Ask HN: What real world problem does cryptocurrency solve?

[lowkeyokay]

I can easily get on the hate train, and view cryptocurrency as a pointless waste of resources. What am I missing? To name a few problems they might solve:

International transfer of value Protection from monetary policies Money laundering (real for some)

[sjducb]

- The currency of my country is collapsing, I need to buy something which has a value unconnected to my country.

- My country imposes export controls on foreign currency. I want to move my money out of my country.

- I am unbanked and want to buy a good or service on the internet.

- I do not trust the counterparty that I am dealing with on the internet. Using cryptocurrency means that my maximum loss is the vavlu of the transaction (I don't have to give credit card or banking info)

- My government wants to seize my assets, I want to make it difficult.

- I want to send money back home to my family. Currently the only option is Western Union which is charging 20% commission. Cryptocurrency results in less than 1% commission.

- I've lost my phone and wallet, I can still get cash from a bitoin ATM using the crypto I'm storing in my brain.

[samwillis]

> - I do not trust the counterparty that I am dealing with on the internet. Using cryptocurrency means that my maximum loss is the vavlu of the transaction (I don't have to give credit card or banking info)

This is worse than if you use a credit (or debit in some places) card. With a credit card you have a legal protection and the card issuer has to refund you if the product or service isn’t delivered, it’s called a chargeback. Crypto has no consumer protections, traditional payments do.

Crypto is irreversible (in most cases) by design, that will always be worse for the consumer and “better” for the vendor. Essentially making it easier to defraud people trying to make purchases.

The only time this works is if the vendor is unable to take credit card payments because they are selling something illegally, but that’s not the example you used.

[sjducb]

The worst case with credit cards is not lost money. It's identity theft. Give your credit card info to the wrong person and you'll end up dealing with tens of thousands of pounds of loans taken out in your name.

[samwillis]

Identity theft from stolen card details is highly unlikely. Possession of credit card detail are never used as a proof of identity. They have your name and address from shipping information even with Crypto.

[zwkrt]

So to summarize, it is useful for variously exfiltrating money out of a country, laundering, and for people who are savvy enough to use crypto but not sensible enough to have a bank account.

The point about currency collapse is interesting to me, because (like almost all crypto apologist points) it assumes you already have a bunch of it/made a bunch of money on it before the bad thing happens. Everyone else gets to suck eggs, as the saying goes.

Of course if everyone in the hypothetical country had crypto, it would cause the crypto to collapse as well…

[ggeorgovassilis]

> So to summarize, it is useful for variously exfiltrating money out of a country, laundering

Summarizing & paraphrasing :-) Greece instated capital controls virtually over night, likely illegally as there is freedom of capital movement in the EU [1]. The money on a bank account resides in a particular country, so its legislation applies. Which country's legislation applies to funds in a globally distributed blockchain, whose copies reside all over the globe?

[1] https://www.bbc.com/news/business-33303540

edited for spelling

[sjducb]

Currencies rarely collapse instantly. You've usually got months to years of warning. Lots of time for people to get their cash out.

If you were Lebanese I would argue that having a bank account was a silly thing to do. Foreign bank accounts were illegal/difficult and domestic bank accounts are now worthless. You could own crypto or some kind of real good, such as a warehouse full of a commodity like wheat or diesel. Those are your options for hanging on to your wealth.

[ploppyploppy]

The vast majority of the planet have no access to the banking infrastructure the west and developed nations have.

Bitcoin fixes that and removes the middlemen.

[malsuwaidi]

PayPal for b2b transactions, Transferwise and similar services for cheaper remittance transfers. Crypto takes electronic payments and adds an ungodly layer of complexity to them.

[krsdcbl]

I feel like paypal is, quite in the contrary, the best example of why you do might want crypto.

Background: my mother had her account and assets frozen for a crazy long time after changing her name. Turns out accounts are bound to your name only, and support is unhelpful at best, so when her business started turning profit and she wanted to change her private acc to business they locked up her funds and refused to process the needed papers, citing she is not the account holder (despite sending ample proof). it's been a nightmare getting someone on the phone who was willing to clear it up.

Individual experience, but paypal to me has ever since been a prime example of why you might not want to use a large private corp for money transfers

[foogazi]

> so when her business started turning profit and she wanted to change her private acc to business they locked up her funds

How would crypto have solved this ?

Can she do business accepting only bitcoin ?

How does crypto accounting work ?

[erc20]

Good questions.

A crypto payment processor allows setting up a payment gateway like Paypal, but accepting USDC instead. When accepting payment, the amount is deposited into the business owner's own wallet. The business owner can choose to accept payment in USDC. USDC is a ERC20 token, each backed by 1 USD or Treasury equivalent, operated by Circle, registered with FinCEN and dozens of other regulators, with monthly reports published by Grant Thornton. USDC token is available for use on the Polygon network, where a transfer costs between a tenth to one cent.

The main advantage over Paypal using the above process involving USDC on Polygon is, she can run her business via a wallet she controls without worrying about a clumsy corporate locking up her funds, and lower transaction fees.

The main disadvantage is - her customers must use USDC on the Polygon network - and adoption of crypto for ecommerce payments, let alone on a specific network like Polygon, is still early.

[D13Fd]

It sounds like to are still forced to trust a third party exchange, and you now cannot accept payment from customers unless they pay in a cryptocurrency (USDC). Is that right? How is this better than a third party intermediary who takes dollars and sends you dollars?

[jokethrowaway]

Unhelpful support is an understatement, PayPal is a criminal organisation for what it concerns me. I don't care what stupid law they're following, they effectively steal money.

[risyachka]

If you are no in the first-world country then you can forget about PayPal, Transferwise etc. Crypto at least gives an option, otherwise you often don't have any.

[Ekaros]

>- The currency of my country is collapsing, I need to buy something which has a value unconnected to my country.

>- My country imposes export controls on foreign currency. I want to move my money out of my country.

Never understood who is the counter-party in these scenarios. Someone must sell you the crypto for seemingly worthless local currency. (Unless you somehow smuggle mining equipment in and buy local electricity)

Who would make that trade? Specially if currency was collapsing or not usable.

[risyachka]

You can always find someone to sell USD for crypto in cash. And you will be able to do it only because crypto allows you to actually own your assets.

[Ekaros]

Question really isn't about USD or Euro. You are already quite happy if you have either.

But let's say you are in Africa and have a lot of local hyper-inflating currency. Who will give you crypto for that? Or at least more than they need for immediate needs.

[sjducb]

Anyone who needs to buy goods and services, or settle debt, in the local currency.

[meheleventyone]

You already need crypto though.

[risyachka]

You do.

I meant mostly that if you store your assets in crypto - it can help a lot in situations like this, presenting a great use case.

[nlitened]

You don’t need to buy it, you can just accept it as a fee for your work.

[meheleventyone]

So now the unbanked need an entire shadow economy to exist in their country to take part!? Plus all the accoutrements to access crypto.

[meheleventyone]

> I've lost my phone and wallet, I can still get cash from a bitoin ATM using the crypto I'm storing in my brain.

To be a bit mean but how do you find the Bitcoin ATM?

[sjducb]

How did anyone find anything before smartphones?

[meheleventyone]

Well there are enough normal ATMs in most of the world that just wandering to the nearest bank is quite simple. There are quite a lot of countries without a single Bitcoin ATM let alone them being widely locatable where you happen to be.

[gerikson]

20% cost on remittance is an absolute outlier, the average global cost is around 7%

https://www.saveonsend.com/money-transfer-services/

[adwn]

> I've lost my phone and wallet, I can still get cash from a bitoin ATM using the crypto I'm storing in my brain.

When I enter my debit card and PIN into an ATM belonging to a legally regulated bank, I can be reasonably certain that it won't directly steal all my money. Using a BTC ATM, however, sounds like a convenient way to have all your funds stolen without having to wait for the next big crypto hack/fraud.

[jokethrowaway]

The credit card one is a good one, credit cards are the worst possible approach I can imagine to transact money with.

Forex exchange is pretty cheap these days with things like Wise.

You can technically charge your debit / credit card just by knowing the number.

All the others are political problems and they can't beat a state actor. Eg. You won't stop the government from seizing your assets: they'll put you in jail until you give them up. We should think about a political solution, not a technical one (I'm all for abolishing the government).

I'm surprised they didn't crack down on crypto earlier, I suspect they're using it as a sort of inflationary device. Having extra unbacked crypto in the world means you have more money in the world, making the rest of the money a little bit less valuable - but I don't think crypto was considered seriously enough to affect fiat, at the beginning. Now, when you want to push your currency or local assets up you can just ban/harm crypto (which is what Russia proposed with the RUB going down a month ago).

[D13Fd]

The credit card one makes sense if you are dealing with a completely untrusted third party with no intermediary, although in practice it probably just means you are using a crypto-based intermediary instead of a conventional one (PayPal, Venmo, etc.).

I’m not sure what you would be doing where that would make sense that’s not an illegal/illicit transaction.

[faebi]

- I want nobody to be able to get my money unless I choose so or somebody tortures me, therefore I want to be able do die with my money by not releasing the private keys.

[ploppyploppy]

My Government coordinates with technology companies to hinder if not eliminate my ability to purchase basic items or use fundamental services for me to carry out my daily life.

A Government forces a private company to restrict 9 million CAD donated to a cause.

[melony]

You forgot the most important use case: you want to build fintech services and applications, but you don't want to deal with almost a century worth of compliance and a tech stack built on rotten foundations and middleman rentseeking.

[jokethrowaway]

Avoiding regulation is a good one, but they'll come for crypto as well.

It's already hard to find unregulated exchanges

[malsuwaidi]

Early(ish) adopter here(circa 2013): initially it was a way for nerds who didn’t have street connections to buy drugs. Then it morphed into the biggest, most decentralized multi-level marketing speculative asset class in the history of the world.

The narrative behind crypto reminds me a lot of gold bugs who rave on and on and on about how defective the existing fiat monetary system is , in hopes to push up the fiat prices of their asset.

Every speculative asset needs to have a narrative tied to it to help newcomers rationalize buying in their fomo. (Look at GME, louisiana bonds etc etc etc). That doesn’t mean that it’s not a good tool to make a quick buck if your timing is right.

[ur-whale]

> Early(ish) adopter here(circa 2013): initially it was a way for nerds who didn’t have street connections to buy drugs.

You are making assumptions.

It might have been your motivation back then.

It most certainly wasn't the motivation for many people I know in the space.

I was introduced to bitcoin by someone who was also promoting this:

https://www.youtube.com/watch?v=2nBPN-MKefA

and the interest I developed for it was both because the tech. was interesting and new and it resonated with my political sensibilities.

Strictly nothing to do with drugs.

[malsuwaidi]

I’ve actually outlined both réal-life use cases: 1- initially anonymous online payment (we all know how that went), and 2- fringe -let’s - change - this - corrupt - system types who also would like to get rich doing it (by definition if you want to change a political economy system it’s for you to come out on top on the other end).

What other real world use case has there been for crypto so far that’s actually 1-useful and 2-adoptable ?

[Ekaros]

Not to forget the hard core Libertarians and Anarcho-Capitalist... I seemingly remember them being quite a big crowd involved. And ofc the get rich people, as early adopters being trillionaires when whole world adopts bitcoin. While bitcoin also being good for the poor in future...

[jokethrowaway]

As an AnCap, I don't think BTC itself will help the cause much (its profits might).

The government will just crack down on it eventually and the transparency of the blockchain will be used against you.

We need a political solution, not a technical one. In my ideal society I would still have private banks and I would have a currency 100% backed by real goods. There just wouldn't be a government bailing out banks when they screw up, vomiting up regulations and stealing your money every year.

That said, some of my friends went all in on BTC and got insanely rich, started buying islands in the Caribbean and places in Switzerland. Hopefully some of the crypto money will start a government-less society experiment somewhere, somehow, at some point.

[przeor]

crack on what? If they receive plenty of taxes for years from it, they are part of the problem not a solution as you would

[ruuda]

Scott Alexander recently ran a grants program (https://astralcodexten.substack.com/p/so-you-want-to-run-a-m...) and wrote this about the experience:

> Then you have to actually give people money. > > You know how, whenever there’s a debate about cryptocurrency, some crypto fanboy gushes about how it makes sending money so much easier? And if you’re like me, you think “yes, but right now you can just enter a number into Paypal, that already seems pretty easy to me”? > > I take it all back. The crypto future can’t come soon enough. Sending money is terrible. > > Paypal charges 2-3% fees. If you’re sending $50K, that’s a thousand dollars. Your bank might do wire transfers for you, but they have caps on how much you can send, and that cap may be smaller than your grant. Wires can involve anything from sending in a snail mail form, to going to the bank in person, to getting something called a “Medallion Signature Guarantee” which I still have not fully figured out. Sometimes a recipient would tell me their bank account details, and my bank would say “no, that account does not exist”, and then we would be at an impasse. If you have double (or God forbid, triple) digit numbers of recipients, it all adds up.

[kabes]

Blockchain only solves the issue of a distributed system without trust. None of the issues Scott mentioned are inherent to a centralized, trust based system. And some exist just as much in crypto space (wrong bank account number -> wrong wallet address and you also pay a fee for transfers)

[gls2ro]

It seems the core of this is that Paypal charges 3% and alternatives like banks don't work because either they are not allowed to transfer that much money or the recipient does not have an account.

Regarding the transfer cap, I really don't understand this. Is that a cap on personal transfers?

Regarding Paypal price, let me ask this: Is the 3% Paypal asks required costs o working with fiat currencies? NO.

Then that is that? That is the price Paypal asks for using their product. Is a price on a free market.

So how will this happen in the crypto space?

Will everybody know how to do transfer with crypto? Or will there appear some products that might charge a fee to facilitate the transfer? And if they will appear what stops them to add 3% fee?

If the answer is everybody will know how to keep a personal wallet and do transfers then the answer is probably wrong. People (outside our small IT bubble) don't want to learn complicated technologies so a nice product with a good UX might appear that will do what PayPal did for credit cards transfers and they will find a way to charge their users.

[melony]

The state (in the general sense, as in the federal government) wants to know where money comes from and where money goes to. Control over capital flow is one of the fundamental levers of modern day political power.

[D13Fd]

You can say that and it sounds intellectual, but the government’s real interest is in collecting taxes and preventing crime.

If you’re not trying to avoid legally-owed taxes or commit crimes, these things can all be done by traditional means.

[kcindric]

Crypto has its own charges, i.e. Eth GAS Fees[0]

[0] - https://www.coindesk.com/learn/what-are-ethereum-gas-fees/

[jokethrowaway]

Bank transfers are free in several countries in the UK and in Europe.

I can even get free (both personal and business) bank accounts.

[elric]

They are free in the entire SEPA (for personal use, up to some number of transactions, within the SEPA in EUR).

Free bank accounts are becoming pretty rare, unfortunately. Give it a couple of years and they'll be extinct :-(

[kwhitefoot]

High transaction cost is not inherent in the technology of bank transfers. Within Europe it's all electronic and my bank in Norway charges less than 1% for an international transfer.

[cja]

Doesn't Transferwise work in the US?

[boeingUH60]

I live in a third-world country, but I work remotely for some foreign firms. Crypto lets me get payments swiftly, easily. Of course, I also use traditional payment platforms like Payoneer, Skrill, etc, but getting payments in crypto (stable coins only) is far easier, and I can immediately convert to fiat.

A brief comparison between getting paid on Payoneer and a crypto exchange.

Payoneer - Sends invoice, client pays. Payment takes 1 or 2 days to hit my Payoneer account, and withdrawal takes another 1 day to hit my local bank account. If you withdraw on a Friday when the banks have closed, you'll have to wait till Monday to get your money.

Crypto - Sends invoice, client pays. Money hits my account immediately, and I can convert to fiat in less than 30 mins.

Now, I'm not even a fan of crypto because I think the field is spoiled with fraud, shysters, snakes, and all that...but crypto solves a good problem for me of getting instant payments. Notably, I only use stablecoins and abhor speculation.

Edit: Just to add, some mainstream payment platforms like PayPal and TransferWise are blocked in my country, and I've lost a significant number of jobs for this reason because clients refuse to use other payment options.

I think people in the first-world may not have much of a use case for crypto, but people in underdeveloped, unstable countries like mine have an important use case.

[Liron]

I agree that use case makes complete sense for you today. But shouldn't we expect that your government will also get around to blocking crypto? E.g. declaring it criminal for you to use, and/or blocking all the fiat on/offramps so you can't buy anything with it?

[marvinkennis]

I've been very skeptical, but recently come around on my position. There are a lot of abstract ideas on why crypto is a good thing (permissionless, decentralized, censorship resistant, anonymity etc etc), but I personally wouldn't bet against it for the sole reason that it massively increases developer and innovation velocity. It is financial infrastructure where innovation can happen at a fast and almost uninhibited pace. It's the path of least resistance for engineers that want to build financial products. Moving "value" at the *core* layer of infrastructure has never been this easy.

Whether you like it or not, financial infrastructure powers our world (chicken nuggets wouldn't be possible without hedge funds, all large corporations eventually pivot into financial services etc), so having a network where innovation of this infrastructure and the products built on top can happen at a faster pace is incredibly compelling. It's a matter of time before most of the new and compelling products and services show up in crypto before TradFi (because easier they're easier to build there), which will in turn onboard more users into the ecosystem.

[knapcio]

That’s an excellent question. I’ve been thinking about this topic a lot. Here’s some problems I think a good cryptocurrency solves:

- Trust: you don’t need to trust any authority or money emitter when using a cryptocurrency.

- Anti-inflation: It’s not possible to print e.g. bitcoin so you are not hit by the “inflation tax”

- Nowadays, governments and other institutions can easily block a bank account with very little reasons and then you need to go through a long process of proving your innocence. Crypto won’t be blocked. It’s like modern swiss bank hiding place

- A real property: it is one of the things that nobody, especially a government, can take away from you

- A war, blackout hedge: it’s hard to travel with gold when you can easily run away from a hot place to a better one keeping your whole fortune

- Probably way more use cases like easily transferring money around the globe etc

I also believe that crypto are in very early stage of their existence so some of the points may not fully apply yet but they are valid in a long run.

[CodeGlitch]

> Nowadays, governments and other institutions can easily block a bank account with very little reasons and then you need to go through a long process of proving your innocence.

This has been happening to immigrants from Hong Kong to the UK who have an HSBC Bank account... On the request of the Chinese government. HSBC has quite a big presence in China and Hong Kong, so I'm not sure they have much of a choice. Sucks either way.

https://www.reuters.com/business/finance/hsbc-aiding-crackdo...

[D13Fd]

You still have to trust the exchanges.

Governments can absolutely still imprison you or seize your other property until you pay your taxes.

The value fluctuates wildly and can collapse at any instant. Unlike gold or many other assets, it has zero intrinsic value.

[knapcio]

You can use decentralised exchanges or websites like localbitcoins to avoid any institutions.

[xiphias2]

For me the big deal in 2013 was currency devaluation of CHF on 1 day (I thought Swiss Frank is safe from it because it's a direct democracy), and the banks taking the pensioners money in Cyprus. That's when I started understanding that the money that I have in the bank is not mine, I'm just a creditor.

Bitcoin solves both of these problems, the code really does what the whitepaper says, I can read it and understand a big part of it (there are a few difficult parts for me).

[gorgoiler]

The mining process for money used to be digging $Symbol out the ground: gold, silver, oil.

Towards the end of the last millennium we ditched that standard and let central banks juggle the pools from which money is derived.

I always liked how Bitcoin went back to the mining principle: a scarce resource that is hard to produce being used as an intermediary for the exchange of goods.

The ultimate reduction of this, for me, is to base mining purely off of time. Every citizen is given a certain number of tokens per day — the same for everyone — because in the end, time is all we have in the mortal world.

I don’t know how to square that off with cryptocurrency in its current form (the rich get richer — those with lots of electricity run the mines.) Maybe there’s a future for my proof of life coin?

It’s abstract, but the usefulness in the current cryptocurrency whirl is in making me even think this might be possible. If Bitcoin is Perl 4, then what instruments will be the equivalent of Go?

[RestlessMind]

Bitcoin, specifically, has the following advantages:

1. "store of value" - no single entity (US Fed, Chinese dictators, De Beers etc) controls its issuance. Supply is fixed and cannot be monkeyed around.

2. ease of transfer - we can transfer $10 or $1B worth of Bitcoin easily in 10min for a relatively little cost. While Gold also satisfies #1, it is not easy to transfer.

3. programmability - bitcoin can be wrapped and opens up a lot of possibilities (lending, collateral etc) on other chains like Ethereum.

4. other people believe in it too - I can trivially fork and create my own ShitCoin. But a harder step is getting other people to adopt it. Bitcoin adoptees, on the other hand, range from gen-Z WSB-ers to staid institutions. The later bucket - US senators, S&P500 companies (MSTR), countries (El Salvador), hedge funds, HNWI's - in particular is providing critical momentum.

[oceanjams]

My first post on HN. I've been watching for about 11 years +. I remember bitcoin in the early phases too. It was used exclusively for illegal purposes.

Ten years down the line, I see new arguments. Store of value is very common. My understanding of digital currency is as follows, You get a small file that's encrypted, and you give someone large sums of money. I can have a 10 year old write up gibberish in Word, and encrypt it for you, if you want to give me money. Digital currency has no value, but what people are willing to pay for it. So if you want small, gibberish files with a password, please ask, I'll give you as many as you want as long as the price is right.

Digital currency is scarce. There are thousands of forms of digital currency out there, and thousands more will be created, making a unlimited amount of files with nonsense in them, that people want to buy. I remember there was a site on HN several years back that you could create your own digital currency. I created one. I never checked it out afterwards. Digital currency is not scarce.

Ease of transfer. I don't know how it is today, but back in the day, it was not easy. You had to set up a wallet, they had to set up a wallet. Information had to be exchanged. Just no. When a mom and a dad, can hand a 2 dollars to a clerk and get a gallon of milk. Ask that same person to try that with a digital currency. Ease of use in a big no.

Digital currency is secure. I just saw a post on HN that someone hit the wong button and delete 1/2 million dollars of digital currency. I remember Mt Gox. I see stories every week about how insecure digital currency is, and not 100s or thousands of dollars, but millions and billions. No not secure.

Digital currency is not subject to inflation. Lol, you drank the cool aid. Big players like investment institutions have gotten in the market. Everything that can't do on the stock market they can do in the digital currency market. You don't think they can be manipulated. Digital currency go up and down every day. In otherwords, if you actually think this is a currency, which it is not. Then, you have deflation and inflation in extreme amounts, daily.

On a side note, the energy use for creating these worthless files is not good for the planet, and should be used somewhere else with a real purpose.

I hope I'm wrong, and digital currency unites the world, ends poverty, homelessness, war, and hunger. But until then, miss me on this insecure, difficult to use, worthless, gibberish files.

[FreelanceX]

Bitcoin today is mainly seen by its investors as a store of value. The closest real-world asset would be gold, which is arguably even less ecologically friendly.

[dns_snek]

As Trudeau has demonstrated [0], cryptocurrencies can ensure an uninterrupted access to freedom of speech [1], despite the governments' attempts at silencing their opposition. [2]

[0] https://youtu.be/A651oDZvb0E?t=266

[1] https://tallyco.in/s/lzxccm/

[2] https://www.cbc.ca/news/canada/toronto/freedom-convoy-2022-d...

[jleahy]

The criminalisation of gambling in Asia and the United States (in both cases widely but not entirely).

People have always found alternatives, for example in South Korea index option trading was historically popular. In the United States it was originally illegal online poker, now single stock options are popular. In Europe trading FX was once popular.

Many of these outlets that either replace or augment gambling have now been supplanted by crypto trading. In many markets you can actually see how declining activity in one aligns with increasing activity in crypto.

[DevKoala]

A decentralized ledger that does not require government input.

No government can mint more crypto due to awful monetary policy.

Also, no, money laundering is not possible on most chains since all transactions are public.

[atoav]

> Also, no, money laundering is not possible on most chains since all transactions are public.

Citation needed — as far as I know there are cryptocurrencies where this is not the stated goal. Also public does not equal no money laundering, because the transactions are at least pseudonymized.

Dubious sales on the darknet were literally the real world problem that made cryptocurrencies what they are today.

[DevKoala]

https://www.businessinsider.in/investment/news/bitcoin-does-...

[Aterio]

That article doesn't really support your statement.

You can have anonymous BTC address. You can tumble it and you can exchange it at anonyy location.

It is the most anonymous digital currency after cash cards.

[dns_snek]

You can tumble it, but Bitcoin is not private by default. It might provide opt-in privacy if you go out of your way to use mixing services.

> It is the most anonymous digital currency after cash cards.

Monero is far, far more private. There is a reason why most reputable cryptocurrency exchanges don't accept it and it's because of its privacy features.

These make it impossible to trace your transaction history (and comply with regulations), which is quite trivial to do with Bitcoin.

[przeor]

who and when invented term "money laundering"? Ehat was initial meaning for this term ?

[Hamuko]

I thought tumblers were being actively used for laundering money.

[uthmancodex]

I'm from India and I get paid in crypto for my dev work through USDC. I never speculate in other currencies.

1. I don't know of any other way send and receive USD(USDC) anywhere in the world with instant settlement for < $0.00025. Previously used Payoneer and Paypal which has much higher % fees (also USDC trades at ~6% premium in my country :D).

2. Good ways to earn yield on USDC on exchanges and smart contracts.

[risyachka]

Speculative coins aside, stablecoins solve a problem that has been there forever - they allow you to actually own your money.

Without them the only way to keep your money not in cash is give them to 3rd party (banks/investment funds etc) which is just absurd.

And if you are not in top country, those third parties can collapse/be blocked in a blink of an eye (and they always and often do).

[mbaytas]

Today: crypto is a much superior way of sending money across international borders – cheaper, faster, more “user-friendly” (not for everyone, but definitely for my user persona).

More generally, crypto can do most things that a bank can do. It’s not the best at many of those things yet. But it’s evolving much faster than banks do.

Here’s Yanis Varoufakis on disintermediation from banks:

“ Today, you use digital money (phone apps or plastic cards) to buy a cup of coffee at your local Starbucks. But, to do so, you first need an account with a commercial bank. In other words, to grant you access to digital fiat money, the state forces you to fall into the embrace of the commercial banks.

So, today, the state guarantees a monopoly over payments to commercial banks. And that is only one gift to the oligarchy. A second, even greater gift, is that only commercial banks are allowed to have an account with the central bank.” [https://the-crypto-syllabus.com/yanis-varoufakis-on-techno-f...]

(He’s very critical of crypto in the rest of the interview - great read.)

Even more generally, with smart contracts, the blockchain becomes a platform not only for finance and trade, but also law. Every country has laws written in their own language. Smart contracts are our laws, written in code. So, anything done by authorities which involves record-keeping is a candidate for disruption by the blockchain.

The trouble is that many of the best use cases for crypto (land deeds, electric car charging, scientific publishing and citations) are public goods – beneficial for the society as a whole, but not profitable for any individual to build. Once we get over baseball cards and apes, it will be exciting to see public goods flourish on the blockchain.

[newacc9]

In Latin America the currency isn't trusted so they hoard USD, in the US inflation plus low bond yields are driving the financialization of housing (ie. turning the world into renters). Maybe bitcoin will fix these. At any rate, USD is going to zero, so you have to pick a financial life-raft one way or the other.

[barnabee]

Cryptocurrency, along with mixnets, end to end encryption, the internet itself, and a scattering of other technologies together make it possible to create a (or more likely several) virtual electronic realms outside the control of existing sociopolitical power structures and unbounded by geography.

They eventually should make it possible to do this unstoppably.

Whether or not these systems, communities, and economies solve any problems for you primarily depends on two things:

1. How accepted they become by the rest of the world (they are more likely to be useful if they can become part of, and enhance, our lives - for example by cutting out exploitative middlemen from some types of transaction or providing for cheap, frictionless, ubiquitous micropayments)

2. How abusive and/or broken our meatspace societies become (you might feel differently about bitcoin, Tor and the rest in an authoritarian fascist regime with hyperinflation than you do in today’s America, for example)

In a few cases we have solved real problems that require this new digital realm to solve, but there’s certainly more to do (as is evident if you try using current iterations of the tech, or better, ask a non technical friend to!).

Some examples:

- The problem of slow innovation in finance. DeFi might be a toy that’s currently learning everything we already know but it’s doing so rapidly and already creating a few innovations on the edges

- The problem of rebellion and civil disobedience — which are important democratic acts that have shaped much of the world we live in today — in an age of ubiquitous information and financial surveillance and control

- the problem of moving US dollars (or somethings close enough for many uses) around if you, your organisation, or even your country is locked out of the US correspondent banking system, because like it or not, dollars are the world’s reserve currency at this point in time

- etc.

[kelseyfrog]

US laborers suffer from the Triffin dilemma[1] by way of the US dollar acting as both a global reserve currency and a national currency. Should US workers have access to an alternate currency, there is a possibility that the trade deficit wich began in the 1970s could be addressed. Though this would put the US government in the position of controlling the world's reserve currency, but not exerting control over domestic monetary policy which I really don't see happening.

1. https://www.investopedia.com/financial-edge/1011/how-the-tri...

[airbreather]

Well, gold mines basically turn diesel into gold - diesel is the primary recurrent input once you have the reserve.

Crypto, with mining, allows conversion of other energy sources, eg hydro or unwanted flare gas, into currency.

Not saying it's good or bad, just making an observation.

[Mirb]

Cryptocurrencies should address the better distribution of money around the world and contribute to financial independence for people around the world. Unfortunately, there were many scams in the Crypto world, but this will be regulated more and more in the next period, although from the very beginning it should have been more regulated and more human rights activists involved, because the crypto world is a great opportunity for the wider good.

[gfldex]

The best dollar bills are printed in North Korea. Forgery (but not fraut) becomes the default with crypto. You can create money without a government charter. However, it is to expensive for the forger to make a profit.

With fiat book money any payment processor (banks, CC, paypal) can create dept and thus money. We have to hold a gun against their heads and never look away to make sure that they don't cheat. Crypto solves that problem.

Please note, that you asked for solution. Crypto is creating way more problems then it solves. The VISA Network is processing 2G transactions per day. With crypto you can be happy if you get beyond 100k per day. There is better reasons to burn fossil fuel, etc. pp.

[cheeze]

I think the NIST flowchart helps explain the use cases well

https://twitter.com/sweis/status/1049047164117078016

IMO the main use case is a decentralized currency that isn't centralized by any specific government (but may be, given enough power). Also things like escrow in a 0 trust system are possible.

That being said, like everything, there are _massive_ tradeoffs to this. Almost nobody actually needs this. IMO buying and selling drugs on the internet was one of few actual use cases, whther "right" or not.

[janandonly]

With inflation at 7.5%, you lose half your money in 9 years.

The only way to outperform that consistently, that I have found, is to Dollar Coast Average: to buy small amounts of Bitcoin per day/week/month.

For example: if You start on 01/01/2019 and put in $10 every week, then by now you would have put $1630 into bitcoin. But there is the thing: the value of that stash of bitcoins today is .... $6,330.56

See how this fights inflation?

You can make your own calculations easily here: https://www.bitcoindollarcostaverage.com

[frb]

While I'm doing the same on a small scale for fun, I think it's important to mention that this is not some magic feature of Bitcoin, but just a speculative effect that works with any kind of asset, as long as its value grows disproportionally to the value of the currency you bought it in.

This only works as long as the price of Bitcoin (and other crypto currencies) "goes up". If it stagnates or drops, you can lose money, even more than the current inflation.

E.g. Calculating the Dollar Cost Average for the last year would show that you probably would have lost money, with a negative ROI of -11%.

[ur-whale]

Have you ever been through a contentious divorce?

Specifically one where the other party is laying claim to assets you earned?

In these type situations, an asset that:

    1) no one knows you own

    2) even if people know you own them, can't be seized short of torturing you to regurgitate the password

    3) can be transferred to any person of your choosing and in any jurisdiction of your choosing in a matter of minutes.

seems pretty darn useful.

[atoav]

> seems pretty darn useful

In societies so broken and unsolidaric that individuals have to fall back on such matters, maybe. Also very useful if you are a drug cartel, a shady bussines or similar — so people that totally won't do damage to the cohesion of society in historic experience.

[ur-whale]

> In societies so broken and unsolidaric that individuals have to fall back on such matters,

The current divorce laws in most western societies pretty much match my description, especially the US.

If in your world, those count as "broken and unsolidaric (sic)", then: sure dude.

[atoav]

And the typical solution to such injustices is to change the laws and not to create a dystopian anarcho-capitalist society in which drug cartels, scammers and fraudsters thrive.

So while I understand (and empathically feel) the circumstances leading to male divorcees in the US thinking this would be a good idea, I think there are easier solutions with much, much less side effects.

Or have people in the US given up on changing society via democratic means to such an degree they don't see a viable way to change such a simple thing like divorce laws?

[robbiep]

For all practical purposes crypto is just another asset class, that gets taxed on capital gains and is registered with centralised exchanges - so 1. Just doesn’t exist for pretty much all practical purposes

[meheleventyone]

And for 2 they can just take other assets in lieu and/or stick you in jail for non-compliance.

[ur-whale]

> And for 2 they can just take other assets in lieu.

Assuming you have any other or the bulk of your net worth is not stored as crypto.

[meheleventyone]

Well then you just get it taken when you use it to buy things and get thrown in jail for not complying with a court order.

I mean this is already a silly scenario where you’ve got married to someone you have an intensely adversarial relationship with and tried to hide all your assets by making them unusable.

[ur-whale]

> so 1. Just doesn’t exist for pretty much all practical purposes

Says you.

You can buy crypto person to person. The transaction isn't registered on any exchange.

You can mine it. Nothing gets registered anywhere.

If you choose to buy cryptos on regulated exchanges (why would you ?), bear the consequences of your choices.

[robbiep]

pretty much everyone who has got into crypto outside of early adopters has bought through an exchange. And a lot of it sits on exchanges or in centralised wallets. Unless you're a drug dealer or other criminal, or a miner, you do not have significant assets sitting in crypto that are hidden to any great effect

[rieTohgh6]

I tired to find recent ruling where judge decided to reopen the case and awarded everything to single spouse, instead of split, after the other one has hidden winning lottery ticket during divorce. But you know what I found? There where multiple such cases.

Crypto would change nothing unless you are much better at laundering money than everybody else.

[MisterBastahrd]

There's gonna be plenty of knowledge about how much you own as soon as you sell some of it. God help you if you try to get that past the legal system.

[CJefferson]

So, it's useful for breaking the law?

[tournicoton]

Andreas Antonopoulos has a great channel where he answers this and other things.

A sample:

https://www.youtube.com/watch?v=l1si5ZWLgy0

https://www.youtube.com/watch?v=ghyaFr7ikEY

[Mirb]

Crypto projects will solve the slow obsolete methods of investing because with cryptocurrencies many around the world have the opportunity to invest with both small and large money.

[morninglight]

A wise man told me that ANY change to the tax code to help the "average" guy always results in his paying increased taxes. The adoption of cryptocurrency to help the "average" guy is governed by the same principle.

[Semaphor]

A few years ago, I was watching a Ukrainian Twitch streamer. PayPal was not allowed, so there were two options for donations: Entering your credit card number and CVC in some weird Russian site’s form, or using Cryptocurrencies.

[cozzyd]

It can solve escrow, if you trust the blockchain will last long enough.

[unamea]

Can solve a lot of real world problems and offer a better business model and economic structure for all of us.

[xunn0026]

Banks were closed during the early days of the pandemic.

Can't have a bank run with closed banks! (Taps forehead).

So, crypto is a bank always open. It's better money than actual money.

[joshxyz]

Speculation.

[malthaus]

The ability to rip off naive investors since the traditional financial markets have a lot of cumbersome regulation wrapped around it

[drumhead]

Money laundering, but after the arrest of the individuals for the laundering of $3.6bn in crypto, I'm not so sure anymore

[SAI_Peregrinus]

It's quite good at separating fools from their money.

[Andrew_nenakhov]

Sending money to people when banks refuse to provide the service.

A few years ago I had a client in Indonesia, who couldn't pay me via banks, because Indonesia banks just said 'no' to transfers to Russia, and Paypal/WesterUnion fees were exorbitant. We tried bitcoin and were blown away: the whole operation (buying btc for Indonesian currency, sending it, selling it for Russian currency) transaction did cost far less than just converting USD to RUB in a bank.

One acquaintance of mine lives in Turkey and Turkish banks refuse to open an account for him. So he receives his payments via Bitcoin and converts them to local cash currency via a local trader.

Also, Bitcoin is the last available way to fund anti-Putin opposition in Russia, our authoritarian government has blocked all other ways to do it.

[K5EiS]

Buying drugs online, that's what i use it for anyways.

[sleepingadmin]

>I can easily get on the hate train, and view cryptocurrency as a pointless waste of resources. What am I missing? To name a few problems they might solve:

When the world went off the gold standard they changed how their currency functions. The thing is, forex basically kept them in balance with each other. So instead of a gold standard it became a forex standard.

Countries still couldn't just print money, but they did.

Countries like Denmark, Germany, Finland, UAE, and some others who didn't... their inflation is under control. The relative wealth of their people is going to be that much higher.

Hungary is a great research point. https://tradingeconomics.com/hungary/central-bank-balance-sh...

They did print money in 2009 and didnt pay it back, now they did it again in 2020. Comparatively it's not as bad as other countries but opps 7.9%

https://tradingeconomics.com/hungary/inflation-cpi

and who did this? https://en.wikipedia.org/wiki/Fidesz A right-wing party who opposes globalization and I believe is fiscally conservative.

The polticians don't matter. The fundamentals of the currency matters post-gold standard. The politicians can and will1 print money but they cant get away with it for free.

That's where crypto comes in. It's not unlike buying Picassos or Hypercars. You are actively hedging your money against the politicians ability to print money and abuses by the financial system.

There's also a very obvious threat here. When countries can effectively no longer print money. Socialism dies again. Hence why communist countries effectively have crypto banned. China and Vietnam have explicit bans. Cuba and Best Korea don't have free access to the internet.

[mixmax]

buying and selling of drugs/weapons/child pornography

Yes, I'm aware of the fact that the ledger is public, but not everyone is.

[lifeisstillgood]

I have been noodling on this for a bit and this is just trying to get some thoughts out:

The base fundamental use case is this: We (humanity) need a digital native currency. If I can web / email / interact with pretty much any human on the planet, over a commonly owned and shared infrastructure using openly developed protocols and software, why can't I send / receive money from them too?

Pretty much every other use case I have heard is a subset of this

- my government stops me from doing X (X being reasonable from our nice Western point of view like avoiding currency controls, or unreasonable like buying heroin from the supplier) - I am unbanked (similar to government stops me ...) - Why should the world pay a Visa tax?

1. there is a difference between "permissioned" and "permissionless" crypto. Roughly speaking permissioned crypto is where some trusted third party (Bank of England, ECB, the Fed) gets involved in creating the crypto-currency and being the validation point to prevent double spending.

The double spending thing is the issue - it is the core of what makes all this difficult. If A spends with B and tries to double spend with C you need some public ledger that says A has already spent with B so C is out of luck. The easy way is A and B post the transaction on the Fed's website and the Fed just takes whoever comes in first. The hard way is to say we don't trust the Fed and have a clever way of agreeing what posts are "true" - blockchain, mining etc etc.

2. Ok - so we now just invent a working permissioned crypto-dollar. Surely this is all good? Well maybe - the basic use case is really important - we want to spend money as easily as sending email - but :

a. Deposits are a big thing. if I can hold crypto-dollars on my phone and send them to Jeff Bezos with no marginal cost or intermediary then why do I have a bank account? Why deposit my salary into my bank? And if I do not deposit my salary into my bank then the wikipedia article on fractional reserve banking goes all funny.

If deposits go out the window, all sorts of second and third order consequences hit.

- If no deposits, then no lending via the banks. and so no monetary supply expansion. Monetary supply expansion in fact needs to be explicit at the permissioned base.

- we could try having banks produce their own currency "under" the Fed but the history of that is total disaster

(it's worth nothing that the history of bitcoin is roughly a fast forwarding of 200+ years of bank failures and fraud that lead to the current state of regulation. Crypto is a wild west that needs a marshal.)

- Yes we can "trick" everyone into holding their currency in a wallet that routes through a bank account, but most banks will fuck that up in the initial implementation and even so people are stupid, especially for bank accounts that charge - and will simply leave quickly .

These sort of consequences of a working crypto-currency were what was being talked about in 2009/10/11 - the downfall of fiat currency etc. Before lots of people found that the number just go up - and speculation (and money laundering / currency control avoidance) became the basis of bitcoin.

References: https://blog.dshr.org/2022/02/ee380-talk.html?m=1

[lifeisstillgood]

Edit on reread : People aren't stupid

[barrenko]

Money is "declining".

[jimjimjim]

swindling and drugs edit: and evade civilization's laws

[nonanona3891]

Bitcoin eliminates the need for trust during monetary transactions while backstopping central bank monetary policy. Is a big deal.

[przeor]

Problem of a coordination, google it

[egypturnash]

How on earth is cryptocurrency going to solve the Prisoner's Dilemma? I don't think the cops are gonna let you have access to anything that lets you fuck around with your crypto wallet while they've got you and your buddy in the interrogation room.

[vntok]

Why would your buddy have your keys or any way to help third parties empty your wallet?

[przeor]

I think, you missed the point and it's off topic what you say

[egypturnash]

That’s the stuff that comes up when I google “problem of a coordination”.