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Comment by colesantiago | Hacker News Reader

It is a massive mistake that Stripe is offering anything in the crypto space as everyone and Stripe knows it is full of fraud, money laundering, scams and it is completely unregulated.

I look forward to the day that Stripe will get investigated for all of the above with this and end up like Paypal, eventually freezing or banning these accounts.

Crypto does not offer anything new at all.

EDIT: It seems Stripe and Crypto apologists have downvoted & flagged my comment since Stripe is somehow a HN / YC darling that is immune from valid criticism even if they venture into crypto scamming, with no usecase that is better than the current financial system.

Crypto is only used for speculating and will eventually collapse under regulation.

@karaterobot

Stripe is no exception here for regulation and will comply by banning accounts if these 'remittances' are fraudulent as the majority of them most likely are.

Even in El Salvador, the country that has adopted bitcoin, merchants aren't using it for payments because they lose money extremely quickly due to volatility, so there isn't a usecase for cryptocurrencies or blockchain at all.

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Crypto is very popular among people working in rich countries who send remittances back to their families in other countries. That's a legitimate use, a very popular use, and is obviously what Stripe is going for here.

Once the remittance is received, how is it then exchanged for the currency the recipient needs?

From my own experience, you can use a very popular exchange that has a huge P2P marketplace, precisely for this.

What is this marketplace named?

It's Binance P2P. You can transfer crypto directly into local currency. It uses local residents as liquidity providers.

Yep that's it. I just didn't want it to look like I was shilling something in the comments :)

Locally, Binance P2P is used a lot for remittances, and plenty of establishments use it as a way to receive payments as well. I've seen the Binance QR code in a bunch of restaurants and autoparts stores, for example

I used it earlier this year to send money to my sister in Argentina. Super fast, no fuss.

Just to balance this, Bisq is a decentralized alternative P2P marketplace (based on Bitcoin mainly) which will keep working even in adverse conditions, where a centralized company like Binance will generally restrict/stop their activity if a government shows their teeth.

Here's a pretty in-depth article about how things work in Argentina. I know nothing other than what's in the article, but apparently, many of the local black market exchanges ("cuevas") use cryptocurrency internally (instead of carrying stacks of US dollars around on motorcycles) and will exchange crypto for cash for their customers.

https://www.freethink.com/technology/crypto-argentina-black-...

I'm not sure where you got this info from but my relatives in the US sends money via Xoom. Nobody's touching crypto.

TransferWise, now just Wise works awesome too.

I'm using Binance P2P. By far the cheapest way to transfer funds from rich to poor countries.

Have used Wise in the past because it's very convenient to use but they are just extremely expensive compared to P2P crypto.

Also they don't support many countries or only support one direction.

Not a crypto bro and very critical of crypto fads normally but this use case actually works for a regular person like me.

Going to try Xoom though and check their rates. Hadn't heard of them.

I think this is a good place to check the rates: https://www.xoom.com/philippines/send-money

The reason that Binance is able to charge less is because they're not really regulated and they're able to pass that risk directly on to you.

Yes but my relatives are old-ish and not the tech type.

Not only much more expensive and slower than crypto, but also not permissionless. I had funds frozen up for before because of an identity/location verification misunderstanding. It was all sorted out through customer support, but it took a week. Closed my account after that because I don't want to take that risk, I just want to transfer funds without middleman hassle.

Great as long as it works for you. Just wait until you yourself are stuck in a situation such as "Google locked my account and I can't reach support", "Stripe banned my business for no good reason" or "Wise froze my funds" - you literally see these threads on HN every week. Crypto suddenly starts to look a lot more appealing once you've experienced these situations yourself.

Coinbase closed their remittance project due to absolutely minuscule usage. Like a couple thousand of dollars a month or value being transferred.

If the biggest player in the crypto space can’t get enough users, I’m doubting any real adoption.

Let's not mistake Coinbase's ability to execute for a lack of user interest. If anything, Coinbase has plenty of failed projects under their belt (and while they are certainly popular in the US, they are not the 'biggest player' by any measure).

Isn't that what Western Union is doing, rather well and gobally?

I don't know if this product will successfully compete with Western Union.

> EDIT: It seems Stripe and Crypto apologists have downvoted & flagged my comment since Stripe is somehow a HN / YC darling that is immune from valid criticism even if they venture into crypto scamming, with no usecase that is better than the current financial system.

> It is a massive mistake that Stripe is offering anything in the crypto space as everyone and Stripe knows it is full of fraud, money laundering, scams and it is completely unregulated.

The argument is engaging in "everything is X" talk by blanketing an entire space as only engaging in negative impacts.

It should be noted that the percentage of crypto used in illicit activity is significantly less than 1%, compared to the estimated 2-5% of global GDP that is involved in money laundering alone within traditional financial ecosystems.

https://blog.chainalysis.com/reports/2022-crypto-crime-repor...

https://blog.chainalysis.com/wp-content/uploads/2022/01/char...

https://crsreports.congress.gov/product/pdf/IF/IF10873/3 (page 1)

Using the same argument, it could be said that cash should be banned because its private & semi-anonymous nature allows for its use in transactions for gambling, drug use, child porngraphy, assasinations, & slave trafficking.

At least cash is accepted everywhere in domestic countries, and even it's online it's card. Crypto isn't widely accepted or even used as a form of payment in the real world and has no useful legitimate usecase. We don't need more unregulated tokens that have no intrinsic value other than speculation, gambling and fraud.

Sure we have issues in the current financial system, but augmenting (and dare I say) replacing it with an entirely worse unregulated system which loses people money through scams, increases and emboldens ransomware and exposes people to huge volatility is not the way to go.

> The argument is engaging in "everything is X" talk by blanketing an entire space as only engaging in negative impacts.

The negative impacts are FAR greater than the positive impacts of crypto.

Cash is not accepted everywhere. Lots of countries are nearly cashless, with small merchants already unable to accept cash.

> Using the same argument, it could be said that cash should be banned because its private & semi-anonymous nature allows for its use in transactions for gambling, drug use, child porngraphy, assasinations, & slave trafficking.

If we somehow magically had come up with a cashless system first, and cash instead was introduced now, I am quite sure that yes there would be calls to ban it for those reasons. It is however an ancient legacy system that's deeply entrenched in our societies, so we're living with it for now, although perhaps not forever.

this is a real lazy take mate. i mean, i agree that the crypto industry is plauged by fraud and posers, but to say that blockchain offers nothing new is just showing ignorance of the technology.

i recommend reading the original bitcoin whitepaper to understand what is new: https://bitcoin.org/en/bitcoin-paper

What can crypto and blockchain legitimately offer that is better than what the current financial system offers?

The Bitcoin whitepaper outlines a P2P payments system, today it isn't used as such, rather a store of value, not even Stripe is using Bitcoin for payments at all.

So what use are these cryptocurrencies for, if not for scams and fraud?

From the article:

> Speed is one advantage of crypto payouts. Reach is another. Millions of talented freelancers live in countries where it’s hard, if not impossible, to open a local bank account. For example, a majority of the people in Djibouti, El Salvador, and Bhutan don't have bank accounts. With Stripe, freelancers in those countries are now able to receive funds via USDC in minutes. With the addition of USDC, Stripe cross-border payouts extend to more than 4.4 billion people in more than 110 countries—a majority of the world’s population.

USDC is a completely centralised 'stablecoin' and has a blacklist function which means they can seize funds of people who they don't like. USDC again is not even regulated as I said with no proof backing this other than 'attestations' which is not a full audit of reserves.

How is this decentralised money that was promised by crypto and blockchain? You may very well use Wise, Moneygram and other regulated alternatives which works better, is also relatively faster and is more stable and widely accepted than these USDC tokens.

USDC can be sent peer to peer with low fees. And I would be extremely surprised if Wise or Moneygram are cheaper or faster.

Does it adhere to KYC and AML at exchanges and other fiat ramps? I think it’s a clever backdoor hack to instant cross border value movement without traditional banking (Wise and company), but the reach of government is always there.

Curious what US Treasury, FinCEN, OFAC, etcs take on this is. The plumbing is easy, it’s the laws, regulation, and compliance that are the work.

High level, Stripe is reaching for growth when there isn’t much innovation to be had in financial utilities besides reducing waste and inefficiencies by cannibalizing your business or someone else’s while the industry continues to commodify basic services like payments, cross border transfers, and deposit accounts (lending and data is the last bastion of profits for financial services).

https://www.pymnts.com/news/fintech-investments/2022/stripe-...

This is partly incorrect -- USDC is regulated and audited. You're confusing it with Tether

https://www.circle.com/blog/how-to-build-trust-usdc-audits-a...

No. I am talking about all stabletokens including USDC.

I don't see any fully independent verifiable real audit of their entire reserves anywhere with USDC, and a lousy blogpost by Circle isn't strong enough evidence and no substitute of this.

I'm one of those, work remote from argentine is simply pay 90 tax becouse of a broken conversion rate technically, becouse you can pay 15 income tax and don't but have a company and return assets like bonds, is a mess . this is really useful and I trust stripe more than the competition

What does “pay 90 tax” mean? Surely you don’t mean paying a 90% tax rate?!

Probably an exaggeration, but caveats apply.

Say, you get paid in USD.

    You got paid: 10000 USD

    Income tax: 15%

    Government exchange rate: 130 ARS per 1 USD
    Unofficial exchange rate: 330 ARS per 1 USD

Now, if you do things like daddy government says and use the official rate, you end up with this amount:

    10000 USD * 130 = 1300000 ARS  and then  1300000 * (1 - 0.15) = 1105000

But if you do what's good for you and still pay taxes to not go to jail:

    10000 USD * 330 = 3300000 ARS  and then  3300000 * (1 - 0.15) = 2805000

Now consider your "effective" tax rate:

    You got paid: 3300000 ARS (fair market value)

    Government rate: (3300000 - 1105000) / 3300000 = 0.66
    Unofficial rate: (3300000 - 2805000) / 3300000 = 0.15

Note that it's before you consider future devaluation of peso. For tax purposes you can say you received 3.3M ARS, but just keep it as 10k USD. Then your effective "government cut" rate over the years could very well be in 90% territory if you do the stupid thing and hold pesos.

> For example, a majority of the people in Djibouti, El Salvador, and Bhutan don't have bank accounts

> With Stripe, freelancers in those countries are now able to receive funds via USDC

That is just people opening bank accounts, but with extra steps.

No you just use any number of mobile crypto wallets, many of which are open source. You don’t need any permission to receive USDC

absolute control of your own money. borderless currency. distributed applications/smart contracts outside the reach of any state. these are my personal faves

With Stripe and USDC you don't have control of your money at all and smart contracts don't work and are broken causing people to lose money in the millions.

It is a fragile, brittle system that is highly likely to fail, you only need to look here to see why. [0]

[0] https://web3isgoinggreat.com/

> smart contracts don't work and are broken

This absolute statement is asserting that ALL smart contracts don't work. There is overwhelming evidence of some smart contracts working just fine, and of course a lot of smart contracts also have problems. It is wild to just drop all of the nuance of such a complicated issue. What new technology has been flawless without any failures along the way?

This 'flawless argument' is an irrelevant statement, we have given blockchain technologies over 15 years to improve, but the scams have been getting bigger in an unregulated environment.

I also don't recall any regulated bank accounts getting automatically drained or losing everybody's money due to a single scammer or a bad actor.

One single error or exploit in these smart contracts results in millions being drained. This happens on a weekly basis with a giant lack of consumer protection, unaccountability or any chance of getting your money back (which that is a huge unsolved problem). So yes, these smart contracts do not work.

It's a system designed to fail with thousands of disasters, rug pulls and scams just waiting to happen.

This is what the arguments you are making sound like to me:

One single failure on an airplane can kill hundreds of people, even a single line of code could crash several planes. There are just thousands of accidents waiting to happen. Planes do not work. They have had a hundred years to make planes perfectly safe. Every year more and more people fly. It is a system designed to fail.

The main difference you're not getting is that there is accountability and regulations for when these issues happen, Crypto has none of these and it has been over 15 years in its existence.

Crypto is a lawless 'decentralised' wild west that has zero accountability for when anyone loses their money in smart contract hacks, scams, wallet draining and rugpulls, in all cases your money is gone with no refunds or consumer protection.

So yes, it is a system designed to fail.

Do you honestly think there is zero accountability or regulations for all of crypto? Would not a single fee levied towards a crypto company for violation of a law invalidate the point you are trying to make?

I would agree with you that more regulation is needed, but to keep saying there is zero regulation is either ignorant or disingenuous. Regulation can also coexist with something that is decentralized and is not obviously adversarial, e.g. we have regulations for gold markets to prevent scams, etc.

It wouldn't invalidate anything because I can list countless examples of scams, hacks, rugpulls, wallet drainings, fraud, ransomware enablement that the crypto space is responsible for. Any example of the opposite doesn't change the fact that the negative aspects are significantly greater than whatever source you can provide.

The list of course is too large for this comment section so somebody has already done parts of the work. [0]

Any user would be very lucky to get their money back in these situations, but like I said, no refunds or consumer protection in the crypto space when you lose your money.

---

EDIT: So? My point still stands about accountability, regulations or not, even Paypal knows the buying and selling of crypto assets is completely unregulated after 15 years.

The main point of this thread is that there is more evidence of broken smart contracts causing more damage to consumers and there is nobody to hold scammers accountable when a rugpull happens.

Because nobody is going to get their money back for them.

How is crypto, this brittle, 'decentralised' broken and unregulated system going to augment or replace the current financial system?

[0] https://web3isgoinggreat.com/

You have said several times, "there is no regulation in cryto". If you know that this statement is not true, then why do you say it? Just say that there are many instances where lack of regulation has lead to bad results. I agree with that.

I think a better analogy is the internet. Or phones. By any measure, either of those technologies have unleashed a torrent of scams and fraud, especially in the areas where they are largely unregulated.

Of course, I’d say the benefits of cryptocurrencies are far smaller than the benefits of the internet (it’s pretty hard to compete with connecting almost the entire world into a single instant global network for the first time). But some benefits do exist, and I feel like you’re being wilfully blind if you disagree with that.

Of course, you might feel that the downsides (massively) outweigh the upsides. And that’s fine. Others will disagree.

One thing I think we can all agree on is that crypto is at least decentralized and permissionless enough to not go away any time soon, no matter who wants it gone.

Those things are neither smart nor contracts.

They are just pieces of code in esoteric programming languages running on world's slowest VMs. They encode primitive trivial rulesets and are still so complex that their own authors fail to see trivial errors even after multiple audits.

An actual real world contract such as buying or selling property (which I've done several times now) would be a beast of such byzantine proportions that it would take until the heat death of the universe to write and audit it. And it would still be unenforceable after that.

You can immediately exchange your USDC payment for some other token that retains full control, via DeFi contracts like Uniswap.

transparent algorithmic governance.

I think it is easy to dismiss as a value proposition. In the end, the future will show, so we probably should not spend too much time speculating.

> What can crypto and blockchain legitimately offer that is better than what the current financial system offers?

Cancellation resistance. Protection from oppressive governments trying to squash freedom. Protection from retroactive laws targeting previously legal transactions. Asset protection.

And look I agree with you. And everything I posted above carries a huge cost given the volatility of most cryptocurrencies, but unfortunately we live in times where if you truly care about freedom from tyranny, your behaviour is going to overlap heavily with criminal behaviour.

I don't think evading sanction laws and taxes with crypto is a great use case and Stripe will be investigated and ordered to ban accounts doing this behaviour.

So you're back to the current regulated system that works, is stable and is the best we have.

>What can crypto and blockchain legitimately offer that is better than what the current financial system offers?

They don't deny the existence of negative rates.

People seem to forget that 6 trillion dollars of liquidity was injected into the US monetary supply in 2020 (close to a 50% increase in the total USD monetary supply). The 2008 financial bailout popularized by "The Big Short" pales in comparison to what happened in 2020. While there are situations where creating liquidity via monetary policy is necessary - it sucks that it directly impacts the savings and wages of everyday people through inflation.

Total bitcoinization would be dystopian but as a lifeboat against the inexorable spread of the negative side effects of inflation and the skyrocketing price of assets due to the cantillon effect - it is remarkably effective.

Hate to be a parrot but... "zoom out".

Can you find any article anywhere which quantifies the magnitude of the Cantillon effect because I certainly have looked and found absolutely nothing.

Crypto is hardly inflation-proof, with major cryptos having fallen 80% or more in the last 6 months putting it on pace with the Lira - if you then adjust it for inflation you lose another 10%. It's somehow managed to do all that in the single most inflationary period in 50+ years. I was pretty sure we'd given up on that silly narrative. Crypto is a high-beta speculative play on US dollar liquidity in the global financial system, not a hedge on inflation.

Wanna save money from inflation? Buy some I-bonds.

So uh, zoom back in ;)

[edit] Also, liquidity per (as defined by the size of the Fed's asset book) se isn't really correlated with asset prices, which is why we're doing interest rates. I recommend listening to the Odd Lots podcast with Kashkari in re: inflation.

Honestly, the cantillon effect is a red herring because any form of spending, it doesn't matter if the money is physically printed as a bank note with no debt backing it or simply spent from savings in a gold standard. If you divide the economy into two sectors, your bank account and the rest of the economy, then spending off your bank account will create a net increase in the money supply in the rest of the economy, this will raise prices in close proximity to you. Or in other words, the cantillon effect describes how price signals propagate through the economy. The strange thing is that people have this fixation on "printed" money causing inflation but as I mentioned, the cantillon effect also applies to normal spending of money that was received via taxes. If you ban the "printing" of money as we have already done by establishing central banks the cantillon effect remains.

Where do we find proof of the cantillon effect then? Government spending as a percentage of GDP and subsequent public sector employment but then again, this isn't something new, it is boring and obvious, not some conspiracy of the government scheming against you.

How would crypto be immune to inflation? If prices of housing, assets, etc go up, crypto does too.

Bitcoin went down from 68k USD to 20k USD...

USDC isn't a inflation hedge. It's pegged to the dollar, after all. Looking at the chart, Bitcoin is worse than an inflation hedge for anyone who bought in 2021 or later.

If you're worried about inflation then I-bonds seem like a less risky way to handle this. (Though the limits are too low for many people, and the website is pretty bad.)

RAI isn't really meant to be an inflation hedge but in theory people can create a price index and then index RAI bonds against it which would then allow you to maintain your purchasing power.

TIPS and I bonds are in my opinion the way the economy should work everywhere. Yes it means nominal yields can be negative but the entire point of the concept is that the unit of account should be stable and not inflating. Even if rates are excessively negative, it is still more predictable than inflation and you know exactly how much you are losing and prices will stay the same so your salary doesn't shrink over time.

What's an RAI bond? My search didn't find anything.

Lol, feels like some people never see trends until it literally steam rolls over them.

You mean negative interest rates? Most cryptocurrencies have died as expected. Some of them are still alive but nobody really uses them as a medium of exchange.

Crypto is very trackable and especially when cashing out. Only countries without kyc/aml protections allow individuals to cash out illicit crypto and that's only a small fraction.

Most of crypto is built on speculation which results in direct losses to consumers. And extensive and endless hacks, which is just another tax on consumers. Very little of bitcoin or any cryptocurrency is used for drugs, terrorism or other serious crimes.

Real world money laundering (trade based etc) is 500x that of bitcoin and real world drug dealing is at least 1000x greater than darknet markets.

No wireless. Less space than a Nomad. Lame.

RAI offers something new.

these comments get increasingly funny to read as time goes on

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