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Comment by wslh | Hacker News Reader

I remember the last post from Fred Wilson: "The Freedom To Innovate" [1]. Even if the SEC is right about Binance and others, and there are without doubt blatant and huge frauds in Web3, there are huge problems with the financial modernization within the US (and the world). Domestic wire transfers in US takes longer and are more expensive than in Europe and developing countries such as Brazil and Argentina. The SEC is not showing a neutral point of view and any special concerns with innovation and legacy system frauds.

It doesn't matter if it is call Web3, blockchain, or whatever buzzword you like, banks have real power and a clash is inevitable now or in the near future. It took a century to dethrone Bell System [2]. It is a political and economical issue, not just an industry.

[1] https://news.ycombinator.com/item?id=36199584

[2] https://en.wikipedia.org/wiki/Bell_System

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> Domestic wire transfers in US takes longer and are more expensive than in Europe and developing countries such as Brazil and Argentina

Fedwires take minutes and cost nickels [1]. If you use wires frequently, get an account that doesn't charge anything for them. (The Fed is launching FedNow [2]. It will cost 4.5¢ per transfer [3].)

[1] https://www.frbservices.org/resources/fees/wires-2023

[2] https://www.federalreserve.gov/newsevents/pressreleases/othe...

[3] https://www.frbservices.org/resources/fees/fednow-2023

I am aware of this option but it happen than not every financial service use them. Also, it is wondering than other countries where faster. Immediate payment account in Argentina exists since the late 90s and we are not talking precisely about a country with a good economy and financial system. Also take a look at the Brazilian Pix payment system [1] that provides a neutral code for payment where other services built on top.

[1] https://en.wikipedia.org/wiki/Pix_(payment_system)

FedNow and Pix were announced around the same time, the American one just took longer. Given the latter has done in three years what volume Fedwire does in months, the lag seems reasonable.

>Immediate payment account in Argentina exists since the late 90s and we are not talking precisely about a country with a good economy and financial system.

It actually helps that the country does not have a good economy and financial systems. It's called Leapfrogging.

The same concept applies to internet access and speed in Romania. They never had widespread copper telecom system, so they went straight into fiber.

Fedwire operates during extended banking hours only. Some people prefer to use crypto. It’s okay.

Just because the current system sucks doesn't mean a replacement will be better. Its the responsibility of people advocating for a replacement system to explain and demonstrate why it will be better.

Banks suck. But that doesn't mean crypto companies should have free reign to do whatever they want for the sake of "innovation."

The point of my comment is about a political issue in financial systems. I don't specially care if the replacement is crypto or whatever other decentralized or centralized technologies move things forward.

Then why make that comment on an article about a crypto company in hot water?

Did you read my other comments? Could you be more explicit about your question?

> that doesn't mean crypto companies should have free reign to do whatever they want for the sake of "innovation."

As a company, you're allowed to do anything that is not illegal. Law is not a whitelist of what you're allowed to do, it's a blacklist of what you're not allowed to do. And while it makes sense to create laws that protect consumers, it doesn't make sense to create laws that blanket ban experimentation with a new system until someone "explains and demonstrates why it will be better" to the satisfaction of some authority figure.

> Its the responsibility of people advocating for a replacement system to explain and demonstrate why it will be better.

No, it's society's responsibility to not create and to repeal laws that drive innovation offshore. Because ultimately it's a country's citizens, not the innovators, who lose out if a valuable piece of technology moves offshore. If Steve Jobs had to "explain and demonstrate" why the iPhone would be better than flip phones and blackberries to the satisfaction of Congress before being allowed to experiment with its design, Apple probably would have just moved their HQ to China, and Americans would be the ones missing out.

So just because Binance is committing fraud and breaking the law doesn't mean that in general we should be blocking the ability of companies from experimenting with new technology, whether or not you personally believe a particular technology will amount to anything.

> If Steve Jobs had to "explain and demonstrate" why the iPhone would be better than flip phones and blackberries to the satisfaction of Congress before being allowed to experiment with its design, Apple probably would have just moved their HQ to China, and Americans would be the ones missing out.

Apple had to comply with a ton of regulations and laws when making the iPhone. Off the top of my head, they had to comply with various product safety laws, FCC frequency allocations, and consumer protection rules.

The US (and most other countries) have a lot of regulations for managing money and investments. These apply regardless of the underlying technology being used. Legally, the only thing cryptocurrencies brought is that they didn't obviously fit into any existing legal framework. This was mostly due to a lack of judicial precedence, not because cryptocurrencies were fundamentally different.

This isn't writing laws to stifle innovation. This is using laws that already exist to actually regulate companies that have managed to avoid it before now.

> > So just because Binance is committing fraud and breaking the law doesn't mean that in general we should be blocking the ability of companies from experimenting with new technology, whether or not you personally believe a particular technology will amount to anything.

This is not new technology, it's moving the money around under the guise of new technology.

And all the same crypto-bros are very proud of the valuation of the company they are at the helm of ....and they always tout it expressed in US Dollars...not bitcoin, not ethereum, not Binance coin.

And the same crypto-bros are very proud of their net worth expressed in US Dollars

While you are here writing "let them experiment with technology dude" they concern with technology is zero, it's all about driving up the valuation and driving up the net worth (always expressed in US Dollars)

Gatekeeping which widely-used new software counts as “technology” and which doesn’t seems like a strange hill to die on.

> Banks suck.

Banks in Singapore provide 5 minute inter-bank settlement. Banks in NZ provide multiple intra-day settlements seven days a week. Australia's NPP settles within one minute as a typical target.

Banks are perfectly capable of this. US banks may not be.

> The Freedom To Innovate

I'm not sure that innovation in finance has always been a good thing. Over the last 50 years we've seen increased levels of debt, increased college costs, increased housing prices, a bigger and more powerful rentier class, growing income inequality, leveraged buyouts, big business eliminating small businesses, hedge funds buying housing and hospitals, big tech buying up the competition, profit is the name of the game, all of these rich people buying politicians, etc. Who came out ahead after all this?

Much of the applied innovation in crypto hasn't been good, either. Block chain is an amazing technology, but the innovators in this space didn't stop at a decentralized money transfer system, they wanted to get rich and they scammed people.

So what kind of innovation are we talking about? Who would be helped?

> Domestic wire transfers in US takes longer and are more expensive than in Europe and developing countries such as Brazil and Argentina

A small aside on this topic: I assume/hope that the new FedNow payment system coming online in a month or so will help with transfers like this.

We don't know if innovation, in general, is a bad or good thing. We assume it is generally a really great thing. Innovation requires time, fifty years is nothing to conclude that the financial system should exist in the same way as existed before.

> banks have real power and a clash is inevitable now or in the near future

Bitcoin was derailed from being peer to peer electronic cash to this strange "store of value" that doesn't store value. It heppened almost six years ago, back in 2017.

Domestic wire transfers in US takes longer and are more expensive than in Europe and developing countries such as Brazil and Argentina

Do you think the US is incapable of sending an immediate message transferring money? Of course the US has that technical capability.

AML, BSA, KYC, Anti-Fraud. These are a few of the things that slow down the transfers and add to the cost. A lot of people think they're a feature, not a bug.

Then along come money transfer services that don't have these features. They'll all either get these features or they will be shutdown. There isn't a third option.

Technical capabilities could be shadow by political capabilities.

AML and KYC got more intense in my EU country at the same time as instant payments became a thing. Between regular banks. I don't think those are the problem.

> AML, BSA, KYC, Anti-Fraud. These are a few of the things that slow down the transfers and add to the cost. A lot of people think they're a feature, not a bug.

This is why you have to harden system at the fringes, not in the middle as old clearing systems did.

Ideally, but now you're trusting the edge. It can be done. It's also a lot harder, and requires a lot more investment in places that were not considered things to care about when those old systems were created.

Some things have improved over time, turns out.

Plenty of countries around the world have all of that _and_ instant payments.

But that takes cooperation, which is incompatible with The American Way of “Winner takes all and the more people you can downtread on the way to the top, the better”

> banks have real power and a clash is inevitable now or in the near future

Bitcoin was derailed from being peer to peer electronic cash to this strange "store of value" that doesn't store value. It happened almost six years ago, back in 2017.

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