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Comment by avmich | Hacker News Reader

> Likelihood: essentially nil, for many, many reasons, such as: The overwhelming majority of people don’t want to maintain their own private keys, and if you don’t maintain your own private keys, cryptocurrencies are essentially no different from fiat money held in banks, except for the many ways (such as the irrevocability of transactions) in which they are wildly inferior.

Looks like an complete failure of imagination. Is it really that hard to assume there could be solutions to problems like that?

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I'd say the onus is on the cryptocurrency people to show that "the many ways [...] in which they are wildly inferior" are fixable.

For example "irrevocability of transactions" is fixable by introducing arbitrators. This has the huge benefit of making the trade off explicit and still allowing for irrevocable transactions. With 2-of-3 multi-sig escrow services can be implemented in a decentralized and trust less way (if both parties agree no escrow agent has to be involved).

Handling private keys has also become much simpler in the past years due to hardware wallets and hierarchical deterministic keys. But I can see why someone could not want to be responsible for the safekeeping of their savings.

"Arbiter" aka a centralized authority. At that point you're better off with a bank.

I think we still have a long way to come in regards to handling private keys. In my efforts to get my family/friends informed on cryptocurrency it amazes me how difficult these things are.

I think that is why Coinbase has been so successful. If my mom wants to hold some bitcoin, I'm sending her to coinbase. She can't be trusted with her own private keys.

I'm interested to read more on the multi-sig escrow services you mentioned though. Do you have any recommended reading material on the matter? Thanks.

Here's some more on multi-sig & escrow https://coincenter.org/entry/what-is-multi-sig-and-what-can-...

Perhaps we should go physical. After all we seem to cope rather well with physical keys. Perhaps we should set up an infrastructure with 3D-printing keys and backup keys. Key scanners are able to read the key if (and only if) you insert the key. The keys are designed such that it is not possible to copy them from a picture of them.

The idea is, if the majority of people understands private keys like they understand door keys, then perhaps managing cryptocurrency private keys will be possible for everybody? Perhaps with some prevention measures against physical loss or theft like Dapp-based insurance or arbitrage?

The option to control your private keys is nice, but not necessary for crypto to thrive. Crypto key management services exist, and the average user will use these services just as they do their current banks.

The difference is, key management services are much cheaper to provide than full-on banking solutions.

As for the irrevocable nature of crypto transactions...this can be alleviated with smart contracts on ETH network, or likely some 3rd party will develop some kind of purchasing/account insurance that provides this service for those willing to pay for it.

The nice thing is, you will have the choice as a user. That is wildly superior to the current system.

I'm pretty sure that most of the cost of normal banking does not stem from storing the currency amounts in customer's accounts (which is analogous to storing their private keys for them), but rather from providing customer service, securing the data and compliance with regulations.

A crypto-currency equivalent of a bank that could replace traditional banking for the majority of users would have all those costs as well.

The reason that full-on banking solutions are more expensive to provide is because storing money is a tiny part of what banks actually do.

The primary business of a bank is extending credit. Of course it's easier to build a wallet app then run a bank - the former's scope is orders of magnitude smaller.

It (and also the role they play in wealth management and fraud prevention) is why banking devours such a large percentage of our gdp. It's not going to be replaced by another Bitcoin fork.

Why should I have to comb through my imagination looking for a problem that fits this solution? No other technology community has to use so much exposition to convince others why their technology is useful.

There are a lot of problems blockchain technology solves. And I would disagree. Personal computers were thought of as mostly useless hobbyist technology until years later when spreadsheets were introduced. Even then, home computers didn't exactly go mainstream until the 90s, when the internet began to take off and OS technology matured (Win 95). Cell phones suffered a similar skepticism up until the networks and pricing models matured in the late 90s. And no one needed text messaging when that first came out. You also couldn't convince most people that a data plan was worth it on the mostly useless browsers of the time.

" Personal computers were thought of as mostly useless hobbyist technology until years later when spreadsheets were introduced."

"Cell phones suffered a similar skepticism"

The people that invented them could tell you what you might be able to do with them and you'd find that way better than your current situation. Whereas, the design of these cryptocurrencies are worse than our current situation in a lot of ways. The problems they allegedly solve appear to be fixable with better forms of existing technology, law, etc that's used in centralized systems. The people pushing cryptocurrencies never even try to do that. They're ideologically against it rather than looking for whatever solutions are most practical.

So, the potential usefulness of the desktop vs the terminals connecting to shared mainframes/minicomputers or mobile phones vs fixed-location phones is nothing like banks, cards, Venmo, and contracts vs Bitcoin or Ethereum. Actually, the current system works so well at what it does that most people are happy with it. The gripes they have are usually on policies, fees, etc that a non-profit, centralized, customer-focused organization can solve. A series of them cooperating via a standard protocol (i.e. better SWIFT) across jurisdictions and currencies can reduce those risks, too. There's nothing about the problems of current system that makes most people think: let's ditch existing currencies, databases, and accounting practices for decentralized, blockchain-based, crypto algorithms. A solution in search of a problem is an apt phrase.

Cell phones aren't the best example for you. As soon as economic and technical hurdles were cleared, cell phones became one of, if the most, rapidly and widely adopted technologies ever.

Cell phones also provided something genuinely novel and useful for those who adopted them, in a package that was familiar and easy to use.

Bitcoin, by comparison, okay I can pay for some things, well I could already do that. I have to adopt hard to understand security measures and my every action with my 'money' is fraught with peril if I'm not exceedingly careful. Well, that's new, but it's not something that appeals to most people.

Cell phones are a great example. They had absolutely dismal coverage in the early days and your bill would be hundreds if not thousands of dollars if you happened to roam in the wrong county. No one questions them today, but to many folks, they were a hard sell in the early days. Most folks thought they'd use a cell phone for emergencies only.

I don't know how you can look at distributed blockchain technology and not see something genuinely novel there. A set of algorithms and code are capable of replacing the functions of a bank (and then some). That is, you can store, transfer, and program the behavior of money around the world without any third party telling you can or can't.

Besides being open source money and all the awesome implications of that, crypto currencies are programmable. You can control the timing and flow of crypto according to scriptable logic. Please explain how you'd write a smart contract that escrows money and disburses according to preconfigured rules using USD.

What would you have to do to achieve that with code, today?

The technology is useful for exactly the things proponents are trying to fight against.

Crypto systems are incredibly powerful control and tracking systems - the ideal tool for banks and governments. That's where the use case is.

Well you don't personally have to comb through your imagination but people see the market cap, currently $390bn and wonder if those things could be worth that or not. And could they make a bob by going long/short.

And? I'm responding to:

> Looks like an complete failure of imagination

Your response doesn't demonstrate a use for the technology, only that people are throwing money at it hoping to get rich. Communities built around useful technology don't spend so much time trying to convince everyone that the technology is useful.

We may long argue who should prove what and why, pointing to existing successes or failures. For me it's more interesting to figure out if the idea has merit, as to me merit is a hint to value.

Bitcoin whitepaper state goals rather clearly, and the problems outlined there aren't going anywhere far right now. So the question is, can cryptocurrencies provide a solution? I'd say it's too early to say.

Bitcoin looks like a much more serious idea than this article to me. On that level of analysis approaches like "come on people... etcetera etcetera" seem somewhat half-baked. The imagination jump which creators of cryptocurrencies made is much more significant and deserves a better review. The article is a good reminder that we need to think more here.

> So the question is, can cryptocurrencies provide a solution? I'd say it's too early to say.

Well the stated goals of the bitcoin whitepaper are pretty narrow in scope, but setting that aside... Can cryptocurrency tokens provide a solution? I think the question is undeniably yes, the question then becomes, is the solution practical and do its tradeoffs represent a net benefit compared to the status quo? In this case the answer is clearly no. "Too early to say" is always true in technology so it's essentially meaningless. It's like if I said it's too early to tell if Diaspora will transform the social media landscape... sure, something unforeseeable could make that a real possibility but just like with cryptocurrency all the hype and fanfare has amounted to technically interesting novelty without much substance.

>Is it really that hard to assume there could be solutions to problems like that?

That's kind of venturing into a recursive loop of pointlessness.

The "problems like that" you mention, are actually the ostensible "solutions" that cryptocurrency was designed to provide.

So the solution to those "problem solutions," is to acknowledge that 10 years of cryptocurrencies with little more to show than Willybots and hot potato hype-machines, says something about their essential value to most of society.

There are already solutions for that! We've had one out for a year:

https://hackernoon.com/so-you-want-to-build-a-p2p-twitter-wi...

That line caught my attention also. Right now most people don't maintain their own private keys, most have online wallets such as Coinbase do that for them.

That was already addressed, in the parent comment's quote

> and if you don’t maintain your own private keys, cryptocurrencies are essentially no different from fiat money held in banks

Or even better, just describe each shortcoming as an opportunity.

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