Hacker News Reader

Even if most exchanges are shut down and the price crashes, the network can't be undone, in that, if there's demand, it's sufficiently resilient to continue to exist. For crypto to function as currency we need it to be at least somewhat stable. We currently have that. We also need to be able to exchange it, which we also have. Remember that decentralized, anonymous and trustless crypto<->fiat exchanges are possible, like Bisq https://bisq.network/

> if there's demand

And if there isn't?

One of the failure states for cryptocurrencies at present seems to be a period of falling demand accompanied with a falling hashrate, at which point the blockchain can be manipulated relatviely cheaply by bad actors and all hell breaks loose.

Bisq appears to rely on bank transfer services, which are usually traceable, reversible etc, so I'm not sure it's quite the panacea one would hope.

> > if there's demand

> And if there isn't?

I feel like this question is meant for speculators and investors.

> Bisq appears to rely on bank transfer services, which are usually traceable, reversible

Bank trasnfers are of course not anonymous, but there's nothing linking them to crypto trading, because those are direct transfers from buyer to seller. The platform, Bisq, doesn't ever touch the money. Bank transfers are sometimes reversible (called chargeback), but for example for SEPA that's only in the case of theft and you're not actually obligated to return the money, but you would have to explain why you received it. The worst that I've heard happen is a bank account being frozen, because of suspect activity (unexplained transfers from many different private individuals). Bisq has effective mechanisms for dealing with the chargeback risk. If anyone reading this is at all interested in trustless system, I highly recommend taking a closer look at Bisq.

Doesn't sound massively trustless to me, and it does sound like passing the risk of frozen accounts etc onto the user.

It's trustless in that you don't need to trust the system. It's not risk free; however, in practice the risk has proven to be negligible. The platform is matching buyers and sellers. There isn't a middleman in the transactions, so there isn't any passing of risk. The risk of freezing your account is only a problem if trading crypto is not permited by your bank, otherwise you can just explain/prove what you're doing. Even if it's not permited, you can be smart about how you trade to minimize risk exposure. Again, it's not risk-free, but you're aware of the risks and the platform doesn't require trust (definition of trustless).

The risk is that you start getting looked at for regular large transactions.

The platform does require trust, it requires trust in the banking system and in the person you're transacting with. Not sure really what it achieves apart from delegating trust from a central authority to a disparate set of individuals. I'm not convinced that's a good thing.

Generating bizzare banking activity is one of the risks, but, again, only where what you're doing is illegal. Also, you don't have to trade in attention attracting sums.

You don't have to trust the person you're trading with, because the platform uses an escrow system (multi-signature BTC addresses), account age signing (an old account is unlikely to have been stolen) and has mediation. That leaves negligible risk, of which you're aware.

> delegating trust from a central authority to a disparate set of individuals. I'm not convinced that's a good thing

Bisq provides very similar decentralization and privacy guarantees as Bitcoin (which is the point, because a system is as decentralized/private as its weakest link), so I'll delegate answering this to the myriad of articles about Bitcoin's trustworthiness.

> the platform uses an escrow system (multi-signature BTC addresses),

But still acknowledges that some methods can result in the money being recalled after the BTC has been released.

> account age signing (an old account is unlikely to have been stolen)

Unlikely, but you still have to trust that the account hasn't simply been used to build up trust before the big score, which is something we see over and over and over again in the cryptocurrency space.

> Bisq provides very similar decentralization and privacy guarantees as Bitcoin

Which is absolutely not the same thing I pointed out to you as the problem. You can't just say "but bitcoin!" to wave away that this platform still involves trust, and not trust in a regulated actor like a bank, but trust in a number of actors, any of whom may not be trustworthy. You may not have to trust the platform itself, but it's not clear to me that that is any sort of positive.

> Actually, the worst case is a crash and the whole scene collapsing in a mess of criminal trials and bitter recriminations.

As I said in my comment and my post[4]: [even if they crash] stable coins are one of the major drivers of cryptocurrencies/blockchains and by definition fully collateralized stable coins does not crash or if they crash it is because the underlying standard financial system crashes.

I also highlight that in this context the most interesting thing about blockchains is that "Openness and interoperability have become more important than decentralization".

[4] The Rise of Stable Coins: Beyond Facebook Libra: https://www.linkedin.com/pulse/rise-stable-coins-beyond-face...

> fully collateralized stable coins

Which ones are those?

The biggest (Tether) have admitted that they are not fully collateralised and withrawn their claims to such. In a court filing last year they announced they had around 73% of the funds available in 'cash or cash-like instruments', but even that hasn't really been verified, nor is it apparent whether "cash-like instruments" includes other cryptocurrencies.

USDC for example.

Oh, and

>I also highlight that in this context the most interesting thing about blockchains is that "Openness and interoperability have become more important than decentralization".

The most interesting thing to me about "blockchains" is how the hype train is still limping on, after almost zero actual delivery of anything useful or world-changing. I expect it to continue to lose steam, as all the pupported use-cases turn out (as they all have so far) either to be some sort of impractical techno-utopian dream, an unnecessary complication where a database works just fine (better in fact), or an outright scam.

I am sharing your sentiment but not 100%. My point there was different, and I highlighted that was an irony: now we have a way to interoperate with less friction than banks or other financial institutions thanks to a new infrastructure. This infrastructure could not be a blockchain and can be a better technology based more in typical federations and less on BFT like descentralization.

Why exactly shall I hold my USD funds in USDC instead of just, you know, US Dollars?

That just doesn't make any damn sense, whatsoever.

For example, USD 10,000 is the absolute maximum you can bring into or take out of the US, or move between accounts in the US, without intrusive and possibly annoying declarations of source of funds, and potential exposure to instant civil forfeiture if you are deemed suspicious [0].

Stablecoins may not be practically subject to these restrictions (they may have other very serious risks and limitations, but not the same ones as USD).

So choose whatever currency is best for you. Isn't it nice to have a choice?

[0]https://news.ycombinator.com/item?id=22489103

> Stablecoins may not be practically subject to these restrictions

Presumably they are subject to these restrictions in law, it's just that right now they fly under the radar.

So ... you're advising people that stablecoins are a good way to break the law?

They may make certain unjust laws, such as arbitrary civil forfeiture, impossible to enforce.

So ... you're in favor of innocent people having their money confiscated on the spot without due process?

No, but I'm quite fond of the proceeds of crime being recovered, so I don't think making such things impossible to enforce is a positive, no.

So regulatory arbitrage? I don’t think law enforcement will see things that way.

OP asked for any reason to hold funds in USDC instead of USD, because they firmly believed there was no reason. I suggested one reason.

Your imagination beyond that is up to you.

> I'm also enjoying the frantic handwaving away of power usage concerns

Because headlines focus on the amount of power used and not the source of power used, which is overwhelmingly renewable and wasted energy that had no prior economic use which undermines the whole reductive argument about power used, and is an outcome resolved purely by market forces.

Let me know if you would like examples for your independent corroboration.

> which is overwhelmingly renewable and wasted energy that had no prior economic use

And here's the handwaving.

Here's a counter-example:

https://www.coindesk.com/a-new-york-power-plant-is-mining-50...