Fintech dystopia(fintechdystopia.com) |
Fintech dystopia(fintechdystopia.com) |
Having no other way to do these simple things, from my point of view, it is not a problem of hundred thousand people in Venezuela, it's a valid problem of tens (if not hundreds) of million people around the world.
IMO The author significantly underestimates how limited and inaccessible the current financial system in the world is.
What crypto is already useful for is not to replace the cash in your pocket and your savings account. It is useful to replace SWIFT and Fort Knox.
What crypto will be useful for in the future is uncertain. But uncertainty does not mean pie in the sky. How the internet would be used was uncertain in the 70s.
Yes, nerds were already excited about the internet in the 70s. Have a look ath the "Mother of all demos": https://en.wikipedia.org/wiki/The_Mother_of_All_Demos It takes decades to iron out the details of how to use fundamentally new technology.
Fear of change. Is there any new technology that HN is in favour of?
Some of its use cases such as having a "smart" personal/digital assistant on the computer helping organize your day are only popping up now thanks to the combination of LLM tech, model self hosting and MCP protocols.
Only took 50+ years, right?
That is what I mean by point 3 in my comment.
As I pointed out last time, Bitcoin was released at roughly the same time as the iPhone. Nobody needed to wait for use cases for the iPhone: the global economy immediately reoriented itself around the smartphone, because it delivered massive amounts of obvious value to customers. If this isn’t happening around cryptocurrency, at some point you have to face facts that it’s because the value isn’t there.
But it seemed pretty obvious to me more than a decade ago what cryptocurrency would be useful for. I remember the ideas flying around in the early days.
It's been a bumpy road...but then, I also remember through the late 90s (and especially after the dotcom crash) when there were countless takes on how the Internet (and PCs in general) had been vastly overhyped. "Computers were supposed to eliminate paper, but we're using more paper than ever! We were supposed to do all our shopping and get our news from the internet, but Sears is thriving and I still get my daily newspaper every morning!"
Somebody could absolutely have made a book out of all the overpromises of the "Internet Superhighway" era.
The path to general use for cryptocurrency has been, and will continue to be, rocky. Moreso than the net. It inherently involves money--lots of money--and so it's been rife with scams. "Nigerian Princes" on steroids.
But I can tell you guys: before the rush of investors and crazy bubbles, before the scams and collapses, long before hucksters like Trump got involved, there was a group of people to whom the potential of cryptocurrency seemed obvious.
Money is not that difficult of a concept, you use it to store value or transact. As a store of value it has no intrinsic advantage compared to any other alternative we have now, and same goes to transactions, it doesn't bring anything to the table than current systems already don't do.
All the features people keep mentioning like the immutable ledger are simply not something we actually need or government have asked for.
The only utility is making money for the people that work on it, there's no societal value in crypto at all.
Fort Knox still exists. US gold reserves are still increasing:
https://www.statista.com/graphic/1/188843/united-states-offi...
I empathize with the author, I really do, but you can't care about someone more than they care about themselves. If anyone has had the supremely unpleasant experience of trying to get loved ones to work out, they know. The last time someone (democrats) tried to tackle healthcare, they lost scores of seats all down the ballot.
https://www.quorum.us/data-driven-insights/under-obama-democ...
> but you can't care about someone more than they care about themselves.
Human history tells us that we don't make it through alone. We thrive on social structures and forming coalitions. Sometimes we get down and our friends and family put in work to pull us back. Your claim is the mental equivalent of "I can't lift someone up more than they can lift themselves up." Sorry, but if all they've got is bootstraps then you bet I can lift them up high into the sky while they can only lift themselves as high as they can jump. I'm pretty sure most people can't jump onto my shoulders and I'm confident none could jump that high and stay without support. Stop asking people to fly and look down at who's shoulders you're standing on
You can't get most Americans to care about anything they consider "socialism", and if you try too hard you'll get Trump.
Democrats losing support can be explained by several reasons that have nothing to do with tackling healthcare. It can be the fact that it ended up being a weak half measure in comparison to the strong desire for a universal healthcare system. Or completely unrelated to healthcare altogether, like the Hilary Clinton scandal fiascos.
The claim then is that people don't care enough about having public healthcare (or are actively against it) for it to be a politically popular goal.
"Why do you see the speck in your neighbour's eye, but do not notice the plank in your own eye?"
One problem with this argument is that insurance companies disagree and nobody with any power in the US seems to want to move away from the "insurance provider" model.
Assuming you're in the US or EU, you have a privileged perspective: your currency is widely adopted and has been (relatively) stable. I think smaller countries (and especially the businesses therein) are better able to appreciate a global-by-default, noninflationary store of value they can use to transact with anyone, at an established rate.
You could cut Visa and other CC companies out of the loop: they'd be obsolete. Their functionality would be inherent in the network. That's huge savings, reduced complexity, and you don't have arbitrary companies with the ability to blackmail you.
Microtransactions online would become feasible, and would use the very same infrastructure as multi-billion-dollar global transactions. Nice and simple. No fax machines or SWIFT codes or intermediary banks. No reliance on banks with a monopoly on access to the financial system, that can pull a plug on a project at any time for any reason--or prevent interesting experiments from happening in the first place.
You know some places pay like 20+% fees on remittances? That's a shitload of money that the (relatively poor) destination countries badly need! There's a lot of gouging and rent-seeking that goes on in the economy (https://www.thebignewsletter.com/p/economic-termites-are-eve...), and a lot of it is enabled by the rigid, crufty and archaic financial system. A simple, open, global public system would fundamentally change that.
I dunno. Your attitude seems the same, to me, as somebody from 1994 who's happily using AOL to read the news, chat, and send emails (though only to other AOL members, of course) saying "What's the utility of this 'internet' thing? I can already do all that stuff! Networking is well-understood, and the 'internet' doesn't bring anything new to the table!" Their perspective on what was desirable or possible was strictly limited by the status quo. Just as was the case then, the best and most interesting use cases of cryptocurrency probably aren't even imagined yet: the infrastructure is necessary to imagine them.
Surely more business is being done with crypto today than was done using the internet in the 80's.
I've been paid my salary in crypto for the last 8 years. The company I work for pays nearly all their expenses in crypto. I pay for my rent and most major purchases with crypto. A significant portion of my savings is in crypto. For fiat purchases, I'll use a reloadable crypto visa card. When I travel to foreign countries that mostly use cash, I'll usually exchange crypto for local currency rather than carry large amounts of USD or deal with sketchy ATMs.
Where's the value creation? At some point value has to be coming into the system, and as far as I can see that side still all bottoms out in crime or scams.
> For fiat purchases, I'll use a reloadable crypto visa card.
I've always felt those were an admission of failure of the whole crypto enterprise. All of the downsides and none of the upside.
https://en.wikipedia.org/wiki/Category:Donald_Trump_controve...
(for reference, Hillary Clinton's list is less than half the size https://en.wikipedia.org/wiki/Category:Hillary_Clinton_contr... and she was never POTUS)
The correct response is to just ignore/abandon them, which actually pisses off narcissists more than you know.
A lot of the value is technically from crime, i.e., using crypto to skirt government laws and financial regulations that I believe are unjust.
> I've always felt those were an admission of failure of the whole crypto enterprise. All of the downsides and none of the upside.
Ideally they wouldn't be needed, but they still allow one to take advantage of the other benefits of crypto (like unrestricted cross-border transfers) and still have access to a large markets of products and services.
I feel like at this point there isn't anybody defending stablecoins who isn't using them primarily speculative investment/trading. There has yet to be a usecase for distributed ledger that isn't solved better by a centralised ledger other than niche counter-culture solutions whose users are typically blinkered to the fact that they are already a self-selected techno-elite who can't bring their utopia to the commons. That ended a bit more nasty sounding that I intended, apologies.
Although the current government is having a good go at reducing the value of the currency, it's barely budged on the chart.
> I agree that a centralized US dollar CBDC that isn't run by scammers would be a simpler way to do this.
I don't think it's a stretch to imagine that the government would ban all other stable coins and strictly control what "valid commerce" is allowed to be done with the centralized coin (see Operation Choke Point)
what about situations where centralized ledgers won't serve you? e.g. someone who wants to buy drugs, or sex workers want to get paid. And you mention "niche counter-culture solutions" but I don't think it's so niche - in 2002, the government of Argentina stole 2/3rds of everyone's savings by forcibly converting their dollar-denominated bank accounts into pesos at a terrible exchange rate. Not having to worry about this because you have a trustworthy government is nice, but it puts you into an elite class of your own.
Do cryptocurrencies provide value to people living in third-rate hellhole countries? Perhaps, because they are connected to the outside world. Ideally you could just have a foreign bank account that your country cannot touch. If the big governments gang up on crypto exchanges, then crypto will be worthless. The only reason they don't gang up on the exchanges seems to be that they (the people in government) use crypto for nefarious activities and money laundering.
The technological innovations of cryptocurrencies make for good thought experiments or puzzles, but serve as a distraction from their inevitable uselessness.
Stablecoins are not speculative or investments at all - their price stays the same. That's where stable in stablecoin comes from.
You see crypto and think day trading
TerraUSD enters the chat
You're right that they aren't speculative in the financial sense of "hopefully gaining value over time", but you do speculate (in the more general sense) on the fiat-pegging mechanism(s) to work to preserve the value you are storing in them...
As I understand it, many countries in the European Union use distributed ledgers for elections. Essentially it lets you cross reference votes and store that database across servers in multiple countries. It also prevents post-election data tampering by the state holding the election.
My understanding is this this system is not an open to every random Joe who wants to have a server (like bitcoin is). I think you still need to be a state actor to be part of the distributed database (so it's not a zero trust environment).
(Unfortunately, I don't have any good links to back this claim up)
I think you’re right to criticize crypto as a techno-elite project. However I think stablecoins have a legitimate use case for billions of people who don’t have access to good banks, or a stable currency, and can’t afford traditional fees. IMO it’s one of the best things to come out of crypto.
The problem stablecoins are solving are self-inflicted: KYC to open a bank account, restricted nationalities, account freezes, capital controls, taxation over-reach, etc.
At some point someone figured out that if they start over, there is a lot of “value” to be unlocked out there; and paid/lobbied/sponsored the right person to execute on that.
E.g."Stablecoins won’t bank the unbanked, because people get stablecoins by purchasing them on a crypto exchange, and no crypto exchange will open an account for a customer unless they have a bank account."
Well, I understand that US has dystopia level of financial surveillance, but in many places in the world you can change cash in person to crypto without many issues. And you don't need to use any major exchange for that, that defeats the whole point.
And yes, Russians, Iranians, Palestinians are known to use crypto, for example. And the majority of them don't have US bank accounts.
One of the core features of crypto that it's not an American (or anyone else) thing, like paypal, stripe, or any other system and American laws can be easily ignored if both parties are outside of the US. That's already a very liberating feature for at least a billion of people of nations hostile to the US and potentially to 8+ billions of people more.
(And to be clear, I’m someone who has never been particularly enthusiastic about crypto or blockchain.)
And I’ve never felt clear on how people trust wallet, hot or cold — at some point they connect to the internet for transactions, and all the vendors seem suspect. I really doubt most users are building their wallet from code reviewed cryptographically signed source… but maybe I’m wrong?
Unless you manually inscribe it with a laser (good luck), that wouldn't really be a great idea unless the computer assisting you in the inscriptions is completely air-gapped.
Stamping/manually engraving your seed on fire resistant stainless steel (308 is my preference) is still one of the most "air-gapped" way to do this.
> at some point they connect to the internet for transactions,
Some don't, for example ColdCard. It is possible to use it without ever connecting it to a computer. Using a power source and a USB cable, they even offer a way to avoid using power adapters (using common batteries) as these tend to become "smarter" these days and could one day be the source of an exploit.
Yeah, it's basically Uber for finance/banking/etc. Reap the free real estate created by rules and regulation by..skirting the rules and regulations.
It also adds indirection, which in turn allows all the parties involved to point fingers at each other Spiderman-style. "Oh I thought $X was responsible for $COMPLIANCE." Eventually, y'all get audited and shape up but that's a years-long process. And in that time you've grown and grown and finance/banking/etc is pretty sticky. Kaching :)
That worked in the U.S.
European banking regulators saw through this ploy and forced them to seek a banking license.
I think this is successful in its goals
Liquidity providing on concentrated liquidity pools is something I would like to see in the high volume US equities market
But will realistically only exist on tokenized platforms that trade their surrogates
It’s extremely lucrative and was only in the domain of market making firms before this technology
A lot of these things are lucrative until they're not. If they are inherently lucrative then that profit will diminish as people catch on.
back to what I'm a fan of: CLMMs (Concentrated Liquidity Market Maker) is a very competitive field. The level of profits depends solely on volume and amount of capital participating. You are counting on other capital getting bored and moving away, as well as volume rising. Thats the game, it will always be the game. Its already "lucrative until its not" so its not really a gotcha or that insightful for those passing by. I'm glad you have some experience with it.
I mean look at something like the Rabbit R1. I'm an AI researcher and I saw my peers get fucking excited about it because it was a leap ahead of all the state of the art research we knew. Sorry, but what? It takes time for research to get into a product, sometimes years, even in tech, even in the fast pace AI world. Like you think they put what normally takes at least one $10k GPU and put that into a $200 device? That they could leverage GPT and not have a subscription fee? You're not going to beat ChatGPT by using ChatGPT lol.
Somehow stuff like this keeps happening and we never learn our lesson. Author is right, they're just chasing. And the irony is that that chase is actually preventing us from getting what we're really chasing
USD has its own woes with inflation and trade wars so fundamentally isn't stable, compared to say gold. Other currencies have runaway inflation or much higher friction to transact.
However the promise of stablecoin is that it can be exchanged 1:1 with USD with transaction fees much lower than CC fees (on exchanges like Solana e.t.c).
Unlike fraud from FTX, USDC stablecoin buys US treasuries dollar for dollar. This generates demand for USD as well as Circle makes profit from treasury yields.
Elegant idea in a way. Fast, cross-border low fee transactions in USD.
Bitcoin now has proven itself as inflation-hedged store of value. USDC is proving itself as a way to transact on goods and services.
Obviously trust is earned as droplets but leaves in buckets.
Crypto is ripe with scams and shady exchanges.
These technologies didn't fix the problems. There is too much regulation, you can't do anything without a license. The only solutions are political, not technological.
Everything feels like a scam within a scam. I feel dizzy just thinking about it. I'm completely demoralised. Everything related to career feels pointless, sisyphean because of the bureaucracy and monopolization. Any work that pays well is useless at best, harmful at worst. It's either illegal or impossible to do anything which might provide value to people. Even if all the hurdles could be removed, I'm not even sure I want to contribute... For whose benefit? And I feel totally disconnected from the broader society around me.
I basically completely checked out career-wise. I'm good at faking though so I just fake it. I just started bullshitting my way through life. I hate it but everyone is just eating it up and loving it. What can I do? Just give the people more of what they want I guess. Value creation doesn't pay, bullshitting pays... People are living a lie and they love it when you build on top of it. If you just say the right words, they will deny their own eyes; this is what COVID taught me and I can see this in my day-to-day life. It's depressing, they are good people, that's why they assume good faith. I was just like them before, living in a bubble, I understand, I'm no better than them, just less fortunate. If they saw what I saw, they would probably do what I do. Many would do worse.
I feel like I need therapy from being this way. I have bills to pay though. I think I did everything approximately right but I've been ridiculously unlucky. I was operating on limited info and incorrect assumptions. Now, I'm stuck between a rock and a hard place.
It's illegal to be homeless in my country. It's illegal to live in a tent on 'your own' property, you are not allowed to build your own house without some expensive license and approvals... You can't do shit within your means. All the things which seemed unimportant to me before are now the centre of my life and on that plane of existence, I see scams all around.
- https://en.wikipedia.org/wiki/Mondex (Mastercard)
- https://en.wikipedia.org/wiki/Visa_Cash
And there is ongoing from the BIS https://www.bis.org/about/bisih/topics/cbdc/tourbillon.htm beside that there are many CBDC projects designed for inter-banks usages or some for wide public usage.
And I am talking about myself here. My only excuse is that I simply don't use my money. Which is not necessarily a good thing either.
Repeat after me. Do not use technology to try to solve people problems.
I am saying the solution to make people smarter or empower the people. Buy now pay later, credit cards, and all these bespoke algorithms is just an illusion to make people feel better when they get ripped off.
Someone responded like "lol, sure, we can find some sociologists to start programming our apps", and I thought Damn. That's really missing the point. And it seems so arrogant. Like, not only do we laugh at the idea of people doing our jobs, we also need to laugh at the idea of the relevance of their fields.
Yet we really should depend on their insights to further our field, in my opinion. No profession truly stands alone, just like no person does.
I think we'll get better about this over time. Right now we've definitely got some growing pains.
I'm not afraid of looking like I don't understand - I simply don't understand. I've tried reading a few "yellow papers" for crypto projects and they are so abstract and full of jargon that I never come away knowing more than when I started reading.
If anyone has a good resource for getting into the technical details of crypto please let me know. I would like to gain a full enough understanding that I can finally decide for myself if it's revolutionary or overhyped.
Democratic solutions are, imho, doomed to failure. In order for them to work a significant portion of "take back control" and "make my country great" brigade will need to have some kind of revelation about the direction of society as a whole. Given the amount of resources pumped into keeping people separate and fighting one-another, this seems like naive optimism.
I consider this to be a woefully inadequate response to a vast, complex and thoroughly embedded set of interconnected issues. Appropriate solutions will require a deep appreciation of complexity science, radically better system design and, frankly, a level of imagination, determination and competence that simply doesn't exist as a social norm, and will not emerge for at least a generation (or three), given that educational and political institutions are so deeply rooted in the current mode.
I don't think Bitcoin is revolutionary - it's just algorithmic scarcity - but I do think that distributed ledgers are an important piece of a future puzzle, as they provide transparency where previously it didn't exist. That said, there are no silver-bullets and not everything should necessarily be held on one.
My position is that, until we actually address the misconception of infinite growth within economic system design (i.e. not by external constraints, such as taxation), we haven't even started. Some may say that Bitcoin already does this, but its capture by the financial sector demonstrates that it is, at best, another asset class.
My anticipation is that this won't happen, so I am fully expecting a kind of looney tunes moment as we race off the side of the cliff. I am interested, not in preventing that from happening, since I think it is inevitable, but rather on planting bushes on the side of the cliff that might give us things to grab as we fall. Feel free to accuse me of either pessimism or optimism.
None of them work cross-border. And one suspects the US Government is working very hard to make sure they never do (look at the money laundering accusations against the Brazilian system for a recent example).
Also, what is this headline even about? Why the bashing on fintech? I worked for 4 fintechs and communicated with many more, not a single one was blockchain related.
Why is this even on hn?
If you want to read proper criticism of blockchain, read Molly White's essays instead
It's not an 'all-or-nothing' thing.
Those are instruments which already help many people (those you define as questionable for some reason). I'm actually pretty happy to see that the world has a tool to help millions of people with "questionable" religious, cultural, political, ideological views or sexual orientations. That reduces the pressure and advantage of people who want to make their lives harder.
If you don't need it, don't use it. That's totally cool. It doesn't have to be global. To be honest, I don't think anything needs to be global. That gives too much leverage to a single group at the expense of everyone else. The world is better off having many options for everyone.
Yes and mostly (as in 99% by amount of crypto moved) it's their governments
For example Russia it is not legal to pay with crypto, and to cash it out allowed crypto exchanges must submit your transactions to the government etc otherwise they get blocked.
But the bandit state is free of course to use it to trade with its friends like NK (which basically runs its nuclear program on ransomwared crypto) or Hamas;)
Sorry, but it's very naive to think that Russian people use only "allowed" crypto exchanges and comply with the laws. That would be an impossible country to live in.
Direct connections with people and being street-smart are important kinds of skills in such societies. And even without connections, you can easily go to some popular Russian exchange aggregators and find no-KYC options with cash delivery, as far as I know.
EDIT: I've actually just checked for you: starting from 10,000 USDT, you can cash out anonymously with cash delivery for 1% in Moscow right at this moment from a publicly accessible resource with reviews.
“dystopia level of financial surveillance,”
these days…
recently i made a cash withdrawal from my personal account ahead of a trip abroad (they asked me why) and within days received a FinCEN notice in the mail warning me about “ structured transactions”… having made no other cash transactions days or even check cashing or writing days before or days after.
I am not convinced this carbon-intensive form of money laundering is a good thing, but it certainly exists.
EDIT: went looking for data and it's estimated that ~63% [1] of power used in bitcoin proof-of-work operations. I honestly thought this figure would be higher, but with the insane campaign the American government is doing to invest and expand on drill operations this could go up in the short term. Long term though it's unlikely that this will keep up and we should see renewable sources gaining space more and more, just because it's the smart thing to do.
Consider living in a country with an unstable and fiscally irresponsible government. And having a net worth <$10k. Suddenly being able to hold your money in USD, on an account that cannot be seized, and can be used globally, becomes incredibly attractive.
You don’t need financial literacy, there is no min-buy in like ETFs/bonds, and there is minimal KYC or other identity restrictions. I think this is an incredible boon for the billions of people living in such conditions.
Is it high fees, is it overly burdensome sanctions/AML checks, something else?
This is just one example of a few factors that lead to a sort of isolation from international banking.
> Bradley Lott-Tillery, 24, from Arizona also entrusted Yotta with his savings, thinking his money would be protected by the federal government. “I emailed [Yotta], made sure it was FDIC insured. Of course, they emailed me back and told me, yes, it’s FDIC insured, which we now know is not true,” Lott-Tillery said.
> While the banks with which fintech companies like Yotta and Juno partner are FDIC insured, this only kicks in when a bank is found to have failed. Since the intermediary Synapse filed for bankruptcy, but not any of the banks, the money is not covered by the regulatory agency.
https://businessjournalism.org/2025/03/synapse-collapse/
(their money was "insured" in the same way depositing money in a random guy's bank account is insured: it's not insured against the guy! these bank-shaped companies managed to convince a bunch of people that they were close enough to banks and about as safe, and then it turned out they all handed the money over to the same fintech company to interface with the actual banks, and that company went messily bust)
You blame regulations and then mention that everything is pointless because everything is: "sisyphean because of the bureaucracy and monopolization".
The tech industry is lousy with scams, hell the entire model of the global economy is exit scamming everyone. No one builds anything because it is meant to last, everyone is fighting for the next IPO or buyout. You have pointed your ire in the wrong direction... because you were unable to scam first? Confusing...
There is definitely a belief in this industry that its primary intent was to demoralise those fleeing the traditional system... Almost as a way to scare them back towards papa fiat.
Crypto, as it turned out, was likely a case of the fiat system playing good cop bad cop with the world's nerds. To push them around and demoralise them into apathy and compliance.
The regulation is there to reduce the amount of scamming and con artists. It's the same reason we have Blue Sky Laws.
> Everything feels like a scam within a scam. I feel dizzy just thinking about it. I'm completely demoralised. Everything related to career feels pointless, sisyphean because of the bureaucracy. Any work that pays well is useless at best, harmful at worst. It's either illegal or impossible to do anything which might provide value to people. Even if all the hurdles could be removed, I'm not even sure I want to contribute... For whose benefit?
None of this is because of regulation. It's all because of greed and unchecked grift and profit capture. Technology is making the world worse because of greed and capturing profit, not because of regulations. The work most of us are doing is harmful because of greed and capturing profit, not because of regulations. Everyone is living a lie because of greed and capturing profit, not because of regulations. These uncountable scams are all because of unregulated greed and profit. People on HN are mad, but they're acting out against an imagined "regulation boogieman," not what's actually causing all of the shit.
Disagree. Zoning law and regulation-driven credentialism are the closest thing to a root cause you can find for most of the problems with modern society; sure you can say "greed" but that's a permanent part of human nature, and most societies find a way to live with it. Today's world where for a family to succeed both parents have to be putting 40+ hours into bullshit fake work in a circular economy of bullshit fake solutions to bullshit fake problems so that they can afford to get their kids the right bullshit fake qualifications is a distinctly regulation-based phenomenon.
> These uncountable scams are all because of unregulated greed and profit.
Sure. But are they actually any worse than the regulated scams? Often the licensed and regulated stuff hurts the end victim more than the direct scams.
But it's hard to fix greed. The solution to fix greed is way more radical, it's violent. The greedy will defend their interests with violence when confronted. The only non-violent solution I can think of is to let the system collapse, under their own direction. That's the only way the greedy would relinquish enough control to allow people the freedom to get things going again. There was a bit of this after COVID but it wasn't enough.
I just hope people can maintain their sanity through this. I hope it's not going to be an endless cycle of society repeatedly rebounding off from rock bottom... Never actually lifting itself out of the muck but basically always scraping rock bottom with only short temporary breaks.
As a developer, the system and code complexity we have to work with is increasing to the level that it should be considered mental assault. You need to develop a kind of apathy to get through life.
You want to be a good person doing good things for other people and getting along peacefully? Sorry, but happy planet is that way. Don't come to earth.
want to elaborate which country this is?
In some cases, this is by design. The project is nonsensical and/or a scam, and the white paper is an obfuscatory smokescreen to provide an illusion of sophistication.
A lot of what we do might be sophisticated in some far corners, but at the end of the day the end results can be trivially explained.
"Taxi ordered from a phone app, "Sleep in other people's homes", "Restaurant delivery service with GPS tracking", "Exercise bike with a screen showing workout videos", "Someone else shops for you", etc.
Unfortunately with crypto, a lot of it is trivially explained as "obfuscated scam"
Blockchain is pretty simple. There's a database, organized in a way that you can add records to it but you can not edit past records - or if you try to, everybody would know you did. There's a network of people maintaining this shared database, as a payment ledger - basically, this database for them says "X has $Y amount of database-money". People participating in maintaining this database get paid in the same database-money. They have incentive to do it properly, otherwise their database-money aren't worth shit. They also have incentive to steal if they could, but since they can't edit the database without other people noticing (who aren't interested in having db-money stolen from them) it's hard. That's the basic level of cryptocurrency systems, very shallowly and simplified, of course. If you want to know the math and protocols, there are full college degree programs dedicated to it (I am not kidding at all, there are). There's even free courses on Coursera and such which deal with the basics.
The second level is allowing to do other, more complicated stuff with the same database. Like keep ownership records for other things (that's basically NFT). The next level is turning it from passive database into a computation engine, so you can make computations that will be reproducible over the database. That's ethereum contracts and such. There also side aspects - like privacy chains, where the information who owns the money is encrypted, so you can prove you own the money but somebody else would have hard time seeing how much you got and where it came from (it's usually very easy in most chains). Etc. etc.
Whether it's revolutionary or overhyped - I have no idea. That's kinda societal question, certainly all the above (and more) can be useful and you can build useful stuff on top of it. Would some people use it? Probably. Will everybody switch to it from existing ways of doing things? I have no idea, but I suspect no. But I am nobody, so it's worth nothing. A lot of people smarter than me thought there's a use case for certain things, and spend a lot of time and money building stuff, and nobody every used it. Take Meta - the whole "metaverse" thing, nobody even remembers it now. There are many things like that. Is crypto one of them? I dunno. We'll see.
For example, there have been a lot of novel or interesting projects centered around cryptography, consensus, decentralization, anonyimity. On a sociological level, there are a lot of interesting social/economic experiments unfolding in the DeFi world as we speak.
But I think that is where the truly interesting or valuable contributions to humanity as a whole end, and the vast, vast majority of it otherwise is just speculation or scams. It is hard to find that signal in the noise, but it is there, if you look.
Fundamentally, we've been making digital versions of everything. We have digital phone calls, television, bookkeeping, document writing, drawing, etc.
One thing we didn't have digitally was a currency.
Why would we want a digital currency? For similar reasons to all the other stuff above. It's more convenient. When you "transfer money" from your bank account to another, your bank has to physically move the associated cash from it's vault to the other banks vault, by hiring secure trucks, people, and so on. If the money has to cross a border, that's even more of a hassle, now you have to physically cross a border with a truck full of cash. When a bank "holds onto your money", they need a big vault full of cash, they have to count it, account for every dollar, physically safeguard it, etc.
This is a huge cost, inefficiency, and a big challenge of banking, and it's one reason transaction fees and banking fees are so high.
Now we have an idea of why we might want to make a digital currency. The biggest issue with making one is how do you solve the "double spend problem". That is, if I have 1 unit of a currency and I give it to you, how do we guarantee I no longer have that unit after it was given to you? In a physical world, I'm giving you the actual unit of currency, but in the digital world I'm giving you a copy of it, it would be easy for me to keep my copy as well and have an infinite money glitch.
The solution to that is simple, you have a source of truth that processes the transaction. That source of truth records that I had 10$ and you had 10$, I gave you 1$, and now I have 9$ and you have 11$.
That's easy enough. Here comes the second problem, who would trust owning that source of truth? Would you trust me keeping the official source of truth log of how much money everyone has? I could easily add myself a few 0s to my account, or remove some from yours.
Would you trust the government of your country? Of another country? A big corporation? A US charity?
This is where crypto comes in. Crypto says, nobody would ever trust a single entity, but what if everyone could join a network of nodes that together form the source of truth? Not owned by any single person, but the union of everyone who wants to join the network, and you could join the network, I could join it, anyone is free to join it, and we can all validate and check each other's work to make sure no one else on the network is fudging the numbers.
And now a lot of complex cryptographic math comes in to from this network.
That's several centuries out of date, I'm afraid. Even before computers banks didn't actually do that, but now they certainly never do that. They just change records in their books - it has been paper books once, now it's just database files. I mean, banks do move cash (still do) but not when you transfer money from account to account, it has nothing to do with that, unless when you're running a massive cash-based business (which most banks hate btw, for many reasons).
>
> This is a huge cost, inefficiency, and a big challenge of banking, and it's one reason transaction fees and banking fees are so high.
That's absolutely not how this works though. Banks perform electronic transfers and most of the money is accounted for in databases. The problems are slow, antiquated, technology, which is made worse by the amount of regulation surrounding it that makes it hard for new contenders to enter and drive down prices via competition.
Cryptocurrency is trustless, but there is an interesting tangent about if you _do not_ want a government to control monetary policy.
Someone completely misunderstands how the real world works, misrepresents that even more when trying to articulate, uses convoluted wording to hide their total lack of understanding of the real world. Then create a "solution" for the problems that do not exist in the real world in the first place, in the process reinventing problems that are solved for centuries already or running head first into ideas that have been proven multiple times in history to just not work.
This whole machinery is then used by criminals to launder money, scammers to scam people out of money and speculants hoping to get rich quick, providing real money liquidity for the previous two.
Payment settlement is a solved problem and very rarely involves physical cash transfer. Most of this is just numbers moved between accounts which commercial banks have with a central bank.
That hasn't been true for, uh, centuries. It's like literally the entire point of banking, to allow financial transactions to take place without having to physically haul around collateral anywhere.
(And if you want a digital version of what banks actually do, it's called SWIFT, and has been around since checks Wikipedia 1973).
While I'm sure some of this is true for some banks at some point in history, this is the kind of understanding of a given industry that results in TechBros reinventing buses or juicing machines.
> This is a huge cost, inefficiency, and a big challenge of banking, and it's one reason transaction fees and banking fees are so high.
The reason banking fees are so high is because they charge what the market will bear, and most of the banks customers are a captive audience. It doesn't cost $2 to perform a transaction at an ATM; it costs pennies, if that. Banks should be paying you for holding, and putting to use, your money.
That’s not at all what happens!
Transfers are done digitally, physical cash does not move between vaults or bank branches.
Even in computing, a profession dominated by scientists and engineers, has a lot of failing. Even the damn SPEC benchmarks don’t know to average numbers correctly.
A decade later, I have 0.2 bitcoins in Coinbase. I want to move to owning my own keys and it's hard to be confident in avoiding footguns.
Any advice on how to securely transition to owning my own keys would be much appreciated.
When I was growing up, I didn’t understand check cashing places, payday loans, the layaway counter in the stores, home equity loans, reverse mortgages, auto leasing, and such.
And looking back, I’m amazed how much nonsense is out there. These are more traps than tools.
And what I am saying is that this sentiment, right here? Is exactly what leads to your later observation below, because the only ones willing to pay someone to implement a technical system, are inevitably the greedy ones looking to extract value from the suckers, and pay a techie to o make the little blinkenlights do their thing. You can't look at the technical side as the "hero" in this encounter, because the technical is what is propping up the fintech dystopia in the first place.
>I am saying the solution to make people smarter or empower the people. Buy now pay later, credit cards, and all these bespoke algorithms is just an illusion to make people feel better when they get ripped of.
You are dead on with this observation, but again, the answer to this is not something the technical world can solve. It's a people problem. We have to start talking about how whether these practices around are fundamentally exploitive or not, and whether they have a place in our society. Whether we should even be trying the money lenders offering them. That set of questions is firmly in the realm of people problems (problems that are fundamentally questions of human interaction, and whether something should or should not happen), rather than the technical, to which most systems in the fintech basically boil down to being a CRM, a set of ledgers/accounts, an invoicing/bill payment system, and some email/login/account viewing screen.
As someone with over a decade having been wasted trying to find a way to genuinely help people through the financial/insurtech sector (I know, what an idiot, right?), you cannot use technology on the service provider side, without it morphing into a more efficient value extractor, and often the other side of the transaction, the ones being fleeced, are in the worst place to say no in the face of a tech enabled lender.
Hence, I know it sounded sort of glib, but I'll say it again. No using tech to solve people problems.
This is the only new thing. Maybe.
I almost feel like crypto bros are all into HODL because spending coins is just too much effort!
I'd say for hardware wallets they are as trustworthy as it gets. And they open sourced both their firmware and hardware schematics so it's easier/possible to verify what you are using, if you have the abilities to do it.
The PSBT format isn't human readable (binary), it's following a BIP standard and open source tools exist to decrypt it... or simply use reputable wallets which support this format. And yes before signing a transaction you get a summary of the transaction/fees decoded by the ColdCard device. You then reconfirm it in the wallet you use to broadcast it before sending it on Bitcoin's network.
> I almost feel like crypto bros are all into HODL because spending coins is just too much effort!
A hot wallet is really no hassle to maintain and use, keep whatever you are willing to lose in it (like you would do in your real world physical wallet with cash... if you still have one of these). For larger amounts HW are more of a hassle... like it's more of a hassle to go to the bank to deposit/withdraw large sums. The differences are that Bitcoin is open 24/7, doesn't tell you what you can/can't do with your money, doesn't add/charge more fees each month for service you didn't ask for and most importantly isn't at the mercy of a single political actor deciding to devalue it more by increasing the national debt. It will be affected by markets like all things, but its total supply is quote certain at least.
“Reaffirm UN SDG: Global average cost of sending $200 remittance to be no more than 3% by 2030, with no corridors with costs higher than 5%” “75% of cross-border remittance payments in every corridor to provide availability of funds for the recipient within one hour of payment initiation and for the remainder of the market to be within one business day, by end-2027” “More than 90% of individuals (including those without bank accounts) who wish to send or receive a remittance payment to have access to a means of cross-border electronic remittance payment by end-2027”
[1] https://www.fsb.org/work-of-the-fsb/financial-innovation-and...
I don't think anyone ever claimed these were complicated or sophisticated, though? They're straightforward user-facing apps. A more comparable example might be cloud services or a good chunk of security products.
In the meantime we can make some money off it legitimately, so why not.
check binance & other markets - e.g convert USD 10 to USDC
Of course, if you're a US citizen transferring 200k USD from Chase to Bank of America, crypto doesn't make any sense.
This will break, sooner or later.
When external buyers stop buying treasuries US will have to massively inflate its money supply, taking bondholders and a bunch of other groups to the cleaners. Such events have a lot of collateral damage, which may fit the definition of financial blow up. But I would place us much further away than 6-12 months, likely at 5-10 years. If there is a viable alternative to US treasuries, potentially sooner, but still not in 12 months. My 2c.
In the shorter term...
NVIDIA is 8% of the US stock market.
88% of NVIDIA’s revenue comes from enterprise-scale GPUs primarily used for generative AI, and half of that is purchased by only 4 companies, Amazon, Google, Microsoft and Meta.
By the end of 2025, these 4 companies will have spent over $560 billion in capital expenditures on AI in the last two years. Their AI revenues? Around $35 billion.
And then there's Tesla, which is 'worth' more than Ford, GM, VW and Toyota combined.
So, 6 out of the 7 largest companies in the US are in a strange position.
Only Apple, the laggard in AI, seems relatively safe to me.
The flipside of this is crypto turbocharging online scammers.
"The industry in Cambodia now generates more than $12.5 billion annually – half of the country's GDP, according to the United States Institute for Peace."
"The criminal gangs entice trafficking victims with fake job offers posted on social media and then force them to financially exploit people online including through fake romances or “pig-butchering” schemes in which the scammer builds trust with a victim before stealing their money, Amnesty said."
https://www.reuters.com/sustainability/society-equity/amnest...
The scammers will make friends with someone online, persuade them to deposit increasingly large amounts into a "crypto trading platform", then finally run with the money.
Crypto has created an alternative financial system with many fewer rules. This can either be good or bad depending on the circumstances.
I think it has the potential to be a good thing in the long run. In the short run, however, people need to learn to instinctively distrust crypto as a scam. Especially if the situation involves a friendly attractive lady you've been chatting with online who's really good at trading cryptocurrency and wants to share her secrets with you.
My general point is that you can exchange money for energy and energy for crypto, and nobody can really stop you if you're doing it at a small enough scale. Siphon the fuel from your car and run a generator, pretend you're charging your EV, whatever.
I do hope regulation drives Tether out of business.
People hold dollar-backed stablecoins because they believe the US dollar to be the most durable unit of account on the planet.
All the proof you really need for that is that most crypto users outside the US still consider the value of their crypto tokens in terms of how many US dollars it’s worth.
The author of this article talks about this being a “parasite” to the US monetary system, but it’s hard to think of a better thing that could’ve happened for the US. Not only has it reinforced that dominance… it’s also driven hundreds of billions of dollars of US treasury bills purchases from providers like Tether and USDC.
It’s like the 2008 crash: people speculating because they think housing never goes down, except a market-scale drop can trigger an uncontrollable rush for the exit. With banks and companies permitted to hold coins as assets, the impact is broad but impossible to regulate ex ante, and difficult to model monetarily.
It’s what I would do if I were Putin and Xi, frustrated with the western controls on the banking system (that have mostly enabled us not to have to go to war).
Keep in mind stablecoins aren't a product built for Americans, they're built for people outside the US financial system to give them access to some of the benefits of the US's relatively solid money.
In 2022 when confidence in stablecoins plummeted after the Terra collapse, $20 billion in Tether was liquidated in a month - $10 billion of that in a single day: https://www.coingecko.com/en/coins/tether
Through that black swan event Tether did its job, processing redemptions for collateral dollar for dollar.
I'm from Russia. People who get paid tether travel out to cash in anonymously. I know because I know them. Believe me you don't want to gamble on this
> That would be an impossible country to live in.
Really? I have no words. Not being able to use crypto and it's now an impossible country to live in? How about this, people just use cash. 99.9999% of people cashing in loads of tether are criminals or connected to the government or both. Who do you think is so rich they just casually throw around tens thousands tether? On average a good salary is like 1k at best
So are you saying that people get paid in tether after the sentence that it's used 99.9% by the government only?
See https://www.bbc.com/news/business-38499883 and elsewhere.
It’s really telling how poor the knowledge of financial history and the existing state of the art in traditional financial tech there is among people in the crypto-boosting space. Many of the “innovations” they claim have been around in traditional finance for hundreds of years.
The regulation + limited liability combo takes away fear. The big companies doing harm love regulations, they breathe a sigh of relief when regulations are introduced. 'Regulatory clarity' they call it. They barely even know what harms the regulation is trying to prevent. They are disconnected from that.
The whole purpose of regulations is to reduce accountability (because instead of taking responsibility for their actions, entities instead just follow the regulations). It's not an accidental bug, it's a fundamental design flaw in the system.
The GENUIS act and I think MICA both disallow that part, exactly for this reason... traditional banks were seeing the writings on the wall and lobbied for such yield distributions to remain their own privilege only. For now.
But you can pretty easily find similar/better yield using DeFi and stake/bond some of your crypto assets in various strategies.
The difference is that there are virtually no minimum and usually no KYC... but there are also not many guardrails/gatekeeping, which leave the place to many scams/traps. It's best to stick to the largest platforms/communities and not fall for insane APY claims.
If the latter, I think that explains why stablecoins are popular in countries with weak institutions.
In a country with strong laws, and strong rule-of-law, "Code is Law" is a solution in search of a problem. But in a country with weak laws, it can be a lifesaver.
Doesn’t solve the problem as these assets can still be seized by foreign governments.
How easy is it from most people in the world to "just" open a bank account in another country?
I don’t understand your point. You said that crypto is only useful as long as governments use it for nefarious purposes and money laundering — so basically it’s a guaranteed relevancy in the future, no? How is that inevitable uselessness?
It's hard to say how long those nefarious purposes will be tolerated. There may come a time when the governments of the world don't even have to pretend to not be doing nefarious shit. At that point, cryptocurrencies will only be a thorn in their side, and will be under heavy attack.
Yes. When I said 5-10 years it wasn't to say that the effects would start then. That was my WAG at the time when normal, mild methods like localized YCC stop working and we should expect significant system-level problems.
For investments, I think now "buying index" will stop working well and buying chosen quality, profitable companies will work much better. My 2c.
Eh, that's what the index should be comprised of anyway, with some lags.
Or, to put it differently, nothing new: it was always much better, if you knew which companies will exceed expectations. After they do so consistently, they get included in the index eventually.
Definitely not lower class people like you seem to imply (or perhaps I'm just reading into it?)
What, in your opinion, are your options for transferring abroad the cash you got from selling your hard-earned assets?
It's very disturbing to me that the possibility of grass roots reform is essentially gone. You need a a two digit million amount of equity, proof of both formal academic and real life experience, you need a large team of trained professionals, easily at least 10 core employees who essentially aren't allowed to know anything other than banking and worst of all, you must keep these employees employed for the duration of the application, which may take a year or two and even if you did all of that, you can still get rejected anyway. Oh, and by the way, you're not allowed to earn money (as a bank) before you get your banking license, meaning that you are burning money faster than any other potential startup.
Now you might think this is fair, after all, banking is a high trust business that requires an extreme amount of caution and care or things will go to shit. Except as I already mentioned: More and more things are moving under the banking license umbrella, but applying to a subset of a banking license doesn't lower costs. The costs are the same no matter what you actually do, which favors massive banks that only have to pay for the license once and use their banking license to the fullest to provide all the services permitted by their license, which ironically increases the systemic risk by letting them become a point of single failure since all the services that ought to be separated are now combined in a single entity to minimize regulatory cost.
Most bailouts are the logical consequence of co-mingling the deposit service with the investment banking services in the same bank. The problem here isn't that losses in investment banking causes loss of deposits. It's that if the bank makes a financial loss in one department, it will also have to shut down the other department as well, because they are under the same company. The opposite is also true. If the payment services run at a loss, the bank will feel compelled to try risky investment banking bets to even the losses out. This type of cross subsidy essentially guarantees that the government will have to bail the bank out.
edit: An the process what you describe as complex etc., is actually good and robust
The place I'd look if I wanted a deeper understanding of how the fed operates would be reading the laws that govern banking.
On technological level? Yes. On the bullshit scam level with sixteen layers of new invented terminology? Most likely not.
And yes, cryptoworld is easier to understand precisely because it's unbelievably primitive once you pull apart hype, scams, and layers of indirection.
Edit: oh, it's also busy re-inventing most of the concepts that the world has had for centuries, and most people understand without needing to read books and whitepapers
the trouble seems to come when the credit union decides it needs to “scale “ sort of defeating the original thing that made it any good. perhaps that comes from just greed (ie the ability to charge fees on a larger customer base) or maybe it’s a requirement of the costs of providing an ever-widening array of newly “expected” services.
> will be immediately sent to prison were I to return to Russia
If this is true you can apply to asylum but for most people who fear this it is not true. Uunless you are literally famous, a rich guy or journalist or inconvenient criminal you are fine. Putler is not a total idiot and keeps an image of normal. My friends support Ukraine and one just recently came abroad again third time since the war started just fine. (To cash in crypto anonymous)
Send proof if I'm wrong!
They also affect businesses, not only the government.
> cannot apply for asylum as I left Russia many years before the war, so I technically wasn't "prosecuted"
you CAN apply for asylum if there is evidence that you will be prosecuted if you return. Really bro. I think even gay/trans people for example used this. But for being pro Ukraine anti war I don't think there's evidence you would be prosecuted unless you are famous or something