Hacker News Reader

Comment by arcticbull | Hacker News Reader

What does that have to do with Bitcoin? That literally continues to apply exactly whether Bitcoin is the currency of record or not.

It's not some magical fairy sauce that solves any problem even remotely adjacent to money.

View on HN

Bitcoin is a liquid instrument of escape beyond any ideology attached to it. You can apply a similar application in other crypto assets but the liquidity factor is critical. Most people outside the crypto echo chamber don't know about even ETH, USDT, USDC, etc.

The key is that people in Latin American countries will use crypto to sidestep tax as well as capital controls. Whereas previously that was more difficult because of the lack of an alternative currency system on the internet.

So, crime then.

Crime is still illegal, the blockchain is public and visible to everyone, it's easy to deanonymize now. So what, an express train to prison?

It's funny to watch this chain because it appears you truly cannot comprehend what he is saying.

If you have a shoe store in Azerbaijan and one month you have a bank that allows you to accept payments, and then the next month your accounts are frozen, and then the next month it costs 60% to accept payments, your business has been stripped out from under you because you don't have reliable banking infrastructure. But when all you've ever known is reliable infrastructure and a bank which reliably holds your money its easy to lose this point.

The bitcoin block chain is never going to freeze your funds. The bitcoin block chain has changing transaction costs but they not susceptible to wild swings in cost by administrative decree. These points sound attractive when you don't have access to good banking infrastructure. None of these things have anything to do with crime of any sort.

Sure but in those countries, is a $10 transaction fee an acceptable trade-off? It probably isn't. That's the thing. The fee is only palatable in countries that have banking infrastructure, and in ones that don't it's beyond extortionate. Like, monthly salary extortionate. Certainly when you factor in the $80 of electricity per transaction that's currently being socialized across block reward. 7tx/sec is enough for an average Costco or a big flea market, not a country. And once you move to Layer 2, the guarantees you're pointing at no longer apply as an exchange can shut you off just as an unreliable bank can - and you can just as easily set up a bank as set up an exchange.

If this is about providing banking infrastructure to countries that don't have it, the fees are not acceptable, and so Bitcoin is not a solution. If this is about evading taxes when running a business, I suspect having your business shut down is still in the cards.

This seems pretty naive to me.

Depends on what they are selling.

Is it a stick of bubble gum? Ok probably not bitcoin.

Is it a house? Yeah, I think theyll manage the fee.

Is it somewhere in the middle?im confident theyll figure it out case by case and distribute costs as necessary and possible.

Still none of this has anything to do with crime and everything to do with serving the underbanked.

Ok but banking infrastructure should support both use cases should it not? You’re not banking the underbanked who by definition don’t have money if you’re saddling them with $10 tx fees. If they had money they wouldn’t be under banked would they? I’ve spent a lot of time exploring this “underbanked” area, and in my opinion it doesn’t really exist.

The issue isn’t that they don’t have access to banking it’s that they don’t have any money to put into the account. That's a social issue not an infrastructure issue.

There are cheaper alternatives, though. Monero, for instance, which also has the advantage of increased anonymity, which can be important in those countries without banking infrastructure. https://www.monero.how/monero-transaction-fees

Are they only cheaper because nobody uses them? For example, BCH?

No, the key is that people in failing Latin America countries have a competing stable currency that can help them keep their wealth from being stolen or manipulated by those in power.

This option never existed before.

They couldn't buy assets? They couldn't buy gold or stonks or bonds? The currency is irrelevant, if you exchange it for assets as soon as you get it net of your expenses.

Gold is impractical, can be easily confiscated and no they could not buy stocks and bonds other than Venezuelan style stocks and bonds if you know what I mean.

Or in other words, "Qu'ils mangent de la brioche."

Well, I'm not exactly suggesting they eat cake (btw, I didn't realize she actually said brioche - TIL!), I was asking if there were other alternatives. There may not have been. With that in mind, my position has always been: if the currency is failing, it's because the government is failing. If the government is failing you have bigger problems than your currency. Once you remediate the government, your currency is no longer a problem.

Reply on news.ycombinator.com