[raesene9]

As others have already commented, existing currencies are already "digital". On my most recent trip abroad (to Copenhagen) I took some physical currency, and didn't use it at all.

Every transaction was digital and instantaneous (I use a Monzo Mastercard). I got a smartphone notification within 5 seconds of having approved the transaction.

The original promise of "cryptocurrencies" appeared, to me, to be decentralization, not their digital nature. The idea that a currency could be free from the control of a given government or set of governments.

This premise doesn't seem to have held for most current cryptocurrencies, as the prevalence of exchanges as central points of control has just led to governments targeting them to get the information they need to apply things like taxation and money laundering controls.

[gwbas1c]

Take the time to read the original Bitcoin paper. It discusses various other electronic currency systems and why they weren't good enough.

The short answer, though, is that if you have a trusted 3rd party managing the monetary system, there's really no need for cyptocurrency. (Edit) Cryptocurrency solves the trust problem.

Overall, we can trust our government, thus there's no need for cryptocurrency.

[mikro2nd]

You (and I'm guessing/assuming you're an American citizen, here, forgive me if I have it wrong) might be able to trust your government. Many of us in the Shithole Countries can not. Then, too, you may be able to trust your government at the present time (or, at least, believe you're able to) but that does not account for some future time when that might not be true.

[raesene9]

You can trust the crypto currency exchanges?

Why would you trust say binance, or bitfinex ? what basis do you have for that trust?

And if you trade on a possibly more trustworthy exchange like coinbase, you're right back to trusting a government, as the US Gov could shut them down if they wanted...

[raesene9]

Indeed, that's a theoretical benefit of the cryptocurrency world over fiat. However, in practice, what seems to be happening is that the decentralized aspect is sacrificed in the rush to make money, which promotes the use of trusted third party exchanges.

In reality, all that cryptocurrencies are doing is, partially, replacing governments and banks with unregulated companies who are still quite likely to be subject to government actions.

[drewrobb]

Having transaction data hidden from governments isn't the essential feature of decentralization in the original promise of cryptocurrencies. The essential feature is preventing a single party from tampering with transactions or account balances. This is still true for bitcoin and many others.

[raesene9]

We have that with existing currencies in most countries. My bank will implement a journal and double-entry bookkeeping system, along with internal fraud controls to reduce the risk of a single staff member defrauding me.

There are then external controls (banking ombudsman, the police, the judiciary) if the bank decides to take my money from me.

Also in the country I live in (the UK) there is a government guarantee, that even if my bank fails entirely, up to £75000 I'll get my money back.

For all practical purposes, my bank is very unlikely to try and take my money from me like that.

whilst cryptocurrencies might in isolation provide that immutability, in practice we have seen several cases where trusted parties involved in the cryptocurrency ecosystem have taken currency from participants in their marketplaces.

I'd be willing to wager that the risks of me losing money to a traditional fiat fraud are far lower than my risks of making use of cryptocurrencies in practice given the current state of regulation of the exchanges that are used.

[actsasbuffoon]

> The essential feature is preventing a single party from tampering with transactions or account balances.

Are there examples of this actually happening? I'd think that would be pretty damaging to any bank that engaged in such behavior.

[uudhodhd]

There are countless examples.

The US government seized all gold.

The Greek government froze accounts, Cyprus engaged in a 'bail in', governments constantly freeze accounts of 'bad' actors, payment processors will decide without cause to stop servicing clients because they are in adult content or because they are WikiLeaks.

There so many examples, it goes on and on ad nauseum.

[raesene9]

if we're citing examples of why "trusted third parties" caused losses to a currencies' users, what about all the crypto currency exchanges that have been robbed/gone bust etc?

There's always that class of risk unless you do things properly without a trusted third party.

Unfortunately in the crypto currency space, most of that benefit appears to have been sacrificed in pursuit of the ability to trade faster to make money...