Comment by wpietri | Hacker News Reader

Comment by wpietri | Hacker News Reader

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No, those aren't real problems either. Problems are experienced by humans. Humans willing to pay money for solutions.

Actual problems are things like "I want to buy this candy bar," or "I want to fly to New York in August and I need to pay for the ticket." Those are problems Bitcoin, as "a purely peer-to-peer version of electronic cash" [1], was intended to solve. It didn't.

As far as I can tell, the main problems blockchains "solve" are things like, "I would like to run a Ponzi scheme and not go to jail." Or, "I would like to hype something and make a lot of money off people." Or, "I would like my consulting company to bill a lot of hours." Or, "I would like to gamble on price fluctuations, and gold isn't volatile enough for me." But I wouldn't call any of those real problems in the sense of being things where solving them is positive sum for the society as a whole.

I would be happy to be proven wrong, of course. Blockchains are a cool technology. But I've spent nearly a decade asking for actual customer problems that are demonstrably solved better by a blockchain. I haven't found one yet.

[1] https://bitcoin.org/bitcoin.pdf

How about “I want to buy a house without needing a bank as the middle man” or “I want to transact online without needing a credit card company intermediary taking fees” or “I want to cheaply send money to my family across the globe” or “I want to diversify with an asset that is truly global and not easily printable by some central government” or “my country’s currency is inflating like crazy and there arent enough usd accessible to safely convert”?

You have the cash to buy a house without a bank? Go ahead. You don't need blockchain for that.

Online transactions without fees? Bitcoin still has fees.

I send money overseas cheaply, easily and instantly all the time. Without Blockchain.

What service do you use if I may ask?

> I send money overseas cheaply, easily and instantly all the time. Without Blockchain.

Really? I live in Canada and bill US customers for 6yrs and I've yet to find a solution for this that isnt awful. It's either slow, not practical for large amounts, very expensive, or requires tons of paperwork and special bank accounts not easily attained.

So by all means please share your solution for this. It'd be a massive industry if you found one...

Which service do you use? What are the fees? Between what countries?

It doesn't exist apparently. No reply to 3 people. He probably Venmo'd $5 to someone and thought it was a solved problem. Not a real solution to real significant cross-border money transfers.

There are a bunch of options out there:

https://www.nerdwallet.com/blog/banking/best-ways-to-wire-mo...

And more all the time; it's a hot area for startups: https://www.wsj.com/articles/fintech-startups-seek-to-shake-...

So it's entirely plausible there's a solution that works well for him already.

So all of these are basically Bitcoin. Bitcoin's been going for a decade with minimal use for any of those things. That suggests none of them are significant user needs for most people. (Or, at least, Bitcoin is a terrible match for any need that does exist.)

Some of those aren't real needs. E.g., "without needing a bank" is not a real problem. The "diversify with an asset that is truly global" is similarly an ideological statement, not a financial one.

The "without taking fees" thing is slightly more plausible, but in practice most people are happy to pay 2-3%, or have merchants pay that, and payment networks aren't free to run, so I'm not sure how plausible it is. Sending money to family can be solved much better with non-blockchain methods, which is why Bitcoin has approximately zero foothold there.

The "inflating like crazy" thing is similarly mostly a fantasy. How many countries are falling apart financially but where rule of law, power service, and internet service are stable enough to run blockchain nodes? How much better would a barely-accessible digital currency be than scarce USD? Why not just buy some directly useful inflation hedge, like medicine or canned goods?

Even if it were good for the "financial collapse" use case, that doesn't mean much in the rest of the world. The US dollar and the Euro are useful in unstable financial environments because they have value elsewhere. But the reverse isn't true; nobody in the US holds USD because it's the black market currency of choice in Caracas. So that use case isn't anything to build a real system on.

Just how in the 90s there was a lot of things that people could do on the internet but didn’t due to the immaturity of the ecosystem so it is with bitcoin today. Back in 1995 you could order most things online but it wasn’t easy or convenient or trustworthy and most people didnt do it despite the availability.

The lightning network is just getting started which (once mainstream) is going to dramatically lower fees and transaction speeds for a ton of bitcoin use cases.

And even if some of the most compelling use cases are niche- (collapsing economies, illegal activities) those alone will keep the currency value afloat and if eventually it matures and offers lower fees than credit card companies and developing nations where many people don’t have bank accounts can leap frog our legacy payment systems then I think the tech will be here to stay.

Yes, this has been the song of the Bitcoin fan for a half-dozen years at least. It doesn't work yet, but in the future it will be amazing. "Jam yesterday and jam tomorrow, but never jam today."

In 1995, the Internet was a vast improvement for things like email and file transfer and online forums and some games. It delivered actual value for 30 million people. Yes, there was more that it could do. But it delivered value on a daily basis for a lot of people. (And that was also true in 1985, albeit for something like 30,000 people.)

Bitcoin will never offer lower fees and greater convenience than existing payment networks. If it actually becomes a threat, those existing payment networks will get their shit together. And they can be far better than blockchain-based alternatives, because blockchains impose unnecessary technical limitations.

Look, for example, at M-Pesa. It's an electronic currency that leapfrogged existing payment systems. It started about the same time as Bitcoin. Except that it's actually useful for normal transactions and has real usage. In 2016, it was averaging 190 transactions per second, about 100x what Bitcoin is doing. Transactions are instant, and its fees are already lower than credit cards.

We could have that today in Western countries, but we don't because incumbents don't want to change and we're mostly fine with that. But if incumbents come under threat, they can do at least that well, and probably better given their much larger tech and research budgets.

You are making sweeping statements like "most people", or "not real" as if those are some sorts of axioms. To me it seems obvious you never really had to send money to let's call it a less-internationally-respected country. The country could be embargoed, or simply 'suspicious', and local regime probably takes exorbitant taxes from foreign remittances, and it's just a beginning of a long list of possible troubles. So, yes, lots of people world-wide, in spite of not being libertarians, or anarchists, or cocaine sellers, or a tech enthusiasts do have a lot of interest in cryptocurrencies. Though, few people really care if it's blockchain, or green cheese, of course.

Also, you seem to believe that high inflation somehow destroys internet access, and everything around it. I suppose it's something from Hollywood movies, sorry. Even in Somalia (which is typically a first example of failed state) internet is a working thing.

I've lived on four continents, so I'm at least hazily familiar with the problem. I agree money transfer could be better. But there's zero reason to think blockchains are a particularly good solution to that except in the narrow case of making transfers that are illegal on one end or the other. That's just not a big market, and it's self-limiting. Significant success will provoke regulatory response. We already see how much Bitcoin-related efforts are having to conform to AML and KYC laws.

I don't think high inflation on its own destroys access. I think a failing economic system definitely harms it, just as it harms every other business activity. Last I heard, if you were going to run your own Bitcoin node, you needed reliable connectivity and power. Try doing that in Venezuela right now, where people are barely getting food, and where the government has cracked down on people getting around its financial controls. (Somalia's a bad example; inflation there is reasonably stable now.)

And if you're not going to run your own Bitcoin node, but instead are using a service, then there's really no point to having a blockchain. At that point, you are just using a bank with a highly volatile currency and an overcomplicated transaction database. You'd be better off using a regular online bank and some stable currency.

>narrow case of making >transfers that are illegal

Exactly, except I don't see why do you think it's a narrow case? Legal ways are burdensome, expensive for those who can live a week for $10, and sometimes don't work altogether because of political reasons which are unlikely to disappear soon (I don't even sure they have to disappear at all). And economic migration is huge, so it's safe guess to say that number of people who need to send money back to home country is very significant. And now it's already being done via gray, and illegal schemes, in fact. (Please note: "illegal" is used as morally neutral term here because laws could be wrong, or simply inefficient.) In many places around the world you can find a sort of alternative banking in a medieval fashion - as a trusted network of individuals, and families. One may expect regular online bank should beat this system, but it just doesn't happen, because of reasons I mentioned.

Somalia remains politically disintegrated by warring factions which I think is a bigger factor then currency rates and still there's internet, that's what I'm saying. Also, myself lived in a country where price of local currency could substantially change during a day, and it wasn't the end of the world. In those times much fewer people used internet, but it was there, electricity was there, no zombies walking in streets, shops worked, and rule of law (even if bad law, and bad rule) remained in reasonable amount. People just started to ignore that part which prohibits use of foreign currencies. Payments were often technically illegal - you see the pattern. Would I use bitcoin then if internet were as available as it is now? I can't say for sure, but maybe. Depends on circumstances like taxes, enforcement of currency controls, availability of US$ cash, need to make cross-border transfers.

Don't know a lot about Venezuela's current condition, but if electricity has become luxury already, an intermediary can solve this trouble, it could still be more efficient than moving cash in bags.

I'm saying it's a narrow case because most people doing international transfers are not interested in getting on the wrong side of the law. If you have data otherwise, let's see it.

Yes, the international transfer system isn't great. But that doesn't mean that blockchains are the best solution. Or a solution at all.

Is Somalia undergoing economic breakdown? I didn't find much evidence for that, and war doesn't mean that it is. And if it isn't, then it's not the kind of economic-collapse case that is typically used to justify Bitcoin.

If you're using an intermediary, then there's no real point to a blockchain solution. Blockchains create a trustless context. If I'm willing to trust an intermediary, then a blockchain doesn't add value.

> How about “I want to buy a house without needing a bank as the middle man”

We are building this, using a Blockchain. No, there's no bullshit. Actually, we already did, few days ago (sold a property (a small lot of land) in California for ~$7.5k, paid in ETH): https://etherscan.io/address/0x190d022d7e4913fee5533cfdba79f...

> “I want to buy a house without needing a bank as the middle man”

That's illegal in some places - transactions above a certain value must be done by bank transfer, not cash or whatever.

The number of places with those laws is probably not going down.

"I would like to pay/donate to an organization even though no major credit card will let me."

Thanks. That's a plausible hypothetical. Could you name an organization like that? One that you are eager to donate to? How many people would like to donate to it? What's the total payment volume per year?

The only organization I can think of that might be in that category is Wikileaks. But they take both credit cards and Paypal, so they don't qualify. Maybe Hamas or Al Qaeda? Except that those are illegal to donate to, so the market is not going to be large.

I once backed crowdfunded hardware before crowdfunding services like Kickstarter were really a thing and they couldn't really get their credit card provider to accept the risk, so I had to use an international wire transfer for it. I guess cryptocurrency would be decent for that.

That really just boils down to cryptocurrency being good for business models that are so new that they sound really risky. I'm not really sure that enabling such models is really a net good to society.

Library Genesis/SciHub[1], and its various access portals[2].

Honestly LibGen+SciHub is doing more for humanity than almost any organization I know of. It's the next generation complement (not replacement) of Wikipedia -- truly opening the entirety of Man's knowledge to anyone.

I don't oppose paying content creators, but I suspect the vast majority of people accessing this knowledge wouldn't do so under traditional publishing. This shows copyright is largely outdated, not serving society optimally as it should.

As for Bitcoin and blockchains... my opinion is that they are extremely useful for efforts like those (and other niches like totalitarian states), if not much else. Perhaps paradoxically I also (controversially) think they should be outlawed and/or heavily regulated (outlawed but as a lightweight non-criminal offense). The potential for theft and money laundering is too large otherwise.

In the limit where everyone used perfect secrecy coins, paying taxes would need to be largely voluntary. And I suppose we all know how well that would turn out.

So I think cryptocurrencies are meant to be underground. It will always be possible to acquire some under the censorship conditions they are really useful for. So restricting their usage mainly curbs trivialized laundering.

[1] https://sci-hub.nu/

[2] e.g. http://booksc.org/howtodonate.php, it does support amazon gift cards too but I find that inconvenient

Thanks! That's a good example. Very niche, so it's probably not enough to sustain a robust financial network. But I agree they could happily piggyback on a more general "light crime" cryptocurrency.

"Other people have money and I don't, so I'm going to redefine money as that which I have, and then I will have money and other people won't."

I thought it was ridiculous too when I first heard about it, and then I realized that "other people have money and I don't" is perhaps the strongest motivation in history. The American, French, Russian, and Chinese revolutions all stemmed from that, as did WW2 and the Holocaust, as did the conquest of the Americas, as did the settlement of the American West.

That's mostly wrong, if you take another look at it.

The American revolution was rich aristocrats shaking off the power that the British ones had over them.

The Russian revolution (October 1917) was a military coup that the Bolsheviks pulled off by subverting enough of an army tired of war - the democratic February revolution hadn't taken Russia out of WWI.

The French revolution was a religious one - the encyclopedists had found a revelation, and by gosh they were going to islam the rest of the world with it.

Etc.

French Revolution was also a way for the "bourgeoisie" (the riches, basically) to get the power that was still held by the aristocracy. So, actually people that had lots of money and thought they deserved to have more power.

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