[Mahn]

Key quote from the article:

> Many have argued that the lack of large-scale applications for the past ten years proves that crypto is useless. I have always argued against this: pretty much every crypto application that is not financial speculation depends on low fees - and so while we have high fees, we should not be surprised that we mainly see financial speculation!

> Now that we have blobs, this key constraint that has been holding us back all this time is starting to melt away. Fees are finally much lower; my statement from seven years ago that the internet of money should not cost more than five cents per transaction is finally coming true.

---

All of this depends on so called "Layer 2s", which adds a great deal of UX complexity to the end user. I'm skeptical that this is best way to solve the scalability issues that plague cryptocurrency, but I will say that this looks to me like it has a much better shot of succeeding that anything Bitcoin has ever attempted to do on this front.

[danpalmer]

5 cents per transaction is high for many parts of the world, and exceptionally high if every interaction in normal life is turned into a financial transaction.

[bawolff]

If their vision is "applications" it feels like any price is too high. Would you sign up for hn if it cost 5 cents? Even though that is nothing in terms of money (for most of us), the friction of money actually being involved in and of itself probably makes it not worth it. Especially when its just a silly internet thing.

[danpalmer]

It's not just sign up though, it's posting comments, upvoting, etc. Every "write" becomes a transaction, many with their own tokens.

> the friction of money actually being involved ... makes it not worth it

This is it. There are very few people who live for this level of financialisation.

[everfree]

I think it's helpful to realize that most everything on the internet is already financialized by default. Whenever you post a comment, upvote, or "write", it costs some company somewhere an amount of money to maintain the marginal amount of server capacity required to process your request. And if you aren't paying for the product, then you are the product of course (ads).

So blockchains don't necessarily financialize things that aren't already financialized, they just tend to make money flow in a more direct way from a group of people using a service to a group of people hosting/providing it. Instead of paying using a micropayment of attention that gets monetized through a complex and often bespoke advertising arrangement, you can pay using a micropayment of a recognizable asset that has actual market value.

Personally, if I could click a single Apple-pay-like button in my browser to attach say 0.5 cents of postage to this Hacker News comment to get it to post, I doubt I would think twice about it. In fact, I would probably participate more confidently knowing it's a deterrent for bots (less of a problem for Hacker News, but a huge problem on Reddit and Xitter).

[bawolff]

> they just tend to make money flow in a more direct way from a group of people using a service to a group of people hosting/providing

I suppose there is a certain sense that transaction fees go to people providing services to the blockchain... but i would mostly describe it as paying rent and not actually paying the person responsible for the service.

[hanniabu]

That's not how it works, not every interaction needs to be onchain

[sainez]

Don't know why this is downvoted. It is possible (and probably desirable) to build applications where only certain data is stored on chain.

[fbrusch]

Farcaster is doing it (allowing posting, upvoting etc) with a pragmatic architecture with different degrees of decentralization (identity onchain, posts on a p2p storage à la bittorrent), and it's going pretty fine... https://warpcast.com/

[soulofmischief]

I'd happily pay a subscription to a closed community if I thought the value of the community was higher than the entry cost. However, I'm glad Hacker News is open and democratic.

[mattdesl]

If that was the cost of decentralization I am sure a lot of users and especially content creators would consider it. I would rather pay 5c per year on Twitter and own my social graph, rather than pay 0c and leave the platform in the hands of the highest bidder.

[chrisco255]

It's really not, especially if you want to transact in USD and your native currency is not USD, you regularly will pay a 5-10% or more conversion fee.

[kinakomochidayo]

It'll come down even more as blobs are increased, and PeerDAS is implemented

[mindcandy]

Perfect is the enemy of the great.

Credit card users pay $1+ fees per transaction all the time. They don’t complain only because vendors usually eat the fees on their behalf to obscure the issue.

I have a “2% cash back on everything” card which I know is actually a “we charged your vendor 4% and shared half of that with people like you who clicked the right button” card. I don’t like it. But, that’s the game.

People complain about the impossibility of crypto having fees of pennies with settlement times of minutes while constantly using credit cards that have fees of dollars with a settlement time of days.

[akoboldfrying]

I totally agree. The perception that, say, credit cards are fast and free is completely wrong, and based on the comfortably ignorant idea that things that only impact other people don't really exist.

If there's one useful thing to take from it, it's that I think it does usefully highlight just how critical that perception is for adoption -- specifically, how thoroughly it dominates technical concerns like throughput and latency. Perhaps if shop owners were prepared to eat the bitcoin transaction fee the same way they eat the credit card fee, bitcoin might have a resurgence as a cash alternative. There would still be the transaction speed issue -- I think it would require a third party to step in to provide merchants with guarantees (in exchange for a fee), so that the merchant wouldn't have to wait for the transaction to go through. But that's not a tech problem -- it's the same problem that credit cards already have, and have already solved.

[medo-bear]

What parts of the world? In non developed countries bank fees are actually higher than in the West.

In Bosnia a most basic bank account costs about $3 per month, or 60 Ethereum transactions (most people usually have 10 - 20 transaction per month). For paying bills banks usually charge a commission fee of 1%. And if you want to send money to someone 50 kms away but across the border the fee is $20 with few days wait for money to be received.

[searchableguy]

Most major developing countries in Asia have p2p instant payments and bank accounts for free or with minimum balance requirement.

UPI (Indian market) launched cross border support with a couple countries starting this year. 118 billion transactions happen via UPI annually.

I do think there is some niche market where ethereum payments will shine but hard to beat free and instant systems already in place at far bigger scale.

[arandomusername]

Which is great when sending to someone in the same country, but we live in a globalized world. Sending between countries (except within EU) is best done using crypto.

[danpalmer]

In many parts of the world people are basically cash-only and don't pay fees for handling money most of the time. The "unbanked". This is the market Ethereum wants to serve.

Also I'd challenge 10-20 transactions per month. I think in many near cash-less societies it might be closer to 5 per day.

[SideburnsOfDoom]

> The "unbanked". This is the market Ethereum wants to serve

M-Pesa got there first, and without the taint of cryptocurrency. It's a real, deployed, working system at scale, and has been for years. The idea that a "hope to serve" after a bit more crypto tech innovation will open an untapped market ... well, I wouldn't take it seriously. It's wishful thinking at both ends of the supply and demand equation.

[thisgoesnowhere]

You can't invest in M-Pesa tho so it's obviously very bad /s

[medo-bear]

Bosnia and eastern and most of europe in general is certainly not cash-less nor do most people desire that

[justwool]

5 per day?

My budget is $20 dollars a day.

Lmao people are so out of touch with reality.

5 transactions a day? For what? Honestly can I get off this train.

[dylkil]

> which adds a great deal of UX complexity to the end user

Not exactly, L2s are being abstracted away, end users eventually wont even be aware what chain they are interacting with without tracing the tx

[ASinclair]

If you don’t know which chain you’re interacting with how can you trust your transactions are secured by a chain at all?

[sainez]

How does this differ from e.g. online banking? Does every user manually check encryption algorithms and keys?

[AlienRobot]

>adds a great deal of UX complexity to the end user

Considering there are people who don't understand the bitcoins aren't INSIDE a physical wallet, that ship has sailed and made a revolution or two already.

[mteam88]

L2s do not fundamentally add any significant UX complexity.

There are some wallets that make this a pain (Metamask) but newer wallets like Rabby (https://rabby.io) and Rainbow are huge improvements.

[tootie]

In the many, many years they have spent building a pile of gibberish tech, traditional finance has begun transitioning to T-0 settlement on centralized platforms. FedNow is going to replace ACH and wires and allow 24/7 real-time transactions.

[chrisco255]

It hasn't at all. If you try to transfer money internationally, you will still pay huge fees and it will take sometimes days to settle. Crypto is truly international, and ERC20s like USDC remain fully programmable in a way that cash will never be. It makes things like permissionless 24/7 exchanges (see Uniswap) possible. Which is more than just point to point or account to account transfers. It's an exchange from one asset to another controlled completely by an automated market making algorithm. You cannot find that in trad fi.

[nikita_789]

This is if you send through banks, but if you use payment systems, such as Arbonum, it will be fast and profitable, they have a small commission.

[DennisP]

Let me know when FedNow allows me to deploy a smart contract that moves dollars around according to whatever business rules I like.

[SideburnsOfDoom]

> FedNow is going to allow 24/7 real-time transactions.

Following in the steps of what EU and UK did few years ago. (1)

And which always made this cryptocurrency fast settlement stuff sound laughable - like they're describing just what a regular bank account does, and it's supposedly their special magic, so what?

People need to look outside of the USA to understand the state of the art.

You can even find these systems in Africa already (2)

1) https://www.ecb.europa.eu/paym/integration/retail/instant_pa...

https://en.wikipedia.org/wiki/Faster_Payments

2) https://www.mfw4a.org/news/instant-payment-transactions-afri...

[everfree]

> People need to look outside of the USA to understand the state of the art.

And yet people need only to look down at their smartphone, no matter where in the world they are located, to understand the state of the art in public ledgers.

[SideburnsOfDoom]

Regarding "unbanked" people who are "anywhere in the world" but have " their smartphone": Cryptocurrency is not only the wrong product, but also in this case a future functionality would be the wrong time. The market gap for that has closed already due to better systems including M-PESA As I mentioned here: https://news.ycombinator.com/item?id=39857944

The consistently ignorant rhetoric here on HN about this supposedly unserved market for cryptocurrency is discouraging. Again, people need to look outside of the USA to understand the state of the art.

[everfree]

Looks like it's not available in my country.

[SideburnsOfDoom]

I think that if you read my above comments very closely, I am advancing the idea that the state of the art is not evenly distributed, and so your comment is in agreement with that. And further, I am hinting that looking around widely to what other countries do, rather than being parochial, is a good idea.