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Comment by casralad | Hacker News Reader

Pets.com and WebVan were exemplary of the dotcom bubble. They had insane valuations and a problematic business model, but investors poured money in because of hype. But both those services are legitimate, profitable through other companies today. They were just too early, maybe too hyped.

I got groceries from WebVan in the 90s. I bought books from Amazon in the 90s. I used Yahoo.com to find information in the 90s. These were services with value even if the companies didn't make it.

Crypto has provided no value other than making some people money. It has solved no problem. In more than a decade, crypto has still not found a viable use-case.

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> In more than a decade, crypto has still not found a viable use-case.

In my eyes, having an alternative to high-inflation currencies around South America and Africa is one hell of a use case.

It's not usable as a currency except in the most dire circumstances and no one is working to fix this. Transactional currency has been abandoned as a goal by every major crypto project, and it doesn't make a sensible replacement for currencies in functioning economies. If the only use case is as a currency alternative for people in a failed state, it's not a compelling technology, and it's not even doing that right now.

Dotcom companies were offering services that hundreds of millions of people could use around the world. There was a bubble and many tech valuations were stupid, but people used Webvan to solve a problem. No one is using crypto for anything other than speculation on the price of crypto.

> It's not usable as a currency except in the most dire circumstances and no one is working to fix this.

I've pushed two different crypto companies I've worked for to focus more on African payment systems, supporting one of the top 10 chains to look at light wallets for just this reason and another to support PoS validators in African countries because it's a very high income for them. I also do some work with philantrophic organisations looking at using crypto. There are several billion dollar organisations involved in this space.

> If the only use case is as a currency alternative for people in a failed state

1) A currency alternative is massive! That's such an insanely awesome use case that if it's "just a small thing" to you then I'd love to know what you're working on!

2) Failing states? What a pessimistic approach. I prefer to see people getting access to financial tools that they'd otherwise not, giving people the opportunity to get out of poverty. Gates Foundation did some research on M-Pesa and access to simple financial systems had huge benefits for people.

> No one is using crypto for anything other than speculation on the price of crypto.

Maybe that's the common view but again it's not the case. If all you see is NFT shit online I get it, but you're wrong.

> Dotcom...

Yes there was a bubble but some stuff survived and look where we are now. There's no reason that this can't be similar. It's been going for a decade.

> It's not usable as a currency except in the most dire circumstances and no one is working to fix this. Transactional currency has been abandoned as a goal by every major crypto project

That's simply not true.

https://bitcoinmagazine.com/industry-events/jack-mallers-add...

https://www.youtube.com/watch?v=dD2-T7TX2rk

Shorter version of the above: https://www.youtube.com/watch?v=o73fWsqJDdY

> it doesn't make a sensible replacement for currencies in functioning economies.

As covered in Jack's presentation, merchants may appreciate saving 3% on every purchase.

>> In more than a decade, crypto has still not found a viable use-case.

> In my eyes, having an alternative to high-inflation currencies around South America and Africa is one hell of a use case.

No it isn't. Why? US dollars and gold work far better for that use case than cryptocurrency.

For someone in a another country, the current 8%+ inflation of US Dollar is far from negligible, especially when the dilution drivers such as stimulus packages are mostly only to the benefit of US Citizens. Physical bearer assets like cash or gold seem to be far worse than any digital solution in that they can be seized with physical force and are not possible to conceal. Bitcoin's advantage is further that it is digital and permissionless. So just like the US Government can't prevent drug cartels from using cash, it or any other government can't prevent anyone from using bitcoin.

What about those countries with sanctions from the US or governments that don't allow the USD to be used, such as Cuba? Do you think the majority of people in Nigeria pay their rent with a USD note or a gold coin? Yes you can get USD on the black market but it's at a much worse rate than the global exchange rate. You're going to be paying, most likely, with M-PESA or a digital currency like eNaira. But maybe you want to avoid 15.7% inflation or high fees? Hence crypto adoption growing by 1200% in the last year throughout Nigeria, and several other African countries.

> What about those countries with sanctions from the US or governments that don't allow the USD to be used, such as Cuba?

That's just plain not true: https://www.hometohavana.com/blog/currency-in-cuba: "Despite the Cuban peso being the only official currency in Cuba, there are stores that sell products like groceries, appliances, and other home goods in U.S. dollars and Euros, though they almost exclusively cater to locals."

> Do you think the majority of people in Nigeria pay their rent with a USD note or a gold coin? ... But maybe you want to avoid 15.7% inflation or high fees?

Do you think they pay their rent with Bitcoin? The point being: whatever upsides Bitcoin has, the dollar typically has it better; and whatever downsides the dollar has, Bitcoin typically has it worse. Both the dollar and gold work to avoid local-currency inflation (and have more widely recognized value and less volatility), and Bitcoin has high fees too.

Also, look up "dollarization."

> That's just plain not true

You can only use USD if you're a resident in Dollar Stores. You can't use USD cards, you can't bring USD into the country, and even on the link you shared it mentions the USD black market with a 2x differing exchange rate. As a resident you can't deposit USD in banks. What you're describing is the illegal USD black market. As of last summer, Cuba has allowed cryptocurrency payments to be made and brought them into regulation. There are other countries like this too, such as Argentina.

> Do you think they pay their rent with Bitcoin?

Not bitcoin, but crypto use is growing.

> whatever upsides Bitcoin has, the dollar typically has it better

Except in countries that don't allow the USD. Or countries that the US doesn't allow to use the USD. Or countries that have black market exchanges which increase the cost of the USD. Or countries unassociated with the US. Or when the Central Bank of a country threatens to seize all USD. Or so many other reasons... Hence why the USD is not the primary form of payment in these countries and they're using mobile money.

Yes bitcoin has higher fees, but there are other cryptocurrencies and I was talking about crypto in general - not just Bitcoin. Although Bitcoin does have low tx fee layers you can use, so it's not that much of a problem.

> Except in countries that don't allow the USD. ... Or countries that have black market exchanges which increase the cost of the USD.

Why would a country ban USD but allow cryptocurrency, except as a regulatory oversight?

> Or countries that the US doesn't allow to use the USD.

USD are little pieces of paper that are in wide circulation. The US can't prevent any country that can get their hands on them from using them.

If the US government did have that power, drug cartels wouldn't be able to use USD. However, they do (in massive quantities), which proves my point.

The US also can't completely prevent people from creating counterfeit cash, see https://en.wikipedia.org/wiki/Superdollar. The transparency of bitcoin is a win here, as everyone can verify that this kind of fraud is not occurring at the base layer.

> The US also can't completely prevent people from creating counterfeit cash, see https://en.wikipedia.org/wiki/Superdollar. The transparency of bitcoin is a win here, as everyone can verify that this kind of fraud is not occurring at the base layer.

Emphasis on "here." I think the one big problem with Bitcoin et. al is that (from a user perspective) they trade major regressions in important areas for small wins against other problems (often purely ideological problems).

Case in point: counterfeiting isn't a major problem in most places. Bitcoin may address it better than cash can, but that's at the cost of major regressions in privacy, economic policy, etc.

I appreciate the nuance-- I completely agree that there are tradeoffs and that no money technology is perfect in all regards. I don't think it is fair to call complete resistance against counterfeiting a small win though, it eliminates an entire category of crime. You can't only consider the total size of the problem counterfeiting currently causes (which is small), but also the expenditure and surveillance that is needed to achieve that outcome.

Usage of foreign hard currency in these countries (like Argentina) is usually heavily taxed and hard to get by. Bitcoin and other cryptos are easier to use.

Are they actually using it as currency?

Yeah! Nigeria is trying to move everyone to their own digital currency, but Statista did a survey and 32% of Nigerians were using Bitcoin for general payments. Quick look for some supporting info came up with this - https://www.reuters.com/business/crypto-trading-thrives-nige... but there's a lot more online if you look (from non-Crypto peddling sources).

Also, take a look at the current forms of payment like M-Pesa (such as https://docs.gatesfoundation.org/Documents/ImpactofMobileMon...) and you'll see a few of the problems such as high fees on remittance payments and lack of account building are solved with cryptocurrencies.

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