Other than making some people really rich, what problems would it solve that aren’t better solved by existing solutions which don’t burn energy to create secure entropy?
I think as entropy becomes very inefficient to produce (difficulty multipliers increasing on crypto as the network expands...) it will become more clear that the expensive part about sending money internationally is trusting all parties involved.
You pay VISA/MASTERCARD a 3% fee because you trust them to protect your account in the case of fraud. Moneygram takes 2% of all transcations over $900 because you trust them to move money from your account to the recipients account without losing it.
Even in computer security, you have to put your trust in something. Somebody picked cryptography and high numbers of CPU cycles.
Anyway, you asked what problems crypto could solve, and I guess my answer is, maybe it will cost less to send money around the world. As it turns out, there's not necessarily a way to make it free.
While that may be technically correct, it's ignorant of the fact that costs are always passed down the line in any economic relationship like you're describing.
That fraud protection costs the card issuers, which is the basis for that merchant fee, and the merchant passes the cost on in the form of higher prices. (Merchant accounts with higher fraud rates will pay higher fees!)
So from another perspective, you actually are paying the bill for those unknown percentage of frauds, which you wouldn't be as much on the hook for so directly if only everyone was responsible for their own individual security.
So, credit card or not, the cost is there, even if I pay with bitcoin or ether. Except of course for the benefits of the credit card.
If people start charging less when paid via methods that have less chargeback risk will you reassess?
Only if the vendor of the TV is abiding by the rules of the credit card provider not to offer discounts for cash transactions.
In effect, the customers buying TV's with cash, paying the same, are paying a "credit card tax" to support the credit card users.
Also, they pay the same, but don't earn any of the incentivizing kickbacks (points, cash back, ...).
You're transacting with the merchant, and a third-party, the credit card company, helps itself to a piece of the action.
Whether that is coming from you or the merchant is the wrong view.
The transaction between the two of you pays it.
It's highly unlikely that the free market somehow sorts this out in the future, considering that it's the free market that gave rise to these power law distributions to begin with.
There will always be some limiting factor or theoretical vulnerability. If it's not ISPs/Internet infrastructure, then its the exchanges and fiat on ramps. But yet, its been pretty hard to kill illegal filesharing, VPNs, etc.
It's even harder to stop those things when the population doesn't believe in legislating against it, at least in a democracy.
I’ll let other people prognosticate as to what, if anything, that means for their future.
As with most things, this can be sort of solved with heavy regulatory structures and enforcement, but I would argue that it's not better solved, especially once proof of stake eliminates the problem of burning energy.
Like what?
Programs that don't require brute-force commonly use many times less energy than programs that do rely on brute force.
This extra cost is often seen as wasteful.
Can you give an example of a program that gives similar results?