Hacker News Reader

> But coming from a third world country, the promise of a decentralized, permissionless market seems extremely promising. Particularly if it doesn't restrict me because of my location or capital or identity.

Your entire argument is about the promise of blockchain and not the actual current applications people are using. Your argument is theoretical when OP is asking for practical use cases. You mention many hypotheticals but not a single "I use blockchain for X" or "my mother uses blockchain for X" which is what actually matters.

> While I won't talk about the idealized vision of blockchains

As far as I'm concerned that's all you talked about, and you don't even realize it.

I literally gave a real world example: Curve.fi that's used to swap between stablecoins. You can literally go right now to swap between tokenized USD and EURO.

Or you can go to the bank and pay their exchange rate. Maybe they'll ask you for your ID too.

Another example of the second kind: www.Ape.tax, where anyone can deploy an investment strategy and beta users can try them out, and if they are successful, they can be integrated - voted on by a DAO - into Yearn.finance, the primary project with several billion $ in investment.

There are existing projects already using the situations I talked about. It's not theory. It's not idealized vision. It's happening right now.

Blockchain is moving so fast that Yearn.finance, the platform with billions in investment, wasn't even a thing a year ago.

You gave a hypothetical example, not something you use. And to answer your question in your original post - no, blockchain would not be more convenient than using my traditional bank. I can do it entirely on my phone inside an app. And every time I've compared it's significantly cheaper not to use blockchain to send someone actual money.

You're giving me possible applications, not talking about you being an actual user. There are products for lots of things, that doesn't mean they have enough people using them that they're going to last.

> Blockchain is moving so fast that Yearn.finance, the platform with billions in investment, wasn't even a thing a year ago.

You're talking about something I've never heard of before as proof of blockchain having made it. We are on different planes here and I don't see us getting through to each other.

Anyway, agree to disagree. Cheers.

Curve did $1 billion in volume over the past 24 hours https://curve.fi

That isn’t hypothetical. It’s like you keep getting refuted and then ignore reality because it disagrees with you.

“Blockchain is unused.”

[a bunch of links with billions of dollars in actual daily usage provided]

“Oh, well, I’ve never heard of that before so it doesn’t matter.”

What kind of arguing is this?

Much of HN is stuck in 2017 Blockchain era. Most haven't looked it serious since that crash. Many still think of Blockchain and can only think of BTC, LTC, Doge and ETH. DeFi is so new that it even caught HN off guard.

Much of HN is also middle of the curve and don't care/know about finance. Finance, financial engineering and P2P is a different beast compared to deploying bloated Docker containers running React frontends. It's a shame because there are a lot of smart people here that could help working on sustainable economics for fun and profit.

This seems to be one of the problems. The other is just a weird contrarianism -- many on HN want open source software and systems, but in no way do they want an open economy or money system.

Curve is just leverage for speculation: deposit token A, withdraw token B, earn the appreciation on both token A and B. Speculation is still the only use case.

DeFi provides absolutely nothing novel. Nobody said it wasn’t used. They asked for a non speculative, “real” use case.

By that standard, majority of Wall Street has no use case either, since much of the money is made entirely on speculation. Is betting on whether oil price will go up or down really that much of a use case?

Unless you count making money as not enough of a use case.

I give up though. HN will willfully ignore crypto and miss out not only on life changing money, but one of the few places in tech that is still fun and exciting and hasn’t been “corporatized”.

> Unless you count making money as not enough of a use case.

So then you're agreeing that the only real use case for crypto is speculation, and not something normal people should care about.

> By that standard, majority of Wall Street has no use case either, since much of the money is made entirely on speculation.

I think most educated people would agree that Wall St is a drain on society the same as targeted ads. The world is better without it. Are ads also useful because of how much money they make?

> HN will willfully ignore crypto and miss out not only on life changing money, but one of the few places in tech that is still fun and exciting and hasn’t been “corporatized”.

I really hope you're not so naïve that you don't realize crypto markets are being manipulated by big banks.

Right now, if I want to invest in US stocks, I have to go through a handful of local brokers. They want a minimum of 10k inr in the trading account. I have to clear kyc and get my account approved. Once approved, they can shut down the account anytime for any reason.

And all of these are recent developments - until a couple of years ago, it wasn’t even possible to invest in US stocks.

Alternatively, I can buy tokenized versions of popular stocks. This will be an erc-20 token that I will have full custody of at all times. I do not have to get “approved” or have a minimum amount in my account. I can be an investor in, say, AAPL with any amount of money from any part of the world. Unlike my own local stock markets that are filled with insider trading and subpar companies, I get to invest in and gain wealth from a more competitive market - without ever needing anyone’s permission.

Do you consider financial inclusivity a bad thing? Would you say that having control over your own money and removing gatekeepers is good?

I know plenty of people in India who trade US stocks and they don't have to put up that much in assets. You've made so many other factually incorrect statements I don't know if you're lying or ignorant but I know for a fact you're wrong.

> By that standard, majority of Wall Street has no use case either, since much of the money is made entirely on speculation. Is betting on whether oil price will go up or down really that much of a use case?

Absolutely. Price is the single encapsulation of all information in a market. But this is only the case because oil is a scarce resource, which needs allocating, and efforts are made to ensure that markets are fair. That is not true for crypto.

However, your presumption about “mostly speculation” also isn’t true and just reeks of someone who has no finance experience. I’ve spent my career as a hedge fund trader, focused in commods. Oil markets exist principally for bonafide hedgers to exchange risk. I cannot tell you how important hedging is to global market efficiencies.

What do you mean is happening right now?

For example, you mention foreign currency exchanges. According to Wikipedia, trading in foreign exchange markets averaged $6.6 trillion per day (April 2019). [1] Is there any indication that foreign exchange markets are moving towards adopting this trading of tokenized currencies that apparently is so much better than the system they're using now?

[1] https://en.wikipedia.org/wiki/Foreign_exchange_market

You're being disingenuous if you're trying to compare the mature foreign exchange market with a technology that's barely half a decade old and still obscure by most standards. Curve.fi, the example I shared, was launched in Jan 2020 and peaked at a daily volume of $1B.

Personally, I can't buy USD without going to the bank and filling out paperwork, submitting ID documents and clarifying why I need the USD and adhering to prescribed limits.

I have no such restrictions with their tokenized variants.

But you said it was happening right now... no you say it isn't happening, okay.

> I have no such restrictions with their tokenized variants.

Regulations don't apply because you're trading fantasy money. Once you try to exchange these virtual tokens for real money, then you will be required to comply with the regulations.

Have you tried to convert currency these days? I do it on my credit card for 0% at the Reuters fix window. If you actually go through your process above, it is so much more expensive.

> coming from a third world country, the promise of a decentralized, permissionless market seems extremely promising

> A very basic usage: using Curve.fi to swap between tokenized USD (USDC) and tokenized EURO (EURS) with minimal slippage and fees, all permissionless, all freely accessible.

As a sibling comment noted, this is hypothetical usage, and a future 'promise,' not actual usable by or providing value to the average person.

I went to curve.fi, and from a first glance, anyone not first-world, techie, and extremely familiar with crypto would be completely bewildered by this.

"Select a wallet to connect to this dapp" — what is a wallet and what is a dapp?

"Swap using all Curve pools" — what's a Curve pool?

"Trade routed through alusd" — what does this even mean?

"Base APY" — what? I thought I was exchanging currency, not opening a bank account?

"veCRV holder/LP ratio (based on fees): 28.74" — This is where even first-world, college-educated people close the website in confusion.

Bad UX in early technology is kind of expected, isn't it?

I'm sure lots of first-world, college-educated people were equally bewildered by email in 1995.

Agreed and it's expected, but the question posed was whether there's actual current instances of crypto helping people in the third-world, or whether it's just a bunch of hypothetical future promises of value.

Speaking as someone from the third world, absolutely.

I just implore anyone here to approach this with an open mind. There's lots of fraud, but that's also leading people to come up with newer, more exciting solutions. Like on-chain insurance (https://nexusmutual.io/) or tranches to compartmentalize risk (https://saffron.finance/) or creating entirely synthetic assets on-chain (https://synthetix.io/)

It's a weird space where finance and tech and design and culture are coming together, and frankly, it's the most fun I've had in tech in years.

Even though I feel that current valuations are grossly overheated, the stuff coming out on a daily basis is just a ton of fun.

What’s the advantage here over mpesa?

> Like on-chain insurance

Doesn't need blockchain

> tranches to compartmentalize risk

Doesn't need blockchain

> creating entirely synthetic assets on-chain

What does it even mean? Also: doesn't require blockchain.

Blockchain is what makes it freely accessible to anyone from anywhere without requiring a sign up or kyc or local presence.

For instance, I can’t sign up for a US trading account without a certain amount of capital, going through a specialized broker, and clearing certain KYC rules.

I can do all of that without ever needing to go through a single centralized authority. I can buy a tokenized version of TSLA stock without going through a broker and having complete and 100% control over my capital at all times.

Unless you consider financial inclusivity and free and open financial markets a bad thing, of course.

All the criticism is so first world centric and elitist

> Blockchain is what makes it freely accessible to anyone from anywhere without requiring a sign up

Except... You need to signup because there's literally no way to obtain anything on blockchain if you're not a miner.

Well, you could probably sell something for bitcoin, but then oops, you need to sign up somewhere to convert it into actual real money.

> I can’t sign up for a US trading account without a certain amount of capital, going through a specialized broker, and clearing certain KYC rules.

And there are reasons for that. And yes, similar crypto set ups quickly rediscover what those reasons are.

> I can do all of that without ever needing to go through a single centralized authority.

Until you pay for something and that something never arrives. Then you would be very glad to have a central authority.

> All the criticism is so first world centric and elitist

Ah yes. The tired old "but the poor people in poor countries" cries the person whose first example was "I can’t sign up for a US trading account without a certain amount of capital".

Because, as we all know, people not from the first world are flocking to open up US trading accounts and buy TSLA stocks.

> Well, you could probably sell something for bitcoin, but then oops, you need to sign up somewhere to convert it into actual real money.

Not quite, you can cash out BTC without going through any KYC. You can use non-kyc exchanges like hodlhodl, ATMs which just give you cash, or in person p2p trading.

> Until you pay for something and that something never arrives. Then you would be very glad to have a central authority.

Lol, you clearly do not live in a country with double digit inflation, government mandated bank limits, oppression. Cryptocurrency is literally saving lives in some parts of the world

> Ah yes. The tired old "but the poor people in poor countries" cries the person whose first example was "I can’t sign up for a US trading account without a certain amount of capital".

And you clearly need to workout that empathy muscle

> ou can cash out BTC without going through any KYC. You can use non-kyc exchanges like hodlhodl, ATMs which just give you cash, or in person p2p trading.

So, all options significantly more involved or less accessible to people than regular cash.

> Lol, you clearly do not live in a country with double digit inflation, government mandated bank limits, oppression

I have. Moldova after the fall of the Soviet Union. Then in Turkey which historically had ~100% inflation for most of its history and then a crash in early 2000s.

I lived through it all.

"You need to set up a wallet for a digital token, somehow buy it for real money, then somehow convert it into real currency" is not an option for the absolute vast majority of people even in the countries with high levels of inflation, bank limits etc.

If anything, cryptocurrencies are a very, very first-world thing.

And, of course, there's also this, much more eloquently put: https://news.ycombinator.com/item?id=27259374

> Cryptocurrency is literally saving lives in some parts of the world

For a very small number of people.

> And you clearly need to workout that empathy muscle

I prefer reality to empathy when it comes to cryptocurrency.

The insoluble problem is that any system of the kind you describe where the final tokens are ultimately spendable will be swamped by criminal use.

If you make an end run around the existing regulatory system through code, the people who are inhibited from transfering money by the current regulatory regime will all use your new system. And that traffic will be overwhelmingly criminal.

The amount of illicit money needing to move is overwhelmingly larger than the sums that honest people are prevented from transferring by corrupt governments or unjust restrictions. That is going to doom any attempt at creating a parallel money transfer system that works at scale.

I think money transfer was Blockhain Era 1.0 use case. The use case has advanced - very rapidly - to money automation. This is all really new stuff, much of it barely a year old, and it has come so fast that even I've been surprised.

A smart contract can currently take your tokenized USD (we'll use USDC since its backed by Coinbase), use that as collateral to borrow ETH on AAVE.com (a lending protocol), use 50% of that ETH to buy up USDC again, use this USDC + ETH to create a liquidity pair on Uniswap, and earning 0.3% fees on any swaps made between USDC and ETH.

All in a single transaction.

This use case is gambling with extra steps, except the software that runs a slot machine is far better vetted for correctness than a smart contract.

Without money transfer, this system remains a toy system. With money transfer, it becomes a regulatory bypass. No amount of complexity layered on top fixes this.

Money transfer is impossible to stop as long as P2P exchange exists. My country banned crypto a few years back. I just bought in-person. Nigerian central bank banned crypto recently. Nigerians just exchanged it over Whatsapp

The fact that central bankers are busy banning it should give you an idea how disruptive it is.

>> Nigerian central bank banned crypto recently

The Nigerian central actually prohibited banks from facilitating or participating in crypto based transactions. You can still trade legally however you want.

Wat. But... why?

Because its accessible from anyone from anywhere without requiring a sign up or kyc or any of the other hurdles that stop the flow of money and information between legal jurisdictions.

A banking and trading account where I can access multiple currencies without ever filling out a form or talking to a sales rep or being from the same country as the banking institution or passing some arbitrary credit check has to be worth something

I can’t buy AAPL here in India without going through a broker and clearing kyc and having certain amount of capital. I can buy tokenized AAPL that will sit in a wallet I control at all times, can buy with literally fractions of a dollar, and buy without ever going through a gatekeeper.

But again, you’re likely in the first world so it doesn’t matter to you. But here in the third world, people are willing to literally break local laws to access these markets.

> A smart contract can currently take your tokenized USD (we'll use USDC since its backed by Coinbase), use that as collateral to borrow ETH on AAVE.com (a lending protocol), use 50% of that ETH to buy up USDC again, use this USDC + ETH to create a liquidity pair on Uniswap, and earning 0.3% fees on any swaps made between USDC and ETH.

And... What does this accomplish, exactly? Besides "get rich, quick, in virtual money that, for now, some folks will convert to real money, maybe"

> I would reckon that alone should make HN bullish on crypto. When was the last time you worked at a tech company where Code was truly the Law?

Hell the fuck no.

Have you seen what kind of code people write?

"Code is law" is the last thing anyone with real tech experience should ever want. It's a terrifying prospect.

Code is buggy. I don't want my laws to be buggy and unfixable.

hard agree on that one: it's a recipe for a cypto-hellscape. You wouldn't know who to trust, and the time it takes to actually audit smart contracts for trust is enormous. What a joke.

   The only missing part is the ability to easily spend this tokenized EURO, but that - I'm hoping - will come later.

I think recent history of crypto has shown this is not possible without KYC/AML/CTF and all the regulatory bells and whistles. Seriously capital flows tied to real economic activity cannot exist without identity, governments won’t allow it.

Nothing stopping you from using a P2P exchange to turn that Euro into hard cash if you don't want to go through the KYC/AML. In fact that's exactly how I bought my BTC after the government here banned it.

I mean on a larger scale. The great promise of crypto, A billion plus “unbanked” people turning to a crypto enabled shadow banking system, will not happen without drawing the attention of the eye of sauron

Shouldn't the fact that central bankers want to ban crypto make you think that maybe there's something here more than ponzis and scams?

If the eye of sauron wants to destroy something, surely it can't be all bad?

>> Shouldn't the fact that central bankers want to ban crypto make you think that maybe there's something here more than ponzis and scams?

Note that I do not support Gov banning crypto.

I see two things: 1. That there's a legitimate threat to their power and existence which they would do anything to mitigate.

2. Also, it could be that majority of their population are being exposed to unhealthy risk.

Take the case of Nigeria for example. MMM a ponzi scheme rocked the country in early 2017. People lost a total estimate of about 18 billion Naira (or $60m as of March 2017)

* https://en.wikipedia.org/wiki/MMM_Global

The Government actually warned people, but the Government has gained reputation for stifling any form of growth. Therefore, no one listened.

Or it's so bad everyone agrees.

Capital flows are massively rising without this centralized KYC/AML/CTF system of gatekeeping, tracking and surveillance:

https://money-movers.info/

The emerging surveillance system in the traditional finance system, with the creation of FinCEN in the US in 1990, and FinTRAC in Canada in 2000, is massively centralizing power and can exacerbate financial exclusion:

https://reddit.com/r/MakerDAO/comments/de0sys/kyc_is_absolut...

The existence of crime and terrorism does not justify warrantless mass-surveillance. People in a free society have a right to privacy, including in their financial transactions, even if that privacy may facilitate some criminal activity they may choose to engage in.

Absent a criminal conviction, or at least a court's ruling that there is probable cause, they should be presumed innocent and secure in their right to privacy, not presumed suspect, and obligated to disclose private data as a condition for being permitted to engage in interactions with other private citizens.

Beyond this consideration for basic human rights and the foundations of a free society, by some accounts, KYC is the most ineffective policy experiment in history:

https://www.tandfonline.com/doi/full/10.1080/25741292.2020.1...

>> In the serious crypto world, there is a maxim: Code is Law.

Yeah, what's this thing of code is law. I was discussing with a friend today on how governments might have to come in to regulated some financial transactions with crypto based assets. And he vehemently kept repeating that no government can regulate crypto because "code is law". We went down to the physics level to see why it's not impossible to do. Only for me to come here again and start seeing code is law. High time someone explained it better.

It essentially means that the Code is the product. Everything is visible and public. Every smart contract can be publicly viewed and verified. If the code isn't up to scratch, you can review it. If it has an exploit, you can detect it. Whatever it is doing, is transparent.

You can't say the same when you deposit money into, say, Robinhood. You don't know what the code is doing with that money.

>> You can't say the same when you deposit money into, say, Robinhood

How do you know what the major exchanges are doing as well?

By the way, how did the exchanges wind up becoming so powerful and rich. Becoming almost a parallel Wall Street, just a smaller one, in a system that was supposed to ultimately democratise power. Some people with resources managed to emerge at the top in decision making...

You don’t have to use an exchange at all. Decentralized exchanges have been around for quite a while and have massive volume. And their governance is entirely controlled by DAOs

Centralized exchanges are a necessary evil for now. DeFi (Decentralized Finance) is where code is law. Services like Uniswap, Curve, Aave etc are all just code that you interact with on Ethereum. Once you've onboarded into the decentralized world you can use them at will and eventually you'll be able to live your life without having to use centralized services again.

> Centralized exchanges are a necessary evil for now. DeFi (Decentralized Finance) is where code is law. Services like Uniswap, Curve, Aave etc are all just code that you interact with on Ethereum.

Code is not law and I doubt it can ever be. IIRC ethereum even had that saying on their web page until that stance threatened to lose a lot of money to people with power within ethereum.

When you put money in your bank account, where does it go? Who uses it? When you purchase shares, where do they come from? How many market makers were involved? How much profit did they make front-running your purchase?

All these things are currently completely opaque to the average person. Decentralized Finance fixes this. Every transaction and system you interact with is completely open source, transparent, and fair for everyone involved. There are no rich and powerful people taking a cut of your money every time you use the system, as it is in traditional finance.

You can see the exact code doing what you want done, and nobody can stop it doing that, or change the rules part way through (see: the Robinhood GME saga)

Traditionally the government set the rules, but the government can be corrupted. Most people know that wall street regularly breaks the law if the profit they make will be greater than `fines they pay * risk of getting caught`. Until now there was nothing we could do about this. Code can't be corrupted in the same way.

> All these things are currently completely opaque to the average person. Decentralized Finance fixes this

Code is opaque to people as well, most SWEs struggle to understand distributed systems that are using consensus protocols much simpler than byzantine fault tolerance, or programming on environment are non-adversarial, unlike solidity. You can't just learn solidity and then trust smart contracts, it takes a lot of knowledge to avoid vulnerabilities.

> Code can't be corrupted in the same way.

If you think this, you might be in your a rude awakening. "Code" is being used in crypto-currencies for corruption all the time, and there is no inherent property of computers that protects you against malice, theft and vice.

I personally don't want to live in a world where I need to audit the code for every financial transaction I'm party to, and fortunately I live in a country with a mostly working legal system that already handles this for me.

> Code is opaque to people as well, most SWEs struggle to understand distributed systems that are using consensus protocols much simpler than byzantine fault tolerance, or programming on environment are non-adversarial, unlike solidity. You can't just learn solidity and then trust smart contracts, it takes a lot of knowledge to avoid vulnerabilities.

It's open source vs closed source arguments again. I have personally never looked at the Linux Kernel or Ubuntu source code, but I trust it more than I trust Windows because I know many thousands of people have looked at it before me and said it's secure.

> "Code" is being used in crypto-currencies for corruption all the time, and there is no inherent property of computers that protects you against malice, theft and vice.

I'm sure it is, code can also be used to create viruses and malware but that doesn't mean Linux is insecure. It's about the transparency of the code and systems you use. More transparency = more trust = better outcomes. I'd rather live in a transparent, fair world, than one where those with more power and money get to set the rules and hide the internal workings from everyone else.

> the two never have to know each other, and can interact entirely with a smart contract available 24x7, what's there not to be excited about?

I tell you that I'm totally going to follow what a program tells me and you should give me your money to earn interest. Are you excited about the possible interest from this uninsured, pinky-swear promise exchange?

> Code is Law

"Code is law unless things go really bad." - DAO

> I tell you that I'm totally going to follow what a program tells me and you should give me your money to earn interest. Are you excited about the possible interest from this uninsured, pinky-swear promise exchange?

It's a smart contract. You can review it publicly. If there are vulnerabilities, if the ownership is not renounced, it would be visible. Can you say the same about your investment bank?

You don't have to trust the coder or the platform or the exchange. Code is Law. Trust the code.

But the smart contact cannot interact with real world. It's the party on the other side that ultimately gets the funds and acts on your behalf. That party can just take the money and go away.

Unless we're talking about purely on-chain strategies. But in that case why wouldn't you copy their public investment contract and execute it yourself?

> Can you say the same about your investment bank?

My investment bank has a tonne of regulation on it. If they go under and I can't claim insurance on it, then we have bigger issues where "money" may not be an answer anymore.

The workers also would be liable to local laws if they tried to literally walk away with money. (Sure, we have various enforcement issues, but the alternative of none-of-that doesn't sound great)

All real and legit concerns. Fraud remains a big problem which is why returns are so high right now - we're all early adopters.

But there are new developments constantly. On-chain insurance against smart contract failure and hacks is a thing (see: https://nexusmutual.io/). More sophisticated insurance strategies to compartmentalize risk are coming up (see https://www.unn.finance/). Protocol design to reduce risk exposure are being experimented with (see: https://saffron.finance/).

It's all new and all very exciting. It's moving very fast and its really fun to be in. I haven't been this excited by anything since the early web.

> Nexus Mutual is run entirely by its members. Only members can decide which claims are valid.

This sounds like a high school popularity contest, not code as law

Well, any political system is a contrived popularity contest, so no surprises there.

I can see where you're coming from. It is an opinion I have from privilege - I don't live a privileged life but I don't struggle either (middle income bracket).

After reading your use cases I do have empathy for people in those situations, where governments and centralized agencies are corrupt etc - just not entirely sure this solves any of that.

man even if you're not a believer in the utility of it all, simply participating in crypto right now is loads of fun. Its a weird space where finance and culture and tech and design come together. For every fraudster, there are 10 people who are genuinely excited about this space and have a true hacker spirit.

I haven't seen that kind of energy on the web in years - so much of it is cleaned up and coporatized. Crypto is still wild and interesting and fun.

You can even consider entering it purely as a hobby - that's how I did, and ended up talking to developers about, say, creating undercollateralized synthetic assets that hold peg to their real world assets by constricting/increasing asset supply at timed intervals.