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Comment by EugeneG | Hacker News Reader

That’s obviously true. And once you accept that then the whole premise behind crypto is gone - if centralization is the only way to make it work, then traditional banking is preferred. All that’s left are use cases that are in the gambling and money laundering category.

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Huh? Crypto is great as a transfer of value network and store of value among other things. You can still use a bankequivalent like Coinbase.

Eh so is runescape items.

I mine ETH. I have flexpool.io configured to pay me out after I accumulate 0.05 ETH which is about $140 right now.

They pay me out to my MEW wallet and the transfer costs me about $7.

I then have to transfer from my MEW wallet to my Coinbase wallet which costs me about $5 since I choose the MEW turtle speed which takes longer.

I then sell the ETH immediately because I realize how useless this crypto crap is for transactions or store of value. That costs me about $2.50.

So about $15 in fees to get my $140. You call that a great transfer of value network? I’ve mine cryptocurrency since you could use a GPU for BTC. There is no legitimate use for cryptocurrency today and I doubt there ever will be. It is structurally flawed in numerous ways.

I'm curious, why you don't just have the pool payout straight to your Coinbase wallet, especially since that is your consistent destination, so at least some of the transfer fees are avoided?

I could theoretically do that. But Coinbase says not to. And every single time I transfer ETH to Coinbase they give me a different wallet address to send the ETH to.

Bottom line, they say not to do it and I personally can't guarantee I'm sending the ETH to my Coinbase account with an old ETH address that I've remembered.

Thanks I didn't know that - and wow, that's a serious disadvantage! (I've got a bit of assets at Coinbase, and was considering doing some mining...)

Mining profits are pretty low right now with EIP-1559 live, difficulty being so high and reduction in ETH price.

For example, one of my RTX-3070s is making about $2.10 per day after electricity costs. Before EIP-1559 on high volume days (ex: Shiba Inu launch) I was making $75 per day with just one card!

Supposedly Ethereum 2.0 is coming in June although that has been delayed repeatedly. So who knows when ETH will switch from PoW to PoS. I can't wait for that day to come because then there will be infinite used graphics cards readily available for sale. Everyone thinks they'll move on to Raven or ETC or other coins but those coins can't handle the hashrate that is current on ETH so I truly think PoW mining will not be profitable after Ethereum 2.0.

Let me know if you have any questions but basic setup I use is gminer on flexpool.io. It's dirt simple to set up if you have a 6GB+ video card (i.e. it has to have enough memory to fit the DAC).

Thanks! I may take you up on that...

I disagree. I believe there's a lot of areas where crypto can bring much more efficiency and transparency into financial markets, and that's a good thing. I agree the point is not to replace banks, but perhaps evolve them, bring about new types of financial institutions, products and instruments.

What kind of efficiency are you talking about? It's far, far from clear -- at best -- that crypto can be more energy-efficient than traditional banking.

Transparency? Really? For whom? Do you want your taxes on the blockchain for everyone to see?

I am not an expert in crypto at all, but what I would love to see maybe, is some type of stablecoin supported by the USPS. USPS used to be in the banking business and are now looking into it again. Is there an opportunity for the USPS to support USDC, to replace money orders to help serve the underbanked?

I dunno.

https://executivegov.com/2021/10/usps-launches-pilot-banking...

Why wouldn't the USPS just be a bank, with accounts with the Fed and FDIC insurance though? The USPS not providing banking services is because Congress won't let it.

While I expect there are important new types of financial institutions, products and instruments that may be evolved by cryptocurrency experimentation, I would be extremely surprised if normal people could do a coherent analysis of the pros and cons of them, and expect they would not be able to distinguish the good ideas from the scams. I mean, look at how many people think literal lotteries are a good investment, or who are furious about the existence of inflation, or whose mind is blown when they first learn about fractional reserve banking.

I don’t know what you mean about efficiency, as there are multiple different ways to count this. Energy efficiency clearly isn’t a selling point, so can you expand on what you do mean?

well, that has nothing to do with crypto, right? that's the case with current state of affairs already.

Current state of affairs is regulated to prevent most normal people from getting into serious trouble most of the time, crypto not so much.

I believe the current state of affairs has governments holding a monopoly on lotteries and actively promoting and marketing said lotteries to the financially illiterate. The odds of coming out ahead are wildly better in crypto vs lotteries. Perhaps we should put an end to government-controlled scams such as lotteries before claiming that regulated industries can do no wrong?

I’m not saying regulated industry can do no wrong, I’m saying the graph of for frequency vs. quantity of wrong for regulated is smaller overall and closer to the axis than for unregulated.

I would counter with the great financial crisis of 2008 - and the stated reason for the creation of Bitcoin. Those were all regulated banks and financial entities that were deeply involved in a fraudulent scam to mis-represent the quality and contents of their mortgage backed securities. They took sub-prime mortgages and then added massive amounts of leverage and somehow the ratings agencies all gave them a AAA rating. This was all in a heavily regulated environment and as such it proved the need for a decentralized alternative.

My questions for those who trust in regulation:

-Why was no one ever prosecuted for this fraud?

-Why did regulation not work in the case if the 2008 GFC?

-If it didn’t work then, why would it work the next time?

Absolutely sympathise with the perspective.

It’s not really a counter though: for that you’d need to compare 2008 against markets with weaker or absent regulation.

I’m not sure the relative weighting of causes, between fraud, the misuse of Black Scholes[0], the elimination of various regulations which has been created at the end of the previous crisis, and the failures of credit rating agencies.

At least some of the fraud which did occur resulted in prison time.

[0] I did hear one of the big problems was everyone looking at the (Nobel Prize for economics winning) Black Scholes model, applying it inappropriately, and justifying this in the grounds everyone else was doing it. This is hard to fix, and group-think of this type is also very much the kind of failure mode I expect to happen more often in unregulated markets, but that doesn’t mean I don’t expect it to pop up everywhere given time.

> At least some of the fraud which did occur resulted in prison time.

Could you point me to any examples? When I looked into this the only person to serve prison time during this period was Bernie Maddoff and his great crime was stealing from the rich.

Sure: https://www.ft.com/content/de173cc6-7c79-11e7-ab01-a13271d1e...

Thanks for sharing that link. It was very informative. They didn’t go far enough (e.g. None of the ratings agencies were impacted) but I’m glad to be proven wrong on this issue.

on a related note: I mentioned in other comment here that people will demand regulation. On the other hand, on numerous occasions I've stated that the next financial crisis will come from crypto. You already have wrapped tokens, tokens that wrap other yield making tokens, tokens that are just confirmation of collateral, yet they can be used as collateral elsewhere, tokens that can wrap multiple different tokens, NFTs that can wrap other NFTs, etc. etc.

Given the human nature, it's pretty much inevitable that some dirt will get lost in this chain, and we will face the exact same fate as we did with CDOs, just with different terminology.

I’m furious about the existence of inflation. I think it should really be called monetary debasement instead of inflation. Satoshi Nakamoto created Bitcoin in part to provide an alternative inflation free money option.

Why am I being naive or foolish to be furious about the existence of inflation? Is it a good thing that I simply misunderstand?

I am genuinely curious. Please help me understand.

Curiously, I was just thinking how I personally am often wrong about inflation right before logging back in to see what responses I’ve had to this comment.

One of the important things I tend to forget, is that effective rate of inflation is different for different people within the same economy.

For example, the official rate of inflation in the U.K. right now is 5.4%, but if you’re poor, you’re likely to be constrained by fuel prices (which just went up ten times that: https://www.msn.com/en-us/news/world/uk-faces-record-rise-in...) and food (which has done worse, but unevenly and over the whole year: https://twitter.com/BootstrapCook/status/1483778776697909252).

This is because inflation isn’t just caused by just governments printing money, it’s also caused by a reduction in the availability of things to spend that money on and even the rate at which money changes hands (https://en.wikipedia.org/wiki/Velocity_of_money).

There’s also a totally unrelated argument that I can follow but not adequately repeat about the impact of various levels of inflation on consumer spending and the feedback that has on employment etc., but that’s not an argument that I expect to do anything at all to reduce anger.

I believe the accurate answer here is twofold: - money is perpetually not supposed to be a great perpetual store of value relative to goods and services. Government policy aims for some inflation, fears too much and fears too little. Why? Because a bit of inflation is an incentive to use your money on more productive asset - eg don’t hold on to it but instead invest in a startup or go use someone’s services or goods (go to a restaurant!). The issues happen when inflation is so high that the money melts away before you have time to figure out how to use it productively. Deflation is also bad because then people stop spending on services, stop investing - and just hold onto money. (“No I don’t want to invest in this startup! I have the best investment I need, just holding onto my cash!”) That slows down the economy. - either way Bitcoin doesn’t solve inflation in any way. It’s just another asset - that can go up or down or whatever, and happens to have gone up for a long time (just like Facebook stock) and then dropped a lot. Just like any stock or any asset, Bitcoin can have higher-than-inflation real returns or lower-than-inflation. And more recent returns have definitely been lower. What will happen in the future? Who knows. Same answer applies to the S&P500 and to Gold and to the new condo in my neighborhood.

> I think it should really be called monetary debasement instead of inflation.

That suggests that you don't know what inflation is.

> I am genuinely curious. Please help me understand.

You say this too much. You can't understand from fly-by comments on the internet, which is why you're in the state that you're in.

If you're actually as genuinely curious as you pretend to be three times a day, go to the library and read a book.

All you're doing is chattering on the web. You will never understand anything this way.

> All you're doing is chattering on the web. You will never understand anything this way.

Is that why you feel justified throwing insults instead of engaging like an adult? This isn’t the only comment where you’ve directed insults my way. It seems you are only capable of name calling, not substantive discussion.

The whole premise behind crypto isn't gone. You can build centralized custody wallets on the blockchain and you still get programmable money, no middle-men for transactions and lower barrier to entry for innovation in financial services (and of course self-managed wallets for powerusers)

> programmable money

Where there's code, there are bugs. I don't want that in my money, thanks.

> no middle-men for transactions

At what cost? Most people don't care about censorship resistance, they want free/cheap/fast payments and transfers.

> lower barrier to entry for innovation in financial services

There's plenty of innovation in finance given the proper legal framework. See the number of fintech startups popping up every year. The only innovation we see in the cryptocurrency space is the recycling of old scams that are impossible in modern finance.

> Where there's code, there are bugs. I don't want that in my money, thanks.

Yeah, money should be data, dumb configuration, not code.

Add another, completely separate layer on top of that, for the code.

Data is still controlled by code and is just as easily affected by bugs.

But none of that is true... transactions still require middle-men, and decentralised finance is fundamentally incompatible with financing. So we are left with "programmable money"... whatever that means.

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