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Comment by colesantiago | Hacker News Reader

I still even today have never seen any legitimate use case for crypto at all.

it does seem it is a solution looking for a problem.

I think I found an actual legitimate, real use of crypto, albeit a small one: A way for an adult to give a gift to a minor. Here in the US it used to be possible to buy "savings bonds" printed on paper. These were very common for gift giving on special life occasions: they matured (were usable) after e.g. 7 years.

But now in the modern era, I couldn't find those or a way to create a long-term savings account for a minor.

But I was able to create a crypto wallet with a small portfolio of Bitcoin and Eth. It was easy to give to her and her family: just tell them the secret 12 words and explain how to install a crypto wallet.

Crypto currencies solve a legitimately interesting problem, which makes it a fascinating technology. My professor called it the "nuclear science" of computer science.

What is striking to me is that most people do not even understand what cryptocurrencies are. I sampled some of my (not so technical) friends about how anonymous bitcoin/etherium are, none of them knew that it essentially publishes the bank records of everyone as a fundamental part of how it works...

A blockchain essentially is just a database. And so many times I have heard people proposing a "novel technology" where they just replaced a regular database with a blockchain, e.g. "why not track logistics through a blockchain". The trouble is that in every case using the blockchain made things worse. In what application do you have to defend against mallicious attack and can not rely on a central authority? In how many cases do you even want to not have a central authority? Money is basically the only semi-plausible use cases where just replacing the blockchain with a normal database doesn't improve the system.

- preventing double spend in a distributed ledger

- creating a secure timestamped append only log of signed messages

- apps like multisig wallets, privacy preserving rollups, cross-site attestations

- creating a global namespace registry for social networks[1]

- building other things on top of these primitives, like disintermediated collectibles for games, art, web communities..

[1] https://www.varunsrinivasan.com/2022/01/11/sufficient-decent...

Those are definitely blockchain features or benefits. But crypto(currency)? I'm not sure.

A crypto currency like ETH acts as the gas that secures the network and all the above use cases. A program (smart contract) can itself also become a token and currency: USDC and CryptoPunk NFTs are just different software programs running on the ledger that maintain their own state of user balances.

Why do you need a blockchain for that? Some of points are pretty artificial.

It always comes down to trust models, (de)centralization, and whether it’s permissioned or permissionless.

For example multisigs, without crypto, require a trusted and centralized custodian, and if you are lucky you might get a permissioned API that exposes a few end points that were dreamed up by engineers at Stripe or some new tech-startup digital bank.

I'm still not sure I understand you. And you know, decentralization doesn't mean that there is no regulation.

Of course, using a crypto multisig doesn’t give you a pass on the law.

The closest example might be to point to TCP/IP which makes up the web and is (pretty) decentralized. Companies and even monopolies compete on top of this protocol but no single company wholly owns it. Although, ensuring decentralization tends to be a much more strongly considered goal in blockchains than what we’ve seen on the internet.

It’s a long read but “The Crypto Story” does a pretty great job at distilling some of the motivations:

https://www.bloomberg.com/features/2022-the-crypto-story/

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