Comment by bonesss | Hacker News Reader

Comment by bonesss | Hacker News Reader

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This comment is a little facetious, but perfectly captures the fundamental misunderstanding the general public has about crypto currencies.

It's not just drugs: any point where regulatory or market conditions create enough suboptimal conditions (ie demand), there will be a possibility for arbitrage by taking the transaction outside of that market. Weapons, people, oil, real estate, and such will constantly create this possibility over time.

The tinkerbell effect - ie money has value as long as everyone believes is has value - is combined with real economic value creation. BitCoin is a 'bubble', and is 'worthless', and is 'meaningless', but BitCoins or some BitCoin competitor will have value as long as that potential for arbitrage exists.

Legalize drugs, weapons, fake passports, money laundering, unregulated international trade, and smuggling and BitCoin will have no value. As long as those things exist, and the tech exists, the global market will demand some kind of grey currency, and keep its value relatively high.

It follows that if crypto is the most efficient way of buying drugs online, that it's probably also the most efficient way of doing other illegal stuff online. Of that we're both in agreement.

Where we'd disagree is on bitcoin or any digital bearer assets being an efficiency for transactions that don't require censorship resistance. You'd better make sure you're sending that half a million in savings to buy your new house to the right address, because it's gone forever if you mess up a single character. Also, even if you did get the right address, you'd better hope you aren't being scammed (because in both scenarios, the traditional banking system and the government at large has your back).

This is the point where you say: but multisig / smart contracts! For a start, if the 'smart' part of the contract is a human oracle, why use a blockchain in the first place (if you're both willing to rely on a third party). Additionally, point me to a single transaction where the legal ownership of a house was transmitted through a block chain transaction (with no human oracle).

Let alone crypto being a terrible idea for smaller transactions. Last I saw bitcoin at ~$20 fees, Ethereum converts to a brick as soon as someone comes up with a popular contract, etc.

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