Why are we calling it crypto? Just call them private coins | Hacker News Reader

Why are we calling it crypto? Just call them private coins

snat-s.github.io

60 pointsrickrollin55 comments

> Can we just talk about the fact that airlines have private coins but they just call them points or miles? Or what about this thing that everyone hates inside of video games that is just passing money to power points or gold coins, or jewels, etc. Or even casinos with stablecoins that are just called chips.

This is actually very interesting and one of the first times I have heard of practical uses of crypto. If credit card or airlines rewards were credited via decentralized private coins, users would have greater ownership of their rewards, and they could be traded in secondary markets.

This is one use of crypto that I really want to come to fruition. Imagine being able to trade your Delta Skymiles for Kohl’s Cash on Uniswap instantly and for 30bps in fees. It would finally make all these random rewards programs worthwhile.

If organisations offering reward programs wanted this they would do it regardless of the existence of blockchain technology. The point is that they don’t, it goes against the point of the programs in the first place. This is the utter insanity of crypto pipe dreams. They do not necessitate blockchain, and blockchain is rarely the most technically suitable means of implementation. The issues are real-world power dynamics and conflicting interests. Completely orthogonal to the blockchain.

Assuming that organizations did want to do this, I would argue that a public blockchain is the most technically suitable solution. I can write up and deploy a new token contract in a few hours and it will be instantly tradable with thousands of other assets on-chain. Compare that to building and hosting your own systems, integrating with dozens of payment methods, and somehow linking up with the interfaces of every other rewards program out there.

If they wanted to do this, they would give you cash back, which is accepted anywhere. If merchants want to incentivize you to use your cash back "points" at their store, they would give you a discount on the card.

Guess what? This already happens! And without the waste of a decentralized ledger.

Cash back is fundamentally different because the store is setting their own exchange rate. Giving away ‘points’ is cheaper than giving back an equal amount of cash because the points can only be spent at the store. By minting points as tokens, the market can then choose an exchange rate through supply and demand of various rewards points.

> users would have greater ownership of their rewards, and they could be traded in secondary markets.

Airlines do not want this. It's explicitly forbidden in their TOS. It has nothing to do with blockchain/web3.

Entire lack of ownership is the whole point of points. If they wanted you to have something you could own, you would get dollars.

Which is why cash back cards are very nice. Because your points are a static amount of cash that you should regularly convert.

Definitely a more flexible option, but you might trade overall value for that flexibility (in the sense that you can frequently use accrued points for more value than the cash).

Or you might not, if the only choices are to buy stuff from their shitty Company Store, or convert to airline miles. I don’t need more stuff, and we don’t fly much. There seems to often be an option to convert to cash, but that’s usually a penalty choice. So we dumped the points card(s), and mostly use the Apple Card, which is just straight X% cash.

Regardless, if I’m going to play “maximize value of effort expended”, I’ll fire up the Xbox and play an RPG. I’ll get a lot more pleasure out of that than playing with credit cards. OTOH, plenty of folks might consider Octopath Traveller a waste of time, so to each their own.

For Chase, spending points on statement credit or gift cards (the penalty option) is the same 1% Apple gives you when not using Apple Pay.

Regularly converting some credit card points is a good idea if you need the cash and it's a terrible system when they don't let you convert for cash. I consider any card that doesn't value points at 1:1 cent as junk.

But if you can use them within the system it's almost always a better deal. When used for airlines there's a large percentage increase in their value when buying tickets. When booking a hotel the cash price can sometimes be twice as much as the points price when I transfer credit card points in for example. Chase offers pay yourself back which increases their value on purchases in certain categories, although the categories haven't been all that great lately.

I used to convert nearly all my points to cash immediately but now I sit on enough for a small vacation before considering changing them out.

You can get more if you are willing to deal with the points. For example, Chase will give you 3 points per dollar on some cards on some categories, and Amex will give you 4. Those points can be >$0.01 each transferring to airline miles (or in the case of Chase $0.015 "paying yourself back" for restaurants). No card will give you 4.5% cash back on restaurants.

That "3 points per $" on Chase cards also translated to credit statements when 2020 happened. It was an effective cash back at the same valuation of the points if used on travel through thr travel portal.

On one hand, they're nice in that the exact value of your "points" is known and guaranteed.

On the other hand, the conversion often isn't that great, typically 1-3%. Meanwhile, earning rewards in "points" or "miles" can return value in the 5-10% range if you're savvy enough. The savings can be worth it, but some might just use a cash card out of principle (refusing to allow the card issuer to dictate how points are used) or laziness (Just don't feel like optimizing the return).

For me, I use a cash card out of laziness.

I just can't be bothered with miles or points, on the credit card, on the airline, nah, like the point in Super Mario World, I think a gold coin is 10 points, everything is a multiple of 10 points, and...and I don't remember a single score I ever got. Just the stupidest thing.

I know I will never benefit from cashing in miles. It's too restrictive. They make sure you don't end up ahead. Their UI's are shit, it's better to just call on the phone and buy the ticket outright, just cash. And if you can't pay that, don't fly, tell your relative it's not happening and that's it.

Just like I could have gotten better credit by getting a credit card, but nah. Credit...points...fuck that. GPA also, grade point average. No idea what my college GPA even is. Or my credit score, the shitty UI's again, deliberately designed so your credit score is a kick-me. If it is a conspiracy (and patio11 said as much, you're the product in those credit score systems, it's about justifying higher interest on your debts, and getting people to borrow more, pay more interest. It's all usury, usury and nothing else), so if it is a conspiracy, let it continue to be a conspiracy, without my ever bother reading the "Kick me" on my back. Never looking in a funhouse mirror of the shitty UI.

I know that "Kick Me" is there, sure. But give it no weight. Never buying into changing myself to game my credit score. Pay my debts in order from lowest interest to highest, try to pay what ought to be paid, sure, but also default on whom it is right to default. Like if I'm being robbed by the shitty UI? Refuse debt I ought to refuse. And refuse receiving compound interest, tried getting a pure checking account with no savings (no overdraft fee stealing as a result) but banks generally won't do it.

Bottom line, shitty point systems go hand in hand with shitty UI's.

Ok you’re not wrong that the UX of many of those apps isn’t great, but you should still try and stay on top of that stuff. Banks aren’t going to accept “bad ui” as a valid excuse for a shitty credit score when you want a mortgage, and your parents won’t when you fail out of college. Also, anecdotally, points back from things like airlines are pretty nice as long as you’re going to be flying anyway. Sure it’s not worth it if you’re choosing an airline or route just for the points, but over time they’ll add up even if you just collect the points from your normal travel. This is a bit of a unique situation, but for example I’m getting a round trip to Europe, possibly business class, for $71 in taxes, because the person I’m going with flies very frequently for business but still gets the points from those comped flights.

Essentially, don’t discount point systems, and please for the love of god fight through the bad UX when it comes to actually important shit like college and banking.

Yeah, with the mortgage...I don't know, I think I could realistically find a bank that will accommodate my religion, Christianity. Especially if I show them something really cool we could do. Or 0% interest mortgage, that'll happen in like 5 years in America. Or just buy a house for cash. It can be done.

You think a bank is going to loan you hundreds of thousands of dollars because of your religion? I'm not even sure what you mean by that.

The alternative is the bank imposing Satanism on me. Money is the root of all evil.

And you haven't seen my research. Math research based on the Book of Matthew, King James Bible.

Or you know what? Maybe I can somehow come up with the money. Somehow, to pay cash.

Is this supposed to be sarcastic? Can it be stated plainly for those of us who are a bit slow?

Imagine having to burn your points paying transaction fees to miners

People bring this up all the time because they see the consumer utility of an open marketplace for loyalty systems but fail to realize that the open marketplace breaks the economics of the program and makes it not worth it to the issuer.

It exists: https://flycoin.org/

One participating airline that is a tiny regional carrier in Alaska.

Yeah it exists alright.

What even is the point of "decentralization" when the intent is to have a central fiat authority (the airline in question), and typically forbid transactions (using only one's own points, etc)?

Since the coins only have “value” for the airline, the company could just store them in a centralized database and write a program for users to authorize trades.

The only benefit of crypto-coins is that if the airline were to go bankrupt, the coins would still exist and could be used as any other crypto-currency. And the value would probably crash anyways.

> So, why are we still trying to make crypto happen?

Because it's just a resurgence of Beanie Babies. It's just this decade's get rich quick scheme

"Just call them 'grift'."

People in crypto invent new words rather than building new things all too often. I think it's a carryover practice that emerged from the whitepaper era of 2017-2018, when you had to have a massive pseudo-intellectual theoretical framework supporting your dApp to support a token raise.

Build cool things and don't hide behind jargon.

Well, most of them aren't private. So, that doesn't work either.

Of course they are. Private in this context means non-sovereign.

> public coins in the sense of government backed currency and we get private coins in the sense of company backed currency

We don't call them that because blockchain (as originally intended) should be not be company backed.

> I think we can catalog most of the companies in the crypto scene in this part. Yes, we still have foundations (ETH), but let's be real, they are not the majority.

Ignoring that with its 70% premine, ETH significantly deviates from the decentralization ideal, Bitcoin and Ethereum together do form the huge majority of the cryptospace.

Wait... ETH had a premine? and with their move to PoS, It's basically a recipe for Rich becomes Richer. How do people not see the clear signs of a pyramid scheme wtf.

In the context of cryptocurrency, "private" can mean a lot of things.

Well just call them privatized coins, all problems solved!

Monero is cryptocurrency, this article is just venting from someone who buys into scams. Crypto matters because privacy matters, and privacy needs decentralization.

-edit- Just to add clarity, decentralization is necessary becasue inevitably the people we need to hide from, are the same ones in control of the system.

You're suggesting that, in order to hide from people, we use a financial system where every single transaction is publicly recorded and available for all to see?

You should google monero first because that's the opposite of what it does.

I am fully aware of what Monero sets out to do, but that's the important piece - they set out to do it, but that doesn't mean they will always succeed. It's perfectly possible to trace Monero using publicly available information[1] (I realize this is an older story, but you can still employ similar methods using public data), and the success of using Monero also depends on the competency of the individual[2] (in a similar sense to how successfully obscuring your browsing via Tor is dependent upon you making sure you've dotted your i's and crossed your t's and not just simply relying on Tor alone). There are also companies out there who claim to be able to track these transactions[3].

Monero may be stronger than others, but it's not foolproof and nobody should assume that it is.

[1]https://medium.com/@nbax/tracing-the-wannacry-2-0-monero-tra...

[2]https://www.wired.com/story/bitcoin-seizure-record-doj-crypt...

[3]https://ciphertrace.com/enhanced-monero-tracing/

Edit: I mean, hell, even just obtaining access to a key essentially eliminates anonymity. You may go above and beyond in your efforts to obscure your activities, but if someone else involved gets busted and officials get access to their account, well...

Your deviating from the point.

Anyone honestly working in cryptography will tell you that it will never be full proof, it's a game of delaying the inevitable. The NSA knew that DES was vulnerable when it was first created! It still lasted what? 20 years? I wouldn't be surprised to here that AES has an "expiration date" either. SHA 256 has a predicted end date aswell, hense why SHA3 was created. It's not a game of finding the "perfect cryptogram to protect my message forever", that game will never be achieved.

But that fact does not mean that privacy is unimportant.

Block-chain is the only way to decentralize a ledger afaik. All those alt-coins out there just have a different way of doing the same thing. It's not that I think it's the best way to do things, but besides decentralizing the the banks themselves, is there any other way?

Aren't there lots of ways to decentralize a ledger? For example, create a collective of 30 independent organizations all over the globe - each audited separately - and have them create a shared ledger based on consensus?

A rose by any other name would smell as sweet

-- William Shakespeare

Too late.

Privacy coins are already a subset of cryptocurrencies, so private coins would be a terribly confusing term...

It's a little late for crypto shills to rebrand. I don't think the word 'shill' is uncalled for at this point. I've been burned a bit and so have some of my friends and family. I haven't seen anyone offering refunds, just lovely names like "degenerate."

> just lovely names like "degenerate."

The use of this term as an insult has some especially nasty history behind it:

https://en.wikipedia.org/wiki/Degenerate_art

Degenerate and base art thou. – Shakespeare, The Two Gentlemen of Verona, Act 5, Scene 4

What are you trying to say here?

I thought for a moment maybe the noun as an insult started with the Nazis, but no, the word goes back a long way.

p.s. I notice the vast majority of your HN comments are similarly very short and low-effort, with a lot of not-very-nice jabs at people on here. Doesn't make for pleasant reading.

I asked because it's a common tactic for people who would use "degenerate" deliberately with its modern, Nazi-associated connotation but simultaneously (and dishonestly) try and hide behind the fact that it is in fact a much older word, thus protecting their dogwhistle. I was trying to suss out if that's what you were doing.

> Doesn't make for pleasant reading.

I can live with that.

Brevity is the soul of wit?

I believe GP is saying that crypto shills have called them a degenerate. I don't think they're using that word themselves.

Yes, I was called a "degenerate." I wasn't calling anyone else that. I was just expressing my displeasure with cryptocurrency and its, shall we say, advocates.

I think the allure of "crypto" is the same as the allure of "gold": it's a store of value that isn't subject to government manipulation (may/may not always be true)

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