profitable, and even if it is eventually punished, the punishment is almost never sufficient to deter pursuing the profits.
• baby 1y ago
  I'll attempt an answer: Today, if you want to transact between businesses or retail (folks like you and I), you need to find a route between the two entities' banks. This route might take several hops, passing through some central banks, and some of these hops might be instant or might take days to actually settle. On top of that, you need to pay the service that helped you find a route (SWIFT) and potentially the nodes your transaction goes through. Bottomline, it can be slow and a lot of middle men are taxing you. This is why you see services like (Transfer)Wise, that basically try to bank everywhere, and allow you to send money faster by taking a shorter route (kind of like a wormhole :D). But they have to add liquidity everywhere, which they have to rebalance constantly, and it's centralized (single point of failure). FWIW it's great because for a long time this is the best thing we had. Now, let's take a look at the other side. Using stablecoin is a matter of just creating a wallet. The openness by default of blockchains make it really easy to integrate with a blockchain as an entity (just use the SDK, it's there by design). Furthermore, it's in many cases instant and cheap (unless you're transacting on a slow blockchain, but then that's your fault). That being said, the elephant in the room is that one stablecoin (let's say USDC) is now present on many blockchains. So if you have USDC on chain A, and I have USDC on chain B, we're back to our "tradfi" world where we have to find a route between our two chains, which might take us over many bridges, which can be slow and costly. The alternative, like with Wise, is to use centralized players who have liquidity on many different chains and can move things around by just updating their internal (and centralized) database. It's tradfi all over again :D
  • hvb2 1y ago
    So why can a traditional bank not solve this? In Europe you can wire money across borders for free, you just need to know the account number. Arrives in seconds at 0 cost. I feel like a lot of the fintech in the US is purely a result of a lack of regulation. For the example of Argentina, the real reason that business is using crypto is because their currency is unreliable. It might be a good fit there but trading in dollars would've fixed that too.
    • abxyz 1y ago
      I’m as cynical about crypto as any sane person but I think you’re hand-waving away the challenges of international business. How can you transact in dollars if you’re a business in Argentina? As you say, if you’re operating in Europe, this is a solved problem, but lots of businesses are operating across borders that don’t have the same payment options. Banks could solve this problem but they haven’t and this is what non-banks have come up with. I’m sure if SEPA was global this wouldn’t be necessary, but it isn’t.
• yieldcrv 1y ago
  that's a very high quality question, in comparison to the others. here is what you're missing, and is very easy to miss: the third party, unaffiliated, developer experience is better on an EVM than it is is on a traditional centralized database. Than it is on a shared database with a bunch of signers. Than on any "web 2.0" cloud platform. the developers continue to bring their entire audiences with them, even though those audiences are quite small, they've grown in aggregate to be large enough. in web3, of which EVM platforms dominate and are the most mature, there is a tiny payment for deploying your application once, and then it exists in perpetuity for free at unlimited levels of bandwidth. your users pay to update the state of your application, and in many cases you can earn from them doing that. there is absolutely nothing in the cloud world that achieves the same thing at the same cost. the payment paradigms are entirely different, you have to pay for hosting, deployment, the thing that handles your deployment, additional workers to unbottleneck your continuous deployment, the bandwidth, bandwidth spikes, and get nickel and dimed on a ton of more things, or paying a premium to a service that handles all that for you. additionally, the concept of "composability" is attractive in the web3 space, again spearheaded by standards on EVMs, the concept is that third party applications are automatically compatible with each other. there are infinite permutations of combinable operations one can do or enable amongst deployed applications. you can compose, or combine, applications in a far less cumbersome and less fragile way, than with REST and APIs of different people's apps in the web 2.0 world. and on top of that, if one of those permutations becomes useful and you make it user friendly to do so, you can collect a toll for others doing that operation. this is just financial services, where "basis points" are collected by intermediaries. a common application are forms of lending. initiating borrowing, trading the opportunity, and closing the loan within a split second, leveraging 3 - 10 financial services at once, is something that's better faster and cheaper than what has been possible outside of the blockchain space. the ability to do so is gatekept by the other financial industry and payment rails in ways that are no longer necessary to debate. now you can do these things with $3 in capital instead of needing $3 million dollars to pursue getting an API key from some old slow moving organization. the compelling reason to create a new EVM are to change some basic parameters. block time, the size of contracts (the aforementioned operations) that can be deployed, and which standards are included into that chain, and of course the governance model - how are new standards deployed and how are transactions added. making stablecoins a first class citizen would need a new blockchain. how your governors/validators/nodes and RPCs function under load would need a new blockchain. it is very attractive to developers that they can deploy applications "in the cloud" that have a very nominal cost, doesn't cost them to maintain even amongst spikes in bandwidth. they don't have to incorporate or do any formalities while having unlimited financial upside, solely because there is already hundred of billions of dollars in notional value sloshing around in that space to cater to already. edit: I'd actually like to work with Stripe or other web3 organizations again on these kind of applications, now that I notice how boutique it still is to understand what's going on, email in bio
• j2kun 1y ago
  All of the other comments are missing the point: using blockchain technology is a means to bypass regulation. That's it. That's always been the point of cryptocurrency.
  • insane_dreamer 1y ago
    Incorrect; it's to bypass the middlemen that create the links of trust between two parties exchanging money. That was the point of Bitcoin from the start. (The many other crypto coins since then are mostly BS freud.)
    • MangoToupe 1y ago
      I'm not sure there's much of a distinction; the reason there are so many middlemen is regulatory.
    • j2kun 1y ago
      In this case, Stripe is adding themselves as a middleman. Whether or not it was the point of Bitcoin from the start, "removing the middlemen" is bullshit because you still need exchanges, wallet providers, people running nodes, etc. Cryptocurrency in practice just transfers power from traditional middlemen to new technically-advantaged middlemen.
      • bravoetch 1y ago
        The middleman that bitcoin is cleaved from is banks (that have control over all balances and transactions), and payment processors (same controls). Previously these were required unless you handed physical cash to someone. Now electronic transactions are free of those controls and the associated risk. Exchanges are not bitcoin, you can transact freely without them. Wallet providers are not bitcoin, they are 100% optional. Nodes don't act as middlemen, they are fabric.
        • mbesto 1y ago
          > middleman that bitcoin is cleaved from is banks (that have control over all balances and transactions), and payment processors (same controls) Miners now replace this since there is a network fee required to transact. I'm not sure what the current state of affair is, but ETH gas fees were egregious last time I transacted ETH.
• realcul 1y ago
  Simple ans. Crypto provides regulatory arbitrage. The steps and process to do the same in Fiat is riddled with regulation and hurddles. the same on crypto side is easy to do as of now. that is it.
• pc 1y ago
  Does that imply that some day users would be able to pay using Tempo? I don't think that customers or businesses should see Tempo very much. In the success case, Tempo is a platform like SWIFT or ACH that others employ behind the scenes to orchestrate transactions. "Decentralized, internet-scale SWIFT" isn't exactly the right analogy (there are clearly lots of differences), but it's not totally wrong either. Why are businesses finding crypto easier/faster/better? Yeah, I think this is the natural follow-up question. The answer differs a bit based on the use-case, but there are a few common reasons: * Instant on-chain transfers avoiding trapped liquidity. If you're transferring money from financial institution A to institution B, and the transfer takes a day, you're either slowed a day in taking the next step or you have to somehow cover that float. Depending on your movements and their predictability, that can require big buffers. * Fees that are lower than cards. Card payments are instant, which is often valuable (and superior to many bank transfers), but card transactions are also expensive relative to stablecoins. (And while card authorization is instant, settlement is not.) * Reliability. This sounds funny, but, when sending money between countries, there are many more manual processes involved at the associated financial institutions than one might think. Money is frequently just... lost, and humans are required to hunt for it. (We see this all the time at Stripe.) Crypto is punishing if you make a mistake, but, if you do things correctly, reliability is all-but guaranteed. * Fewer currency conversions. Wholesale FX for major currencies is very cheap, but minor currencies can have bigger spreads, and the actual fee incurred by a regular customer (e.g. with their bank) can be significant. Stablecoins often make it possible to skip conversions that would otherwise happen. * Access to USD-based functionality. The US is the world's most sophisticated financial services market. Having a stablecoin means "having an on-chain asset", but it also typically means "having a USD asset", and a lot of major parts of the ecosystem (e.g. US equities and credit markets) primarily, or only, deal with US dollars. Acknowledging the obvious, a reflexive answer frequently invoked here is "it's regulatory arbitrage", but I think this is some combination of misguided and incurious as an explanation. First, stablecoins are now formally regulated in the US (with the GENIUS Act) and in Europe (under MiCA), so their use is now very explicitly regulated. Secondly, it implicitly assumes that the only reason one would seek an alternative to the traditional ways of doing things is because someone is doing something illegitimate. I think this usually indicates a lack of understanding of the challenges, complexities, and costs associated with high-volume cross-border money movement. Indeed, and somewhat ironically given the claim, one of Bridge's large customers is the US government.
• krrishd 1y ago
  The status quo of cross-border, bank-to-bank money movement today is actually somewhat decentralized: - SWIFT is really just a messaging protocol between a distributed, decentralized set of global banks that are all passing messages/money between each other. Your SWIFT wire might pass through an arbitrary number of correspondent banks, sort of like a flight route with multiple stops, until it reaches its destination. - Consequently: money moves slowly (up to 5 days), is expensive to move (variable fees assessed either to the payor or payee, by every bank in the chain), and there is an indeterminate amount of manual ops burden, multiplied by every bank in the chain. - As another commenter points out - services like Wise really just use massive amounts of liquidity spread out globally to try to minimize the number of true, bank-to-bank cross-border settlements required to get low-value payments from A -> B internationally. Ironically, I think the great accomplishment of stablecoins is its "centralizing" of cross-border money movement into a single ledger -- reducing it to a "book transfer" of sorts -- where getting all the world's money to pass through a single ledger would otherwise be a very difficult (probably intractable) challenge _if it were not for_ the permissionless-ness + global neutrality of the blockchain that is tasked with doing so. (I wrote about this in a slightly longer post here: https://text-incubation.com/The+great+irony+of+stablecoin https://text-incubation.com/The+great+irony+of+stablecoin)
• gamblor956 1y ago
  It's left unsaid because the truth is that businesses are not finding crypto easier, faster, or better. In most cases, it's the exact opposite. But crypto excels at one thing: obfuscation. A regular log or ledger file could accomplish the same thing as a blockchain for significantly less technical debt or ongoing expense. And note that the best use cases Stripe could find for "real world" use cases were a company trying to complicate its FX cash management, and a cash transfer app with fees higher than most of their competitors.
  • jdminhbg 1y ago
    > A regular log or ledger file could accomplish the same thing as a blockchain It is kind of wild how a bunch of people hyping blockchains five years ago has resulted in a thermostatic reaction where a bunch of other people have decided that distributed computing is easy, actually, you just need a ledger file.
    • gamblor956 1y ago
      You do understand that a blockchain is just a hashed ledger? It's called "crypto" because they use cryptography principles to hash the ledger into multiple parts. But it's still just a ledger. With blockchain, you just get a ledger that's harder to use and dependent on external connectivity.
• Izikiel43 1y ago
  >why are businesses finding crypto easier/faster/better? From the example given from Argentina, it bypasses capital controls, which until recently, made accessing foreign currency very hard/expensive/illegal. Argentina had a huge crypto boom because of them.
• sunshine-o 1y ago
  > why are businesses finding crypto easier/faster/better? One way to see it is today the EVM ended up being the solution to a lot of other problems. The banks are dying, their core banking is dying after 50+ years of service. There hasn't been any real investment since 2008, only minimal maintenance and cost cutting. Also generations of incompetent people at every levels created a situation with no escape. Also things like SWIFT became very irrelevant in practice. I can assure banks did not really used it for a while. When Ethereum and its EVM appeared 10 years ago a lot of people saw an opportunity to build a better "programmable money" platform but nobody really succeeded. At the same time Ethereum did not fail, improve and still secure the assets and run the smart contracts deployed in 2015. More than enough to convince the people on a sinking ship to jump on that boat. My guess is the the EVM is becoming something similar to UNIX: a loose standard almost everybody will build on. Maybe not the best but something good and flexible to jump and we need to move forward. Also the dollar urgently needed a new outlet so its on. So it is not really about "crypto" it is more about the EVM as a platform.
• spaceman_2020 1y ago
  I sold a blog in early 2021. The seller offered to pay via wire transfer or via Bitcoin. I chose wire transfer. Which meant going to my bank, getting approval to get paid, fill out two forms, and making three total trips. I now have contractors in Nigeria and Philippines who want to get paid in USDT. It's instant and there is a thriving local scene of P2P sellers for instant liquidity.
• staplers 1y ago
  This is a very bad place to ask. Very anti-bitcoin crowd.
  • jchw 1y ago
    Well, I was just curious to hear it from the horse's mouth since they were answering questions in here. The answers are interesting, though I think they're answering a bit of a different question than I am personally asking. Like, blockchain technology to power distributed ledgers for peer-to-peer payments is pretty interesting and I think I'd prefer it exists, consequences be damned. Stable coins don't really fit the same use cases though, and generally do have at least some reliance on a central party, so it raises the question whether the desired technical properties can't actually be achieved using traditional technology. Unfortunately, the answers pretty clearly center around not what kind of technology is used to implement the ledger, but rather the choice to implement one versus using existing payment networks. I don't think this is done in bad faith, but rather is the result of very different perspectives. I think the blockchain skeptics have a point: even if there is something especially technically advantageous about using the blockchain for this purpose that really couldn't be accomplished some other way, so far the only obvious incentive to do things this way appears to be regulatory differences in how the blockchain is regulated versus traditional ledgers. Very tangential, but seeing major entities and even governments adopt blockchain technology has made me think a lot about potential consequences in the longer term. I really wonder what happens to the properties of various cryptocurrency networks when and if quantum computers scale big enough to start breaking our cryptographic systems. I guess CryptoNote is just toast.
    • Zpalmtree 1y ago
      Why does it need to be achieved using traditional technology? Crypto works, and has attracted billions in liquidity for stable coins
      • staplers 1y ago
        Because ego. Takes a lot of self-actualization to recognize you might be living in a weaponized system that devours anything that doesn't participate (financial markets fed by unlimited supply).