For those saying that crypto is useless, here is a great use case. Authoritarian governments are currently preventing individuals from moving their property across borders. Crypto fixes that.
It's not just "authoritarian governments" but rather "governments" in general, unless you consider the EU government to be authoritarian. And circumventing the law has always been the prime use case for crypto since the beginning. I think everyone has always agreed that it's great for that.
> And circumventing the law has always been the prime use case for crypto since the beginning. I think everyone has always agreed that it's great for that.
Absolutely. Even the criminals, scammers and extremists using Signal and its E2EE also use it to communicate with each other whilst sending/receiving funds via a private cryptocurrency called 'MobileCoin' which uses an encrypted blockchain and all transactions are untraceable and scrambled. Even they would agree.
Got to thank Moxie and his friends for creating a great tool used and adored by many criminal masterminds all around the world. /s
You know, security either works for everyone including undesirables, or for no one. There's no such thing as technology or mathematics that only works for good guys; this is where sufficiently advanced technology and magic diverge.
When most people say "crypto is useless", that is rarely about BTC being used as a currency, and is more about everything else in crypto (NFTs, web3, smart contracts, decentralized apps, ICOs, etc). The idea of a currency which has value because people give it value makes sense, regardless of how speculative it is.
People have been saying "crypto is useless" for wayyy longer than the time since NFTs were first popularized (which didn't become a mainstream term until 2020/2021).
Totally - the conversation definitely has shifted in general in Bitcoin's favor since it's launch.
My only point was, whatever comments people are making in the past few years which fit under the umbrella of "For those saying that crypto is useless", it feels like those have been directed at all the other stuff in the eco-system - while "moving their property across borders" is something which was solved by Bitcoin along time ago.
People pretty regularly say its useless in this sense as well. But even if it were true, as soon as you accept crypto is useful as money, DeFi smart contracts are pretty obviously useful as financial infrastructure on top of it.
Sorry, I was being a bit quick when I typed that out. I wasn't trying to define why it has value per-se, I was trying to make the distinction that someone who says "BTC is very speculative, therefore its too risky for me" (ie: a hater) is not the same as "it's useless".
But the catch-22 is that, if it actually becomes popular for fixing the problem of currency controls and sanction lists, governments have the ability to impose a lot more control on crypto exchanges to prevent this kind of use.
Maybe at that point there would be two worlds of crypto: you can trade it on the above-the-board exchanges, but can’t move those coins out onto the blockchain in any meaningful amounts. Or you can have it on the blockchain, but you can’t convert it to USD/EUR in any meaningful amounts unless you find a private buyer.
In fact these separate worlds already exist — it’s not like most Coinbase users ever interact with the actual chains, they just trade inside Coinbase’s SQL database. But a lot of the appeal of crypto is about theoretical possibilities, and government regulation can put a real damper on that enthusiasm.
Yes, if crypto actually became popular for international money transfers, it seems almost inevitable that it would acquire the same kind of regulatory regime that already exists for Western currencies. The exchanges can be compelled either directly or by choking their banking relationships.
As I've seen pointed out on crypto Twitter, the net effect of a public blockchain ala Bitcoin is that the actions of large whale accounts(hence oligarchs etc.) are highly visible and constitute prizeworthy targets for everyone who wants to take a shot(regulators, thieves, etc). Small accounts and transactions don't raise the same level of alarm. While you can try to spread out your balance among many wallets and small movements, that makes it logistically difficult to move money - more seeds to store and track, more transactions taking place, lower liquidity. People who succeed in grand on-chain heists have trouble doing anything with it...because everyone knows.
So Bitcoin therefore ends up being more useful to ordinary Russian citizens under sanctions than it does for oligarchical, globe-spanning wealth; the exchanges hold a similar role to the banks and can be brought to heel, but at a small scale you can self-bank. There's always a leak in the system because of this, even if you brought down the hammer on every exchange. Destroy Bitcoin and it'll just mushroom up again in some other form.
Crypto is game-theoretically useful even to elites who suspect they're under threat of being frozen out; they might not be able to keep 100% of what they have, but even 0.1% of vast riches is enough to sustain a comfortable life for some time. And if they lobby to keep exchanges open, they have the possibility of keeping more. This explains why there hasn't been a strong global consensus on crypto yet.
This seems rather naïve. If you can't leave a country because your government requires you to fight a war rather than leave, how do you get yourself, or any physical property, out? If you're in jail, justified or not, how does crypto help you move your property? Or the government you live under simply doesn't allow exiting? What if all international airports refuse to allow flights originating in your country to land, and trains and roads and ships are far beyond capacity? Even your intangible crypto wealth can't be moved across borders, if you yourself aren't able to cross a border.
There are plenty of cases where you can leave a country, but not with large amount of cash or gold. Like nowadays in Russia. Crypto allows you leave with your property in these cases.
You just wrote the same thing SamReid did. Yes, of course, in some cases, crypto can help. There is a very wide gap between that, and the parent poster's declaration "crypto fixes that" like it is a failsafe cure-all.
I was presupposing you can get yourself out. If you can't physically leave the country, owning crypto will not help you much, except perhaps to bribe some corrupt official who could smuggle you out. Similarly, if the electric grid goes down, if there is a nuclear war, or if a gamma ray burst causes a mass extinction, we will have other things to worry about. Crypto is not a magic bullet for all the scenarios you can think of, but it can help most cases.
Like most things crypto, the initial promise is that is fixes everything (like you initially wrote), but when you dig into it, the reality is that it's often not cheap, often not quick, often not portable, often not anonymous, often not safe, often not unrestricted from confiscation. And it introduces all kinds of concerns as well: losing keys, fraud, insecure wallets, exchanges that lose your funds, ransomware, etc
Crypto has utility, yes. But it is far from a panacea and actually does not "fix" many of the problems its supporters claim it does.
Yes, I agree, it certain situations, under certain circumstances, it helps. But the parent comment was "Crypto fixes that", as if it universally removes all barriers and obstacles, which it most definitely does not.
I would also pose a question, in the case where you have to leave NOW in order to cross that border -- would you rather have all your money in a bank with accounts currently frozen, or have crypto keys stored physically in an apartment or bank in an active war zone that you are unable to reach and faces a real possibility of being destroyed/bombed/flattened at any moment?
It's an interesting question, and it might depend on what currency the money is denominated in, or what bank. I don't know how I'd manage crypto keys, but it is possible to reduce all your holdings to a 20-word passphrase that you've memorized. So there is the question of whether I've already prepared to bug out. At least for myself, if I fled the country, I don't have any valuable physical property I'd ordinarily take with me when moving, except for a GDM-FW900.
But it does not - or, to the extent that it does, it only does as a yet-unclosed loophole.
If crypto is not currency, it needs to be converted to currency before use and as such can trivially be blocked with KYC rules at conversion.
If crypto desires to be a serious currency, it needs to greatly improve efficiency and stop being deflationary.
(Funnily enough, Tesla accepts dogecoin but not USDT, so maybe I am wrong with the second requirement; but maybe not - it's likely just a gimmick in this case)
Thing is, there are, and will probably always be, enough purely criminal uses for money, where KYC is not a thing, that use of crypto for non-criminal purposes will be able to work too: criminals will function as "entry and exit nodes" between cash and fiat, and between them, legit users will just operate with crypto.
Fiat is based on people's trust with governments. Crypto is based on people's distrust with governments...
If you're relying on criminals you already have excluded widespread/mainstream use.
The question is not if "crypto is a novelty that enables some people to go around some laws" - everybody can readily agree to that. The question is whether it is a systemic force/ agent of change, that can e.g. prevent enforcement of some kind of laws forever and thus have long-lasting societal impact. I think the jury is very much out on that. (and no, you can't rely on criminals as exit nodes if you claim to be an unstoppable agent of change)
Crypto is infinitely divisible, and because of lack of physicality it does not really suffer from lack of liquidity on the same sense that you can't cut a 20usd bill in half to pay a 10usd item, you just swipe with your phone or wherever e-wallet you use
The deflationary bit, is sort of a problem on the centralization of wealth yeah, but that's a macro problem, not a barrier of entry to individuals
I think that your comment tries to take digs at Crypto in an overly contrarian way, Crypto is digital gold which can be easily hidden, I guess that you could buy a bunch of paper Swiss bonds hide them on a bag or whatever and take a flight with these, but that already has a higher barrier of entry than buying wherever amount you want on ether and put it on a thumb drive, I guess both methods could work, certainly both are easier and sneakier than carrying a brick of gold around on your flight luggage
Liquidity has nothing to do with divisibility. Liquidity is the ease with which an asset can be turned into money. By definition, money is the most liquid asset.
I don't get divisibility argumebt. Why woukd anyonce care if their Bitcoin can be divided if they owe 0.0001 Bitcoin and Bitcoin suddenly doubled in value which doubled the amount of money they owe without giving consent to owe more money. It is kinda like someone used a technological defect to justify a non negotiated contract change. The person who promised a certain amount of debt obviously promised the earnings of a fragment of their talents. The volatility of the currency does not affect their talents.
How does 0.0001 BTC "suddenly double in value" to be 0.0002 BTC?
What you're actually saying it suddenly doubles in value when converted to another currency.
Just the same as if I owe someone $10, in the same currency, then it doesn't matter if the ratio of the dollar to the ruble doubles or triples at the same time. It's still $10 to both of the parties.
They're not preventing movement of physical currency - they are preventing use of the existing network and systems to easily move debts around so that it is exceedingly difficult and you have to move physical currency instead of bits / IOUs.
Maybe a distinction without a difference to some, but it makes sense that a country that bucks the consensus of a number of member nations would be excluded from a consortium of institutions like this. (Leaving discussion of disparate impact and whether this actually achieves national goals for another forum)
I don't personally see a huge distinction between crypto and global banking. Just a different set of ledger-holders. Miners, instead of institutions. Just because it's a different set of folks controlling the ledger doesn't mean this can't happen with a blockchain. Maybe I missed something and the tech prevents this somehow? But not that I've been able to figure out.
The main difference I can see is that the Fed controls the dollar. It is the central account holder.
Miners are distributed and there is the well known problem of 51% of the mining pool being controlled by a single party, but they would have to control 100% of the mining pool to be the equivalent of the Fed.
The dollar is only one currency. SWIFT is the network that allows transactions in multiple currencies across banks easily. There are a huge number of sovereign currencies in the world that you can buy things with, not just one. Probably more central banks than there are large mining pools.
If mining pools conspired to, say, fork a chain because somebody stole a lot of tokens due to a bug, it amounts to the same kind of control.
This seems like the very essence of money transfer without using the Western banking system, and it's a system that's been around for probably over a thousand years:
Hawala is literally the opposite of crypto because it’s entirely about trust and has the same issues of external pressure modern banking has to stop transactions that crypto doesn’t
I don't see how they are alternatives to each other, because crypto doesn't perform the same function. It's only marketed that way.
You can be sure a system like Hawala works because actual terrorists have used it forever. Like Toyota pickup trucks.
There are notorious pictures of Toyota pickups with frames that have broken in half. Since they have "issues" does it mean insurgents should drive Teslas instead?
