[theaeolist]

> For example, in Sri Lanka, there is no way for someone to accept payments or send money through PayPal or Stripe. However, people will be able to send money through the blockchain and bypass these restrictions if more people begin to trust crypto.

If Sri Lanka blocks PayPal and Stripe are you sure they will not block commercial entities from converting between rupees and crypto-assets? Individual and small scale operators might still do it, flying under the radar, but that is not a scalable proposition.

[scoopertrooper]

I think the eventual dream is that people will exchange goods and services in crypto and bypass the necessary step of currency conversion.

[krab]

Imagine cryptocurrencies are banned in your country.

The exchange of goods and services you describe might work between individuals. However businesses are much more visible. OK, you run a business accepting cryptocurrency payments for your goods. How will you explain it to the tax office? What if someone tips the police you accept it and they try to purchase something? OK, so only the small businesses will do it. They're numerous enough the police can't catch everyone. How will they transact with the bigger companies that can't accept illegal payments? Purchase utilities, tools etc. OK, somehow you make enough money with legal payments to pay your bills and keep the cryptocurrencies only as profit. Now try buying a car or a house with illegal currency.

Everything has a workaround, but if the state outright bans cryptocurrencies, the market will be severely crippled.

[scoopertrooper]

> Everything has a workaround, but if the state outright bans cryptocurrencies, the market will be severely crippled.

Like how they effectively enforced their prohibition on drugs and people working for cash-in-hand to avoid income tax and reductions in government benefits. Right.

It's always a cat-and-mouse game.

[adrianN]

I don't know about how it is where you live, but where I live it's a lot easier to buy something that is legal than something that is illegal and most people pay most of their taxes.

[krab]

Yes, exactly! The people who want to make money selling drugs have much harder time. It's possible but inconvenient (and in this case also dangerous).

[thawaya3113]

Also, drugs didn’t have a legal competitor.

Now that marijuana, for example, is largely being legalized through the U.S., illegal sales of marijuana have completely vaporized.

Very few will opt to use crypto if a government has deemed it illegal if there is a legal alternative.

I guess there is value in crypto if your government and civil society is completely collapsing, but those blockchains are being sustained entirely by first world gamblers hoping to make a buck on cryptos prices increasing.

Once they realize that crypto has been reduced to (as its backers are now insisting) a currency for failed states, they won’t gamble in crypto and they won’t fund the enormous amounts of energy needed to keep a blockchain running.

Maybe a non profit can run a blockchain that people in failed states can depend on. But then the question arises, why would that non profit use an expensive technology like the blockchain as opposed to simply using a Postgres DB. Something which all the biggest crypto exchanges already do to provide immediate transactions because the blockchain isn’t fast enough.

Which brings us to the point that the only reason anyone is using the blockchain is because it’s been successfully marketed to lay people as this magical inflation defying, freedom providing magic money tree that only goes up in value, when in reality it’s at best a pretty terrible database with some niche uses.

[krab]

To be fair, crypto has some value for illicit transactions and money laundering.

It's not obvious to me whether this value is greater than the mining costs or not. I think the value is in fact smaller and therefore the valuation is just a bubble.

[notahacker]

Plus of course they mostly run their drug operations using USD, so if your definition of "uncensorable money" is that people are able to do something to a limited extent illegally if they can obfuscate their relationship with the publicly visible part of the transaction and avoid asset seizure, we had it before blockchains were invented...

[tluyben2]

I paid people with crypto (a client paid me in crypto so I thought why not) for work and goods; these were people who were told by believers this will be a currency like you suggest. After (in 2018) they asked me if they could get money instead if they gave that crypto back to me. As long as people cannot actually buy flower and yeast with crypto from the wholesale supplier, it is kind of doomed.

[netsharc]

There's a blog post I read once which title was something like "How I accidentally started a bank" about a dev who added a chatbot in his work's internal chat (I don't think Slack was a thing yet back then) that tracked what each colleague owed to each other for lunch, coffee, etc. The bot expanded to track monetary value, and in the end he realized he made a bank, where each colleague had their balance, and transactions can be made.

In theory a group of people (expandable to a society, depending on trust) could just use such an app (or even just a WhatsApp chat) to do their business transactions, e.g. in China people probably just keep a balance in their WeChat accounts, and the money just moves between WeChat accounts.

[hajhatten]

It's already started in developing countries https://twitter.com/HODLneverSODL/status/1518134911244320769

[scoopertrooper]

Not sure how I feel about Twitter user HODLneverSODL as a source.

[mFixman]

Effectively blocking entities from converting currencies in person is much harder than banning inter-country trade.

My dear home country made it illegal to trade foreign currency except at government exchanges, which trade only one way and at an exchange rate 50% worse than the real one. This just made illegal exchange shops pop up everywhere, and the biggest difference is that it's now dangerous and inconvenient to change money.

Crypto is one of the few ways I can wire money back to my family and friends.

[omnimus]

People bringing cases like Sri Lanka honestly never cared about it and issues people there have. It's just hypothetical usecase they use to their advantage. Solution to this is right there - its political, its development, its financial aid.

Just imagine how could Sri Lanka farmers run their bitcoin nodes and wallets and pay the fees for transactions... idea is frankly insane. The reasons people are "unbanked" is because when you have 0 money you don't need a bank huh.

[raverbashing]

Obviously. A lot of crypto hucksters went into "firehose of falsehoods" mode some time ago already

[once_inc]

[citation needed]