[arcticbull]

It’s not fair to write off all criticisms of the blockchain as privilege. The issue isn’t privilege. The issue is that folks who don’t have access to financial services deserve access to financial services and blockchain doesn’t get them that. It gets them a “ruined fresco” [1] of that. A crap approximation if you squint, but if you zoom in all the details are wrong.

Intermediaries are a massive optimization and solve a ton of problems. Pushing a world without them onto these disadvantaged folks, in a very real way, locks them into a second tier moving forward.

[1] https://nypost.com/wp-content/uploads/sites/2/2016/03/2-phot...

[rglullis]

> It’s not fair to write off all criticisms of the blockchain as privilege.

Not all of them. Just the ones that compares the current implementation with some untenable ideal or with the status quo in the developing countries. Saying "I can send one million dollars or 20 dollars easily to anyone without blockchain" is no different than a "Let them have cake" to someone in Argentina who would like to work as a freelancer with European customers. Saying "blockchain is never going to compete with Visa" is a big fuck you to the small business owner in Rio who needs some rotating capital to their shop and the bank is offering "competitive rates" of 2%/month.

> Pushing a world without them onto these disadvantaged folks.

It has very little to do with "disadvantaged folks" or "not having access to financial services". It has more to do with enabling whatever-you-can-call "middle class" to be able to protect their wealth and to do their business without being harassed by corrupt government officials, or having their savings inflated away by government that can not/will not manage their finances and even to enable them to make business with foreign entities without getting ripped off by abusive/unfair taxes.

> Intermediaries are a massive optimization and solve a ton of problems.

No argument there. But again, the problem is when people don't have intermediaries they can rely on. If you show me any non-blockchain alternative where people are free to choose if they want intermediaries or not, then I will gladly support it.

As everything in designing systems, there is no solution free of trade-offs. Forcing people to depend on institutions and to accept centralization is a clear trade-off between performance and robustness. Too much optimizing and not focus on robustness brings you to a system that is so inflexible that becomes dangerous. It works well until it doesn't. When it fails, it fails spectacularly.

[arcticbull]

> Saying "I can send one million dollars or 20 dollars easily to anyone without blockchain" is no different than a "Let them have cake" to someone in Argentina who would like to work as a freelancer with European customers.

Again, that's not the point I'm making.

Yes, perfect shouldn't be the enemy of good, but utterly insufficient shouldn't be the enemy of good either.

Yes, some people are helped. No, substantially any more people cannot be helped because - and while you disregarded this criticism earlier - the system simply cannot and does not scale to any transaction quantity larger than that of a single Costco or a large flea market.

btw, if someone's charging you 2% per month for a loan, that's likely because lending to you is incredibly risky. If someone's offering you a loan for less than that, they're in danger.

> It has more to do with enabling whatever-you-can-call "middle class" to be able to protect their wealth and to do their business without being harassed by corrupt government officials, or having their savings inflated away by government that can not/will not manage their finances and even to enable them to make business with foreign entities without getting ripped off by abusive/unfair taxes.

Blockchain doesn't stop any of that. It's not a way to protect your wealth if the value drops 40% in a month. In this month. That's not protection, that's juggling buzzsaws. In no small part because the same thing that allows it to be used in these rogue jurisdictions allows scammers and criminals to manipulate the ever loving crap out of it - I mean, Tether, for example, but that's just the latest example. It's impossible to actually price because you can't see through the murk.

I've said this before, and I stand by it: if you have a government that cannot manage a currency, you have bigger problems than your currency. Once you sort out the government, the currency is no longer a problem. And even if you use crypto you are still subject to those same taxes. But strictly worse because you have to pay them in local units, but store your value in a wildly fluctuating store of value.

I also reject the idea that "just do financial crime" is a solution to really any problem you may have.

> If you show me any non-blockchain alternative where people are free to choose if they want intermediaries or not, then I will gladly support it.

Good news!

Can the entrepreneur in Rio or the freelancer in Argentina who wants to do business with Europeans not use TransferWise or open a TransferWise Borderless account in seconds? [1] It allows them to hold any of 55 currencies and send them to 70 countries - at mid-market rates, plus a small fee - including Brazil, Argentina, the US, Canada and Europe. Their rates are incredibly competitive.

If you're upper-middle-class there's always HSBC Premier which will get you local bank accounts in 80 countries, with one-click transfers between them in Global View. [2]

[1] https://transferwise.com/us/multi-currency-account/

[2] https://www.us.hsbc.com/premier/

[rglullis]

> system does not scale to any transaction quantity larger than that of a single Costco or a large flea market.

IT DOESN'T HAVE TO! That is why I am ignoring it.

Systems that enable trustless transactions do not need to be Universal to be useful. Even if blockchains did only one transaction per minute, they would be useful - it's just that we would have to make accept a bigger trade-off in regards on what must go off-chain.

Understand this: blockchains are only needed as the settlement layer between parties that do not trust each other. This means that is not every transaction that needs to happen on-chain. If you trust a part of the group that you do business with, you don't need blockchain, you don't need layer-2, you don't need even a fucking bank account. For peers that do trust each other, transactions can be registered even on a A5 notepad or a excel spreadsheet if you want to get fancy. For local markets, paper IOUs are absolutely fine.

When you say "does not work at scale", your implied reasoning is "it does not work at every scale". You are thinking that the technology is only usable if it is universal and satisfies all scales: from the hyper-local to the municipal, provincial, national, global.

Your mistake is to think that a system is good if it is universal and all-encompassing. That truth is that Universality is not a requirement. Blockchain enthusiasts/developers are all accepting the limitations of the current technology and how fully-trustless transactions are too costly to be usable at anything but the national/global dimensions. The work is then to figure out ways to (1)increase the current limits so that more trustless transactions can happen in the lower levels and (2) know when (and how much!) trust inherit to the lower levels can be introduced to the higher ones as a way to make the system more performant.

The more progress is made in these areas, the better it will be for the overall system and the less it will be required for people to rely on trusted parties.

Let me repeat: systems that enable trustless transactions do not need to be universal to be useful.

---------------------------------------------

Now, a separate section to highlight what I mean about your ignorance based on a privileged position:

> if someone's charging you 2% per month for a loan, that's likely because lending to you is incredibly risky

No. That is simply not true. Banks in Brazil are notoriously known for having one of the largest spreads between what they get from the SELIC (the Central Bank's rate) and the average rates for retail. Retail banks have profitability rates that were unmatched by any other country. Until a few years ago, they were offering "co-signed loans" of ~1%/month to pensioners and public servants. Absolute zero risk, and these were touted as low rates to increase credit in Brazil.

(Something that I forgot to mention when you were talking about how Visanet has low rates in Europe: Direct debit cards - zero risk! - charge ~1.9% of the transaction value. Some of them charge a little bit less, but put a sizeable monthly rate on top of it.)

> Transferwise

Right, tell that to an Argentinean and see his face of horror when he needs to find out if he is going to receive the official, the blue or the black rate. Tell that to a Brazilian and they will tell you that if you want to go through Transferwise a 6% fee will be added to the invoice, to make up for the "finance operation tax" that occurs on any credit, currency swap or insurance policy transaction.

> Once you sort out the government, the currency is no longer a problem.

One could argue that not even the developed world has "sorted out the government", and you think that Latin America is going to be able to do it? Do you think that continent-sized countries like Brazil or Turkey, with so many different people and different views and conflicting points will be able to "sort it out" through a political system that is set up in a way to not let anyone prosper unless it is submitted to the corrupt elites? Haven't you learned anything from the events of the last 20-30 years?

Why do you think that people should spend their lives trying to fix a so-horribly complex broken system, when they get sidestep the whole problem by disrupting it and searching for a more localized approach?

Sir, you have absolutely no idea what you are talking about. Or worse, you DO and you are actively defending it. Maybe that is the problem. Maybe you are so comfortable in your golden cage that you think it would be silly to work to be free and to be able to fly at will.

[arcticbull]

(1) IMO your point about scale is asinine. If it doesn't scale, it can only help a small number of people so the net welfare increase is negligible. Might as well not exist if it can't scale. I'm not saying to everyone, I'm saying to more than a single Costco. As I said, Layer 2 doesn't count because you can just as easily set up a fiat bank as an exchange, and with far less regulation in exchanges you take on way more risk. Fine, whatever, we won't see eye to eye on that.

(2) Debit interchange in Europe is capped at 0.2% and has been since 2015 [1]

(3) Let's walk through my proposal. Step 1: Sign up for TransferWise Borderless Account. Step 2: Receive EUR. There is no fee, and there is no step 3. If you don't trust your local currency why wouldn't you just hold EUR or USD or CAD or NZD? They're actually stable and don't drop 40% in a month.

Let's walk through your proposal. Step 1: Convince someone in Europe to sign up for an exchange, verify their identities and whatnot. Make a SEPA transfer into the exchange, pay 1-2%. Wait 1-2 days. Buy a crypto. Transfer the crypto to you. Pay a fee. $15 for BTC right now. Step 4: Convert at whatever rate to your local currency, pay 1-2%. Deposit it into a bank anyways since nobody uses crypto. All the while taking on huge counterparty risk, a large bid-ask spread and exchange rate shift risk. Step 5: Commit tax fraud by not reporting your transaction. That sounds like (2+6=8% to 4+6=10%) to me for the Brazilian in your situation.

If that's flying free, I'm ok on the ground.

How could you possibly believe the latter is better than the former?

[1] https://www.adyen.com/blog/all-you-need-to-know-about-the-eu...

[rglullis]

(1) substitute "people" for a "clusters of people with insular trust". Most of these people can not setup an account, but some of them can. They collectively managed their internal accounting and only need to go to the blockchain when a settlement with someone from the outgroup needs to be done. What is so hard to understand about this?

(2) Yes. IN EUROPE. I talked about Brazil. How many times is it going to take for you to understand that having good market competition in one place means absolute jack shit in another?

(3) You can not hold CAD or NZD or USD or EUR on a bank from Brazil. You have to convert it and there is a 6% fee for it. This is on top of the exchange rate fee from transfer wise.

The alternative I am proposing, however, is to receive crypto, sell it to BRL at the exchange (often at a better price than the USD equivalent, because there are people willing to pay the premium) and withdraw it free of charge.

In this case, crypto is giving me the choice of intermediary: a crypto exchange that I know will give better rates and faster transaction times. I could go further and convert the crypto to a stablecoin like USDC, EURS or DAI at the exchange and hold it there. I can use the exchange (if I trust it) as my informal bank which can hold crypto currency that is paired to something stronger than BRL or ARS. Worst case, I don't trust it so I withdraw local curency, but rest assured that it will be a good deal because crypto exchanges will work with rates closet to the market and not what the Central Bank is willing to pay me.

You keep arguing with unrealistic hypotheticals when you could actually ask people outside of your bubble and they will tell you the thousand different ways where the status quo is worse. Do you really think everyone is these places are so stupid?

[arcticbull]

> (2) Yes. IN EUROPE. I talked about Brazil. How many times is it going to take for you to understand that having good market competition in one place means absolute jack shit in another?

Obviously? Usually however, there's a reason why the fee is what it is. Have you dug into it? For instance in the US interchange is high because the vast majority of it goes towards rewards programs and loan origination costs. I'll be the first to admit don't know how that maps in Brazil.

However, read back to your earlier post: "(Something that I forgot to mention when you were talking about how Visanet has low rates in Europe: Direct debit cards - zero risk! - charge ~1.9% of the transaction value. Some of them charge a little bit less, but put a sizeable monthly rate on top of it.)"

Did you say anything about the rate being 1.9% in Brazil? No, the only geography you referenced was Europe, which is why I followed up with the, you know, European rate. It sounds like you should just be advocating for a fee cap in BR right?

You really haven't explained why TransferWise is worse than your recommendation, and you keep avoiding the whole "breaking the law and exposing yourself to prison time" bit.

I keep saying, you can keep the foreign currency in your TWB account, and send it to other people later, just like you hold crypto in a wallet. Why bother with DAI and USDC when you can just you know hold USD in your TWB account? A borderless account is a bank account, that you, in Brazil, can open, and hold all all those currencies with banking details in most of those places. For free, I believe!

Frankly, why don't I think people use TransferWise? Obviously I don't think they're dumb. It's new, I don't think they know about it. Borderless launched in 2018 and I suspect Brazil wasn't it's first supported destination. Getting the word out takes time. Read about it and let me know what you think!

[arcticbull]

> Transferwise uses rates close to what the central bank/governments is paying, which is far from the actual market rate. Plus the whole 6% fee.

No, you're not listening. TransferWise Borderless is a bank account into which you can deposit and retain US dollars or Euros or CAD or NZD, and any other currency you want, even in Brazil. There's no 6% fee because there's no conversion. There's no exchange rate because there's no conversion. Unless you elect to. Read about it and then reply. It stays in the currency which you receive. It's a multi-currency online bank account.

They give you an account number and a routing number in the US, and in SEPA, and in the UK, and in Australia, and so on. You receive a domestic transfer. It shows up in your account in the foreign currency. And it stays in the foreign currency. Then you can send it elsewhere if you want. Or hold onto it.

Doesn't expanding TWB sound way better than crypto? It's nice and regulated, and insured too!

[1] https://transferwise.com/us/multi-currency-account/

[fock]

> (1) substitute "people" for a "clusters of people with insular trust". Most of these people can not setup an account, but some of them can. They collectively managed their internal accounting and only need to go to the blockchain when a settlement with someone from the outgroup needs to be done. What is so hard to understand about this?

Great, now we are at the 10k libertarian tribes, which conveniently want to impose a great cost (energy-wise - and no, you didn't mention how this is set to improve) on society for their personal freedom. I understand that. Most often these libertarian interests align with criminal interests, I also understand that this is what happens with a bunch of sociopaths...

> (3) You can not hold CAD or NZD or USD or EUR on a bank from Brazil. You have to convert it and there is a 6% fee for it. This is on top of the exchange rate fee from transfer wise.

Can you just communicate with your libertarian tribes there, if you are not one of the persons actually allowed to communicate internationally ;).