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Comment by superkuh | Hacker News Reader

Actual cryptocurrency does exist and has very little to do with these modern scams (ie, stablecoins, nfts, or anything else centrally controlled). It hasn't been possible to grow a cryptocurrency up from the vulnerable grassroots state since massive public attention and "investors" got involved ~2015. Pretty much every "crypto" project after that date has just been a normal financial scam dressed up in "crypto" clothing.

And these "news" companies, and all the "investors" can't tell the difference, which is the point, I guess. I really hope this is the end of people "investing" in currencies but I doubt it. So the ignorant "investor" opinion that drove speculation up now drives it down... but it has zero impact on me actually using the bitcoin blockchain to pay for things.

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I honestly don’t think actual cryptocurrency’s exist. I was very excited when bitcoin came out in 2008 or so but soon after I thought this is not really useful as a currency

It's globally used for cheap international money transfers. I use litecoin for that.

Litecoin also has some privacy features now too — MWEB (mimblewimble extension blocks) that aggregates all MW tx into a single blob, and hides the amounts transacted. Check it out if you haven’t seen it, it would be good for the network to expand the volume of the anonymity set.

I didn't know, I'll check it out, thanks!

I have used monero plenty of times. Speculators don't like it so it has a relatively stable price, unlike bitcoin.

weirdly it seems dogecoin is the only original cryptocurrency still trying to be a 'currency' if you read the plans https://foundation.dogecoin.com/trailmap/prologue/

It's hard to tell for sure, but the evidence suggests that several tens of millions of people survive on Bitcoin remittances from their family members abroad.

What evidence?

Even if they do, why would the best way to allow efficient international transfers be to invent a whole new financial system? If the money is coming from traditional money (as the workers are basically always paid in traditional money) and will be exchanged into traditional money (as the recipients of the remittances will exchange to to be able to use it) why would we want to add an intermediate crypto step (which is also quite volatile)?

It’s the best way because those in power in the centralized institutions embedded along the existing financial system don’t want to service these “fringe” use cases that to them are too volatile. - that’s one potential answer at least.

> why would the best way to allow efficient international transfers be to invent a whole new financial system?

The risk of running a traditional currency exchange in places where people really need money is high. Some places simply don’t have a money service for this reason.

If you can cut the middle man and transfer money discretely, you may actually be able to send money, as opposed to not.

tl;dr: If the average risk is high enough, the volatility of Bitcoin and risk of getting scammed may actually be lower.

But you still need to have a bitcoin exchange accessible, both to the sender and to the receiver, right? And in the cases of unbanked areas that exchange needs to be physical and able to give out physical cash. It doesn't need to be the same exchange, but both those exchanges would still have the same issues as a traditional exchange, right?

Walk me through a transaction that is better with bitcoin and would not be easier by modifying the current system.

If you postulate modifying the current system, of course you can postulate modifying it to be better than Bitcoin. But Bitcoin isn't hypothetical.

I postulate that modifying the current system is easier than integrating bitcoin/crypto in ways that are actually good, and easier still than replaceing the current system wholesale with crypto.

> modifying the current system is easier than integrating bitcoin/crypto in ways that are actually good

This is true for societies that have good money systems.

And you think that replacing the financial systems of those other societies with a system that no one (especially not the societies themselves) has any control over will be easier than improving their current systems?

> you still need to have a bitcoin exchange accessible, both to the sender and to the receiver, right?

No, you only need an exchange accessible to the sender. The receiver can receive Bitcoins; they don't even need to be online while receiving them, because they can agree on a fixed address.

> in the cases of unbanked areas that exchange needs to be physical and able to give out physical cash

That is the case for traditional currency exchanges.

It is not the case for Bitcoin.

The missing part that you might object to is of course: If the receiver eventually wants to convert their Bitcoins into some other currency (USD, or some local, not hyper-inflated currency), they do need some kind of exchange.

But they can choose to wait until they have access, they can send Bitcoins themselves, and they can meet with people to exchange Bitcoins with the risk that involves. None of these scenarios requires a traditional currency exchange to be available in their area. Running such a currency exchange is presumably too risky / not worth it. But being an individual Bitcoin trader might, because individuals are exposed to and assess different risks.

> No, you only need an exchange accessible to the sender.

I said in my original comment that the recipient will need to exchange it to be able use the funds. Unless there has been a huge upswing in bitcoin usage for payments in the areas of the world remittances typically flow to that will be true.

> That is the case for traditional currency exchanges. It is not the case for Bitcoin.

I said unbanked since many remittances are sent by and received by people who are unbanked. How do you exchange something from/to bitcoin if you have no bank account (which usually means no way to pay or receive traditional money online) and there is no physical exchange?

> meet with people to exchange Bitcoins with the risk that involves

That's literally a physical exchange, regardless of if it's just one dude or if it's a company with a physical presence.

> the recipient will need to exchange it to be able use the funds

Eventually, undoubtedly.

Given the choice between non-existent traditional currency exchanges, and some sketchy guy your friend knows who will exchange your Bitcoins into iPhones or USD, Bitcoin presents a solution to a problem that isn't otherwise solved. Bitcoin, being risky and decentralised, allows for being traded in places where traditional currency exchanges will not go.

> How do you exchange something from/to bitcoin if you have no bank account

Using cash, for example.

If you've tried to buy Bitcoin from your bank account, you will have experienced that it is, due to KYC rules, often more difficult than when you exchange them for cash.

The interface between Bitcoin and existing money systems is at conflict in our society.

In societies that don't have well-functional money systems, less so.

Bitcoining the unbanked is easier than bitcoining the banked. :-)

> Using cash, for example.

We are literally back to what I said a few comments ago:

> And in the cases of unbanked areas that exchange needs to be physical and able to give out physical cash. It doesn't need to be the same exchange, but both those exchanges would still have the same issues as a traditional exchange, right?

So again: Why would a physical bitcoin exchange be easier to operate than a physical traditional exchange?

If your reason is laws then I'm guessing you'd also need to explain why widespread bitcoin usage wouldn't be subject to those laws too.

I'm not a believer in crypto by any means, but I think there's some fundamental differences between physical money, conventional currency, and bitcoins.

- physical money (eg. precious metals, physical cash) is hard to transfer, so that's out.

- conventional currency requires recognition from a legal system; anyone can open an illicit "exchange" claiming to trade foreign currencies, and record a bunch of numbers in a spreadsheet, in the same way I can claim to have paid you US$100000 through this HN comment. But nobody takes it seriously unless the transfer is recognized as legitimate by some legal body. And if local laws prohibit or severely limit the operation of such exchanges, it just cannot exist.

- Bitcoin's legitimacy is not based on recognition by legal systems, but rather a common, mutual recognition of a blockchain protocol. As long as there's just one shady dealer who accepts bitcoins in exchange for physical money (gold, precious goods, physical local currency), then this is an "exchange". It's not an exchange in the usual sense, but it doesn't really matter.

The crucial point is that the "protocol" if you will of conventional (non-physical) currency depends on some sort of legal system recognizing the currency. We're talking about wire transfers, cheques, etc., not paper money (which in this context is considered physical). The reason I can instruct my bank to transfer money from my bank account to your bank account is because of a bunch of legal rules and processes that ensure that it happens properly. If either party is in a place where such transactions are prohibited by the law, it is fundamentally impossible to do such a transfer because such transfers require recognition by the legal system.

Your confusion might stem from mixing up two concepts -- (A). the general duty to follow the law, and (B). the fact that conventional currencies depend on the law to operate. The GP's friend might be breaking the law no matter what kind of currency they are using, this is consideration (A). This is the same. But Bitcoin doesn't have problem (B).

The consideration of B still comes in when the bitcoin needs to be exchanged for actual goods or services though, where the payment (at least in 99.99% of cases) needs to be in traditional currencies. So bitcoin has not really removed a problem, bitcoin has just moved it. My argument is at least somewhat under the assumption that the trades/exchanges need to be legal to be mainstream. If you assume only illegal trades then of course it easier to postulate a system that works since it does not need to consider how it would work internationally or within a state.

I don't think I'm confused (but then again confused people usually think they are not), but I do think that modifying the traditional system is far more reasonable and doable than moving to the alternative crypto/blockchain system. Considering all the money and manpower thrown behind crypto I'd say it's not unreasonable to think that a better system building on the traditional finance system could be built.

The point is, as it didn't seem to get across in my previous comment, is that Bitcoin doesn't suffer (as much) from consideration B because any shady dealer can act as an "exchange", whereas traditional non-physical finance requires a chain of somewhat reputable institutions to be the middle person.

You can't "fix" traditional finance system if the government of one party makes it illegal to do trades (unless you're thinking about plotting a revolution in another country).

A colleague who sends money to his family in a third world country with unstable currency explained to me why he uses crypto to do so. Even if he uses dollars to initiate the transfer here in the US, his family is going to receive it in the local currency. But that would incur losses as the official exchange rate is held artificially low. Also that currency is losing value very fast due to high inflation (much higher than the US in fact). So it is much better for his family to have their savings in Bitcoin. If there was a way to transmit gold easily avoiding government rules, he could have done that too but sending gold to his country is impossible.

This gets to the heart of another common refrain on HN that Bitcoin is great to facilitate illegal transactions. Well guess what, if a shitty government in some corner of the world is going to make it difficult for its citizens to live a normal peaceful life by devaluing currency and imposing artificial barriers to save meaningfully, then I am rooting for Bitcoin to help people evade that tyranny.

What country is that?

Stellar Lumens are actually more suited for Remittances. It’s one of things it aims to provide.

https://stellar.org/learn/stellar-for-remittances?locale=en

Sure but why would anyone want Jed’s PoS token in the first place? They just printed it and gave it away to people on Facebook when launched. Like all PoS tokens, they have no value and cannot really be used as a universal medium of exchange between fiat; they are best to be used as the antispam and fee mechanism, to conserve and meter precious eternally recorded storage.

> Like all PoS tokens, they have no value

Then what's special about PoW tokens that give them value?

That we had to fight for them be created. Eternal hash war. We didn’t wave a pen or type a keystroke to magic them into existence.

Don't flatter yourself: wasting electricity running sha256 a billion times is not "fighting" for anything.

Better to spill the electrons of the enemy than their blood. We can only hope that future warfare is computational, rather than kinetic.

> We can only hope that future warfare is computational, rather than kinetic

Why would this hypothetical enemy agree to participate? Even if they wanted coins (instead of say, land, subjects, or natural resources), it's cheaper and easier to steal or extort them from you than mine them.

If this was true, in it was easier to steal or extort; the miners would be stealing or extorting. Such is the nature of the Bitcoin game.

There are plenty of reasons not to steal and extort, like personal ethics or a fear of getting caught. If it were easier to mine than steal or extort, gangs would be running mining operations instead of wasting their time with theft and ransomware. A hostile cyber army would need mining to be twice as effective at raising funds as theft or ransomware, since stealing 1 BTC drains your reserves and adds to theirs, whereas mining only adds to theirs.

> Such is the nature of the Bitcoin game.

I assume from this sentence in your comment and from your bio ("Character account — I only play a Bitcoin maximalist on the internet") that this is just performance art/trolling for you, so I'll wrap up my end of the discussion here.

And I’ll leave you with “yes, the game theory intensifies”. Thank you for playing.

Yea agreed. I’m definitely a bitcoin maximalist moreso now. I mean if I were to receive a remittance I rather receive bitcoin than lumens.

Interesting with bitcoin though, when I first heard of it, I remember hearing they use that computational power to help (eg. Hospitals) run various computational heavy simulations in exchange for btc. Kind of like how Seti@home works. Always wondered where I heard that from. Unfortunately it’s just wasting energy rehashing sha256 a billion times :$

“Useful” PoW never really took off (primecoin and riecoin were prime number discovery POW functions that did not sustain long term value).

it’s possible that general purpose and usable proof of work system might exist but I dont think we have found it.

I have always said knowledge of the silicon capability of SHA256 and the integrity of ECDSA is itself of immense value.

I’m definitely not super knowledgeable in cryptography, from the outside, the integrity of BTC is what makes me a bitcoin maximalist when it comes to Crypto lol.

However, the high energy consumption as the tradeoff is definitely like the elephant in the room.

One way to think of it as energy spend on activism for integrity. Many governments, tyrants and thieves would stop at nothing to corrupt the integrity of the chain. By sacrificing energy we make it very difficult for them to do so. It is not the energy or work itself that is valuable, but the requirement that an adversary outwork in order to inflict a negative outcome.

Ah, so not because of demand, but because of the amount of work that went into them?

This is the labor theory of value, originally espoused by Marx. I'm under the impression that most bitcoin fans consider themselves libertarians. It's interesting to see that combined with Marxist economics.

Not quite :-) I believe it is part of the equation. I don’t think it is the nature that work occurred applies value — rather the demand for something that someone has sacrificed something for exists — in art, generally a work that has sacrificed time to create something aesthetic has a demand that provides its value. It’s value is subjective to the buyer, however the astute buyer is more likely to buy the 1000 hour work over the mass produced out of nothing thing.

So, you're saying PoW coins have no inherent value, only the value we bestow on them? Your reasoning is circular

I don’t know if we have a way or model of calculating it accurately yet. It exists.

The actual LTV argues that any increase in value comes from the labor, not that the labor inherently has value.

People I know send money to their families using Western Union or PayPal. It's often completely free to send money using those systems.

I guess you don't know anybody whose families are in Cuba, Iran, or Venezuela.

Sending money to those countries is against US sanctions. So now we're back to the point a lot of cryptocurrency skeptics say. It's only useful for illegal activities.

It's not illegal if you're not in the US, which 95% of people aren't. And there's an exemption in the sanctions for family remittances, so it's not illegal then either.

Not really. PayPal I believe it's ~3% fees + spread + taxes. That's not free. I just sent some money to myself (not via Paypal) effective fee was 2,38% and I will have to wait 3 days. Crypto for a time was a good exchange medium, low fees, almost instant, no KYC, less bureaucracy. But I believe those days are counted because for good and bad it's now regulated and was reduced to speculative virtual assets.

Maybe PayPal subsidizes some users to make it "free" in exchange for gaining control of their finances. They're notorious for stealing users' entire account balances and justifying it with unsubstantiated accusations of fraud, so gaining control of more users' finances is very profitable for them.

Without fees generally means a bad spread. In the end is the same, you don't pay a fee but will lose on the exchange rate.

Where is this evidence? People like to mention it, but no, there is no such group in the world of a meaningful size to depend on bitcoin for international money transfers.

"Actual cryptocurrency does exist"

okay, i'll bite, what's it called

GNU Taler? https://taler.net/en/

- Actually designed for payments

- Doesn't use silly blockchain token nonsense

- Allows for collecting taxes easily

> Doesn't use silly blockchain token nonsense

(suddenly pays attention)

Is. Is there an electricity downside, like there is with blerkchain?

There are too many good reasons why money is centralised and you are an outlier if you find good reasons to pay for anything with bitcoins. That's the truth.

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