Can this problem be solved without crypto? Probably, but currently crypto is looking like the best way to be able to do this.
Now about decentralization, I believe that most people hold their transactional crypto funds in a handful of exchanges and thus the dream of decentralized crypto transactions is rarely realized.
But most importantly why does the end user care if the transaction was decentralized or went through a series of transactions through one or more centralized intermediaries.
All people care is have funds that left place A showed up in place B
On ramp and off ramp to fiat will kill you - whether through transaction fees or through slippage.
Let's say I am in US with 10k USD cash and I want a family in Ukraine (let's say somewhere safeish like Lviv) to have that 10k USD in hand.
Crypto is going to be more expensive than Western Union/Transferwise/SEPA/regular bank transfer/courier through friends.
That is the problem with crypto transfers - sure most crypto coins can be transferred cheaply.
However that "cheapness" only works as long as you stay in crypto verse.
Onramp via onjuno, convert to USDC, send to your polygon wallet, convert to jEUR on Jarvis, send jEUR to friends wallet, they offramp jEUR with 0 fees to their IBAN bank account in ukraine via mt.Pelerin.
You only pay the polygon token transfer fees here.
Times have changed since 2010!
Now do the same thing with sending money to Russia. I just checked WISE. "We temporarily stopped sending money to Russia".
Yeah.. thanks..
Most Americans - particularly those who grew up before globalization - underestimate the scale of global markets. The U.S. is about 4% of the world's population and about 15% of global GDP. Anything that's Internet-based and has truly global appeal will be significantly larger than anything we would've been familiar with pre-globalization. Hell, the product I work on has about 3B users, 10x the population of the United States.
I just never actually see evidence that crypto has taken over global finance or is well on its way to doing so.
The only thing I used this crypto for is to sell it later (and gain something like 15 euro profit). Am I a user? By your statistics, still yes. Do I even matter? Still no.
Additionally this use case (trade crypto hoping for gains in actual fiat money) is the absolute vast majority of what crypto is used for. Is this replacing traditional finance? Ahahahaha, no. AliPay has a bigger impact on "traditional finance" than all of crypto now or ever.
a better way to frame your comment: why does the world use Stripe and PayPal when you can just go to your bank and ask them to setup a multi day long wire process from bank A to B for less fees?
Zelle is between US banks only. some people live outside of the US, surprisingly.
So, for EU (23 countries) it's not a problem either.
Sending money between banks is both a technical and a regulatory issue (and crypto is discovering why regulations exist at great cost to crypto users). However, "instant money transfer between banks" is not an unsolved issue.
the EU and UK banking system is far better than the US but still it is not a global payment processor network and API, hence why the web even in EU and UK relies on Stripe, visa, Apple Pay and PayPal and their corporate and centralized infrastructures. building an alternative infra that is not based on a single corporate entity is net positive for the world long term
Crypto bros really have to drop the idea that it's going mainstream by allowing people to transfer money. Crypto is NOT easier or safer for anyone than a faster payment in the EU/UK. Unless you are doing something illegal.
> was in the destination account the next day
that’s probably CHAPS as well then as FP is within 2 hours. still a a lot slower than crypto’s 30-60 seconds, and extremely opaque process that could have taken additional days without any information to the customer.
but undoubtedly, both CHAPS and FP are very fast and inexpensive, and some of the best systems in the world for interbank transfers. unfortunately it only works from one UK bank to another UK bank, which makes up a small portion of global population. even within UK you will often have need to pay somebody who doesn’t have a UK bank.
and yes UK faster payments system is great but it is not yet the backbone of global payment processing. the world is larger than the UK and as we continue to connect globally online and become more digitally nomadic there will be more need to pay users outside of a UK-to-UK bank system.
banking is a radically different design philosophy than a protocol where all addresses and transactions are treated equally regardless of wealth, class, and other social factors like race and family connections.
"Oh, that's not a useful system, because there are limits."
"Well, when you get near those limits the bank starts to work with you so those are still not roadblocks."
"Oh, well that's just because they prefer the rich to the poor."
No, you miss the point. At lower amounts, it's a non-issue because you're not hitting limits. At the point where you are hitting limits, it's facilitated to smooth those things. End result is that there should be few issues, regardless of amounts.
most private clients are getting cushy services such as better lending and interest rates, faster payment times, better wealth management services.
but I digress. the banks are useful obviously, despite their flaws, and in the EU and UK the banks tend to be some of the best in the world. this is not to say banks as a whole are useless, but banking systems on average across the globe have many aspects that fall short of our ideals. crypto does not fill all of those, and has plenty of flaws and issues as well, but it does excel in certain areas and at the very least provide a competition that forces us to more closely consider the pitfalls of our typical financial structures.
My issue is that people don’t even need to see crypto actually succeeding at the use cases people talk about to be considered a good investment. People will invest in crypto regardless. I believe crypto does have value but the valuation in no way matches the actual present day value of the crypto or even a plausible projection of its future value. People just say “crypto to 100 trillion! Smart contracts!” and nobody has to see any real results that justify those numbers.
Why should I be impressed that something has potential? Many things have potential.
To me, it’s strange that you can agree that most cryptos are scams but don’t understand why there is so much hate for them.
Why is this necessary? I have banks in three countries and generally pay nothing to move money between them or to pay others. This really doesn't feel like a problem that needs to be solved except by those trying to avoid taxation.
And that's just in my neck of the woods, I'm sure I'm forgetting more.
it is like asking “Why Does PayPal Exist When We Have iBAN?” obviously some subset of the globe finds it more useful than iBAN transfers for their needs (like setting up an online shop).
God that whole process sounds painful.
In the Uk we would just transfer the money across with a bank transfer as all banks support instant transfers which have no fees (including between banks).
the point is not to be a system that beats a single service for sending GBP from A to B in the UK. the point is a system that has a variety of uses and applications accessible by anybody, regardless of which country the user resides in.
even in countries with good banking like UK, many e-commerce companies will still choose Stripe VISA and PayPal to reach customers outside the UK and integrate a payment processor API. an online shop could offer crypto as a payment mechanism if they wanted to avoid using these companies and if it met their needs.
... so suggest that they use crypto, which for many, comes with an onerous fee too, to be timely. Your "buy from the shop" example better not be urgent, otherwise you're paying gas for someone to verify it, or it sits in the queue.
though eventually as these networks scale most users will be transacting and interacting with L2 rather than L1. fees in L2 are in cents on the dollar, transaction finality is often very quick, and security assumptions are typically good enough for most use cases.
https://www.useweb3.xyz/gas?source=ethgas.watch&referrer=eth...
The UK example just shows that a decentralised blockchain approach isn’t required to meet the use case you are describing - in fact it’s worse for the described use case in almost every metric.
Having a different, worse alternative isn’t exactly something to shout about.
whether it is better or worse for each of those depends who you ask and what their goals are, and also in what year you ask. ten years ago it was inconceivable to do these things with crypto, ten years from now it may be that these systems will continue to improve in terms of fees, privacy, scalability and user experience. consider the current cohort of users to be beta testers who are taking on additional risk and technical burden while the system continues to improve.
How would paying in crypto avoid app store fees? Presumably you mean the Apple / Google App Stores, when Apple or Google will still want to take their 30%? How do you bypass that?
> purchasing digital assets like art
Who is using Crypto to purchase art? (Note: NFTs are not purchasing Art, you own some metadata that refers to a piece of art publicly hosted somewhere else). I can certinaly use my fiat currency to purchase both the rights to artworks, to purchase actual physical art pieces without having to jump through payment hoops, and even to purchase on-demand streaming of performance art. I cant really do any of that with Crypto without turning it back into regular fiat currency first (without searching out the tiny amount of places that accept crypto directly, but even then - whats the advantage to just paying in fiat?).
I mean I'm entirely unconvinced there is a compelling real use-case in anything listed here.
> ten years ago it was inconceivable to do these things with crypto, ten years from now it may be that these systems will continue to improve in terms of fees, privacy, scalability and user experience.
IMO if a technology is actually transformative, it will find a valid use case quicker than this. The only real use-cases I have seen seem to have been creating ponzi-schemes, effectively laundering money and speculative gambling on the price.
> you can just use cash?
this question sorta gets at one of the primary values of crypto, that it’s peer to peer, transferred non custodially and pseudonymous. many countries are moving away from cash into digital only forms of transactions, and having a system that upholds peer to peer transactions can be useful.
replace abortion in that example with other legally questionable actions depending on your state. maybe buying marijuana or psilocybin for medical purposes, paying somebody like Edward Snowden for giving a lecture, or purchasing a VPN subscription. for citizens who are rebelling against their state in some way, such as abortion rights protests, or climate activism like extinction rebellion, or a person that lives in a less democratic regime, it may be desirable to use certain crypto systems to mitigate state oversight.
https://www.nytimes.com/2022/05/14/style/abortion-crypto-don...
The point is it's not buying art though.
I can sell you an NFT of my house, and promise to only ever mint one NFT of my house, but that's different to selling you my house.
You also have to pay transaction fees transferring crypto, it's build into the protocol.
It's not solved by real world implementations of any major blockchain.
If you are sending a fair bit of money, I very much doubt that.
I think the point they're trying to make is the current (lack of?) Global financial system is a joke.
Crypto is enabling something that has the value and utility of "money" with interconnectedness and simplicity of the Internet. How does that not click in ppls minds?
For the 7Billion ppl on earth, easy low fee international money transfers are a joke. And in this context low fee is 1-3%.
I can send $1B USDC for 60 cents using crypto.
And before anyone says "but you need to have crypto and a wallet and an exchange and a ..."
The same is true about email. You need to have a computer, and internet, and a email provider/server.
We take for granted the things that are already engraved in our lives, but it wasn't that long ago when someone could make the same argument about snail mail/fax vs email.
Secondly, no government is giving up control of their economy to Crypto miners and the "global financial system". It will not happen, it will be regulated until it is controlled (a state owned coin effectively). I certainly don't want anonymous miners or the whims of Crypto casino controlling the economy in the country i live.
At least with the current system I can vote for a government that has control of it's economic policy, even if that vote has minimal effect. Some control is better than none.
> Sure 99% of crypto schemes are b.s and ponzi.
That second sentence explains the first, really.
Anyway, so the remittance industry is estimated to be USD 15.27 Billion as of 2021 so if you could tap into that market, you'd do pretty well. Or rather, you would, if you charged some sort of fee to use your services, so you need to charge some sort of a fee, which negates that advantage of using crypto. Coinbase makes it easy to get into crypto, but they do charge a fee for that.
There are at least a dozen countries that I can think of that have massive restrictions on how many flows in and out of the country, preventing people from being able to keep their money safe from raging dictators or changing rulers.
It's a lot more than 1%.
Obviously providing some service to even .01% of people or whatever is valuable. But at this point Bitcoin is valued like Google which is used by tens of percents of all people.
If I'm sending a remittance or similar paying $$$$ in fees is absolutely not desirable. And with current gas prices the cost of sending anything less than 50k is pretty comparable with just doing a wire transfer.
I remember feeling the frog water warming up when I first heard how "wrapped ETH" was another required fee in-between... craziness.
for payments over 10K the fees may be less than Wise or a wire, and faster.
for average users the end game is L2 and direct on- and off- ramps from CEX and services like Ramp, and more payment processors accepting crypto so off-ramps will not be always needed. fees in L2 are in cents.
wish i could frame this quote