Remove the fiat part from the equation, and the way to answer is easy, you can trade crypto-tokens in the many decentralized exchanges.
And if you just want to hold volatile currency, you can trade the BTC or ETH for some stable token (like DAI, synthetix USD if you don't want to rely on fintech-backed tokens. If you are fine with using tokens backed by more credible institutions, you can hold USDC or Gemini USD)
Irrespective, if I want to lock in trading gains I want FIAT. Because that's what I use to buy stuff. Sticking it in some proxy to FIAT is taking counterparty/credit/etc risk for no return.
For now, for lack of competitive alternatives.
I'm not even saying that you will be buying everything with crypto in the coming years. But I do see a future where it can be more secure and more practical to buy some things with crypto: digital goods, concert tickets, service subscriptions... put all of these things together and suddenly we will find ourselves with a crypto wallet making transactions worth a few hundred dollars every month.
(http://www.paulgraham.com/organic.html)
> you can't use this currency for day to day transactions
Not with this attitude, you can't. ;)
What currency is "this"? BTC, ETH, Doge, USDC, DAI?
> incredibly volatile
How volatile is USDC, DAI, GUSD?
> risky to hold significant amounts of it
It's also risky to walk around with significant amounts of cash in the wallet. It doesn't stop people from wanting to carry some money around. And more importantly, the alternative of "going cashless" is a whole other set of systemic risks.
> it might be useful!
The use cases exist already. Micropayments and streaming transfers (as an alternative for subscriptions) using stable currencies are already possible. If you don't care about it, it's a different story.
You could make that argument 10 years ago. It's been plenty long enough to find a use case that isn't breaking laws.
It's impressive... Like clockwork, there will always be one coming to throw the "only use-case is illegal stuff!" line. It's like people can't wait to throw their opinions about a topic while displaying their complete ignorance of it.
Tell me how you can do the use-case for Brave - ie, sharing revenue from the ads with millions of users from anywhere in the world - within the traditional payment networks.
You can't. There is no Paypal or any other financial institution interested in making monthly transactions that can go as low as a few dollar cents. And somehow Brave does it, legally, and it all works out.
Brave collects money from advertisers, Brave sends money to sites and users. Nothing in that requires any sort of blockchain. If the monthly amounts are so small as to make flat transaction costs significant, then the amounts are themselves insignificant. None of this requires a decentralized trustless ledger.
That is the hole in your argument. Imagine the amount of business opportunities if the total cost of a transaction was a fraction of a cent.
> None of this requires a decentralized trustless ledger.
That is an implementation detail. If you find any other method to securely send value across the world for fractions of a cent (even if with intermediaries), I'm all for it.
Anyway, I'd be eager to hear all the amazing achievements from Mr. ohgodplsno. You must be very fun at parties.
Once again, you said it yourself. His accomplishments are "he made money" and "he found ways to give money". Let's not mention the fact that YC has funded many extremely dubious companies and that _giving money isn't work_. Had PG not been here, someone else would have had that money, and would have given it to startups. He's a glorified (quite bad) essayist with money.
Anyway, I've heard lots of PG critics, and some of them I even say I'd admire because they actually did something of interest and according to their values. But you? You haven't shown anything of value that you can do. Let me repeat: I'd love to know more about your accomplishments.
But if anything, you just keep proving that you might just have a talent for egregiously mind numbing, self absorbed essays just like PG
YC is not a miracle product. The man had money and said "Hey I'm going to give it to higher risk companies to get some money back". It takes zero ability. Venture capital has existed for centuries. He's a glorified bank, except my bank doesn't put out pompous essays on their blog at least.
HN, aside from being a great purveyor of laughably inaccurate comments does not nearly have the global impact you think it has. It's the laughing stock of most of the tech internet. But at least sometimes the links posted are good.
They are both ways to dismiss an idea though.
The transition from paper fiat dollars to electronic (credit/debit cards and later NFC apps) for ordinary everyday payments which began in ernest ~1990* is still not complete (30+ years). This is despite the fact that it is only a different method of payment, not a change in monetary system like gold/silver -> fiat was.
Why would anyone expect a transition from fiat (paper and/or electronic) money to crypto to only take 10 years?
* one of the places I worked in high school in 1988 was People's Drug (CVS). While we did have the primitive early electronic swipe terminals for credit cards, they were only used by the cashier for pre-authorizations (replacing the earlier method of calling an 800 number). The pre-auth step could take several minutes. We then had to imprint the card on carbon paper vouchers with the mechanical "click-clack" machines and write down various information on the vouchers with ballpoint pens. Fortunately very few customers used credit cards due to this long tedious process. Payment by check wasn't much faster as we had to write down driver's license number and address on the check by hand.
In 1990 or so the first gas stations started to accept payments at the pump. Before that you had to walk inside and pay with paper money or the old slow mechanical credit card method or checks. For the first few years they only accepted debit cards at the pump, not credit. A few grocery stores started accepting debit cards around the same time as the gas stations.
The question is not whether cryptographically secured algorithmic money will be a part of future monetary systems but who will control the algorithm and/or how will different systems compete with each other.
1)centralized and has all these centralization risks (USDT had frozen 360M on ether alone),
2) crypto-overcallaterized that has less centralization risks but limits in stability.
3) or something else, that usually doesn’t work (terraUSD)
I keep 99% on my money in crypto (plus I recently got pretty much excluded from banking system) so i have my money where my mouth is: DAI. I don’t like everything about it, like lots of USDC is collateral, or ineffective liquidation system, and for that reason I’m participating in StableUnitDAO to build far-better alternative (feel free to join us, i bet all my lifesavings on this project) but for sake of this argument it’s not good fiat vs bad crypto stablecoins. For lots of people it’s strictly opposite.
4.5 years is not a lot of history. I wouldn't fit a basic credit model on that much data.
open disclosure, I know nothing of DAI (indeed little of crypto). But if I want a dollar-like asset, a risk free asset, then "limits in stability" is not compatible with that.
That the important thing is giving people an option, and not just some high-stakes casino.
And then:
> I bet all my lifesavings on this project.
You are not helping me, dude. You are not helping anyone...
> I recently got pretty much excluded from banking system
Does it have anything to do with xSigma, perhaps?
(It's amazing how inconsistent the skeptics are, when they are only trying to score some cheap points against what they don't like)
Most people looking to trade large quantities of crypto have most of their wealth in other assets and expect to be able to convert between them, with the dollar as the default go-between.
This is true of practically every traded asset, including FX. It’s not true of e.g. MGM tokens. But that disparity highlights the difference between crypto and other traded assets.
Also, the fact that people currently use USD as "the default go-between" does not mean that people have to keep using it. Crypto OTC desks already exist.
OTC desks are the correct answer, not “why would you want to” use a dollar. Yes, in a hypothetical world people wouldn’t use dollars as a go between, but instead use [insert theme of the decade]. In reality, we do and will for the foreseeable future.
Also, a crypto OTC desk that doesn’t ask for KYC is by almost every country’s law laundering money. So it doesn’t sidestep the core issue of this post.
If the idea is, like you said, just about being able to convert between different asset classes, we could have OTC desks that would be taking crypto and (after following proper KYC/AML regulations) giving you any of stock/bonds/real estate titles/commodities/etc, and vice-versa, without any need of USD as intermediary.
- Because every USD <-> local currency may have processing fees (credit cards on retail, withdrawal fees for large FX traders)
- Because some banks use the opportunity to slap tons of other fees
By holding crypto, one can legally avoid all of these costs.
It’s almost exactly the use case you want for an exchange (or really in fx a consumer liquidity platform as they aren’t really traditional exchanges).
Is that different in the crypto world? If so why? All of the costs (ie risk management) seem more expensive in crypto than fiat.