Or is it I who's doing the not getting things?
Plus funds in a wallet require extra steps when you want to trade on an exchange (extra costs via gas, time, possible errors, etc). The use cases for crypto are so minimal for the general population one could argue it's only survived this long through making trades on exchanges - to what essentially amounts to gambling. You can't gamble with funds in a wallet which defeats the entire purpose of crypto for the vast majority of the "users" in the space.
One of the joys of HN is that on the whole no one knows who anyone else really is nor keeps track of what they've argued previously.
"I write these words in steel, for anything not set in metal cannot be trusted." - The Well of Ascension, by Brandon Sanderson
Stone have low market value while metal can always be melted to do something else (like weapons).
It's one of my main take away of my art history lessons -> most antic art done on metal has been lost, but the stone remains!
Stone is susceptible to cracking/shattering if caught in a house fire right?
I was stunned to see so many of these products on Amazon last time I searched for smartcard stuff. On that note, I hate that you can't search for smartcard products anymore without 80% of your results being crypto wallets.
vs
Give your private key to an exchange, and enrich the shitheads running the exchange when they run away with your money.
First option seems preferable. If you're going to lose your money, better for the money to be truly lost than to enrich a thief.
I'd quite like an option C
The system that the crypto advocates hate on, but provides 250k per person + per bank + per account type as insurance by default to all registered financial institutions?
But I have drugs to buy and cannabis to smoke and joints to roll before I sleep.[0]
More seriously, there are use cases for cryptocurrency (smart contracts are a different think, unaddressed here), they're just mostly illegal.
Whether that illegality is appropriate or not is another question.
That said, there are use cases for cryptocurrency.
[0] With apologies to Robert Frost.
Let me address this, then:
- they are not smart
- they are not contracts
- they are programs written in esoteric programming languages running on world's slowest and most inefficient VM
- due to esoteric nature their own authors cannot find trivial bugs in their implementations that are exploited at scale which would make any real platform nonviable
- cannot be updated or reverted because blockchain
- have literally no use outside the virtual imaginary world of crypto
- have zero legal standing, and cannot be enforced
- in every single case would be more efficient and better served by Visual Basic running on a single Raspberry Pi from a sqlite database.
Literally everything I wrote applies to Uniswap.
> because somebody has to own and control that database and physical device.
You've missed the point completely.
Where exactly in this comment did I say that: https://news.ycombinator.com/item?id=33606218?
> If that is your point, it's a funny one to make in a thread about a CEX collapsing.
What's funny is inventing arguments for other people and valiantly fighting against them.
"Smart contracts" were mentioned as "other uses of crypto currency, as yet unaddressed". I addressed them. I couldn't even care less how you made the illogical leap from that to whatever you accuse me of.
> in every single case would be more efficient and better served by Visual Basic running on a single Raspberry Pi from a sqlite database
Let me rewrite this on point in a single sentence "this ineffecient unenforceable bug-ridden fest that can only use the imaginary tokens can be run more efficiently from a single Raspberry Pi".
Does this help?
But, you are still making the claim that a decentralized smart contract protocol would be better replaced with a centralized traditional database on a Raspberry Pi. We disagree.
Come on. You started with assigning me arguments and thoughts I never said and thought.
> you are still making the claim that a decentralized smart contract protocol would be better replaced with a centralized traditional database on a Raspberry Pi.
A person who claims that their opponent makes arguments in bad faith ignores everything their opponent says and keeps pretending their opponent said something he didn't.
There are eight bullet points. Read them. Understand them. However, I'm not going to continue this conversation.
Not that different from what is happening now with the crypto "exchanges", by the way.
I'm talking about how both bubbles were a consequence of all the money being pumped relentlessly by governments. That it was going to pop, we should not have no doubt. If it wasn't for crypto "exchanges", it would be a dot-com v2 (which is also happening, but without crypto to take all that capital this crisis would be bigger still), or it would be something else entirely... but at the end of the day, as long as we have governments addicted to growth, we will have boom and bust cycles.
Yes, yes we can.
The only things that ever justified the use of cryptocurrency were ideological fantasies and speculative gambling. Every other justification is just hype created as a post-hoc rationalization for one of those two things. If you look at any of them closely, they completely fall apart when compared with competitor technologies (such as fiat paper money esp. the US dollar, conventional banking, and even gold).
I look forward to a future where "crypto" again unambiguously means cryptography.
As for legal uses, yeah, there are not many at the moment. Maybe some day there will be a DAO-type org that is worth being invested in or something but not today.
Kinda sorta. Wasn't that back when people assumed cryptocurrency provided the same kind of privacy that cryptography does, which was (in retrospect), pretty dumb?
> as was being able to smuggle wealth out of a country with exit restrictions.
That one doesn't make much sense either. How are you supposed to get your cryptocurrency to smuggle out in such a country? Wire your money to a foreign exchange?
> As for legal uses, yeah, there are not many at the moment. Maybe some day there will be a DAO-type org that is worth being invested in or something but not today.
I agree the "best" actual use cases involve illegal activity, but I think even those are sketchy. Most of the ideas don't actually work unless cryptocurrency is ubiquitous, but that doesn't matter since it will never become ubiquitous without compelling use cases. And given the illegal activity it enables, even if it did have compelling use cases, it would probably be made illegal if it was on its way to becoming ubiquitous (which would instantly marginalize it in a way it could never overcome).
That use case at least makes some sense and isn't illegal, but there are probably only dozens of users who'd ever want to do something like that, which isn't enough to support a payment ecosystem.
There are also probably conventional alternatives that probably work for that. I'm somewhat paranoid about getting doxxed based on some teenage internet experiences. There are a couple of forums out there with paywalls that exist mainly to reduce moderator workload, and (10-15) years ago I was able to subscribe with a combination of Visa gift cards and PayPal. The gift cards let you enter (un-validated) identity information so they could be used like credit cards online, and PayPal didn't seem to like them but there was a long delay before they were detected. So I created a throwaway PayPal account with a small-denomination gift card as a payment source, paid for the membership, and abandoned the PayPal account (which would eventually get locked).
Well, there are currencies that do provide strong anonymity, so no?
But yeah agreed that cryptocurrency doesn't have that many use cases, just as cash has a declining number of them. I hope someone makes an Amazon-like platform for it.
Banking may well collapse in the US (I'm not betting it will - quite the opposite, to be honest - but historically speaking it's not an impossibility.)
The issue is that if banking in the US collapses... well - we have much, much bigger issues than "crypto". You'd be far better served with a stash of dried/canned products and a gun or three.
Also - it won't be crypto that matters in this case. It will be the new currency of whatever regional nation states pop up in the US after the collapse, or if the federal gov manages to hang on, the new USD.
Side note - last time I bought in bulk (because hedging against this is relatively cheap, all things considered) split peas were the best bang for the buck in terms of cost/calorie. Just slightly beating out plain white sugar.
75 days of food for 4 people at 2000 calories per day cost about $350 (not including storage containers) and will last a very long time if it's composed of dried legumes, flour, oats, sugar, rice, oil, etc... in airtight containers.
If you cook yourself and rotate through, it's actually a fairly cost effective way to eat cheap and healthy (although without any additional inputs - also very bland) while also keeping storage on hand and not feeling like a complete prepper.
If your house burns to the ground and collapses in on itself, the extreme majority of fire proof safes, aren't. If the fire dept shows up and it's out in an hour and it wasn't buried, your things will probably be alright.
I dealt with a guy's gun collection stored in his $10,000 "fire proof" safe stored in his garage. Almost everything was garbage. Saved a handful of parts here and there.
Absolutely no one needs to be putting a private key on paper in their house, that is insanity.
---------------
RE:
>The question is if you can reliably remember it in ten or twenty years without ever using it in the interim.
I check my bank account daily for fraudulent transactions; it would behoove anyone storing any sizeable amount of value to check/refresh on that daily, however that looks like for your form of storage.
The question is if you can reliably remember it in ten or twenty years without ever using it in the interim.
I was about to say this isn't the worst opsec until I realized you mean people are sending businesses their passphrases and not purchasing an etching kit to make the plate themselves.
Say I'd have $100000 in a crypto wallet, I'd etch it too and keep it in a safe instead of giving it to a website with no state backed guarantees.
But a lot of this is too troublesome or adds too many hoops to jump through than is practical for many people.
If it’s risk of customer funds mismanagement, coinbase is just not in the same galaxy as the folks who have blown customer trust.
If it’s securing funds, to prevent hacks, CB offers cold storage. Lumps of crypto can be transferred out of their control as needed to manage risk.
> But nobody has addressed that market.
Au contraire! You've correctly identified an important market! There is both existing work and ongoing development that tries to satisfy exactly what you've asked about (and doesn't involve burying etched steel plates).
Encumbering your bitcoin with the requirement for multiple, M of N threshold signatures ("multisig") is an important way to protect large amounts. Companies like Unchained Capital [0] provide a service wherein the user holds two keys and the company holds 1 key in a 2-of-3 multisig setup; if the company key is needed, video authentication and other procedures are required.
Other, non-company-assisted multisig setups use schemes such as you propose; one example is the Nunchuk wallet [1] which allows you to sign multisig transactions on your own, or request signature(s) from a key held by a family member or friend, passing the PSBT (partially signed Bitcoin transaction) over a secure communication channel.
Finally, two great examples of physical devices to protect your Bitcoin are (1) the Tapsigner [2], which is an NFC-enabled smartcard holding your secp256k1 private key that does on-card signatures; and (2) Jack Dorsey's Block (formerly Square) is developing a hardware wallet that integrates with your smartphone [3] -- one neat innovation here is that policies can be set such that the user may spend small amounts of funds with the phone only; but larger transactions require a thumbprint or pin on a physical device.
You also mentioned time delays -- this is also supported by Bitcoin script; advancements such as miniscript [4] allow you to express complex spending conditions in a tree-like way.
[0] https://www.unchained.com/ [1] https://nunchuk.io/ [2] https://tapsigner.com/ [3] https://wallet.build/ [4] https://miniscript.fun/
1) They downplay the expertise and knowledge required to manage your own tokens.
2) They advocate for the use of cryptocurrencies by normal (i.e. non-expert) users as this increases the value of their holdings.
3) They prefer to blame users who make mistakes, are hacked/scammed, or otherwise lose (real) money for their lack of technical expertise.
Given this, it's not surprising that the enormous gap between naive engineering assumptions and human reality is filled by intermediaries despite how consistently they fail. As long as cryptocurrencies continue to exist beyond a tiny niche I don't see this changing.
The knowledge gap between "normies" and "crypto-aficionados" is pretty large.
Which is, of course, why so many crypto "businesses" turn out to be scams of one sort or another -- the asymmetry of information makes most folks easy meat for scammers.
To point up this asymmetry, go ahead and watch this[0]. The lack of knowledge WRT crypto-currencies (let alone smart contracts) among the hoi polloi is striking in comparison to those who are in the know.
[0] https://www.pbs.org/wgbh/nova/video/crypto-decoded/ (Recent NOVA episode).
The name of the game is pump and dump, you can't play the game (speculation) if you're not on the field (the exchange).
Crypto's marketing is 'financial freedom' as in get-rich-quick, not free as in libre.
Add on top of that the general volatility of crypto, people not wanting to deal with maintaining their own wallet, and you have a recipe for people keeping their funds on exchanges.
I realize that transaction fees are probably a moving target but is there a ballpark figure you or someone else could say? I'm guessing it's percentage-based?
Needless to say, this is much more affordable for a million-dollar transaction than for buying a cup of coffee :)
I'll give the answer for Bitcoin as of a couple of years ago, and others can chime in for things like Etherium and other cryptocurrencies.
With bitcoin it's not a fixed fee, it's more like a priority bid. So, there's a pool of "pending" transactions that any miner can grab from. Each pending transaction has a bid for its transaction fee. Each miner will then grab whatever set of transaction it wants to bundle into a block, and try and compute the hash for that block. Once a miner finds a hash for that block, all the transactions in that block are added to the chain and the transaction is "complete" (in practice, people will often wait until one or two blocks are added _after_ the transaction is included in the block chain to be _sure_ it's done).
So, to your question, ultimately the transaction fee is a bid for how quickly you want your transaction included. You can bid $0, and it's likely your transaction will _never_ be included. It doesn't really matter how _much_ you're transferring, but _how quickly_ you need it included in the chain.
How much you'd practically pay for a transaction (in USD) has been super variable over the lifetime of Bitcoin. It fluctuates with how many miners there are, how many transactions are happening, and the exchange rate of BTC to USD (since the feeds are paid in BTC). See the chart at the bottom of this page: https://privacypros.io/tools/bitcoin-fee-estimator/
It looks like it's generally between $0.75-$1.00 right now. So if you're making a transaction of $1M the fee is trivial, but if you're buying a cup of coffee for $5 it's...pretty high.
People don't want to be their own bank, just like they don't want to be their own bakery, or their own farmer.
Sure, some people do bake their own bread, but they do it either because they have to, or because they enjoy it.
So the people who control their own keys need to have a reason to do so. Because it takes more effort than not managing your own bank.
What exactly are the reasons to run your own bank? What problems in your life are solved by it?
I can think of a two:
* You want to hold more cash than FDIC guarantees. * You think the government will seize money out of savings accounts, as happened in Cyprus.
These have to be weighed against the facts that while not literally in your mattress, the money becomes pretty easy to steal, for anyone willing to point a gun at you. And being your own bank comes with obligations, too, so the government will come after you if they want to drain your bank. And the justice system can put you in a box if you don't comply.
Basically: If you already have a bank, why would you not just use it? And if they refuse to do your thing (like order a hit), then buy tokens and pay a hitman in tokens.
If there were FDIC for tokens at your real bank, redeemable in same number of tokens, then any general public that wanted to use cryptocurrency would likely just use that. Because outside of fringe LARPing nobody wants to run their own bank.
This is a solved problem up to millions of dollars [1]. Past that, you buy Treasuries. The real third case is you’re doing something illegal.
[1] https://accountopening.fidelity.com/ftgw/aong/aongapp/fdicBa...
https://www.intrafinetworkdeposits.com/
I suspect the government / Fed will have something to say about these in the future since it's a bit contra the purpose/intent of FDIC insurance but for the moment, you can abstract away all of the complications.
Basic corollary: if you already use a bank, why not just use money?
> If there were FDIC for tokens at your real bank, redeemable in same number of tokens, then any general public that wanted to use cryptocurrency would likely just use that. Because outside of fringe LARPing nobody wants to run their own bank.
So the only remaining question is why would normies who say (according to you) amen to all above would need crypto besides a ponzi-speculative joy ride?
On one hand we have funny money backed by a world power and all its resources, and protected by ICBMs and an impressive navy and bases around the world and a financial infrastructure around USD & convertibles.
On the other hand we have funny tokens issued by "genius" -mushrooms- who are elevated into the spotlight by the likes of Forbes magazine and the rest of the media circus, protected by nothing [though the genius scammers themselves are apparently protected ..]
Exactly. They don't. Not as a currency. It's gambling. And "normies" don't want to run a bank just to gamble.
> money backed by a world power and all its resources, and protected by ICBMs
And e.g. in the US the USD is not just protected from outside threat (ultimately) by ICBMs, but also internally by the fact that tax is due in USD.
There are cryptocurrency advocates who say that the USD is backed by nothing. Which is a very odd thing to say because as long as the US has tax laws there will be demand for the USD (under penalty of prison), to pay your taxes. Demand for a thing creates value for that thing.
Anyone who thinks that backing is not real is likely to feel the physical effects of its reality.
So basically no real change except they're much more exposed to risk (fraud and market swings notwithstanding)
A large chunk (probably even a majority) of the people involved in the cryptocurrency space don't actually care about cryptocurrency as a technology at all, they're just there to make money. To these people, market price is everything, and the technology is irrelevant except to the extent that it affects the market price.
Then in the other camp there's a group of people who don't care about the current trading price, they're just interested in the technology and the new capabilities it enables.
I'm in that second camp (perhaps unsurprisingly, since this is Hacker News), so in my view this story isn't really all that interesting or surprising. From a legal/societal perspective, yeah this is terrible and probably someone should go to jail. But from a technical perspective, the fact that exchanges can scam people out of their money is hardly new information. As the saying goes: not your keys, not your crypto.
Though obviously for those who are interested in cryptocurrency solely to make money on speculation, yeah this is a big story.
Of course what folks are seeing now is that it's real easy for exchanges to lose their buttcoin deposits too.
This is a concept that probably never existed before crypto, called "fiat." "fiat" is the latest and greatest in crypto technology. True decentralization. Multiple countries. Multiple municipalities. Multiple systems, multiple institutions, multiple protocols and multiple contracts, the picture of decentralization that crypto could only dream of. And of course, if you make a mistake, you can revert your transaction, a form of technology crypto has not yet mastered. Oh, NFTs? Please. "fiat" utilizes advanced art international HS92 commodities exchange codes to kick start the burgeoning modern art scene of completely legitimate businesses.
If you internalize this fact, then it explains why people just keep their coins on exchanges, why they buy centralized "cryptocurrencies" , why they leap at the chance of buying the latest Paris Hilton NFT and why they keep defending Tether as legitimate.
Fundamentals are thrown out of the window unfortunately.
Those people put a bunch of money into bitcoin to inflate the price, but they need a bunch of rubes trading the currency to keep the value of the coin (relatively) stable so they can withdraw their holdings, but they don't care much if those rubes have full control, and that's where exchanges come in.
Exchanges are there as a way for the first movers and the ultra-wealthy to extract wealth from uninformed, naive new investors into crypto.
How sad that you think the only people that cares about not giving governments control of everything are "scammers, criminals, tax dodgers, and exchange runners".
What is alarming and becoming more revealing is how much of this crypto was being back-doored from one crypto "product" (exchange, fund, coin, ICO, etc.) into another. In programmer terminology: it looks like there are (were) a lot of pointers to the same memory address.
But then bitcoin started getting popular and emerging towards mainstream culture, the talk about wallets seized. All the new crypto firms started marketing accounts and "cloud wallets" and the personal pocket wallet was never mentioned.
Crypto then continued to advance in mainstream culture and personal wallets were kept a secret. I doubt the average crypto user even knows about personal wallets.
And if you disagree, please prove me wrong. There are many crypto commercials on mainstream media, show me one that has mentioned that you can keep a personal wallet.
So the crypto industry is to blame for this. They basically hid the most important part of crypto from the public because they would make more money without it.
But regulators have failed to provide clear framework for exchanges in the US[1], so most CEXes are running off shore.
[1] https://www.cnbc.com/2022/11/11/op-ed-crypto-markets-need-re...
Many people will never be capable of self-custody because the lack the interest to do it. They see money to be made and ignore the warnings of those who try to explain what they have on an exchange is a promise of money, not money itself.
When you say "nobody does this anymore," that's kind of true, but also not true. Those who have learned the hard way do, the newbies (which vastly outnumber the first group) don't.
Self custody requires knowledge of some basic math, cryptography, and the ability to understand basic security principles.
User growth explodes with exchange rates. Those diving in understand very little about what they're doing and should stay out. They don't listen to people saying such things and the result is, well, predictable.
I mean, do you store all your cash under your bed in case your bank go bust? People keep crypto on the exchange because it makes transactions easier, and in some cases you might have other perks such as being able to lend it for interest or spend it with crypto credit cards.
This idea that you can have a digital currency without some kind of bank or exchange is fundamentally flawed imo. Unless you believe the only valid usecase of crypto is as a digital alternative to physical gold then it probably makes more sense on an exchange. The main issue here is that the exchanges are not regulated.
But I suppose given the lack of regulation I would have to agree with you that the only safe use case right now is as a "store of value" in a cold wallet.
On decentralized exchanges, you pay each time you trade (gas fees and such). That cuts right through the endorphin rush.
Centralized exchanges keep those fees low by making everything centralized. It's akin to casinos keeping their guests comfortable and liquored up.
As a person who works in crypto, I'd like to see us engage with this more forthrightly. When we cut out gambling, how many use cases are left? How many are viable today?
The original crypto culture which emphasized privacy (although speaking of a public list of all transactions ever performed on the network as privacy oriented is pretty hilarious), control and decentralization has for the most part been lost to crypto's eternal September.
Managing your own mail server, website, social media instance, music streaming, cryptocurrency wallet, power grid, vegetable garden, etc requires more time and skill than just paying someone else to do it for you. The result is that most people end up using a handful of centralized offerings except for a small niche of enthusiasts who derive enjoyment from the work and/or can justify spending the additional time.
Ultimately it's up to the designers of distributed systems to make them trivially easy to use if they want them to be popular and remain distributed. (Napster and maybe BitTorrent are the examples that come to mind.) Otherwise it remains a niche for enthusiasts and/or ends up with centralized intermediaries.
I say this in jest. There are more than one reason to be interested in crypto, but when bitcoin suddenly went from 1BTC=USD$1 to $1BTC=USD$100 (I don't actually know when the boom happened--I wasn't watching that closely) the individualist, libertarians were obscured by the quick-buck types looking to turn their thousand into a million. Thats when the scammers all came out.
Same as with source code version control. As soon as distributed VCS appears (git), people promptly centralize it with another abstraction layer (github, gitlab, bitbucket, etc).
Now everything is in github, gitlab, or bitbucket, and centralized there.
At one point I asked (rather naively - not trying to sound wise here) whether our dependence on GitHub was an outage risk. Response from CTO was that git is distributed and everyone has a copy and whatnot. In retrospect, yeah, the code is not lost, but we had never actually built the infrastructure / tested the procedures to actually handle that fallback to a distributed world...
It's close to just running your own email / fileserver etc. IMHO.
So while possible it's also annoying and not worth it for most people, and I get that.
The right way to do that is to use a hardware wallet. There are many companies making and selling those, so there's definitely a market for that.