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Comment by after_care | Hacker News Reader

How far away is crypto from being a viable alternative payment processor? The problems I see are the translation layer between fiat and crypto, the fluctuation of value of tokens, the long confirmation process of many tokens, the environmental impact, and the physical infrastructure (atms, etc). Each individual problems seems solvable, and it would be a significant historical event if banking was moved to these decentralized platforms.

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There have been many attempts. So far none have succeeded. The main problem is fiat exchange, which ends up being tied into some country's regulatory regime.

We are mostly there.

Environmental impact is mitigated by newer proof of stake tokens. Cardano, Solano, Polkadot. Also, Ethereum is moving to proof of stake eventually as well.

Slow confirmation times are also solved by these same coins. Even ETH with proof of work has a quick confirmation time. Also, for payments over the internet, confirmation time is not a big deal. It's more an issue when buying something in person.

Price fluctuation is an issue, but we do have stablecoins. However, there are only a few.

We do need ATMs, but that also does not matter for online payments.

Fiat to crypto translation layer is probably the main issue in regards to online payments. However, setting up an account on Coinbase or Binance is pretty similar to setting up a PayPal account. Then you can pay any merchant with a QR code or address or whatever, using any of the coins Coinbase supports.

And, if those problems were solved and it became more of an everyday form of payment, there's the problem that government would start regulating it like other money anyway...

Yes, but it's harder to "herd cats" than to control an oligopoly (Visa & MasterCard).

There are crypto enthusiasts in every jurisdiction, with various motivations, including legitimate ones. They will speak out for any undue burden.

It's the translation layer between fiat and crypto which will be the problem. That's the layer that will get sued for the same reasons MasterCard is changing their ToS.

Volatility and exchange with fiat are the main issues. In terms of simply effecting a payment Bitcoin has worked since launch (aside from a few times when transaction fees got pretty silly). The scaling problem can at least temporarily gotten around with multiple currencies. (Which seems to have been adopted in practice when Bitcoin hit its txn soft cap a while back.)

IMO here in Canada it's near-feasible. Most people can purchase Bitcoin near-immediately with a bank transfer. Slightly more complicated than linking your PayPal account to your bank.

Open Question. Why don't more places accept stablecoin like USDC and USDT? The number of places that accept crypto is exceedingly low but even those that do usually only accept BTC. I wonder why stablecoins aren't used more for these sorts of transactions? Is it just that BTC is the most well known? Or are the underlying technical differences that prevent that from happening.

Most places which accept Bitcoin don't plan on holding it as cryptocurrency; it's converted quickly to USD (or whatever). They would do the same with ETH or USDC, convert directly to USD, or Bitcoin then USD. In short most USDC purchases would probably be fiat -> ETH -> USDC -> ETH -> fiat anyway. But fiat -> BTC -> fiat is a more established channel, and with lower txn fees at the moment.

The root of money as a medium of exchange is trust.

Most people don't even know what USDC or USDT are, so there's no trust there. Among those who do, there's concern that they're too unproven; there may be not-yet-identified attack vectors on the stack of technologies they depend upon that could some day allow one attacker to crash the coin. BTC has withstood a test of time that lets people who can't walk all the way through the implementation details to sanity-check them for themselves trust it.

Money is a lot more like a social network than a standalone technology.

Banking is already decentralised. There is more than one bank. I think you might be thinking about "central banking", but central banks don't provide banking services.

Yeah, but how does it help with essentially duopoly of payment processors? How does it help with the US finance industry exporting their rules under ultimatum "either you comply or you will be excluded from the world financial system"?

We saw how it played out with funding of WikiLeaks for example. We need cryptocurrency to avoid this happening again.

I'm sceptical about the ability of cryptocurrencies to solve problems. I think in order to solve a problem, first you need to spend some time understanding the problem, then come up with a solution. The crypto community doesn't seem much interested in thinking about problems. They think they have a solution that will fix a whole lot of problems, but in this case, like in many others, I don't think the solution would work, or even make sense.

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