Basically one of the exact reasons why Crypto should exist.
[0] https://en.wikipedia.org/wiki/2013_corruption_scandal_in_Tur...
[1] https://en.wikipedia.org/wiki/Recep_Tayyip_Erdo%C4%9Fan#Auth...
Furthermore, stability and monetary policy seems to involve handouts to wealthy people. While I can certainly benefit from that, I don't see why handouts for wealthy people are a good idea. It looks like a bad idea. People seem to be getting angrier about it as time passes too.
These are two unrelated things. The relative instability of improvement doesn't have much to do with whether or not it's preferable to have a stable economic system.
Economic stability can be good. Rapid Improvement can be good. Rapid improvement can occur in economically stable times.
I seem to remember from studying economics and history that usually, economic instability occurs AFTER rapid improvement, not before or during. This is in part because rapid improvement outpaces regulation and the economy around it, leading to an unstable economic environment rife with opportunity for good and bad actors to make fortunes.
The central banks monetary policy is exactly what's destabilizing the economy
Are you serious? Honest question.
There are bad surgeons, you should still probably want surgery if you're sick.
Cryptocurrencies developed on 10+ year old tech, that have stayed in that state throughout may indeed have very poor tps as you state. However, this is absolutely not the majority, as that base tech has iterated both at the base level, and in the application of layers. Typical these days are tps-handling in the 1k's - 10k's, and beyond. This will only keep improving as the technology progresses.
Many systems capable of such throughout are heavily under-utilised, showing that crypto technology is generally ahead of those needs. That there have been hiccups have been more due to "brand loyalty", not tech deficiency, but even those technologies (Ethereum, mainly), are in the process of being upgraded.
Given tps in the fiat world is somewhat of an inapplicable metric, as fiat transactions typically take in the order of days to complete - it's even more of a misleading comparison. Credit cards achieve 30k tps throughput only with the considerable caveats of reversibility and 30 day (or longer) finality. Crypto suffers from no such limitations.
The majority of worth in the space is absolutely not of "criminal origin", demographics of crypto holders have been studied extensively and are readily available.
While it is the case that most things get priced relative to BTC, and this does have a network effect since you end up exiting to BTC and thus reenforce its price, it's increasingly common to see trading pairs for ETH, LTC, USDC/USDT. There is interest in getting more liquidity into the market and that's a large part of "DeFi". It's not that BTC is self-perpetuating lock-in, it's that they're all growing but everything else is running several years behind, so on a day to day basis BTC still holds relatively more of the market.
Another option is of course that one crypto would just overtake Bitcoin. If I remember correctly this almost happend with Ethereum and was called the flippening. This scenario would be better for crypto of course than a real Bitcoin crash.
But you can't make a trustless exchange on top of a custodial framework.
Base layer has to be trustless / permissionless; all manner of third parties can build all kind of things on top of that.
But reverse isn't true - if base layer controlled by small number of third parties; nothing built on top can claw back that control.
Only once have I ever use the deferred payment aspect of a card, and that was a 0% APR offer.
The necessity for reversibility, and the inflexibility of being limited either to it, or some form of it, is indicative of an inherent, unfixable flaw in the system itself.
This flaw limits the systems growth, adaptability, and usefulness.
Now, on the UX topic, btc has a lot to improve. But I’m always surprised how rapidly people assume their transactions in fiat are settling as a comparative criticism for Bitcoin.
Do you have a source for that? I tried looking and everything I saw is it would take between 24 hours and 3 days on average, for credit cards.
You very well could be right, I'd just like to see something that confirms it, and wasn't able to find anything.
Example source: https://lifehacker.com/this-is-why-your-credit-card-transact...
The bulk of fiat does not move around on peoples payment cards or in cash in their hands, it moves in bank-to-bank transfers that indeed do take days or even weeks, and further have an up to 10% failure rate.
It may well be that through the use of caveats you don't see or think about, you are able to execute small transactions quickly with fiat, but it is the counterparty to your transactions who is bearing the burden of fiats shortcomings in these cases.
For example, if we're comparing digitally, in most cases, you are able to arbitrarily reverse the transaction up to or even over a month later, claiming it as fraudulent, or rejecting it for some other reason justifiable to you, but for which the vendor has little recourse. This is the concept of "transaction finality", and with fiat it is very, very broken.
With cash a similar problem exists with counterfeit money, a vendor may collect up a weeks earnings, only to take them to the bank and have a percentage of them rejected.
All of these problems are solved by crypto, it improves on money in many key ways (these are just a couple), that's its point, and why people are excited about it enough to drive its collective value up to the region of Apple's stock value, around 4x faster than Apple took to do so.
Worked quite well for me when my credit card details were stolen and I could revert $8k of purchases immediately. If my wallet keys are stolen or cracked, I will lose everything with "transaction finality" - that would be a problem which is enabled not solved by crypto.
That crypto can do new things, and yet may also facilitate all of the (useful) old things, simply makes it a superior tool. There can be no fundamental argument against this.
It's a bit like worrying about how internet users will deal with IP packets that don't arrive, in the context of thinking about about how smooth an experience they're going to have surfing the web. It's not, and won't be, their problem to deal with.
The fact adoption has rushed ahead such that many multi-millions of users are faced with the base layer is analogous to if millions had rushed into using the internet when it was command-line only. Sure, if that had happened, many people would make mistakes and delete their drives or whatever - and this illustrates how wanted and overdue crypto is.
There are tremendous consequences of using this tech at the base layer incorrectly, but it doesn't appear to be dissuading adoption.
... and yet the world turns; and credit cards amount to $3tn of payments in the U.S annually.
As it turns out, businesses do not actually care about instant settlement of payment transactions that much, what's important is instant authorization.
Credit cards are small by comparison.
https://mobile.twitter.com/yassineARK/status/134613927863667...
First of all, global credit card volumes are much larger than Bitcoin volumes. Asia Pacific has been a bigger credit card market than the U.S. for some time - for example.
Secondly, credit cards payments are overwhelmingly payments for services or goods; effectively none of Bitcoin's total volume is in that category.
In fact, virtually all of Bitcoin volume is gross settlement and relates to speculative trading activity.
On-chain transactions are for a variety of things, but they are all payments, which was the criteria in question you brought up.
Regardless of how you might opine on those payments "merit" (I could equally deride the usefulness of plastic trinkets ordered from China on Amazon - for what good it would do), they are not insignificant on Bitcoin compared to legacy systems. They are all payments settled either from one party to another, or between one party's multiple accounts, and just because they are almost entirely "only" settlements does not imply they are somehow not useful or otherwise to be derided.
Where does that number even come from? I've been trying to source anything that's even vaguely in the same ballpark and coming up empty. Most of the sources I can find suggest ~$100bn a day.
But no, in any case, that's not what I'm talking about either. Nor am I trying to apply any moral value to the purposes to which payments are put.
The point is: you can't say "credit cards are small relative to BTC" without consider the segmentation of the payment market in the fiat world.
I encourage you to provide evidence of the size of the "credit card" usage (i.e. goods and services payments) of BTC. Good data is hard to find but it's self-evidently not in the "trillions of USD per year" order-of-magnitude.
If you want to talk about the gross settlements segment, again, BTC is a minnow. Sure counting every transaction on the BTC blockchain, it's a few $tn a year currently. Fedwire does that much every day, and that's only for inter-institutional transfer.
You said "credit cards amount to $3tn of payments [my emphasis] in the U.S annually.", doing so as if this somehow made crypto appear small. I pointed out that Bitcoin alone does more than this per year in payments since 2018, and that there are thousands of other crypto projects. Many of these are also making comparable numbers of payments.
By the simple metric of how much value cryptocurrency users are transmitting with each other as payments, versus how much users of credit cards are doing - which was the original framing as I understood it - crypto wins. And of course it does, you may be right its an apples to hand grenades comparison, but the simple fact of the matter is we are comparing apples to hand grenades.
In some ways this is all about as useful as comparing how many miles horses and carts are doing versus steam or combustion engines.
The point is, even early on, per mile travelled, engines win. And they do so not just because they can travel further faster, but because they enable new use-cases by doing so - just like crypto.
Crypto has been here for ten years already and despite being derided as a toy early on, is now worth, and transferring, trillions.
See you after the next ten years, when credit cards will almost certainly be as VHS tapes are now.
I think their point is criminals are bad, so anything they use is also bad. Like guns, and drugs, and cars, and food, and beds, and houses, and air. All bad. We shouldn't use those things, and we should ban them at the earliest opportunity.
I agree with you. Comments like that have such a low intellectual effort that they are mainly noise.
People in stable countries (us, uk, western Europe) don't understand the lack of confidence that citizens of underdeveloped countries have in their own government and financial institutions.
The argument that criminals also use ordinary money doesn't work here. Crypto was adopted by them at first, e.g. look at Silk Road, or billion volume hacks of exchanges. If BTC will grow then their relative power will grow.
And you could use this exact argument against the Turkish government banning crypto to protect its own exploitative currency scheme..
7tps on the base layer, you're ignoring layer 2s and all other places where you can exchange crypto without it being recorded on the blockchain, as a matter of fact, unless you're buying directly from a miner, the single transaction that you use to put it in your wallet actually corresponds to many other transactions elsewhere.
> (supposedly of criminal origin)
Big bold claims also require some proof. It's a decentralized protocol that can't be controlled by anyone.
Do you really trust that your gov and the politicians/bankers have your best interest at heart?
On a scale of 0-1, representing my estimate of P(no catastrophic economic/valuation failure in any given year), my trust is: {Government (German): 0.99, Government (UK): 0.85, Politicians (UK): 0.67, Bankers (collectively and internationally): 0.95, BTC: 0.15, Cryptocurrencies in general: 0.05}.
> you're ignoring layer 2s and all other places where you can exchange crypto without it being recorded on the blockchain,
Thus negating all the so-called benefits of the Blockchain, but without the benefits of a double-entry bookkeeping database audited by professionals and with public liability insurance.
I don't have much trust in my government either (Ukraine), but at least I know who they are.
Also there are many other ways to store a value.
So if you don't trust them, why would you let them control your money, knowing them doesn't change much.
Sure there are other ways and people are free to choose whichever one they prefer.
But if you're in a country where your money have been dropping 10% per annum for the last 10 years, and where the concentration is anyway not that different from bitcoin, then things start to make more sense.
Also, most people in this situation are not looking for a day to day transactional currency, but rather for a store of value to hedge against their falling native currency.
- It forces everyone who wants to receive money to constantly run a node at all times. If their node goes down at any time (or is intentionally taken down by a hacker), in certain situations, they could lose money.
- The channel provider needs to lock up a massive amount of BTC to provide liquidity to channels for all users. It costs BTC to open the channels.
- It's brittle because you need many watchtower nodes to constantly monitor every single participant in real time in order to ensure that nobody cheats and rolls back valid transactions.
- Watchtowers could be fooled by attackers to spend all their processing time on fake frauds to distract them from real frauds.
And there are a lot more serious vulnerabilities outlined here: https://www.coindesk.com/bitcoin-lightning-network-vulnerabi...
I think for high volume payment processing, we might as well use centralized payment providers off-chain.
Such as...?
I'm fine with that. Current monetary policy sucks.
Cryptocurrencies are not destroying government run financial systems. They are just an alternative.
Bitcoin's 7 tps is a base-layer limitation. Layer 2 technologies like Lightning aim to address this issue. Lightning is functioning well and growing rapidly.
I don't think it's fair to say most Bitcoin holders are unknown entities. The AML/KYC requirements for converting crypto into spendable fiat are strong. The criminal use of Bitcoin is a small compared to it's legitimate use as a store-of-value.
* roughly false on unknown entities for two reasons.
1) btc is fairly easy to surveil [1], and see Chainalysis
2) logic here doesn’t make sense. Are you saying you know all owners of cash deposits, or just assuming someone does? A lot of folks keep cash “in a mattress.” Is that bad as well, as it’s a mirror of holding crypto?
[1] https://decrypt.co/66411/cia-bitcoin-surveillance
And
https://cryptoforinnovation.org/resources/Analysis_of_Bitcoi..., for the primary source.*
* Is this source from a crypto lobbying group - yes. Is the author the deputy director and twice acting director of the CIA, so he probably knows bitcoin’s use for criminal payments more than the average critic - yes.
- me: criminal activity not a majority of btc use and severely overstated overall, and it enables surveillance, aka intelligence gathering for LEO/IC if properly utilized.
- 30 year veteran, ex-deputy director of the CIA:
“However, based on our research and discussions with industry experts, I have confidence in two conclusions: • The broad generalizations about the use of Bitcoin in illicit finance are significantly overstated. • The blockchain ledger on which Bitcoin transac- tions are recorded is an underutilized forensic tool that can be used more widely by law enforcement and the intelligence community to identify and dis- rupt illicit activities. Put simply, blockchain analysis is a highly effective crime fighting and intelligence gathering tool.”
“ All of this together suggests a broader point—that the illicit use of cryptocurrencies in general and Bitcoin in particular, as a share of total market activity, is cer- tainly not higher than it is in the traditional banking system and is most likely less”
Quite literally does say something/anything like what I said.
Their evidence is: "the firms we spoke with believe the unseen illicit activity is relatively small". That's it. The confident conclusion that it's overstated doesn't even allow you to infer if it's more or less than 50%; it doesn't even say which statistic they actually used.
If it's total percentage of transactions or sum of traded bitcoins, that isn't even that important: you can amass a small fortune in just a handful of transactions, whereas trading bitcoin for investment generates many more transactions, all completely irrelevant to the influence of bitcoin on crime.
There are other quotes from experts available, such as “Bitcoin — and virtual currency in general — is widely used in the trafficking of weapons and drugs, and in ransomware and extortion cases. It is used a lot by criminals.”
Privacy is a feature, not a bug. I don't want people knowing how much money I have.
Is this supposed to be bad? Look at what the US government does with civil forfeiture. Can't do that with cryptocurrencies and that's a good thing.
If government charged a flat rate for its services, tax evasion would become impossible. One would simply show a proof of payment. This would only be ~$10k/year in US according to its current tax receipts and population. Property tax is also impossible to evade.
Furthermore, her cash in a bank is protected by the government, and there are safeguards in place to help protect her from people trying to scam anything she has saved away from her. There are also mechanisms in place that when things 'go wrong' she's looked after.
I'm not arguing for or against cryptocurrency, but there is some value to having a society where those that earn more help those that earn less by paying more taxes. I'm also pretty happy to pay for police, and firemen, and someone to pick up my bins, pave my roads, medical care etc. etc. All too often it seems the crypto argument is "I don't want to pay taxes, it's MY money" - yeah, it hurts, but the benefit of doing so is very real.
The caveat, of course, is I say this living in a country with great free medical care, that's actually a pretty nice place to live, even if I really don't agree with some of our politicians. I appreciate not everyone lives in such a country.
> The caveat, of course, is I say this living in a country with great free medical care, that's actually a pretty nice place to live
Unfortunately, not every country is nice. Not every country uses taxes for the benefits of its citizens. Some countries have governments so thoroughly corrupt even the bare minimum only gets done before elections. Some countries have government officials who purchase goods and services at incredibly inflated prices so they can pocket the difference. Government officials who steal money meant for COVID-19 vaccines.
If you're from such a country, paying taxes is really no different than financing any other type of criminal operation. In these cases, avoiding taxes is a moral imperative. In these places, it's the duty of every single citizen to pay as little taxes as they can get away with.
I did say that there is a prevailing undercurrent within the crypto space that government and fiat is bad and wrong and taxing people pretty much amounts to theft. And without some visibility into how much money someone has or is making, ensuring that someone fairly pays taxes becomes a lot harder.
As for the banking part - whilst I understand where you're coming from, cryptocurrency is nowhere near as 'safe' as a regular bank for (probably) 99% of the population. My mum can barely use Amazon...
The banks can give her those same protections and she will be the last to adopt it. She will hardly notice and just tap her card/phone like always
Banning crypto payments is like an airport refusing landing clearance to bicycles.
Governments do that on their own they don't need any help from crypto.
About "Bitcoin cash also has no place if we take into account other cryptos (Monero or Algorand)", I completely disagree. Bitcoin Cash brings a lot to the table:
- Shared history with BTC up to the fork day (August 1, 2017).
- SHA-256d mining, like BTC.
- Much increased capacity, about 20 times higher, with plans to continue scaling to order of magnitudes more.
- Very low fees (less than $0.01), with a roadmap to keep them low as usage grows.
- Reliable almost instant 0-conf for smaller-to-medium transactions, with plans to improve its security.
- Privacy improvements such as CashFusion [1].
I wish Bitcoin Cash didn't need to exist because BTC scaled, but until then I will keep using it and advising others to do so.
Other coins have low fees and privacy. Neither are unique selling points.
Why not use Algo instead of bitcoin cash? https://algorand.foundation/the-algo/algo-basics
I disagree with your comment about PoW because hashrate moves between coins. It's not impossible for hashrate to move from BTC to BCH in the future, especially if BCH adoption continues to rise.
Disclaimer: I hold huge amount of Algorand as a liquidity or custodial
Personally I wish Bitcoin Cash didn't even need to exist, if BTC had scaled as it was originally planned by Satoshi Nakamoto (increasing the maximum block size before it got full). It was sad watching the adoption rate halt and then regress. Remember when BTC was becoming accepted by Steam, Microsoft, Dell, NewEgg and others back in 2015-2016? There is no doubt in my mind that if BTC had scaled properly almost every online shop and a lot of real-world shops would be accepting BTC by now (and incidentally BTC price would be even higher than it is today).
Imagine if the Turkish government had allowed their citizens to use DogeCoin a few days ago before the big pump, they'd already be out of their recession ;p
Not your keys, not your coins. Your response now will, of course, be “well that’s why you rotate your coins out into cold storage” which is sort of like me saying “you just convert your lira to dollars at the end of the day when you’re done buying food and water.”
Corruption is causing the devaluation of the currency in this case. The devaluation is already a method for hurting the ones responsible.
I'd think that the ones that are corrupt would be able to store their currency in crypto, while the rest of the citizens are not.
Crypto doesn't help anything. It could help some who know how to use it ( and will not forget their password)
If Bitcoin is global currency system then there's no chance of using such a mechanism-tool-lever, however with current system of governments it can be used; Biden's recent financial acids actions against Putin's actions against the US is another example of this.