[bhupy]

But that's sort of a straw-man representation of what (most) Bitcoin adherents see as the future of Bitcoin / crypto. I don't think anyone serious expects the raw blockchain to power every single transaction in real time, rather it's seen as a mechanism to supplant clearing houses. Consider that every night, banks submit batch files to a network of clearing houses in order to electronically transact US dollars (credit cards, Venmo, etc are all just abstractions on top of this ultimate step). The slow, asynchronous blockchain transaction is meant to be a replacement for that step.

The steel-man version of the Bitcoin/crypto future is that most people would use trust-based institutions to perform instant transactions (like credit cards and Venmo), just that the ultimate step involves an hour long blockchain transaction rather than a days-long ACH batch file. The fact that the Blockchain also enables individual point-to-point payments (albeit slowly) in a trust-less way is more of a replacement to having to mail somebody an envelope/briefcase full of cash, which is currently the only way one can transact if one is blacklisted by the centralized institutions. And depending on your political leanings, you might still prefer to use centralized payments on top of Bitcoin/crypto instead of on top of USD because with the former, there's little room for funny business by central bank reserve messing with the supply of money.

[elliekelly]

> rather than a days-long ACH batch file

Same-day ACH exists today. Even for international transactions. Most ACH batch files can be processed in as little as an hour. To the extent there's anything preventing "instant transactions" its (1) AML regulations and (2) internal/contractual (Visa, etc.) fraud prevention, not the ACH process.

[bhupy]

That's not the point though, the point is that Bitcoin is not comparable to the entire financial system, rather it's comparable to raw cash. Just like it's pretty infeasible for everyone to always use cash all the time, it would be pretty infeasible for everyone to always use Bitcoin-on-the-blockchain to buy a cup of coffee.

What Bitcoin allows you to do is build a financial system comprised of products that look like Venmo, credit cards, banks, etc on top of a currency system that's 1) censorship resistant (unlike ACH), and 2) independent of central bank monetary policy (unlike most fiat currencies).

The degree to which you care about (2) is obviously based on your political leanings, but (1) basically turns paper-money in-person transactions into something that can happen between strangers over the Internet unencumbered. Most crypto bulls hope that the vast majority of people use instant bank-driven payments, just based on the blockchain at the lowest layer, rather than USD-over-ACH.

And to be clear, I'm not really a crypto bull and I don't really have a horse in the race. But this is the steel-man argument for crypto.

[erehweb]

I think I'm missing something. If the system doesn't have that much capacity for transactions, wouldn't that still be a problem, even if you do the Venmo-like stuff instantly and batch the reconciliation overnight?

[bhupy]

The system has just about as much capacity for transactions as batch-driven ACH clearing houses today. Until very recently, the expectation for ACH was that a transaction would clear after days (sometimes weeks). The end user of that product (at scale) is banks, not individuals. Bitcoin/crypto solves the problem of being able to essentially do a "briefcase full of cash" transaction over the internet, a use case that obviously only matters to a tiny sliver of people. The remaining majority would simply use more trust-based institutions (like the Lightning network) to facilitate convenient/instant transactions. The fact that you can run an hour long transaction in a trust-less way on the blockchain is just an option, but realistically not the use-case for most people.

[sfblah]

If the typical user would use a trust-based institution, then what is the advantage to the end user over the traditional banking model? It's hard for me to see why I as an end user would want to use such a thing, outside of speculating on the price of the cryptocurrency. Put differently, if there were a cryptocurrency whose price did not fluctuate, how would you convince me to use it?

[bhupy]

> If the typical user would use a trust-based institution, then what is the advantage to the end user over the traditional banking model?

In theory, it's two-fold:

1) That you have the option to use the same money in that account in a trust-less way. In the USD/cash world, the only way to do this is to withdraw money from my bank, put it in an envelope, and mail it to the recipient. In the crypto world, you might still use a Visa card or a centralized money transfer product to transact day-to-day, but if you want to (just as an example) donate to an adult entertainer on OnlyFans/PornHub (blacklisted by the major CC networks), you can do that off the same crypto wallet via the blockchain. Another (perhaps more topical) example: there are a handful of companies that are effectively persona non grata to the tech world, like Parler and Gab, effectively cut off from PayPal/Visa/MC/etc. If you want to transact with them digitally, the crypto model allows you to do that without mailing briefcases of cash.

2) The underlying currency is deflationary and immune to the whims of a state-run central bank. This is only valuable to you if you're worried about hyperinflation and the money printer.

> Put differently, if there were a cryptocurrency whose price did not fluctuate, how would you convince me to use it?

If the above reasons aren't important to you, the other point I think is that crypto doesn't need 100% adoption to be successful. It's another currency option for those that don't trust the USD or JPY or EUR, and a fully realized crypto/fintech ecosystem affords one the ability to live their entire life off of one of these cryptocurrencies while still interoperating with fiat currencies via exchanges like Coinbase. ~1.5% of the world uses JPY day-to-day, and that’s a perfectly viable currency.