Several years ago, the discussion around cryptocurrency often centered on the valuable uses it could have. Now that it's been around for quite some time, how are people using it, in terms of useful functionality?
I know very little about the subject, but my initial thoughts lead to things like ransonware payments, money laundering, etc. Certainly there are other useful ways that people regularly use cryptocurrency. What are they?
It's kind of frustrating because I don't know a single person (besides myself) who uses crypto for anything but investing. Maybe one person because they bought an NFT (also for investment).
I felt like games/fantasy sports/betting would have come online by now. But, actually using crypto to buy anything is usually a convoluted process.
For betting and fantasy sports, you have better options. Most the games are still fumbling around/obvious vaporware. Your best bet is probably Axie Infinity, and it's not very fun, and also hard to play for free. Also, 80% of the people playing these games are using them for income streams, so they get min-maxed to hell, and there is even more botting than usual.
All of these altcoins, even bitcoin to a degree, are all barely usable unless you're letting them sit on an exchange somewhere.
I've had a good experience purchasing a good or service with exactly one altcoin.
Even all the DeFi stuff you hear about in articles/podcasts is too complicated, or you're going to have to pay $500 in gas fees to do anything.
It's pretty obvious most of the people who are "into" crypto, aren't really doing anything with it besides honing their investment skills once you actually talk to them about what they do with it.
The exorbitant gas fees should be largely resolved by L2s and other L1 scaling solutions. I am a huge crypto bull, but that is based in part on my belief that those scaling issues will be solved over the next couple years. I don't think anybody believes that crypto will be successful if those scaling issues are not addressed.
Currently, mostly buying currency in Mir4. Apparently, you're going to be able to buy and sell characters soon. Mir4 you can mine currency in game and convert it to crypto or vice versa. So, I did the latter. That took two exchanges, multiple wallets,
and multiple days for a less than $50 purchase.
The other games I've tried (Gods Unchained, Axie Infinity, MyCryptoHeroes, Splinterlands, Sorare) are either too expensive or not fun.
Augur (prediction market) is pretty interesting, but it's off limits in my region. It's also Ethereum based, so high transaction fees.
I've also bought a few pizzas, gift cards, domains, supplements, VPN access, that sort of thing as well. I still check for a crypto option at most places I shop (including SaaS services), but I don't see it most of the time.
Yes, the criminal uses are dominating the non-criminal, but the non-criminal continue to mature.
The way to think about it is that crypto is reinventing all of the historical aspects and nuances both of money and also of public systems of record- both of which are millenia old- on a much faster timeline.
There are orders of magnitude more people alive and participating in this money/ledger maturation process than all the previous times put together, of course. Much of the learning is just being implemented, rather than discovered. (Many of the mistakes, however, are being rediscovered.) So it is going very fast, but there is still a LOT to cover.
I would posit the system of record use cases are much more profound than the money use cases. Those are still years away- we don't really know how far- but it appears to me the infrastructure is still on track to have a role there.
In response to a question- in X years will there be jurisdictions using public blockchains for, eg Real Property ledger, rather than the mix of paper and digital non-blockchain systems variously in use now- I would say yes, and put greater than 50% odds that X is less than 10.
Real Property ledger is much more important than money. You can use any old thing for money, but in any civilization there is only one Real Property ledger.
I think I'd be more willing to bite on the "record keeping" concepts, if you can come up with ones where decentralization is a meaningful feature.
The big selling point of blockchain is trustless decentralization. How does decentralization improve a property registry? There's a finite amount of land, most of which has a fairly clear paper trail. The existing paper trail has well established legal credentials that any replacement system would have to re-create.
I guess the vision is that if you had immutable records of changes, it would self-resolve ownership disputes. I suspect the vast majority of such disputes aren't about "did he file deed A or B, and when" and more informal "the property line was only vaguely defined" or "we're trying to understand a will written in 1855 without context" situations that may not resolve to a document, and probably require a judge, not an algorithm, to decide.
In a general sense-- supply chain tracking, ownership tracking-- there's usually a single or small cluster of of "end consumers" of the data being stored. For supply chain integrity, it's the end consumer/manufacturer who needs to be able to produce a report saying his cocoa is Fair Trade Certifiable. For land ownership, it's the local taxation and legal system who needs to know who to send the bills to. They become the obvious steward of a centralized record system.
A centralized system also allows for sensible gatekeeping to prevent misuse of the system. I can imagine a blockchain land registry letting people develop a software package to play Monopoly with real land, while a traditional centralized county recorder would probably start penalizing you for filing frivolous documents before you got to the green properties.
No disagreement with any of your points; where decentralization/automation "helps"- for some definition of help- is liquidity. Real property is give or take the largest global asset market and is also incredibly illiquid.
Not only illiquid, but mispurposed. Only a portion of the individual assets have humans living in them, many are really just holdings, suitable for Monopoly.
There are plenty of structures that convey portions of real property legal rights in more or less efficient ways, but overall I don't see how it isn't inevitable for value to flow to those mechanisms that enable more liquid and efficient trading, and those mechanisms I think are most likely blockchain based.
It will take a long time, to be sure, and all kinds of new law has to be developed, new kinds of disputes (rhyming with old disputes but in this new medium) have to be subjected to governance and resolution.
But assuming an increase in human movement, climate-driven property value change, nation-state resource volatility, will there be a jurisdiction that adopts an on-chain registry in the next n years? I think so.
Is it better? Does it align with the needs of many stakeholders in the current registry systems? Likely not. But seems still like it will happen.
I think liquidity tends to trend with commodification, even more than a more efficient ledger.
Real property is fairly hostile to commodification-- even if you have "100 square metres of grade-XYZ commercial space", the guy with a different hundred metres can say that his averages 4 minutes closer to where your workers live.
It might be viable in some level of the market-- perhaps large commercial property owners disinterestedly trading bundles of bulk assets in between themselves-- but even there the time for the transaction to settle is secondary behind things like 'arranging funding', 'inspections', or 'finding a suitable property for needs.'
Also, I didn’t comment on whether the experiment is ethical. Crypto and morality is a whole can of worms that I find hard to understand in a satisfactory manner due to the high stakes of different groups abd they all seem to have a point.
There are millions paying family in their home countries, it is a significant slice of local GDP in some ways places. You want to throw a straw man to make this look sketchy. I’m sorry but you are many many years too late for such antics.
I’m not sure I understand your issue with the previous comment, just because they are sending it to family at home doesn’t mean they are doing it in a lawful way or even that this is desirable or “good” economic behavior.
OK, remittance is a big deal. I accept that. But so what? How much of remittance is moving via Bitcoin? Is that an actual use of Bitcoin, or just a theoretical, it-might-happen-that-way-if-people-decided-to use of Bitcoin?
Someone who is not me regularly buys LSD with monero for what it's worth and the shopping experience is almost Amazon level, next day shipping included.
Cryptocurrency has three successful use cases. One is speculation, hoping to profit from coin value increasing over time. Two is enabling nefarious activity such as ransomware payoffs and buying illicit drugs, weapons, illegal pornography, etc. Three is money laundering.
It’s served me well to be able to hold money when stocks seem really high, without being coerced by inflationary policy to throw more money into a bloated stock market by our political masters.
I recall that at the start of 2020, people were posting predictions for the next decade, and one guy predicted Bitcoin would reach $100k. In fact, he predicted it would reach $100k by the end of the year, IIRC. I take the opposite view; crypto mania will fizzle out in the next few years, leading to a corresponding decline in BTC and ETH prices. People bought crypto without belief in its intrinsic value or any intention of using it to buy goods, but rather because they hoped it's price would increase - the very definition of speculation.
Well, there was not such a thing as intrinsic value in neither cryptos nor in any fiats. Fiats at least are backed by the governments. For cryptos, there is nothing backing them nor would anyone really believe in them. The only potential value is to speculate. They claim to have resolved centralization issue but ironically people speculate cryptos in centralized exchanges. Centralization in financial areas are there for a reason, it just cannot be resolved by decentralization and that why people need crypto exchanges.
As a matter of fact, lots of regulations are on the way, and some countries go further even try to criminalize them, which will accelerate the decline for sure. Myself actually tried to speculate BTC in late 2008 or early 2009 which I cannot remember exactly, as I was pretty sure people were going to speculate in it. It was shame that I was too early, the price was super low ($0.001 or might be $0.01) but there was no venue for me to buy any. The next time BTC returned to my sight was around 2017, the price went up to $1000. I chilled out thought those people were crazy. But it turned out they were actually much crazier than I speculated. I look forward to seeing how this drama is going to end.
I mean that’s what happened in 2017-2018 yet again we are repeating the same bubble. I guess these crazy run ups will end at some point but I see no indication this will be the last.
I talked to a person that valuates art. When I heard her talk, I felt that cryptocurrency valuation had a lot in common with it.
Where art is valued on:
- Rarity
- Popularity of artist
- Perceived craftsmanship then
- Perceived craftmanship now
- Emotional elicitation (indirectly, i.e. if we didn’t “like” or “felt” something through art it wouldn’t hold value, probably).
Now cryptocurrencies:
- Rarity
- Popularity
- Innovativeness of idea at the time
- Innovativeness of idea now
- The ideology that a certain coin or cryptocurrencies as a whole represent (e.g. if it didn’t have an anarchistic and innovative bend then it would be worth a lot less)
- To a small extent: its utility (e.g. the unbanked using it)
Obviously I am handwaving and simplifying. My point: they are more similar than you think.
It’s not just speculation. It’s experimentation as well. The crypto community has been really playful in how they use and define money. There are wuite a few lessons that we have learned as a society that otherwise wouldn’t be so salient.
Things like:
What is trust?
Should we put our trust in technology instead of people?
Can we build a blockchain vm?
Can you censor blockchain technology? Or will people find ways around it?
Bitcoin will always hold some lower bound value, because there will always be 2.1 million willing to use $10 to see what happens.
Governments aren’t playful, people are. Playfulness can lead to recklessness and pain. It can also lead to artistic expression and innovation. IMO with cryptocurrencies, you see both.
I used to think the same way, but I now I believe BTC is here to stay. There is too much uncertainty in the mainstream monetary system. A bout of hyperinflation and everybody is wiped out. People are desperately looking for alternative value stores, even if imperfect.
At this point I am interested in pretty much anyone's perspective other than his. He bashes crypto, he makes money, his company builds something using crypto, he makes money. Just like his bank he is too big to fail and serves no one's interest but his own.
Gotta love when the Hacker News crowd sides with Wall Street kingpin Jamie Dimon just to own Bitcoin. This guy became a billionaire thanks to taxpayer subsidized bailouts after the 2008 crisis while regular people lost their homes, and while I don’t know that it is proven, it is very likely he was personally involved with or at the very least aware about the subprime mortgage derivative schemes that set off the entire thing.
Actual misinformation. Dimon's bank was one of the strongest ones and wasn't making or wholesaling subprime mortgages. It was able to acquire Bear Stearns for less than the value of Bear's real estate owned.
Misinformation? What do you mean? One of the strongest ones? You mean they didn’t lose a lot of money as a result of the collapse? That is exactly my point. They were financing the lenders and offloading their own bad securities in secret while not touching the ones held by their OWN CUSTOMERS. Aka they KNEW the whole thing was a scam and knew the whole thing was going to implode and didn’t want to be caught holding the bag when it did. They still got bailed out along with everyone else.
Bitcoin is important to a global industry worth around 2.8 trillion USD.
"A comparatively simple crime-economic model, constructed from readily available international databases, closely predicts a range of such expert assessments, and appears to offer a framework for determining and monitoring the size of money laundering flows around the world. Further research is required to complete the model, but the nature of that research is made clear, and it appears that existing data sources are likely to be adequate.
Initial output from the model suggests a global money laundering total of $2.85 trillion per year, heavily
concentrated in Europe and North America."
JPMorgan and friends are so hyperregulated they literally have regulators who sit in their offices, company officers who are required to report to regulators on a whim, regular scheduled updates with regulators, audits, etc. etc. there is probably no industry more regulated than finance.
It's pretty important to understand the difference between compliance regulation, and effective regulation.
We rarely get effective regulation — most often, it's simply hoops to jump through that new entrants and smaller competitors will be unevenly burdened by the resource cost of complying.
Barriers to entry. Facebook wants social media network regulations, and Amazon (now!, very rich) wants taxes on online purchases — and now cannabis.
It's already very , very heavily regulated. I remember in 2010 trading on etrade or ameritrade was a simple as filling out the form and wiring money, but with cryptooo there are tons of security checks, ID checks, verification, screening, blaocchain analysis to do anything.
I can tell you haven’t worked in a regulated industry, there is almost no regulation.
Most of the stuff you list is simple stuff done to meet KYC rules that most exchanges were initially delinquent in implementing and only did so when it was pointed out the obvious liability they were taking on not implementing them.
For regulated securities products there are all sort of approvals needed from the product itself to the marketing materials. There are rules about suitability of the product, transparency over commissions and fees, licensing and registration of market participants, market data rules.
this does not refute my personal experience. took me 3 days to trade on ameritrade, and I could withdraw $ in days too. Coinbase req.photo ID tons of other stuff to withdraw crypto. way different.
>Most of the stuff you list is simple stuff done to meet KYC rules that most exchanges were initially delinquent in implementing and only did so when it was pointed out the obvious liability they were taking on not implementing them.
If Jamie doesn't like it, I like it even more. At a first approximation, whatever is bad for JPMorgans and Goldman Sachs' of the world, has a high probability of being good for the rest of us.
Actually I understand _exactly_ what they do, and how Bitcoin (and crypto in general) threatens their business model. But go on with your strawman, please.
I am not always crypto advocate but how can any person take this seriously, what a massive conflict of interest we have here. If I ran some large business I probably also would say some potential competitor was worthless and due for regulation. Maybe bitcoin is not a competitor, but maybe it is, and maybe some other "fintech" or "defi" is a future competitor, if Dimon tar Bitcoin as a bad scam tech now and get these regulations he is stopping future competition before it becomes any problem.
Because JPM is a middleman, crypto removes middle man. Like all the car dealerships use legal means to prevent Tesla to sell cars directly to consumers without local shops.
It's not about fear of competition. Crypto doesn't remove the middle man. There are just other middlemen, but JPM also is not stupid and will figure out how to compete in this space. The new middlemen are folks like Coinbase, the other exchanges, middlemen like PayPal that are built on top of middlemen like Paxos. Regular people aren't going to using private keys to send money (where a typo leads to permanent loss) anymore than regular people are going to be coding in assembly on their machine to do addition and subtraction.
If there's really value in bitcoin and it becomes a thing, JPM will figure out how to help. Why? Because they are good at what they do, they have tons of clients and relationships. They add real tangible value to their clients. If middleman means "tangible value" then yeah, they're a middleman. JPM figured it out with currency markets, stock markets, bond markets, commodity markets, credit markets, equity derivatives - they figured it out with big institutional clients, with retail clients - they figured it out in simple products (buy EURUSD) and complex products (buy a 5 year forward knock out call option on EURUSD, contingent on SPX, quanto into Yen). I'm sure they'll figure it out for digital assets - if it truly becomes a market worth entering.
In the meantime, crypto has yet to add any real world value. What sane person takes a vacation to Tokyo and does anything other than use their Chase-issued Visa card (now available on your iPhone!) to buy stuff? Are you going to go there and pay with your bitcoin? Ridiculous. And guess what, the credit card route works instantly and it costs nearly nothing.
Where are the real use cases for crypto? Digital gold? Maybe. Weird trading card things, ok maybe. But real ones? Maybe they will come, but also maybe not... When internet/BBS came out to real people in the mid 1980s, even then (even then!), it was obvious that this was huge and had real value. People communicated, played games, etc. In the 1950s, business used computer to automate processes. We didn't need to wait until 1995 to figure out the internet (or computers) would eventually be huge. But with crypto, 10 years later, and nobody who actually understands traditional finance can articulate where crypto is better/faster/easier/cheaper, or any other use case. Maybe it will come, but I haven't heard it!
Have you seen Coinbase’s margins? They’re taking a bigger cut than any traditional financial actor, and the similar pricing from shops like Gemini suggest that the rest of the crypto industry is, also, rife with middlemen.
Those margins are absolutely incredible, Goldmanesque.
Heck it it were Goldman or JP Morgan running it, you have the CEOs dragged in front of congress being asked why they are robbing poor old grandma while she’s just trying to say trade cryptos
Those are middlemen for fiat-to-crypto transactions. No middlemen are needed for crypto-to-crypto transactions like with fiat-to-fiat transactions, with the exception of physical cash.
You gotta pay to get your transaction executed, the miners take that.
Right now transactions are heavily subsidized by the mining reward, at some point there will no longer be a mining reward so the whole thing will be only supported by transaction fees, and they are likely to be spectacular, even today with the low transaction volumes, actual transactions can sit in the mempool for quite some time before getting executed unless you pony up fees.
How do you figure? I've heard this before but I don't get it. If bitcoin is to be treated like currency, well, that would be in their wheelhouse right? And if bitcoin is to be treated as a speculative asset, that would also be in their wheelhouse?
My interpretation is that bitcoin is not "for the man", and therefor "the man" will not like or want it. But "the man" would trade in gilded gizzards if that would make them money.
Decentralized finance, in theory at least, undermines their power to determine the rules of the game: the decentralized nature of DeFi potentially dimishes the ability of financial lobbyists and the revolving door to influence regulation and policy. It also enables the lightning-fast rise of what would be serious competitors for JPM's customers. That's why I think that, if DeFi were to actually get big enough, companies like JPM would for a change start crying for MORE regulation. All in the name of protecting easily-swindled retail investors, of course.
If BTC does well, other cryptocurrencies will likely do well, which means DeFi will do well, which presumably means less people needing JPMorgan as an intermediary.
Can you explain that in smaller words, with more verbs? I'm also under the impression that a big smart contract went tits up recently and the establishment resorted to legal threats due to a huge loss of money which isn't confidence inspiring.
But more to the point, what would stop JPMorgan from getting in on the game if there was money to be made?
Nothing will stop JPMorgan from getting into the game who are trying to middleman / rent-seek from end users desiring a bridge from traditional finance to DeFi. However, as DeFi matures and new generations of users become accustomed to working directly with the technology, the role of the rent-seekers is systemically eliminated.
Long-term, it is in TradFi's best interested to oppose the emergence of DeFi. I predict they will use common and tired arguments to push for strong government regulations similar to those on TradFi, to encumber it and add to their own value-prop.
Also, some smart contracts can and will implode on occasion and that is fine. DeFi returns power (and responsibility) to the users, but as they are not used to having this level of responsibility there are bound to be losses here and there due to technical incompetence.
His opinion on things his job depends on failing should be taken with a grain of salt. Like a horse drawn carriage salesmen telling you cars are useless.
The guy is 65, has a net worth of $2bn. I genuinely don't think he gives a crap about bad mouthing bitcoin to save himself. He's won the game. At this point he's just trying to be credible and honest. There are crypto lovers who hear what he says, it hurts their emotions, so they rationalize his words as some sort of nefarious plot to subvert public opinion! But the explanation is simpler, it's just what he thinks.
It’s not a security. Bitcoin makes banks obsolete. Private Bankers and Central Bankers are quaking in their boots over Bitcoin. It undoes their damage. They are not longer needed.
Here is one perspective on Bitcion: In a world where abundance is abundant (every day we have more cash, cars, etc..) scarcity by itself could manifest value. As per law of supply and demand.
He may be uninformed or outright wrong about Bitcoin, but he runs the largest investment bank in the world. A whole lot of people care what he thinks about financial matters, and even if he's wrong about Bitcoin, the fact that he holds that opinion is important in itself.
Politicians and bankers (almost all on the older side) have no clue what they're talking about when it comes to technology, and come to terrible conclusions all the time.
I know very little about the subject, but my initial thoughts lead to things like ransonware payments, money laundering, etc. Certainly there are other useful ways that people regularly use cryptocurrency. What are they?