Comment by scrubs | Hacker News Reader

Comment by scrubs | Hacker News Reader

Parent Full thread

No - crypto does nothing for cross-border flows. It could only make it worse. Purchasing shares in foreign countries say France often (not always) requires one to go through an approved French broker (middleman). Why?

- so there's somebody in France that can *make money* being the middle man

- so the French broker can be held to some standards reporting and what not. For example, the French broker at risk of criminal prosecution cannot sell shares to NK or Iran.

- so the rules around transfer of shares for payment and settlement are set so people can't be screwing each over or not completing settlement in a timely fashion

- because of scale: there are zillions of trades done every day. that's why netting-out is a real thing. settlement has to be fast, tight, nailed down. And regulation helps with that through known pre-approved brokers with set roles and responsibilities

Also consider that unlike crypto you gotta settle. Settlement is serious. And settle in a bonafide currency that everybody agrees is a currency: EUR, for example. And you have fixed time to do it in.

You can't be waving your hands with some stupid story about how your broker/holder of crypto,

- stopped you from withdrawing your stuff

- is down

- is in chapter 7 or 11

- that you forgot your crypto keys

- and the entity getting the cash for selling shares isn't gonna wait around for some miner to "approve" your transfer maybe in 10 mins ... or maybe tomorrow

I think the settlement story for bitcoin is actually superior than with USD/EUR. Yes you have to wait 10min x a few blocks, but that is final, irreversible settlement.

Except for the possibility of unconfirmed transactions if the network is under load right? With both centrally registered clients and counterparts what’s the case for decentralisation here again?

If the network is under load you can prioritize by paying a higher fee. If mining slows down it can take more time for a block, but difficultly will adjust to get back to 10mim cadence.

I'm not sure what you mean by centrally registered clients. You can still use bitcoin peer to peer. Also the idea that banning peer to peer bitcoin would be what would make decentralization not worthwhile feels rather circular.

Surge pricing to settle stock trades? Obviously this is worse than the existing tech

To trade you need to be registered by regulated entity, it’s already a centralised environment. You’re also purchasing shares issued by a centralised issuer, the corporation. Your suggestion that bitcoin offers any solution to settlement (much less a superior solution), just escapes me

I'm not sure why you are talking about stock trading. Settlement is a general, non stock specific thing. I'm talking about settlement in regular transactions, e.g. paying rent or buying groceries.

I mean, so is FedNow and RTP and SEPA - the list goes on and on - none of which are blockchain powered. They settle instantly and finally. In the case of international transfers, the delay is intentional for regulatory and risk management purposes. Not technical reasons. So the advantage of crypto isn't technology but regulatory arbitrage.

These work if you either have a master fed account or have credit with some bank that does. You can't settle instantly with an entity that is not already known in the system.

I can't see how that's a problem.

Do you think a bearer asset like cash has zero use cases? Bitcoin allows settlement much like this with a party that doesn't need to be identified and already trusted by a central clearing house. Of course this can be dangerous and might not be desirable for every transaction, but there clearly a technological achievement to make it possible.

No, my point is that having to use an intermediary is not an issue. If you really don't want to be identified open an LLC.

Proposing opening an LLC is a pretty involved workaround that again requires more supervision and gatekeeping (e.g, for many people and many countries this is not even possible). Cash like settlement with any person on the planet without any intermediary is a pretty big technical achievement that absolutely was not possible before blockchain.

Reply on news.ycombinator.com