[datadata]

I agree that it is a feature, but that feature didn't come with any downsides initially when the speed of everything else was also slow. The downsides are now substantial as the customer expects higher speeds. The downsides of not having the option to have final settlement quickly also seems to be a source of many other problems.

We also don't even need to change this aspect of traditional banking in order to add strong asymmetric encryption in front of the system. That would nip most fraud in the bud, and if nothing else save a lot of effort that goes into fraud schemes, prevention, and reversal.

[themagician]

Honestly, I don't really see this. Small personal transactions happen via Cash, Venmo, PayPal, Zelle, etc. without much issue or friction. As far as the general consumer is concerned it is instant.

Large business transactions generally (not always, obviously) do not have the sense of urgency that would require fast settlement. There's some market maker stuff that benefits from fast settlement, but that's not exactly a reason to push whole new system out to everyone.

The biggest "benefits" of crypto are not benefits to the average consumer going about their daily life. Instead of dealing with fraud you'd have to deal with customer service issues for actual customers who forgot/lost their keys. And, honestly, you'd probably have to deal with more fraud. Your phone gets hacked, your keys get stolen, and then what… all your money is irreversibly gone?

[datadata]

You are imagining a false dichotomy where things like fast and final settlement, or self custody are forced onto every user, and pointing out the obvious problems with that scenario. They are not good defaults, but they are great to have as options to protect customers against a fraudulent or over leveraged system. It is a bit like any protected right-- you don't have to directly make use of it for it to be valuable, the real value is in the optionality you have to be able to use it, and the risk that optionality poses to those who would exploit the absence of the right.

[themagician]

Not really. Fast (immutable) settlement is terrible for humans. Self custody is more or less incompatible with our modern world. And despite that, there are ways to do both without crypto—hand someone stacks of cash and keep gold in a safe under the floorboard. Both of these options exist.

[datadata]

You are repeating the same false dichotomy by stating again that final settlement and self custody are bad defaults for the entire world. That isn't want I'm saying, I am saying a choice is better than no choice at all. I'm also not saying anything about crypto. Gold and cash are also useful instruments that should be financial instruments for everyone also.

[sublinear]

> The downsides are now substantial as the customer expects higher speeds.

Why would they expect this? It seems like the slowness is the only thing keeping the game from growing legs and walking away from the humans playing it.

[datadata]

Ask anyone waiting for an emergency withdrawal to settle from a failing institution like FTX or SVB.

[medvezhenok]

On the flip side, think about all the old people that initiate transfers to various scammers and get stopped by the bank.

Making things faster will be good for some people, bad for others. Not clear if better on the whole.

It’s also probably better to keep it slow to prevent impulse decisions (let me put all of my money into dogecoin, it’s mooning now)

[UncleEntity]

According to both of them that’s what sank them and not the blatant shenanigans going on.

If there were more of a delay, like the maturity rate of whatever bonds, SVB would be fully functional today.

FTX, as long as nobody looked too hard they probably could have lost the few billion they had left while keeping everyone happy.

Bank runs… always blame the customers.