[gonehome]

You’re asking this on HN so are likely to get 95% of people agreeing with you from confirmation bias alone. Median HN hates cryptocurrency.

I’d probably suggest this: https://www.matthuang.com/bitcoin_for_the_open_minded_skepti...

I think it’s not “all a scam”, but there are definitely scammers in the community which add a lot of noise to what’s a pretty cool new capability to handle decentralized state.

https://danromero.org/crypto-reading/

I don’t know if what your startup is building is worthless, but the tech underlying the domain is not.

[bpeebles]

You don't list any so I'll bite, I guess. What "cryptocurrency" company isn't a "scam" as basically defined in the post?

[gonehome]

It’s not we’ll defined in the post, but there are some easy examples.

Rainbow wallet is just working on a wallet with nicer UX: https://rainbow.me/

OpenSea, Coinbase, FTX - basic exchanges supporting the market.

Trezor and Ledger make nice hardware wallets.

If you’re specifically asking about companies that have their own token for something, I think urbit’s use of NFTs as IDs for their network is a cool use that makes sense.

The automated money markets are also pretty interesting and not scams.

On the NFT art side, BAYC has been making cool stuff and owning one of them is basically an entry ticket. The community membership aspects of this are more interesting to me, the art and it’s associated status is just what enables that.

I know less about city coins but I like the idea of a way to incentivize a group to do what’s best for the city - could be a way out of NIMBYism. It’s interesting at least.

Cryptocurrency has utility in its current state, but it’s a frontier. I think the Bitcoin for open minded skeptics post does a decent job discussing it.

[sireat]

Let's assume those are mostly legitimate (BAYC being cool is highly questionable but ok)

Even then all of those are services and goods for the crypto ecosystem.

So much of crypto space is turtles all the way down.

Besides evading capital controls, there is not much real world adoption for crypto still.

You start living in the crypto world and then yes you start thinking DeFi is cool and useful. I am yet to see how DeFi can help someone who is not already invested in crypto.

PS Mined first BTC in 2011 but got out of the whole greenhouse in 2017.

[ryan_lane]

Even if you're in crypto, it's good to note that DeFi is collateralized lending, for which the intended purpose is to avoid paying capital gains for the borrower, or making unrealistic returns for the lender because they're helping people avoid taxes.

I'm not saying this is unique to crypto (stock collateralized loans help the rich avoid paying taxes in the same way), but it's not interesting or unique.

[gonehome]

I'd read that bitcoin for the open minded skeptic article I linked, I think it makes a good argument about that core use case.

A decentralized global store of value has a lot of utility - more so in countries with bad financial systems and limited access to dollars. I think global currency/value store is the killer application of blockchains, and it makes sense a lot of the focus is on tooling/products around this. Provable membership/ownership via tokens is an interesting spin off.

Evading capital controls I think isn't a great use of it actually given the public nature of transactions (unless you're willing to flee the country I guess, which can be good for getting wealth out of countries with authoritarian governments).

The ability to publish and update decentralized state is a new ability and useful. There are obvious tradeoffs around speed and complexity and a lot of things should not make that tradeoff, but the use cases here are real - at least I'd bet on that, it's not "all a scam".

[mwerd]

How about AAVE and their Arc product specifically? https://www.fireblocks.com/blog/permissioned-defi-goes-live-...

You've got a fully compliant (in terms of anti money laundering), whitelisted counterparties only, decentralized lending and borrowing platform that completely eliminates the friction of a typical corporate treasury banking experience.

You deposit dollars, you earn yield in dollars. If you want exposure to eth or BTC, you can exchange dollars for either or borrow at transparent rates. The transaction settles in seconds and the fees are fractions of what it costs to wire funds.

My organization uses Wells Fargo for similar services (sans BTC and ETH) and pays considerably more for the pleasure of receiving less in return. Aave achieves it with virtually none of the back-office or legacy COBOL based software that these dinosaur, heavily entrenched, ethically challenged financial institutions require. It's like pre-acquisition WhatsApp compared to at&t efficiency comparison.

There's innovation and value creation happening in crypto, whether you choose to see it or not.

The hostility to crypto from a bunch of SV engineers who have scammed society out of billions (trillions?) of dollars pitching ineffective digital marketing is not without irony. Not to mention the societal and political fallout from the uncontrolled spread of misinformation, aided and abetted by the likes of Facebook, Twitter, and other SV darlings. Pushing ads to fuel consumerism and coming on here to complain about emissions from proof of work Blockchains. It's rich.

It's not easy to build software that actually solves large scale problems. Most of the companies/apps in crypto will fail, just like internet startups. What succeeds will likely disrupt the financial system.

[warsheep]

Isn't this a circular argument? The question was what "useful" things do these crypto solutions/companies provide, and your example is a product which allows regulated entities to invest in crypto.

"Why is X valuable? Because X allows you to invest in... X."

Also, in this specific example (Arc), is the solution even considered DeFi? There's a centralized list of whitelister entities and you can only participate if you're a customer of these entities. So they're like banks.

[mwerd]

No, the question was what in crypto isn't a scam.

Whitelisted counterparties borrowing and lending to each other without having to trust a third party to intermediate, such as fedwire, swift, or dtcc, is clearly not a scam. It's a b2b product with at least 30 sizable informed and willing institutional participants. They could take their capital anywhere else in financial markets but choose to take it to Aave.

It's the same platform Aave offers anyone else on Ethereum, polygon, arbitrum, and other chains coming soon. The customers of the arc product have a regulatory compliance burden that arc solves for them but the tech is the same.

[mostertoaster]

I see crypto as a guy had this beautiful idea that the little guy could topple big powerful banks, and then all that happened is powerful people will find a way to exploit it for more power.

Crypto is neither good nor bad, but people are.

[randomhodler84]

Coinbase, Gemini and Kraken isn’t a scam. One can give them $430 and they will give you a million satoshi in Bitcoin.

Until the day they stop sending the sats when you send them dollars, like Gox, like Cryptsy, like Cryptopia, like BTC-e, like Quadriga, like Bitgrail, etc etc; not a scam.

[VoodooJuJu]

>confirmation bias

I wouldn't dismiss HN's concerns on anything tech, finance, or business related. Fact is, much of HN is technically-inclined, many here are financially-inclined, and many are both at once.

When you have people who are both tech-savvy and finance-savvy giving their thoughts on a novel financial technology, you would be wise to listen.

And when this tech & finance-savvy community is bearish on a finance technology, you better be as well, unless you're the one at the top of the pyramid. Then by all means, enjoy your fools.

[gonehome]

HN is famously dismissive of new ideas that go on to become billion dollar companies or products (the iPod and dropbox for two easy examples).

HN is better than average, but still pretty poor at recognizing something good until there's mass consensus. Even then there's often users complaining about niche technical details despite obvious success.

[acdha]

> HN is famously dismissive of new ideas that go on to become billion dollar companies or products (the iPod and dropbox for two easy examples).

That's a pretty misleading conclusion to draw: for example, here's the whole Dropbox thread:

https://news.ycombinator.com/item?id=8863

One guy says “you can already build such a system yourself” but that point was immediately contested on quite accurate grounds. Someone else had the correct take (“This is genius. It's is problem everyone is having, and everyone knew it”) and the rest of the thread is similar – lots of use of terms like “great”, various technical questions, comments on how to improve their presentation, etc.

Re: the iPod, are you sure you're not confusing HN with Slashdot.org? The iPod launched 6 years before HN.

[robryan]

The question is though, is it enough of a scam that anyone not looking for a high risk investment or putting a lot of time in should just steer clear of the whole thing?

In terms of the currency aspect of cryptocurrency, what risk adjusted benefit would I get right now attempting to use any of them as a currency rather than dollars?