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Comment by kemonocode | Hacker News Reader

I've also been cut off from most of the traditional banking for most of my professional life, and my only crime was being born in Venezuela.

Yes, I know Bitcoin and other cryptocurrencies aren't being used by everyone. Yes, I'm aware of the risks and the costs. But it's still a huge boon as crypto allowed me to transact at all when it was physically unfeasible to do so.

I've said it before and I'll keep saying it until such reality changes: most people who disregard cryptocurrency as just a fad can afford to think that way. Their needs are served by traditional banking, and that's fine! But it's not the reality for an important amount of people who are unbanked for whatever reason: their past, their actions (whether moral things considered illegal and thus they're prosecuted, or legal things that society consider immoral and thus they're censored) or even just a geographical accident.

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I think it's a reasonable solution at the margins as long as the situtation in countries like Venezuela is as bad as it is. I don't think many people dispute that.

But as a solution for the institutional failures it still is not a replacement and obviously the solution in Venezuela needs to be repairing the system.

Same with Sci-Hub in this case. The Bitcoin donations alleviate financial pressure somewhat, but of course the lawsuits and IP-infringement will still haunt everyone involved.

> I think it's a reasonable solution at the margins

Reasonable solutions at the margins tend to be adapted in some major way by the masses in time, like bottleneck microstates can end up driving steady state long term behaviors of systems in glassy dynamics… technical solutions to make lawsuits and IP-infrignment have no teeth are being adopted more everyday but not as fast as some would like.

> the lawsuits and IP-infringement will still haunt everyone involved.

I suspect donations are used mostly to keep the lights on.

The point that you're missing is that there will always be Venezuelas and Zimbabwes, and Bitcoin, in its current form, serves as a baseline financial system that unfortunate citizens of failing states can fall back on. It has plenty of issues when it comes to buying coffee and small transactions, but perfect is the enemy of good and it has properties that make it much harder to censor than USD based services, which will just comply with the state.

I often hear the argument that BitCoin is unsuitable for small transactions. That's certainly the case (at least in recent years).

What I don't understand is why people don't then just use one of the literally thousands of other currencies -- most of which handle small transactions just fine.

For small transfers I use DogeCoin and the fee is 0.2 cents.

Bitcoin for me is a "savings account". The tx fee is certainly important, but more important is the long term value appreciation. I have changed btc to other cryptos to spend them, so I pay less fees, but Im not holding other cryptos long term.

a savings account that loses 50% of its value in a matter of days?

If anything, the crash last March has proven that BTC is not a safe asset and not immune from a global financial meltdown. Other way around - its very sensitive to it actually.

It's very volatile but usually you don't touch a savings account regularly so it doesn't matter what it does day to day, only long term.

It seems like the whole meaning of "savings account" has been lost in one generation..

In the old days, the very point of a savings account is that it keeps the value stable, and pays interest on top. The more long term you save, the higher the interest. Compounded.

Yeah, that whole thing doesn't exist for my generation. We've never had savings accounts that beat inflation in our lifetime.

Savings accounts aren't meant to beat inflation.

In some European countries, your money on the bank was taken by the government due to the crisis. It's a bit worse than ups and downs in bitcoin, where you have a chance to get it back.

Bitcoin isn't so bad fees wise. https://www.buybitcoinworldwide.com/fee-calculator/ is showing 3c if you will wait 8 hrs or 72c for 40 min. It has other problems as a practical payment mechanism though - lots of people don't take it, it's always kind of slow, you have to have your passport scanned and pay fees to convert it to fiat etc. Some of those apply to other crypto too.

This sort of "Once we've made everything perfect" reasoning doesn't really reflect reality all that much though; the point is that centralized systems will always be vulnerable to these problems; even if we temporarily fix them, that'll be an exception and sooner or later the systems will fall back into their broken state.

From that premise that the probem is universal, the deduction that the solution is also not just a temporary fix seems like the only reasonably conclusiont to me.

I'm not completely sure whether you're arguing that the bitcoin hype will pass once we've sorted out a few problems, or just that it'd be a nicer world if that could ever be the case; but either way, I don't think cryptocurrencies should be a last resort but instead become the norm. Offense is the best defense, after all.

I would argue that centralization is inherent in most humans instincts. To put it another way, many people like having a leader.

In fact people like leaders so much that exposed to a capricious and cruel world they'll invent imaginary and often cruel ones just to give the world a sense of order. Think the old testament God or lizard people conspiracy theories.

Given we're going to huge groups of people running around following leaders I think our best effort is spent trying to make the selection of those leaders pick non-evil people who run vaguely meritocratic and fair systems. Rather than trying to engineer ideal de-centralized systems _which will also have to be robust against the mob following their evil leaders.

Obviously this is a false dichotomy and we can do both, but please don't give up on good leadership, people need it and there's plenty of examples of it exiting.

This causes such a problem with governance though: Instead of voting for (or contributing to) ideas/policies directly, you have to translate your preference into a selection/ranking of the people who sound like they might support the ideas that you would like to see in your democracy. Sounds like a pretty crappy codec for that kind of signal tbh.

I would go even further in your argument and say that the escape-hatches are a requirement to keep the centralized system in check. This is a bit like the free market argument in the sense that it creates competition.

Also consider using a stable coin like DAI, USDC etc if your use case is to mimick somewhat of a bank account without crazy volatility.

They’re a scam. They have no real reserve.

> But as a solution for the institutional failures it still is not a replacement and obviously the solution in Venezuela needs to be repairing the system.

The point you seems to be missing, that the system cannot be repaired in a day and people need to eat, while they doing the repair.

It doesn't address the problem of Venezuela at scale: the initial distribution problem. If you trade BTC for Bolivars between people in Venezuela then the total number of Bolivars, hence welfare within the system, remains unchanged. If you trade Bolivars for things outside, you can trade outside the country, and are better off with literally anything you can get outside the country.

I don't doubt for a small handful of people who got their hands on some BTC they individually are better off. That doesn't change the fact it's not a reasonable solution at scale.

> But as a solution for the institutional failures it still is not a replacement

I don't think one can call PayPal an institution. As for an ability to transact - I don't see why shouldn't we replace institutions that prevent us from transacting.

Failing business models of Elsevier and likes are a problem of their shareholders. I, personally, want them crushed.

I think cryptocurrency is great as a currency. I think it was stupid as speculation or investment.

Digital money is awesome, it being taken over by so many carpetbaggers is not.

I’m looking forward to bitcoin having a stable value for a few years, any value.

Bitcoin has really settled down in terms of price swings over the last year. It did have a major covid crash, but aside from that it's been very stable for the past year.

Keep in mind that the price moves also attract attention, and act as a sort of advertisement of its existence. It wouldn't get any mainstream coverage without the price moves.

It’s definitely better this year, but I don’t want my currency to fluctuate 10%.

On what time scale? Currencies fluctuate 10% all the time over a year.

A typical volatility index measure like VIX( EVZ ?) could be good reference , there are few VIxes which look bitcoin as priced in USD

BitCoin has fluctuated much more than 10% in the last year though: https://www.xe.com/currencycharts/?from=XBT&to=USD&view=1Y

Certainly much more than USD/EUR: https://www.xe.com/currencycharts/?from=EUR&to=USD&view=1Y

10% is an underestimate. BTC fluctuates by 50% or more.

Sure tell that to the Zimbabwe dollar, the South African Rand.. the Yen, etc. This is an ideal that doesn't exist in practise for all but a small handful of actual currencies.

I think that supports my point though right. Does anyone think the Zimbabwe dollar is a good currency? I think few choose to use it.

It’s hardly a choice for its country’s people. Governments in developing countries are very big bullies.

> Bitcoin has really settled down in terms of price swings over the last year. It did have a major covid crash, but aside from that it's been very stable for the past year.

lol what? It went from $7000 to $10500 to $4000 to $10400... Blame it on covid if you want but the whole year has been this violent zigzag

that’s at least all in the same order of magnitude! only a couple years ago it was swinging much more wildly than that

But it has nothing on the established fiat currencies, where a >10% change in a year is (rightly) considered a major event

Consider USD/EUR. In 2015 it was 0.9, and currently it's 0.89. It's peak and low was 0.96 and 0.8. That a 10% bandwidth around a stable average.

Over the past year the DAI token on Ethereum has tracked the US dollar better than that, without requiring anyone to hold collateral off-chain.

https://coinmarketcap.com/currencies/multi-collateral-dai/

Pegging your currency to another currency and claiming it's more stable is cheating and doesn't really solve the problem.

Like the US can stop PayPal from providing financial services, they can too stop banks from storing USD collateral to such parties.

Also I don't agree with your "tracked better than that" claim: DAI/USD has a 15% drop and increase in a few months, about the same as USD/EUR in 5 years.

DAI is not backed by Usd collateral, the collateral is a basket of other crypto currencies.

Yep, from the point of stability that sucks obviously; there are stablecoins though. I still like BTC as a speculator (and I know it's almost nothing more than gambling, but considering coin tossing, dart throwing or monkeys outperform professional stock investors/fund managers (at least there are a ton of articles saying that), it all sounds like gambling), I create a nice living wage doing nothing at all but clicking buy/sell a few times a year. And that is only running on profits (so all money I 'invest' is profits made with btc alone) from when I bought a stack of btc end of 2016 because something seemed to be happening and by golly it was. As long as it works, it works.

Good or bad; whatever works... It's a nice extra on top of my day job.

I bought bitcoin first time when it was below $10. Happy to be stupid and have those thousand percent gains.

Enough people sunk their whole live savings and then some into this. They are less happy than you are.

With any financial instruments there are those for who it is a worse deal than alternative. With Bitcoin you have great volatility, but it has been mostly upwards. If you have made loss you are probably minority of the user/investor base.

For example, the current ATH was nearly $20k, and the current price is $9k. If you were unlucky enough to buy at ATH, you are down to 40%. Thats still not that bad situation - for example with stocks it is easy to find bets where you lose 90%.

Sinking your whole life savings into something is stupid and it's peoples own fault if they do so and lose everything.

Sunk half my life savings in at $16, then doubled down and sunk the rest in when it dropped to $3.

Have now bought a house each for pretty much all my close friends and family members.

Couldn't a gambler say exactly the same thing?

Usually, no.

With gambling the winners is very, very small minority. With bitcoin/crypto practically all people who got in before 2017 have been doing very, very well.

Early Ethereum buyer checking in.

Although, most of my holdings are now BTC & XMR.

XMR or Monero, is the best cryptocurrency IMO.

Ledger is totally opaque. Actually works like cash.

> Early Ethereum buyer checking in.

Hopeful about ETH tokens rising in value soon? ETH 2.0 is coming later this year, which may shake things up one way or another.

I don't know, I'm a little worried about 2.0 as they've delayed it for so long.

Ledger is totally opaque? Maybe I'm confused, but opaque means not transparent. Surely you'd want the opposite?

What ledger is used for tracking cash?

Transparent means people can tell how much money you have, how long you've had it, where you got it from, and where you send it. An opaque chain means outside observers can't really do that. If people have the private key, of course they can, or if they have view keys they can. The the chain is verifiable even while being opaque thanks to the beauty of mathematics.

Of course, that’s reasonable that you would be happy with your luck.

Buying lotto tickets is irrational as well, but the winners are happy. Some speculators end up ok.

As much value has been lost by bitcoin as created (ie, someone bought at $20k and lost at $10k, etc).

I’m glad you made a ton of cash, I hope you can retire. But this volatility is really bad for currency.

Why not stablecoins (like DAI/USDC/PAX)? All (but one) benefits of bitcoin and none of the price fluctuations.

I personally prefer not to use fiat currency, because I prefer my purchasing power to go up. Thats why I say no to stablecoins.

> bitcoin having a stable value for a few years, any value

It will still be "that" lottery.

In its current form every major crypto has been "promoted" as "be the first one to get onto my crypto bandwagon and this will make you rich".

And that will also make sure something like this BBC programme - Missing Crypto Queen - keeps on repeating.

https://www.bbc.co.uk/programmes/p07nkd84

Eh, bitcoin isn't really "great" currency. It has some pretty poor properties as currency. Now I understand it's better than nothing. You want currency to slowly lose value. If it goes up in value, than it make no sense to exchange it for goods and services, which is the whole point. Wild fluctuations in price also cause massive headaches.

You'd think that Venezuela would have provided incredibly fertile ground for bitcoin usage to go mainstream.

But what actually happened is good old fashioned dollarization. U.S. dollar banknotes flooded into the country. As for digital payments, Venezuelans have repurposed Zelle, the U.S-based person-to-person payments option, to make digital U.S. dollar payments.

I was under the impression that bitcoin trading volume has been increasing steadily in Venezuela.

https://coin.dance/volume/localbitcoins/VES

Yes, it is. My understanding is that some people use bitcoin as a bridge for remitting funds into Venezuela.

But this is a niche usage. What locals really want are dollars. Something like 50-60% of all Venezuelan transactions are now being conducted with U.S. paper money and Zelle.

It's true, most transactions that involve USD are done with paper money in Venezuela (which is why I mentioned I used BTC when it wasn't physically feasible to transact because coming by such paper money is not straightforward) but when it comes to electronic solutions it's a constant cat-and-mouse game. You mention Zelle which was up until very recently [0] the most used option, but people are now seeking alternatives- cryptocurrency just being one of them- and I ought to clarify that not everybody has a trusty acquaintance/family member with an US-based bank account (or a bank account themselves) to use these solutions.

[0] https://www.archyde.com/wells-fargo-eliminates-access-to-zel...

It is important to look at the axis and see there is no major growth right now it is floating around at 500 BTC per week which is about 4 million usd or approximately zero. This transaction volume is a rounding error for a country of that size

I wonder how hard it would be for a bank to try to become nationally available by explicitly serving the people (firearms manufacturers, pornographers, and immigrants from high-risk countries, among others) who are inappropriately mischaracterized as “high risk” despite having good books.

> I wonder how hard it would be for a bank to try to become nationally available by explicitly serving the people (firearms manufacturers, pornographers, and immigrants from high-risk countries, among others) who are inappropriately mischaracterized as “high risk” despite having good books.

Very.

Operation chokepoint essentially blackballed every single one of those Industries, and some credit unions tried to get a Charter from the Federal Reserve, and were essentially 'choked in the crib' when they attempted to.

Look up the story of 4 corners credit union, $100ks were wasted trying to appease the regulators to help members of the Cannabis Industry. Some eventually got other banks to participate, but it was still, and likely always will be what I always referred to as 'bank account whack-a-mole' where several accounts are shut down and have 2-3 to serve as backups when they eventually get shutdown.

This happened to a local dispensary owner, whose son is actually a Lightening Network developer and was able to route around it. Adoption was less than ideal, but it proved a point that the tech is mature enough to take on financial censorship if/when the will exists.

For whatever it's worth, the problem with the cannabis industry is that they are still committing federal crimes, there is a legitimate reason for banks to shy away from cannabis manufacturers, processors, and retailers even if they would have an ordinary risk profile under other circumstances.

The federal government does not enforce the law sufficiently to motivate its repeal, so we are stuck in limbo, where the mass of individuals are complacent, and they externalize the costs on the suppliers and retailers.

> For whatever it's worth, the problem with the cannabis industry is that they are still committing federal crimes,

I'm well aware of what that entails in a legal sense, I worked in the Industry as both a former Farmer as well as a Fintech Founder; the thing is, Cannabis is a term that encompasses Industrial Hemp as well as MJ and the former is actually 50 State legal as of 2018 with the Farm Bill in the US.

And still many Banks refuse to deal with Hemp farmers or producers of its value added products (CBD/CBG/CBN etc...) and still treat it as if its MJ for reasons only known to them as many large retailers like 24 Hour fitness, Sprouts, and even some Safeways and many Gas stations have CBD products on hand. It could be a scale thing, where losing that large of a customer with immense volume is worth it, whereas a small retailer is not and carries too much risk.

Also, consider that the legal status still doesn't mean the banking Industry will accept them with open arms, Canada still has the same issues they always had when it came to financial services and banking where MJ has been legalized Nationwide.

Legitimate federally licensed firearms manufacturers have access to the same financial services as any regular business.

Explain that to the Obama adminstration, which ran a program called Operation Choke Point, that lumped firearms in with multi-level marketing and payday loans as "high risk" transactions and repeatedly issued informal - sometimes just verbal - guidelines to banks to not handle such transactions.

In my experience, there are a lot of cryptocurrency detractors that don't understand that the crux of their stance is essentially privilege.

Access to a computer and internet is also a privilege. Good luck using bitcoin without these.

You would be surprised, but I am willing to bet that to have access to those is way more common that to live in a country with a sane and stable economy.

Any currency can be used as a parallel currency. Cryptocurrency doesn't have a monopoly on that. Usually people just use dollars when their native currency is worthless.

Sure, good luck using dollars without any banking services. The dollars are so safe under your pillow. Especially since the country is so stable and nice and criminals are so nonexistent. Very good plan.

In practice it's exactly what happens.

Bitcoin volume in Venezuela today is a rounding error. But most of the country is using physical USD to transact.

Crypto still has not solved two key problems, volatility and usability. Most people are not technical. Most people are also not OK putting their savings in something that can easily lose half its value in a month.

Internet services are regulated by the state, and it's not unheard of for states to turn off access during periods of mass upheaval, or block websites wholesale. What then?

Elon Musk's Starlink would like to have a word with you.

It’s still very rare. Most of the time you can connect to VPNs.

On a Boston subway several years ago I heard a homeless guy with a smartphone, talking to a friend about looking for a place to sleep that night, and about a cool new app.

Cell coverage is widely available in third-world countries, and smartphones are increasingly widespread.

So, not all that much privilege anymore.

> So, not all that much privilege anymore.

Your anecdote doesn't invalidate my statement. 2G/3G coverage isn't even highly available in most third world country. How do you know your homeless guy had a data plan? You don't.

The elephant tells the ape “you big too.”

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