[fastball]

Right, but is that not merely because cryptocurrency is a nascent technology?

The modern financial system has required an insane amount of capital (energy, resource, human) in order to get where it is.

It seems very Luddite to think that the pure-digital system is not more than capable of outpacing (in terms of efficiency and effectiveness) a system that involves massive amounts of human capital, when that (humans > machines) has literally never happened in human history in the long-term.

[imtringued]

I can't comprehend your comment. You can just create a centralized system that does the same thing as Bitcoin and consume less power. It is that simple. Blockchains don't provide utility beyond executing arbitrary code in a trustless manner. We already know how to execute arbitrary code in a trusted manner so the only substantial difference is the degree of trust which in the vast majority of cases simply doesn't matter.

[inersha]

> You can just create a centralized system that does the same thing as Bitcoin and consume less power. It is that simple.

You wouldn't be allowed to do this unfortunately.

[varjag]

I'm not sure how say Bitcoin payments are going to outpace in effectiveness what is essentially database queries.

[fastball]

The key improvement with cryptocurrency (and what allows it to be the first truly digital currency / financial system) is the trustless nature.

Yes, existing banking is just "database queries", which are of course more efficient than transactions on a blockchain. BUT in order for people to trust those database queries, you need to build a monstrous behemoth of energy/resource/human expenditure to maintain that trust. If I just spin up a PostgreSQL database and tell people "hey, I'll store transactions for you – super energy efficient" obviously nobody will use my system (e: without utilizing supplemental systems for trust). Think about how much human/energy/resource expenditure goes into just making counterfeit-proof paper money – humans designing anti-counterfeiting measures, building money printing machines to make good on those ideas, using plastic/metal threads and such in each and every dollar, humans checking your $100 at the grocery store with a pen / UV light / whatever, people making those pens / UV lights, Secret Service agents investing time and money to find and stop counterfeiters, etc.

In cryptocurrency, "counterfeit-proof" comes merely at the expense of more clock cycles. The benefit of which is obvious (to me at least) as the world moves towards 100% renewable energy.

Here's a graph to illustrate the point. txns is the cost of an actual transaction. trst is the cost to maintain trust on top of transaction cost. Worth noting that at some point (hopefully), both "txns" rows will be entirely renewably-powered, while the "trst" rows have a good number of processes that are not made more efficient with the onset of renewables.

[trad banking]

txns: #

trst: ##############################

[crypto]

txns: ##########

trst:

[MrMan]

If my bank switches to bitcoin only, I still need a bank. So the energy consumption of the new bank is bank + the banks share of bitcoin overhead, energy or other wise. Subtract the overhead of supporting the currency called dollars.

Bitcoin doesn't save me from living my life and needing financial services. I choose to transact with people I trust or intermediaries I trust.

We will still need the OTC, FDIC, SEC, the Fed the Treasury, even if it is all denominated in bitcoin.

[ric2b]

> If my bank switches to bitcoin only, I still need a bank.

For loans and other financial products, sure.

Not for securing your money or transacting with other people or making payments to companies.

[imtringued]

>If I just spin up a PostgreSQL database and tell people "hey, I'll store transactions for you – super energy efficient" obviously nobody will use my system.

This happens all the time and there are more of those nobodies than people in the cryptocurrency space.

[fastball]

Can you give me an example? The things that spring to mind for me are generally built on the back of (usually more than one) existing financial system, for example settlement layers at the very least (Visa / Mastercard).

[literallycancer]

A permissionless system will outpace the incumbents eventually. Just like the web made all other platforms completely irrelevant.

It might not be bitcoin, but it certainly won't be Bank of America coin.

[xapata]

How will I get insurance or coverage against fraud in a permissionless system -- who will be my intermediary?

[ric2b]

There's no reason why you can't have those same systems on top of Bitcoin. For some applications they can be safer, like openbazaar vs ebay.

[xapata]

https://openbazaar.org/features/

> It’s important to choose a moderator that is trustworthy for both parties on a decentralized network so make sure to join the OpenBazaar discussion communities and learn How To Choose a Good Moderator.

I don't want to learn "How To Choose a Good Moderator." I'd like to have someone with deep pockets that I can sue for damages if they don't keep their guarantees, like Visa.

[ric2b]

Ebay or Visa could easily be a moderators on the platform.

And they would be safer than they currently are, currently they can theoretically run away with your money and your best hope is to sue them.