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Comment by impulser_ | Hacker News Reader

There are features of cryptocurrencies that would actually be useful in today's financial services.

The main one would be near instant settlement. If I make a transaction on Bitcoin, that transaction is completely settled and verified and approved over a hundred thousands times within an hour.

All parties can trust that the transaction happened and everyone has their money. That's not possible in today's financial systems. We don't even have settlements on weekends.

If you sell a stock on Friday, you aren't going to get your money until Wednesday at the earliest. We don't even have T+1 settlement in the US yet lol.

Why do business days exist in todays financial system. If I transfer money from my brokerage on Friday why can I get access to that money right away instead of waiting over the weekend.

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Then look at _why_ you don't have it in today's financial services. Is it because there is some technology lacking that only blockchain and cryptocurrencies can solve?

No, it's because in the years of financial market experience, people realise the risks don't outweigh the rewards.

Cryptocurrencies and block chain isn't solving a problem, it's just spruiking the pro's side of a pro's and con's decision.

I never said blockchain was a solution. I literally just said there are features of cryptocurrencies that are useful.

Send money across the world in minutes without haveing to pay a corporation is a useful feature that could be adopted by the US financial system.

Instant deposit money into any bank account is a useful feature.

PayPal makes billions offering this service, when it could be a feature of the financial system.

I never said blockchain was a solution. I literally just said there are features of cryptocurrencies that are useful.

There are features of cryptocurrencies that would actually be useful in today's financial services.

The main one would be near instant settlement.

PayPal makes billions offering this service, when it could be a feature of the financial system.

You seem to be doing this weird thing where you're trying to imply cryptocurrency is solving a problem, but still wanting to have take backs when people say "cryptocurrency doesn't solve this problem".

If your position is that instant transfer would be useful, there is no reason we don't have that already at a technical level. It's purely a financial system construct that we wait and have settlement periods for the ability to reverse transactions, have added security, etc.

If your position is that cryptocurrency somehow solves a technical problem, I'd be interested to hear what you think that technical problem is.

Taking Bitcoin as an example...it's an open and free alternative to those private systems.

Sure it has limitations, but the base network layer is there and functioning (with 100% uptime) for anyone to use without needing to ask for permission. That's the value.

Respectfully, I'm not really sure how this is relevant to anything I said?

I think even crypto cryptic should take some time to actually try out on-chain applications. It's really hard to convey just how much more frictionless it is than the normal financial system.

For example the other week I wanted to buy some Series I savings bonds. This involved first freeing up some capital by selling some index funds. I put the order in Friday night and had to wait until Monday morning for the trade to be executed. Then I had to wait until Wednesday for the cash to become available in the brokerage account. I transfer the cash to my checking account, and the ACH doesn't clear until Friday morning. I finally go to make the purchase on Treasury Direct, and it tells me the order won't go through until the next business day (Tuesday because Monday is a holiday). All told it took me 11 days and countless time fumbling around the outdated and laggy web applications of three different financial institutions.

In contrast the other day I unstaked some USDC I had earning yield in Curve, bridged it from Ethereum to the Polygon, converted it to MATIC tokens using Uniswap, then staked those tokens to earn yield in Lido. The entire chain of transactions took no more than 5 minutes. Didn't have to create an account or login into any of those platforms. Everything went through Metamask connected to an ultra secure hardware wallet.

I'd draw the analogy of how a lot of people from the older generation missed the explosion of mobile convenience apps tens years ago. I can recall my parents asking "why do you need an app to make a restaurant reservation, what's the big deal with just calling the restaurant." And I think the point is that consumers often treat frictions as a given until they actually have an experience where those frictions are removed. Then they have a really hard time going back to the old way.

I get instant settlement of cash transfers in my country. No blockchain was required.

Switching to blockchain isn't any easier than simply improving the existing system.

Really? Running open source software "isn't any easier" than convincing your government to overhaul their banking infrastructure?

Yes, making small improvements to the existing system is much easier than getting every single financial institution in your country to switch to a blockchain.

For blockchains to be a useful product, it is not a prerequisite for "every single financial institution in your country" to switch over to using them.

How about when you sell shares? Still a 2 day minimum almost everywhere in the world, takes me about a week from sale to money in my bank account.

Have you ever attempted to send shares overseas? 2 weeks minimum, up to 3 months in some of my cases, and endless paperwork and emails. On blockchains it takes less than a minute.

All of finance should be fast and globally accessible, money is only the most basic use case.

This sounds good until someone makes a mistake and your money is irreversibly gone forever.

This is based on a common misunderstanding of Blockchain. Yes transactions are immutable, but reversing is not necessary. All fiat backed stablecoins run on decentralized infrastructure but they also operate on smart contracts that give the creators the ability to mint and burn coins at will in order to credit fiat deposits and burn tokens for fiat withdrawals. The fact that it runs on an immutable Blockchain just means transactions themselves aren't reversible but it doesn't mean new transactions can't be made to rectify a problem with loss or stolen funds.

Sure, you can make new transactions that do whatever you want, but can you force the recipient (edit: or smart contract author) to create a transaction that returns the tokens or do you have to hope they'll do it on request?

When you give the butcher a hundred bill instead of a ten bill, and he says "no, it was a ten", what's your recourse?

Same onus.

First, you are conflating settlement of securities with money transfers, two different things.

Next, I can transfer money in Europe (SEPA) settling immediately, for a tiny fee ($0.30 or so).

Finally, I've had BTC transactions in the mempool for 16 hours or more, hanging in there without any confirm. They might just drop out, or they might eventually be included in a block - who knows. Not exactly a predictable and reliable money transfer.

> I've had BTC transactions in the mempool for 16 hours or more

...and then what?

This is the first story I've heard like this.

I've experienced this as well. The "and then what" is a big unknown. Is the BTC "gone" forever? Who knows.

>The main one would be near instant settlement.

How is this any different than what PayPal has been offering since 1998?

The main difference is not being PayPal: https://hn.algolia.com/?q=paypal+account

> We don't even have T+1 settlement in the US yet

By default, no. If you’re an idiot and put yourself in a place where you need instantaneous settlement, you can get it. Hilariously, their extravagant cost was apparently too low. Post crypto, they index to crypto trading fees. These are at least quadruple their historic spreads. I don’t believe anyone but the crypto bros demand it in real markets.

You can get if the business offers it. Which they are just a loaning you their money while they wait for your money to settle in their bank account.

If their was no demand, then why does PayPal, Square, and other FinTech companies make billions a year offer you to instant deposit money into your bank account lol.

If the US banking system had instant settlement Venmo, Cash App and other apps wouldn't be in business because you could just send the money through your bank for free instead of using Mastercard or Visa.

> they are just a loaning you their money while they wait for your money to settle in their bank account

Nope. No loans. You can demand physical settlement on stocks, end of day. Naked shorters (MMs) have to do this from time to time. It’s now more expensive because: idiots. Which suits Wall Street just fine.

> why does PayPal, Square, and other FinTech companies make billions a year offer you to instant deposit money into your bank account

They’re lending you money. No “lol” needed. (Am I misinterpreting this?)

> other apps wouldn't be in business because you could just send the money through your bank for free instead of using Mastercard or Visa

Trusted versus untrusted counterparty. I’m not wiring my hotel because I want AmEx behind me.

You wouldn't be wiring your hotel. You would be wiring your hotel's bank.

> You wouldn't be wiring your hotel. You would be wiring your hotel's bank.

Sure. Yes. Fine. A worthless difference. But yet. I won’t wire my hotel’s bank.

I will wire my lawyer or accountant. (Sorry, their banks.) Wires which process instantly and for free. But virtually irreversibly, and so at higher risk for me. (Also, AmEx gives me goodies. Same reason I don’t swipe my debit card.)

I'd wire or send them cryptocurrency of a small deposit — the same one they're putting on your credit card via a hold, if there's any issue.

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