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Comment by danielmarkbruce | Hacker News Reader

Isn't it also weird that crypto enthusiasts assume that you obviously can't trust a central clearing house (or similar mechanism) when they have been working well for hundreds of years? In numerous cases humans trust institutions for certain things, and those institutions are usually strongly incentivized to act honorably, and do so. And when they don't, the court system works pretty well. At least in the countries where the vast majority of economic activity occurs.

These are two premise which... don't seem to hold water?

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This obviously doesn't hold up if we look at the original purpose of the blockchain, ie Bitcoin, to avoid issuers of money to debase said money. Which has in fact happened thousands of times through out history and keeps happening to this very minute.

All the evidence shows that a rate of inflation around 2% averaged over the business cycle is beneficial and necessary for the economy. Trying to adopt a deflationary currency is akin to refusing to drink water because people drown in lakes.

> All the evidence shows...

There is no such evidence. There are those who benefit from inflation (and only if it's predictable for them) but the majority of people don't. Unless you define economy as something only the wealthy can benefit from - no, inflation is not good.

The majority of people have wealth in real estate and generate income from wages, both of which are inflation neutral.

In contrast, the rich are much more likely to have bonds or cash holdings. They are the ones for whom inflation is a real problem. Why else would all this political pressure for a 2% inflation target exist? It's because that's low enough for the rich, not because it's high.

Printing money and redistributing it would severely impact capital holders, like it did in the post WWII boom which created the middle class.

Here is an entire book on this topic :

https://en.m.wikipedia.org/wiki/Capital_in_the_Twenty-First_...

That's a great book, one of my favorites.

The wealth redistribution post-WW2 had more to do with the war itself than inflation though.

So back to the 21st century: what makes you think that those who have excess capital don't invest wisely? Compare that to lack of any excess capital for the majority.

Lack of excess capital means inflation doesn't affect them as they have no capital to depreciate, as long as wages keep pace with inflation. The fact that the minimum wage doesn't keep pace with inflation is a huge problem, but the solution is to raise the minimum wage, not to throw out inflation.

Perhaps I should have said "de-fi" instead of "crypto" ?

No one would want to use a clearing system if it was possible to do without. Now it is.

Is it, though?

One quite essential feature of a clearinghouse is the ability to correct the books in case of operational errors, in response to court orders etc.

People lose their passwords, get scammed, go bankrupt, die and leave their possessions to their next of kin... It's very hard to achieve the desired/expected outcome for any of these situations on a blockchain.

It has worked well enough for trading of physical items with dollar bills for quite some time

Until we've found better alternatives.

Cash doesn't have a built-in paper trail and dispute resolution mechanism, all of which are highly desirable when doing business with unknown/not yet trustworthy entities.

In many (definitely not all!) cases, transaction finality is a bug, not a feature.

You make good points on paper, but in practice (in my own life at least) I’ve almost never needed to reverse a transaction where the merchant couldn’t do it himself.

And the one time I had a dispute, Visa claimed that the transaction was out of policy somehow (timeframe, region, etc)

So no, that better alternative doesn’t favor the customer

The existence of a dispute resolution system is usually enough to keep the vast majority of participants in a system honest.

In the case of card payments, merchants incur a fee for every transaction reversed through the card scheme, whereas voluntary refunds are essentially free. They are accordingly incentivized to understand and follow the scheme rules.

> And the one time I had a dispute, Visa claimed that the transaction was out of policy somehow (timeframe, region, etc)

That's unfortunate, and mistakes or seemingly unfair decisions do happen – just like in a public legal system. But you are essentially basing your opinion on a sample size of one.

Practically, some banks just seem to be better (i.e. more consumer friendly) at dispute resolution than others. As an example, in the case of a high profile airline bankruptcy in my country, some banks have proactively reached out to their customers, letting them know they're happy to pursue disputes for them, while others were declining them outright due to a – likely wrong – understanding of scheme rules and bankruptcy law.

Yeah, basically everything you've said is the details of what I meant. Why is this often overlooked? Why is it taken at face value that a central clearinghouse (or similar) is bad??

I think this is a bad assumption.

Trusting facebook as the central clearing house for all of our personal data doesn’t seem to have worked out very well.

Let's call it regulated clearing houses then.

Regulated by who tho? There is a natural misstrust for everything involving the U.S. As service provider around here because of the weak privacy laws compared to us (Switzerland) or our neighbors . And yet we heavily depend(ed) on the American led credit card system.

Not for most people. Most people in the US trust institutions without even realizing/thinking about it. I don't think they care.

The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.

Neither of the two hold water if you look at how Chinese institutions dealt with the Ant IPO and recently the Didi fiasco and probably many more if you look.

That seems to be an issue with chinese institutions, not with concept of trust in general.

"institutions are usually strongly incentivized to act honorably". I am providing a counter example.

Yep, it's not perfect. It's just pretty darned good is all I'm saying.

https://www.theguardian.com/media/2010/oct/14/wikileaks-says...

Governments can arbitrarily censor legal payments at will, without legal cause.

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