[abrahamepton]

This is pretty damn incoherent.

> the core reason for cryptocurrencies; escaping inflation and control

Maybe in a whitepaper. In the real world, it's mostly about speculation and enabling crime.

> Law and order stands on the backs of a lot of stuff and CO2. Bitcoin is an example of one little piece of this not needing all that stuff.

Ok...? This is nonsensical.

> Instead it's protected by this mining fleet. And if you want to contest ownership there's no one to invade, no one to attack; the best you can do is make a fleet and try to mine.

Or someone can beat you up and make you give them your password. Rubber-hose decryption has a long track record and is trivial for the right actor to implement, this isn't some weird edge-case.

> It's a small step in the direction of getting away from all these endless wars and control.

Citation badly needed; how does cryptocurrency "get away from all these endless wars"?

> Carbon tax CO2

Ok, this is correct and not incoherent.

[ramphastidae]

> Maybe in a whitepaper. In the real world, it's mostly about speculation and enabling crime.

That’s the same line authoritarian governments used to demonize encrypted communications.

[apotheon]

The real complaint from the surveillance police state is that people use encryption for privacy -- whether it's basic communications privacy (end-to-end encrypted text and voice) or basic financial privacy (cryptocurrencies that aren't being made progressively more trackable).

Part of that "used for crime" shit is about things that are against the law just because nobody reported buying a car or something like that, too.

[amanaplanacanal]

In the real world most encrypted communications is probably people using HTTPS.

[emptysongglass]

I don't think GP's comments were either incoherent or nonsensical. And you don't expand on your cheap hits, you just casually toss them out as unkind words on the internet. Try to be nice, please. And please develop your criticisms if you find it necessary to be so thoughtlessly hard on others.

[RinTohsaka]

> Maybe in a whitepaper. In the real world, it's mostly about speculation and enabling crime.

Speculation I could agree with... however,

Crime? Really? Got anything to back this up? The vast majority of crime is performed using cash.

https://hodlhard.io/blog/bitcoin-crime/

[perardi]

https://www.researchgate.net/publication/333388187_Sex_Drugs...

https://blog.chainalysis.com/reports/darknet-markets-cryptoc...

Anecdotally: people buy lots of drugs using cryptocurrencies. Not that I would ever do such a thing…

[thesz]

I performed a napkin calculation about percentage of criminal transactions using $100 bills [1].

[1] https://twitter.com/sergueyz/status/1365040381155491841

Quote: "$100 bill spans 22-23 years with about 20 operations per year, 450 operations in total, 220 for median. We need to calculate probability p that operation is not illicit. p=0.2^(1/220)=0.9927. Probability that operation is illicit is 1-p=0.0073 or 0.73%."

I was answering clearly biased twit about "only 1% of transactions using bitcoin are criminal and 70%-80% of $100 bills are used in criminal transactions". The calculation above is for worst case of 80%. For best case of 70% of transactions are illicit, the probability of single transaction being illicit drops to 0.55% (fifty five hundredths of percent).

Thus, bitcoin carries from one and a third (1.36=1/0.73) to almost twice (1.8=1/0.55) more percentage of illicit transactions than money.

[tubbyjr]

How many angels can dance on the head of a pin?

[boc]

> Just last week, the United Nations alleged that North Korea was funding its nuclear weapons program using funds from hacked cryptocurrency exchanges, alongside other thefts. The U.N. believes that over $300 million in crypto assets have been stolen by various North Korean hackers.[1]

> Iranian thinktanks have also emphasized the need for the nation’s government to use cryptocurrencies to circumvent US-led international sanctions. It now appears that the Office of President Hassan Rouhani has become more serious about using crypto. [2]

A rapidly growing percent of nuclear weapons proliferation is being funded by crypto. That's way worse for the planet than crime performed using cash.

[1] https://www.coindesk.com/doj-charges-3-north-korean-hackers-...

[2] https://www.crowdfundinsider.com/2021/03/172786-iran-is-repo...

[celticninja]

What's the issue with Iran using it? Or is it that Iran are just "bad guys" therefore if they use it must be bad.

In that basis let's get rid of nuclear power because Iran use that. I think they also have the internet so while we are at it let's get rid of that.

[chrischen]

> In that basis let's get rid of nuclear power because Iran use that.

That’s exactly what they did.

[celticninja]

Exactly what who did?

[chrischen]

US and allies got rid of nuclear power for Iran.

[Nasrudith]

Can we actually show that nuclear weapons are bad for the environment? Obviously there is a baseline production cost and various detonation costs plus issues of trying to get a scalar judgement from a complex systtem but they could perversely be helpful theoretially by stopping other polluting activities.

Isn't it perversely possible that the environmental impact of another two more Iraq War scale conflicts plus end of ongoing middle east presence means that ironically Bitcoin and nuclear weapons combined could help the environment net in comparison.

Sort of the logic behind a joke "They say that nuclear weapons kept the cold war cold, they say want peace in the middle east yet when I give Palestine Iran and Palestine nuclear ICBMs suddenly I am now the bad guy here?"

[boc]

When 99% of people say "good for the environment" it's implied that the point of protecting the environment is to sustain human life on Earth. Nuclear conflict is not compatible with sustainable human life.

[kragen]

Originally posted at <https://news.ycombinator.com/item?id=26238410>. Slightly edited.

If you live in a country with a highly functional banking system and no kleptocracy, Bitcoin is probably a bit puzzling unless you have family in Cuba. But it’s not puzzling at all for those of us who live somewhere in the middle of the broad spectrum between Switzerland and Somalia, because most places have a little kleptocracy. Argentina is a stable democracy, far from being “a failed state,”† but if you want to send US$500 abroad via non-Bitcoin means it’s basically impossible, and the only broadly available savings vehicle is real estate (“ahorrar en ladrillos”). This of course grossly inflates real-estate prices, with a substantial part of the capital city occupied by empty apartments someone bought “as an investment”. Historically, Argentines have saved by buying dollars, but that’s limited to US$200 a month now, and then only if you have a non-under-the-table job (about a third of total employment is under the table):

https://www.ambito.com/finanzas/dolares/cronologia-del-cepo-...

You can see that in September 02019 when this measure was imposed the price of a dollar was AR$63.50; now it’s AR$139. So whatever savings you had in pesos in 02019 have lost 57% of their value to peso devaluation.

In 02001 a lot of Argentines had saved dollars in their dollar-denominated bank accounts. This did not preserve their savings through the financial crisis that year; the cash-strapped government limited withdrawals to a trickle, then converted dollar deposits to pesos at a one-to-one rate, then released the exchange-rate peg, at which point peso went overnight from being worth US$1 to being worth US$0.25 before settling at about US$0.31 for the next few years. The US did something similar in 01933.

Some might suggest using “alternatives to banks like credit unions where customers—as owners—hold more power,” but Credicoop depositors suffered the same two-thirds confiscation of savings as depositors in for-profit banks. And they pay the same 3% tax on bank transactions including checks. That’s more than a fast Bitcoin transaction fee of US$15 for transactions over US$500 (though see below for data on current transaction fees).

This month there's a new development: every eligible person or company in Argentina (about 12% of the population, and about 20% of the bank-account-having population) gets locked out of their bank accounts until they comply with the government's new "economic census" program. At 5 days from the deadline there were still 700'000 depositors who hadn't complied:

https://www.cronista.com/economia-politica/que-es-el-censo-n... https://archive.fo/Os91S

But we’re not a failed state. There are no gangs of bandits roving the streets in Argentine cities (though there are some pretty bad slums where you’ll get robbed if you wander in without knowing anybody). Courts, free public hospitals, and roads continue to function, though there are more potholes than a year ago. Argentine infant mortality is 10 per 1000 live births, down from almost 20 in the late 01990s and the same as the late 01980s in the US; life expectancy at birth is 77 years, worse than Switzerland’s 84, but the same as China and Hungary, and better than Saudi or Mexico. (Somalia is 54.)

Most of the world is worse off than Argentina, although not necessarily in such a statistically transparent fashion. About one fourth of the people in the world are unbanked, 51% here in Argentina; even advanced countries like Russia, Hungary, and Uruguay have roughly a quarter of the population unbanked:

https://www.gfmag.com/global-data/economic-data/worlds-most-...

And if your family lives in a country like Iran or Venezuela subject to US sanctions, and you live in the US? Good luck sending them an ACH, instant or otherwise!‡ It’s well known that Bitcoin is very popular in Venezuela, which kind of is a failed state, so one of the Venezuelan governments is trying to tax Bitcoin remittances at 15%.

https://archive.fo/ZRXzS

Bitcoin handles a few billion dollars per year in such remittances. This might seem like a trivial amount of money to someone in a rich country, but in poor countries, it’s enough to keep several million people alive.

Even in the US, it’s common for the police to confiscate large amounts of paper currency just because they can (“civil forfeiture”); US bank accounts are probably fine for US$100K but probably somewhat risky for US$10M if the bank thinks you don’t seem like the kind of person who ought to have it. US$10M in US$100 bills fits in a box you can wheel around on a dolly, but Bitcoin is a lot more practical. (And of course US$10M in dollar bills loses about US$200k per year to inflation.)

Transaction fees are high enough that you wouldn’t want to use Bitcoin to pay for a can of Red Bull or even a restaurant dinner. But it’s extremely practical as an alternative to Western Union or US$100 bills or gold, even with the current very high transaction fees. At the moment, the break-even point where the Bitcoin transaction fee is less than the 3.4% spread you’d pay to a jeweler or black-market money changer is around US$3000, because the median Bitcoin transaction fee in the last block was 1.7 millibitcoins, which is US$100:

https://btc.com/0000000000000000000ae1cdc00169e5fb6931d10584...

A month ago it was 0.31 millibitcoins:

https://btc.com/00000000000000000000476ab57eea9be8ada36e2680...

But there were transactions that made it into the last block with a transaction fee of only 0.082 millibitcoins, or US$5:

https://btc.com/81032a76e7ced9678996446ea05c91329d028af2fbfe...

So, Bitcoin doesn’t have to be a cypherpunk utopia to be a big improvement on the status quo ante. For those of you living in stable countries where your worries are things like “instant and extremely low-fee ACHs” and “decentralized utopia”, this may be very confusing, but try to remember that most of the world lives in places with much more pressing concerns, concerns that Bitcoin helps a lot with. And you may live there too, soon—the loyal subjects of Kaiser Wilhelm in 01913 certainly didn’t expect that in 15 years they’d be in the middle of a hyperinflation episode that remains legendary a century later.

____

† We’ve remained democratic since 01983, electing presidents from three different political parties (UCR, PJ, and PRO), and there’s no serious insurgency. It’s the economy and government policy that are ruinously unstable, to a point that seems satirical to anyone accustomed to the US, but is lamentably common worldwide. Rich people sometimes say they don't know of legitimate uses of Bitcoin outside of “failed states”.

‡ Family remittances are specifically exempted from the US sanctions on Iran, but good luck finding a US bank that’s willing and able to take that risk: https://www.wiggin.com/wp-content/uploads/2019/09/26580_advi...

[Gendun]

"Argentina is a stable democracy, far from being “a failed state,”† but if you want to send US$500 abroad via non-Bitcoin means it’s basically impossible...."

So about that: https://www.crowdfundinsider.com/2018/06/134729-transferwise...

I believe in fact one of the core aspects of this critique is that cryptocurrency is often presented as the only solution to problems that are either already solved or that have obvious conventional alternatives.

[kragen]

Probably it's true that "cryptocurrency is often presented as the only solution to problems that are either already solved or that have obvious conventional alternatives," but I don't think my comment or the sentence you cited from it is an example of that.

That article says that TransferWise was going to offer service in Argentina. Looking at TransferWise's web site (now wise.com) they currently support converting money to Argentine pesos but not from Argentine pesos. So maybe if you're in Argentina and you have US dollars in your TransferWise account you can send them to someone else abroad.

But how do you get the dollars into the account in the first place? TransferWise doesn't seem to have a storefront in Argentina where you can walk in and deposit dollar bills. Their nearest office is in Brazil. Apparently to pay them you have to use the banking system.

But, as I've explained above, the Argentine banking system prohibits most people from buying any dollars at all, and the people who are allowed to buy dollars are limited to US$200 per month. It's easy enough to buy dollars on the black market, but there's no way to put those dollars into a bank account, and thus no way to send them to TransferWise.

So maybe that's why I know people who have successfully sent money out of Argentina with Bitcoin, and I think I know someone who has sent money into Argentina with TransferWise, but I've never heard of anybody successfully sending US$500 or more out of Argentina with TransferWise.

If it turns out that TransferWise actually does work for this at some point in the future, though, it would downgrade "sending US$500 abroad via non-Bitcoin means" from "basically impossible" to "a hundred times slower, expensive, and unavailable to the 51% of the country without a bank account". Cryptocurrency would go from being the only solution to just being the best solution.

[kragen]

> have lost 57% of their value

Correction: 54%, if we're counting from the September number I gave. The average inflation rate since 02001 has been about 19% per year, although the government statistics are faked to hide this.

[anoncake]

So Argentina has problems that crypto-"currencies" serve as a workaround for? But do they help actually solve them? If not, then they are harmful as workarounds reduce the incentive to actually fix problems.

[kragen]

Well, Argentina doesn't really care about these "problems"; it's a large expanse of dirt and rocks, and what people do on top of that dirt and those rocks only affects it minimally. They are born, live, suffer, and die, but Argentina endures.

Some of the people do have these problems, but they aren't the ones who have power.

Rich people in Argentina already have most of their money in offshore bank accounts, so these "problems" aren't problems for them†; they may even benefit from them; for example, because they can buy bigger houses and pay their servants less, and things like the rigged currency system give a lot of tools to the ruling party to reward their supporters with. When the official exchange rate is 30% below the real rate, for example, an import license is virtually a license to print money.

So, I think that providing workarounds to the people who need them, cryptocurrencies probably not only ameliorate the most immediate and pressing concerns of poor parts of the population like Venezuelan immigrants, but probably also adjust the power balance in a more liberal and democratic direction. This will improve the chance of those concerns being ameliorated by public policy over the next decades as well. But it's hard to tell what will really happen. The potential disaster scenario is that, by making most taxation impossible, cryptocurrencies destroy the modern welfare state without providing anything to replace it. So the public hospitals close, the enormous police force starts to support itself by extracting tribute, and the infrastructure decays. Pretty similar to what's happened in the US over the last 50 years, in fact, only more so.

However, at this point I think the modern welfare state is already doing a good enough job of destroying itself without any significant help from cryptocurrencies—as evidence, I can point to Maduro, Macri, Bolsonaro, Trump, and Brexit, and metonymically to the social changes they betoken. So at this point I'm more worried about cushioning the collapse than preventing it.

______

† That isn't the way I see it, because I've seen how rich people in more egalitarian societies have better lives than rich people in Argentina, but it's by and large how powerful people in Argentina see it, and that's what counts when we're trying to predict the political effects of events.

[kaliali]

The real reason why anyone I know wants cryptocurrencies is to escape inflation and control. The US financial system will collapse, it's not a matter of if but when. You can choose hyperinflation, government seizing assets, government declaring bankruptcy, or cryptocurrency.

[ibrahimsow1]

A highly developed sovereign government will never go bankrupt. Just experience economic turmoil. They can print more money, or draw on their deficit. US is the world reserve currency and will be for the foreseeable future. Fiscal policy in the US could comfortably control inflation, before it becomes hyper.

[Tenoke]

>enabling crime.

Is this about DNMs? Because last I checked their volume is tiny.

[fphhotchips]

Ransomware is a key one, also.

[challenger-derp]

Can't deny the fact that it's written by someone who's quite literally "DickingAround".

[louloulou]

Lol. The alternative is the PETRODOLLAR, where a global military force (costing trillions) locks the global trade of hydrocarbons to dollars.