I used to pay to run a few TOR exit nodes located in Iceland that I didn't want tied to me because I didn't want the hassle. It was marginally easier to use bitcoin than it was to get a prepaid credit cards with cash each time.
I actually think there are other use cases for crypto, but this isn't one (anymore, bitcoin may have been more anonymity-preserving in the past)
Unless you mined the BTC yourself from a VPN that doesn't keep logs, or acquired it directly from someone else who didn't know you, the BTC would be traceable to you now (though it may still require coordination of multiple state-level interests which is typically reserved for very high-interest targets)
I paid cash to a dude that I met in-person on localbitcoins and we met in a place that lacked cameras. I wore a hat and sunglasses (because it was bright in palo alto). This was back when one bitcoin was under $100 however. I even remembered to use a burner phone.
Opsec was still weak in terms of nation state actors but I was doing something legal, I just wanted to minimize the chance of random hassle.
Just because you come from a place of great financial privilege and a liberal society does not mean others have no use for a censorship resistant form of money.
But all three of them also accept USD or your local currency. So the use case remains... evading the authorities? That's not a compelling use case for the general population.
Is everyone who is using cash also evading authorities?
Unfortunately most internet companies don’t accept cash, therefore I’m trying to use something which gets as close as possible to cash in regard to its privacy aspects.
I just don’t want to use shitty paypal which locks money of vendors for 180 days, or mastercard who randomly allege companies of child porn without providing any evidence (see pornhub).
I don’t like these companies and will try to not use them at all. Yes, I’m paying a price for it, but imo it’s worth it.
Well, purportedly BTC is a high-yield investment asset, so paying for things in it instead of regular money, which is purportedly a negative yield (e.g inflation) asset, makes way less financial sense.
Though this does highlight one of the things that's never made sense to me about this entire ecosystem. Something that's a high-yield asset is a terrible currency because you're basically punishing your future self for spending it on mundane stuff.
While other treat bitcoin as an investment, I treat it as a way to send money without getting censored and without supporting PayPal and VISA/MasterCard. It’s an idealistic thing (which is probably the reason why I only pay products worth 100-200$/month in BTC. I obviously don’t pay my rent, my car etc in BTC).
For me it’s just an alternative to cash, which I also use for smaller purchases — cash is „gelebte Freiheit“.
Honestly, I’d also prefer to use GNU Taler instead of bitcoin, but unfortunately GNU Taler never gained any traction.
Never liked the one way privacy of it, and it’s not a coin. It also adds nothing you don’t get already in the underlying cryptocurrencies.
It’s a payment protocol for arbitrary assets. You can pay in Bitcoin via Taler. I don’t think it will gain traction. The best payment protocol for Bitcoin today is Lightning Network, and is as open, and more sophisticated than GNU Taler ever was.
Yes, I ack that BTC is pubkeyhash and scripthash pseudononymous are not private.
High Yield? No way. Bitcoin can only be mined. It returns nothing. It’s a boring rock that can be transmitted over a communication channel. You have the same number of Bitcoins today, next half, next generation (provided you don’t lend or sell them).
Other PoS shitcoins could be considered high yield, in fact the yield is algorithmic and is independent of market value (which is an odd concept, as other reg high yield products will return capital explicitly to satisfy a yield.)
Taken further, yield may well be the “scam”. Bitcoin provides none of this.
IPFS has some cool use-cases, like anti-censorship webhosting. I'm with you on waiting to see actual money use cases that crypto is better at than real dollars/credit cards. It's not even good for money laundering since the blockchain leaves a very public trail that lasts forever.
There are features of cryptocurrencies that would actually be useful in today's financial services.
The main one would be near instant settlement. If I make a transaction on Bitcoin, that transaction is completely settled and verified and approved over a hundred thousands times within an hour.
All parties can trust that the transaction happened and everyone has their money. That's not possible in today's financial systems. We don't even have settlements on weekends.
If you sell a stock on Friday, you aren't going to get your money until Wednesday at the earliest. We don't even have T+1 settlement in the US yet lol.
Why do business days exist in todays financial system. If I transfer money from my brokerage on Friday why can I get access to that money right away instead of waiting over the weekend.
Then look at _why_ you don't have it in today's financial services. Is it because there is some technology lacking that only blockchain and cryptocurrencies can solve?
No, it's because in the years of financial market experience, people realise the risks don't outweigh the rewards.
Cryptocurrencies and block chain isn't solving a problem, it's just spruiking the pro's side of a pro's and con's decision.
I never said blockchain was a solution. I literally just said there are features of cryptocurrencies that are useful.
There are features of cryptocurrencies that would actually be useful in today's financial services.
The main one would be near instant settlement.
PayPal makes billions offering this service, when it could be a feature of the financial system.
You seem to be doing this weird thing where you're trying to imply cryptocurrency is solving a problem, but still wanting to have take backs when people say "cryptocurrency doesn't solve this problem".
If your position is that instant transfer would be useful, there is no reason we don't have that already at a technical level. It's purely a financial system construct that we wait and have settlement periods for the ability to reverse transactions, have added security, etc.
If your position is that cryptocurrency somehow solves a technical problem, I'd be interested to hear what you think that technical problem is.
Taking Bitcoin as an example...it's an open and free alternative to those private systems.
Sure it has limitations, but the base network layer is there and functioning (with 100% uptime) for anyone to use without needing to ask for permission. That's the value.
I think even crypto cryptic should take some time to actually try out on-chain applications. It's really hard to convey just how much more frictionless it is than the normal financial system.
For example the other week I wanted to buy some Series I savings bonds. This involved first freeing up some capital by selling some index funds. I put the order in Friday night and had to wait until Monday morning for the trade to be executed. Then I had to wait until Wednesday for the cash to become available in the brokerage account. I transfer the cash to my checking account, and the ACH doesn't clear until Friday morning. I finally go to make the purchase on Treasury Direct, and it tells me the order won't go through until the next business day (Tuesday because Monday is a holiday). All told it took me 11 days and countless time fumbling around the outdated and laggy web applications of three different financial institutions.
In contrast the other day I unstaked some USDC I had earning yield in Curve, bridged it from Ethereum to the Polygon, converted it to MATIC tokens using Uniswap, then staked those tokens to earn yield in Lido. The entire chain of transactions took no more than 5 minutes. Didn't have to create an account or login into any of those platforms. Everything went through Metamask connected to an ultra secure hardware wallet.
I'd draw the analogy of how a lot of people from the older generation missed the explosion of mobile convenience apps tens years ago. I can recall my parents asking "why do you need an app to make a restaurant reservation, what's the big deal with just calling the restaurant." And I think the point is that consumers often treat frictions as a given until they actually have an experience where those frictions are removed. Then they have a really hard time going back to the old way.
Yes, making small improvements to the existing system is much easier than getting every single financial institution in your country to switch to a blockchain.
For blockchains to be a useful product, it is not a prerequisite for "every single financial institution in your country" to switch over to using them.
How about when you sell shares? Still a 2 day minimum almost everywhere in the world, takes me about a week from sale to money in my bank account.
Have you ever attempted to send shares overseas? 2 weeks minimum, up to 3 months in some of my cases, and endless paperwork and emails. On blockchains it takes less than a minute.
All of finance should be fast and globally accessible, money is only the most basic use case.
This is based on a common misunderstanding of Blockchain. Yes transactions are immutable, but reversing is not necessary. All fiat backed stablecoins run on decentralized infrastructure but they also operate on smart contracts that give the creators the ability to mint and burn coins at will in order to credit fiat deposits and burn tokens for fiat withdrawals. The fact that it runs on an immutable Blockchain just means transactions themselves aren't reversible but it doesn't mean new transactions can't be made to rectify a problem with loss or stolen funds.
Sure, you can make new transactions that do whatever you want, but can you force the recipient (edit: or smart contract author) to create a transaction that returns the tokens or do you have to hope they'll do it on request?
First, you are conflating settlement of securities with money transfers, two different things.
Next, I can transfer money in Europe (SEPA) settling immediately, for a tiny fee ($0.30 or so).
Finally, I've had BTC transactions in the mempool for 16 hours or more, hanging in there without any confirm. They might just drop out, or they might eventually be included in a block - who knows. Not exactly a predictable and reliable money transfer.
By default, no. If you’re an idiot and put yourself in a place where you need instantaneous settlement, you can get it. Hilariously, their extravagant cost was apparently too low. Post crypto, they index to crypto trading fees. These are at least quadruple their historic spreads. I don’t believe anyone but the crypto bros demand it in real markets.
You can get if the business offers it. Which they are just a loaning you their money while they wait for your money to settle in their bank account.
If their was no demand, then why does PayPal, Square, and other FinTech companies make billions a year offer you to instant deposit money into your bank account lol.
If the US banking system had instant settlement Venmo, Cash App and other apps wouldn't be in business because you could just send the money through your bank for free instead of using Mastercard or Visa.
> they are just a loaning you their money while they wait for your money to settle in their bank account
Nope. No loans. You can demand physical settlement on stocks, end of day. Naked shorters (MMs) have to do this from time to time. It’s now more expensive because: idiots. Which suits Wall Street just fine.
> why does PayPal, Square, and other FinTech companies make billions a year offer you to instant deposit money into your bank account
They’re lending you money. No “lol” needed. (Am I misinterpreting this?)
> other apps wouldn't be in business because you could just send the money through your bank for free instead of using Mastercard or Visa
Trusted versus untrusted counterparty. I’m not wiring my hotel because I want AmEx behind me.
> You wouldn't be wiring your hotel. You would be wiring your hotel's bank.
Sure. Yes. Fine. A worthless difference. But yet. I won’t wire my hotel’s bank.
I will wire my lawyer or accountant. (Sorry, their banks.) Wires which process instantly and for free. But virtually irreversibly, and so at higher risk for me. (Also, AmEx gives me goodies. Same reason I don’t swipe my debit card.)
I would like to make quick (<30 min) transactions of large amounts. I can do that with BTC, but it would be nice to do this with USD. Currently, this involves finding a bank, go during the right time, proper account numbers, etc.
>Still waiting to see even one single useful use case for cryptocurrency
Sending funds to people outside of the country without being reliant on gatekeepers is extremely useful. This is especially true if you want to send funds to people and/or organizations being blackballed by the US financial establishment (either because of their function, such as Wikileaks, or their location, for living in a frowned upon country).
I still find it somewhat astounding that people, especially techies, can't see the extreme utility in this function. But, unfortunately, ideology often trumps logic.
Interbank nightly balance settlements between large institutions. A distributed cryptographic ledger would be great for this kind of thing. A private “coin” between mostly trusted partners with provisions for reversing transactions as needed.
Useful because it would have lower administration overhead than one bank maintaining a service for exchanging funds, no concerns about downtime, and all sorts of guarantees about the correctness of balances. Lots of back end software that just doesn’t need to be written or maintained.
Lots of similar usecases where small mostly trusted groups need to keep track of asset transfers or trade between them.
> Interbank nightly balance settlements between large institutions. A distributed cryptographic ledger would be great for this kind of thing. A private “coin” between mostly trusted partners with provisions for reversing transactions as needed.
But they’re already trusted partners who already have a functioning settlement mechanism that already has provisions for reversing transactions. Jamming a blockchain on top of this solves nothing not already solved.
The claim that this would reduce maintenance overhead is hogwash – we’ve seen an unending litany of unexpected bugs in blockchain protocols and smart contracts, while the existing transfer mechanisms are already debugged. Trustless mechanisms are harder to get right than trust-based ones, not easier.
> All I’m talking about is a simple ledger, not the fancy smart contact nonsense.
You wrote:
> > A private “coin” between mostly trusted partners with provisions for reversing transactions as needed.
Either you’re doing that with a smart contract, or you’re just plain trusting the other people to reverse it when asked, in which case there’s zero reason to be using a blockchain to begin with.
You don’t want or need trustless ledgers to interact with trusted parties - that’s a big increase in complexity for zero gain.
edit: Suggesting that the interbank system move to crypto on a thread about a massive failed crypto project is a huge failure on reading the room. It's like trying to convince people to buy Titanic II tickets at the funeral for the Titanic I victims or trying to sell a Model 38 to Jacqueline Kennedy on November 23, 1963.
People significantly underestimate how much cost there is at certain points in the chain.
Interbank transfers are very cheap. A lot of central banks have invested heavily in payments systems too (the BoE is one, Faster is very good). But at certain other points, this technology could be very valuable. Two examples that occur to me immediately are pensions and fund administration.
Obviously, Ethereum goes beyond that with a more generalized VM. From what I have seen, this is a ludicrously inefficient way to perform computations. If that is wrong, then maybe there is more. But just blockchain alone will have a huge impact (if you look at back/middle-offices in banks/fund managers/pensions/insurance, I remember working in this area and going to one of the largest pension admins in my country...I remember vividly opening the door to the pig pen, and it was just a sea of people, 95% just responding to very basic customer queries/doing incredibly basic computation work and costing huge amounts of money...because, of course, there is no cost pressure from "customers"...a parallel that more people understand is US healthcare admin, huge inefficiencies, pension admin is like that).
We are not even at day one with this trend. I am sure people will find other applications after, but applying blockchain/distributed storage/distributed computing/whatever to back/middle office in finance will be huge. It also isn't really a question about whether it is going to happen...it will.
> I remember vividly opening the door to the pig pen, and it was just a sea of people, 95% just responding to very basic customer queries/doing incredibly basic computation work and costing huge amounts of money...because, of course, there is no cost pressure from "customers"...a parallel that more people understand is US healthcare admin, huge inefficiencies, pension admin is like that
How does blockchain solve this?
There are always people pushing generalized "it will be good for this" statements, yet they can never seem to give concrete examples of where blockchain would be a better solution than the current implementation.
Because all of the operations that these people perform can be performed computationally (and the reason why they aren't now is not necessarily technological, all the technology exists to do this today but blockchain forces everyone to change all at once).
Blockchain solves it by making it so that all that goes away. In return if something fucks it up...well look at every crypto project that has ever crashed. I'm not being glib. That's the solution.
This is why you don't understand...the "customer" for pensions/fund managers is not the end-user, it is financial intermediaries (in most countries anyway, the level of disintermediation varies, some do market themselves to individuals i.e. Vanguard but most do not, the commission does not go to the customer).
All of the technology to do away with this exists now and existed before blockchain. But most of these companies haven't implemented because they aren't native tech companies (I don't think people understand on here, these places don't have any software engineers, they hire consultants, their idea of a "tech guy" is the guy who sorts out the Microsoft licences) and the cost saving is only realised if everyone adopts it.
With blockchain, it allows you to decentralise a whole set of computational logic that was previously performed by hand, and you change how people interact with that.
It all seems totally puzzling...because most people assume that these businesses are already using technology, when they aren't. Blockchain incentivizes business transformation across the supply chain, which allows you to remove cost from almost every level.
The question of actual customer support is not going away, it will never go away. That is what financial advisers are for, they are actual customer support.
Classic HN though, a bunch of people who don't work in an industry pontificating about how that industry works...genius.
There's nothing to support. The block chains immutability means no takebacks. The phone line can just have a message on repeat "Sorry, nothing can be done. The Blockchain is the source of truth." Customers can then just hang up knowing that it's the real world that is wrong and not a thing on chain. This is blockchain realism at its finest.
Fucking lol. I can just imagine a company sending a package to the wrong address. The customer rings the company to ask what's going on. "Sorry the blockchain is immutable, we can't change where your package is going, deal with it".
Yes, blockchain totally solves all these problems...
If banks distrust each other enough to want a blockchain to handle nightly settlements, then they are massively exposed to transaction rollback shenanigans. Interbank settlements can be very, very large, and I have trouble imagining, even in the wildest cryptocurrency fantasy land, that banks could arrange for all their different types of settlements to be on the same blockchain.
No problem having dozens of specific purpose blockchains.
It’s just a ledger, it doesn’t matter at all how big the numbers are. It’s not real money just a record of balances.
I’m not talking about a cryptocurrency, just a blockchain as a replacement for a database table, essentially a different api that ran distributed instead of on some ancient mainframe.
Suppose you and I are large institutions. I owe you $10bn today. You owe me 10bn EUR today. I owe you some currencies tomorrow, and you owe me some tomorrow, etc. (I may also owe you a bunch of future corn, you may owe me some shares of Coinbase, etc.).
The practicalities we need to attend to include, at least:
I actually owe you those dollars, and a business decision was made to keep that debt payable today. So I have to convey the dollars to you. Similarly, you need to convey those Euros to me. We can do this by actually transferring them via central bank mechanisms, or I suppose we could have a custodian that operates a blockchain and use that blockchain. I’m unclear how that helps. But keep reading…
There is a risk that one of us will default. If I default before any transactions take place, it’s not a huge deal — I still have my Euros, you still have your dollars, no one is out a huge amount of money, and the lawyers and courts can pick up the pieces later.
But there is also a risk that only one transaction goes through. (Look up Herstatt Bank.) If this happens, then one of us is out $10bn until the law does its thing. That is a big deal. This can be mitigated by atomic multi-currency transactions or maybe by a hypothetical blockchain handling USD and EUR (and Coinbase shares and everything else), but that seems every bit as hard as getting the central banks to use the same database, if not harder. [0]. Or they can use an escrow service like CLS, which works without a blockchain.
[0] Blockchains perform spectacularly poorly in the event of a network partition. Does anyone really think it would be wise for, say, the central banks of the US and Russia to allow currency to move in the same blockchain or, for that matter, on a POW or PoS blockchain?
If we need dozens of specific purpose ledgers between banks, what's wrong with database tables running on ancient mainframes, and how would dozens of different blockchains solve that specific problem?
This is called the ACH network and there's no way to trace, undue, or recall transactions. It has been used in bank robberies [1] and numerous financial institutions and payment processors who are not banks use it, not all of whom are trustworthy.
Parent didn't ask for "groundbreaking", they asked for "even one single useful use case". The bar wasn't high.
More charitably you could call them 1. micropayments and 2. disrupting rent-seeking incumbent banks. You use a currency to pay for things, so yeah, the use cases will tend to circle around payments and transferring money. What did you expect, a cure for cancer?
>2. Transferring money internationally as groundbreaking uses for crypto? Seriously?
You are confusing, "groundbreaking" with, "useful and convenient". It is much cheaper, faster and easier to send small international payments via crypto than it is via any legacy financial service - this is beyond dispute.
> It is much cheaper, faster and easier to send small international payments via crypto than it is via any legacy financial service - this is beyond dispute.
Let me dispute it then. Try Wise (formerly Transferwise). It is cheap, fast, and easy.
FWIW, I know many people working abroad (from expats to domestic helpers), and none of them use crypto for remittances, as far as I know.
>Let me dispute it then. Try Wise (formerly Transferwise). It is cheap, fast, and easy.
Just checked it out, sending $5 costs at least 13% (they receive $4.33) and doesn't transfer until tomorrow. Some currencies cost far more. Sending $5 to my friend in Brazil would cost a whopping 28% (they receive $3.54). Some currencies don't allow you to send $5, but have minimums that are higher.
Sending $5 of litecoin costs me about .75% (they receive $4.96) and takes anywhere from 10 to 30 minutes.
And although I haven't tried the service, I'm sure they block payments to people and organizations frowned upon by the banking system and the US government. Would my payment to Wikileaks go through? Or the Julian Assange defense fund? I find it highly unlikely.
Finally, individuals like myself who in the past played online poker are blocked from using transfer services like Moneygram and Western Union for engaging in blacklisted behavior. Why would I struggle to enter the walled garden when it is cheaper, faster and easier to use crypto?
>FWIW, I know many people working abroad (from expats to domestic helpers), and none of them use crypto for remittances, as far as I know.
I know dozens of people who work here in New York who use crypto for remittances. In fact, although I don't use it, there is a nearby laundromat with a bitcoin machine that is almost entirely frequented by migrants from South and Central America. Search for "bitcoin machine" in the NY metro area and you will find a huge number of them are located in landromats and bodegas frequented by immigrants who use these machines to send and receive funds.
How does that work? Does I transfer a bunch of "ill gotten" ethereum to someone who agreed to buy my 5k goofy ape NFT for 1 million bucks and now I've made 995k that I can pay taxes on and use as laundered money? There's still a transaction chain of eth so it wouldn't be impossible to figure out what I just tried to do.
You start a ransomware group, you take the country of Belize for a million in etherium.
You also start a NFT collective, you post a bunch of pictures you have for sale. In a fit of 'we're gonna blow this money', the ransomware group, which is you, buys a bunch of NFTs from a few NFT sellers, including the NFT group you setup. The group posts the JPGs on their twitter to show what they "wasted" their money on for lols.
Can the country of Belize claw back their money? It depends where you live, where your NFT collective lives, and the treaties between the countries. If you chose your countries correctly to ransomware. If Eth is fungible currency, then you can claim that just because the 'money' someone stole ended up with you, for a legitimate sale, its not a 'stolen good'.
Crypto is our generation’s write off. The cost of a free market economy. We’ll have people with stranded skill sets. They deserve compassion; though based on precedent, they will find none.
Maybe in a hundred years we’ll realise they were ahead of their time. When some UN blockchain extends across the solar system. Like how we remember N. Tesla and the 90s’ satellite internet folk. Financially ruined. But cute in their own way.
There are a lot of boomers recapitulating their 90s in crypto. They’re fine. They’re gambling. I have a lot more sympathy for the young people wrapped up in the whirlwind. They’re making me wealthy. But oof, do I wish they’d widen up.
> Maybe in a hundred years we’ll realise they were ahead of their time. When some UN blockchain extends across the solar system.
I doubt it. Crypto reached the superbowl and it's incredibly mainstream. If it's trillion dollar use hasn't been found yet (beyond just doing what already exists slightly better / worse) then I doubt it will ever come.
They weren't really scamming, but got scammed along with several other companies that were trying to be legit. They made large loans to three arrows capital because on the surface it seemed like a legit serious business hedge fund, but it turned out it making tons of high risk bets in the crypto scene that fell apart when the market crashed.
Was three arrows a scam or just acting like a hedgefund? It’s well known hedgefunds can go bust like LTCM. Especially if you’re doing arbitrage and your thesis is two disparate assets are price linked.
The whole 3AC story hasn't come out yet, but the rumor is that they were able to use the same collateral with different lenders. On top of that, they offered to "manage" portions of their vc investment treasuries.
In what way did it seem like a "legit serious business hedge fund"? I'm unclear how Celsius got scammed making loans to a hedge fund that is on record as investing exclusively in crypto since 2018 [1] - did the hedge fund lie about their positions?
Celsius got huge deposits based on unsustainable yield guarantees (17% I think), they took that crypto and used it as collateral on defi protocols, then took the loans they got and gave it to funds like 3ac, who made money on leveraged carry trades that eventually worked up to Luna which was offering an absurd 20% apy through anchor which was completely unsustainable but basically kept afloat by Luna itself dumping money into it.
Everyone could see they were running out of money which would eventually cause them to blow up, which caused people to eventually jump ship, which caused Luna to implode because it was fundamentally flawed but people were either too greedy or didn't do their due diligence to avoid it, which caused all of their assets to vaporize as they tried to defend their stablecoin peg. With 3ac insolvent, nobody that lent to them could get their capital back, which meant they could no longer repay their defi loans which caused them to be liquidated as prices dropped and they couldn't post additional collateral. With their funds locked or liquidated, they had nothing to return to depositors who wanted their stuff back.
To be charitable you could say they weren't outright scamming people, but anyone with a nose should have smelled the enormous stench of death coming from the entire thing.
