Hacker News Reader

Comment by lkrubner | Hacker News Reader

You call this "censorship-resistance" but it seems to be "law-resistance." This is a point that critics of crypto have been making for awhile: crypto's only use-case seems to be to avoid the law. At least in the USA, the courts have typically granted wide latitude to technologies that have a mix of both legal and illegal uses, but crypto seems to only have illegal uses, so it looks more and more like one of those technologies where the courts often allow strict regulation or outright bans. Especially in the democratic nations, where the laws have the legitimacy granted by popular representation in the political process, there is no reason to tolerate a technology if that technology exists solely to evade the law -- there must be some clear legal purpose for the technology.

View on HN

More directly, "censorship-resistence" == "criminal enabling".

In practice the primary use cases for Crypto Currency are:

1. Running scams (see: NFTs, most exchanges, etc...)

2. Speculation (HODL)

3. Laundering dirty money

4. Buying contraband (drugs, guns, etc...)

5. Tax evasion

6. Extortion payments (crypto-locking viruses, etc...)

7. 419 scam payments

8. There was once a way to pay for burritos from a specific restaurant using Bitcoin.

9. Everything else

It really shouldn't be a surprise that lawmakers have taken a dim view of the subject. That said, there are a handful of legitimate uses for cryptocurrency, but it's hard not to think that we could find better alternatives for those use cases, especially given the disastrous environmental impact of many of these crypto schemes.

Personally I have been using Bitcoin for legal & legit use cases for years. It is primarily a hobby, but personally I believe in the long run it will also benefit me financially. As a personal savings and checking account it works, though the volatility for many is understandably hard to bear.

For online purchases in my country Bitcoin works very nicely. Also for travel related purchases. I would estimate that maybe 60-70% of my purchases are in Bitcoin these days.

I would be fascinated to read the details about this kind of lifestyle. Buying groceries, plane tickets, concert tickets, etc... with Bitcoin.

You can already do that, but with other tokens. Maybe you should read more about other blockchains other than bitcoin.

It's life as usual - the biggest mainstream webshops here accept Bitcoin. I can buy anything I want that way - groceries, tech gadgets, kitchen machinery, garden equipment, whatever - with same-day or next-day delivery. The mainstream concert ticket sellers also accept BTC here. Not sure about plane travel, but I can use BTC to buy train tickets.

If I can't use Bitcoin at a store directly, I can simply take out some cash at a nearby Bitcoin ATM - nowadays there's more BTC ATMs than my bank's ATMs.

Groceries I don't buy with BTC, because it is not possible. But basically all household items, thanks to several big online retailers accepting BTC in my country. Also all travel related stuff, hotels, flights, etc.

I very rarely use BTC in brick-n-mortar setups, in the last year once in a restaurant where I had a bigger bill and they had recently started accepting it - went actually very fluently.

It is not really that much different lifestyle to any normal life, I just pay with BTC where it works. And these days it works very fluently in online setups in my experience.

The lifestyles not that different, except the relative value of the currency you use on apparently a daily basis has dropped 52% this year? Do you hold bitcoin, or just convert whatever your employer pays you in fiat into btc every two weeks? With a limited number of potential retailers, how do you comparison shop? How do retailers handle pricing and the volatility of bitcoin?

I just don't see how this is at all possible. Like, who are you paying bitcoin to for flights?

But what are the advantages of BTC in these cases? Transaction fees + Processing Times are so high that make it uninteresting for many people.

It feels like translating the real value of something (say $5) to something else (e.g., 0.01 BTC) with every purchase. It's just overhead at this point.

With Bitcoin directly? You'll be quite limited (though not impossible). If you are looking for non-KYC off-ramps, there are many; especially if you are living in a country where cash is widely accepted. P2P Bitcoin trading is quite widespread, though it requires some due diligence to find reasonable and trustworthy people to exchange with.

For most of your online purchases, you can go with a gift-card; though it's an annoyance compared to just having one single card with rewards and cashback.

I read this and think ".. and a16z is doubling, even tripling down on cryptocurrency?" Do they not have the self/brand awareness that they are over-indexing on this area? It doesn't deserve zero funding, but maybe not launching fund over fund dedicated to it? Did a16z jump the shark?

Hacker news is a bubble of crypto haters, everything positive gets downvoted here.

There are hundreds of apps in DeFi, was 250B invested, over 10MM paid per day just in transaction fees, and 20k developers. The amount of users is growing as fast as the internet was during the 90s (we're equivalent to 1998 now) and almost every usage graph is up and to the right exponentially. Can see many of the metrics at https://defillama.com and https://link.medium.com/readqva7brb

Ethereum by the metrics looks like the greatest startup investment of all time. It was also the quickest to reach $500B market cap. But alas many are going to miss out because they miss the forest for the trees.

A16Z is definitely making the right moves based on the metrics. HN folk are blinded by emotions, and not bothering to do the research. The person you're responding to doesn't even know DeFi.

If you want to understand what DeFi is check my post history. I often talk about it yet every crypto thread is always the same dumb "only criminals use it" comments voted to the top.

I'm not a big crypto person. But I do think that it does one thing well, it enables the transmission of value digitally. The same way I can transmit a file to you over the internet, I can now transmit a crypto coin of value.

Now, personally I don't have a lot of issues with the prevailing system, venmo and similar apps. I don't have any issues buying what I need online since credit cards work and are widely available.

I suppose crypto could be useful for industries that are legal, but banks do not like engaging with. Like adult entertainment.

I can Paypal and Apple Pay and ACH you already. For likely much cheaper.

Crypto adds nothing.

But then how am I supposed to commit crimes!?

There are other ways to do crimes with USD.

At least with USD, when you gotta do it, you can do it.

https://www.youtube.com/watch?v=7HrmD_vIMIk

Not sure about "likely much cheaper". Those methods are either funded by VC money (for the case of early startups) or in the case of bigger companies, their other products that monetize you in other ways.

BTC is expensive to transfer, but other options like LTC are not. It takes a small fraction of a penny (in USD value).

The thing is, crypto coins tend to be terrible ways to transmit value. They usually have massive overhead compared to pretty much every other system and are often quite slow.

Anybody who has tried to pay for something directly with Bitcoin will see the problem instantly. The mining fee is a significant percentage of your transfer unless you're sending literally thousands of dollars worth of Bitcoin and it typically takes 4-24 hours for the transaction to clear unless you're willing to increase the transaction fee significantly.

Crypto currencies are so bad at this that PayPal is a better way to transfer money. Let that sink in.

I have been using Bitcoin for various online purchases for many years. For me it always works fluently. In fact I have had more cumbersome experiences with fiat payments.

Not that I have much problems with any payment methods. I just prefer to hold Bitcoin and use it as my primary currency. I'm willing to willing to spend some extra effort to pay with it, but if it gets too difficult I'll resort to fiat.

Comparing a Bitcoin transaction to a PayPal transactions is comparing Apples to Elephants. They have different value proposition. A more fair comparison is comparing a PayPal transaction to a Coinbase one. In which case they are the same (haven't used PayPal for a while, so not sure if they are charging fees for P2P transfers).

what value are you talking about? currency themselves have no inherent value and are only backed by the confidence that people have of the issuer.

The value is whatever you may exchange the crypto for. Much in the same way that the value of a dollar is what it buys you.

Censorship-resistance == law-resistance. Rules for censoring are imposed by state entities or by private entities enforcing state-defined rules

When the social contract is so deteriorated and government so corrupt. Is that a bad thing?

Would you make this same argument regarding, for example, Tor? Why or why not?

To me it's the same thing. "Law resistance" is a prerequisite for censorship resistance, because governments are often the ones doing the censoring.

But originally, crypto was built with the expectation of being illegal and yes, to facilitate only illegal transactions, that live and die illegal with no communication with "white" money. It's only in the recent few years - to attract normies' money - it started to make weird detours into the legal space.

I think there is no need mixing the two. Use normal banking, companies and taxable jurisdictions for white money - everyone needs some white income to explain what they are doing - and crypto for the rest.

Crypto people i know (the real ones), want it illegal, because then their work has fewest impediments - it becomes nothing but coding in R, Solidity, some Python, and occasional visits to a guy next block for a pack of cash. No paperwork.

Sounds like bullshit. Yes there have been criminals using Bitcoin since the early days. But there have been always a lot of people promoting it for normal merchants. There are lots of shops accepting Bitcoin these days, depending where you live though.

The only 'legal' purpose is speculation around 'decentralized innovation'. It is legal to speculate that Bitcoin or NFTs may be more useful someday, therefore more in demand. Obviously that makes it no different than beanie babies, but buying beanie babies is legal and a lot of people did it.

I think a very legitimate, legal purpose of the technology is for the implementation of financial systems. How many billions of dollars of computers, networks, mainframes, and engineers are dedicate to running the financial system? Distributed ledgers are basically an abstraction for implementing financial systems. Think about them as C for the financial system, where the current financial system is assembly. The doesn't mean public, decentralized blockchains are the answer the any particular problem, but blockchain technology can be useful even if they exist mostly as private chains run by financial institutions.

Reply on news.ycombinator.com