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Comment by oblio | Hacker News Reader

> One is a threat to the actual dominance of the present global financial system, one very loudly pretends to be but is in fact hijacked by said global financial system in order to implement their policy goals with a populist cover story.

Quick, how do I:

1. Pay for groceries with crypto? Is the transaction cost higher or lower than with current systems?

2. Take out a loan to buy a car with crypto?

3. Get a mortgage for a house?

4. Get a huge loan to buy a container ship for my company?

Do you even <<know>> what the "global financial system" does, besides work with currencies (which is more or less the only angle covered by cryptocurrencies)?

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1. Ever heard of Lightning? https://cointelegraph.com/news/bitcoin-lightning-network-is-... And yes, some countries accept partially paying through Lightning. El Salvador obviously, but Costa Rica as well (check "Bitcoin Jungle"). In Africa, it's starting...

2. I sold a car for ~30k USD in Germany 2 weeks ago. I wish the guy would have been able to pay in crypto, because bank transfer didn't work out (because of money laundering law between unrelated banks due to the higher amount) and he ended up paying in ... cash (yes, the irony, so much about money laundering). And now, I had to open a new bank account which will be able at some point to accept the money. It's not just time consuming, but all this is not free obviously

3. Well, that's a good point, since loans are created out of thin air... https://www.investopedia.com/articles/investing/081415/under...

1. Heard of it? Yeah. Knowing anyone who uses it for day to day transactions? No.

Crypto people love to point out these obscure experiments as if "it's happening". My BTC sits in a wallet.

3. Why is that bad? How else would you expect a loan to be created? Comments line this reveal an underlying ideology.

Very odd. The last time I bought a vehicle I just wrote a check, the seller took a photo of my ID, and I was handed the vehicle title. I understand some sellers will accept a cashier's check. I always thought this was the normal way of buying high dollar items like this with 'cash'. Does Germany not have something like that? Surely going to a bank in Germany and withdrawing or depositing $30k in cash must raise some alarms.

It's not normal. You'd be able to transfer the money, after the outlandishly weird step of... informing your bank about the transaction :-)

> 1. Ever heard of Lightning? https://cointelegraph.com/news/bitcoin-lightning-network-is-... And yes, some countries accept partially paying through Lightning. El Salvador obviously, but Costa Rica as well (check "Bitcoin Jungle"). In Africa, it's starting...

I worked for a blockchain startup, and it had the exact same concept listed here:

> Due to the nature of the Lightning Network's dispute mechanism, which requires all users to watch the blockchain constantly for fraud, the concept of a "watchtower" has been developed, where trust can be outsourced to watchtower nodes to monitor for fraud.

However... we were constantly discussing this. Was the network truly decentralized in this case? Watchtowers basically concentrate power in a handful of nodes, you're back to oligarchy.

Which means... why bother with blockchain and cryptocurrency anymore? What's the point?

> 2. I sold a car for ~30k USD in Germany 2 weeks ago. I wish the guy would have been able to pay in crypto, because bank transfer didn't work out (because of money laundering law between unrelated banks due to the higher amount) and he ended up paying in ... cash (yes, the irony, so much about money laundering). And now, I had to open a new bank account which will be able at some point to accept the money. It's not just time consuming, but all this is not free obviously

He could have just... warned his bank?? Also, what's with the jab against cash, yes, it can always be used for money laundering, it's not like, God-forbid, cryptocurrencies being used for the same reason, see sock-puppet transactions, anonymity....

> 3. Well, that's a good point, since loans are created out of thin air... https://www.investopedia.com/articles/investing/081415/under...

Yeah, and what's wrong with that?

1. Use something other than BTC, like BCH. TX cost is a lot lower.

For the rest, there's no reason you couldn't do any of those things in a legitimate working peer to peer cryptocurrency in principle, regardless of the fact that at the moment people don't and the structures you engage with instead are staples of tradfi.

They do many things, but the ones I want to avoid the most are their mechanisms of control in the global economy. The fact they can lock your bank account and deny you access to global trade because you said something or did something they don't approve of is utterly unacceptable and this alone is enough for me to aim for their destruction.

> For the rest, there's no reason you couldn't do any of those things in a legitimate working peer to peer cryptocurrency in principle, regardless of the fact that at the moment people don't and the structures you engage with instead are staples of tradfi.

Ok... let's see how a mortgage would work.

A smart contract for the initial loan?

Regular payments into the smart contract as the monthly installments?

What happens in case of default?

> They do many things, but the ones I want to avoid the most are their mechanisms of control in the global economy. The fact they can lock your bank account and deny you access to global trade because you said something or did something they don't approve of is utterly unacceptable and this alone is enough for me to aim for their destruction.

How exactly do cryptocurrencies prevent this?

> What happens in case of default?

Assuming you live in a world where everything happens mediated by decentralised ledgers and no central source of enforcement or power, an entity is dispatched to repo the house and auction it in order to pay out the initial smart contract financiers. It's a long way from here to there, I know, but there's no "impossible" about it. If you want to get really tricky, just incorporate a token for the house, the ownership of which is decided by a clause in the smart contract for an auction if the terms of the payments for the smart contract are not met, then the physical arbitration component boils down to "this person says they own the house, they have the deed, please leave" just like it would in present world.

> How exactly do cryptocurrencies prevent this?

Because you hold your keys and you get to decide what is broadcast on their behalf on the ledger, not a custodian. There is no central point to pressure or capture in order to execute the same attack as above in tradfi.

> There is no central point to pressure or capture in order to execute the same attack as above in tradfi.

Yes, there is, the person (software system?) with the bat that's actually enforcing the smart contract in real life.

You can dispute it in the case of some hypothetical future architecture that requires physical real world enforcement of some state change on a decentralised ledger, sure, there you might have a point, who can say what the future holds?

That's not the same as denying access to global markets, as long as legitimate cryptocurrencies maintain liquidity with global markets, that attack can be ruled out if you self custody. It doesn't rely on any physical state, it relies on you using a centralised service of custodial account management where a third party can direct that entity to deny service to you, or that service can independently decide to deny service to you. There's no centralised service to attack in a proper peer to peer system, they can't stop you interacting with the market.

> You can dispute it in the case of some hypothetical future architecture that requires physical real world enforcement of some state change on a decentralised ledger, sure, there you might have a point, who can say what the future holds?

It's the present day, not some future. You need real world enforcement of real world states.

I just realized! Cryptocurrency bros are pure function bros. Everything is pure and has no side effects!

Except for the fact that the world is a <<result of side effects>>. All that's nice about computers has to do with them printing to screen/paper, sending across the network, etc...

Similar story with money. All we care about is that effects they have on real life.

> that attack can be ruled out if you self custody.

Which puts a huge target on your head for any kind of real world malicious actor.

> I just realized! Cryptocurrency bros are pure function bros. Everything is pure and has no side effects!

That's a fair criticism to the extent that any theoretical decentralised ledger process pipeline touches the real world, but the extent to which they do touch the real world, and the benefits available from each of them varies enormously.

> Which puts a huge target on your head for any kind of real world malicious actor.

If the choice is between that and having a bank and its chain of dependencies as a tyrannical real world dictator, I'd rather have to deal with that target than be trapped in that tyranny. That risk can be mitigated, it can be compensated for, structures can be erected to address it.

If you're slave to a tyrant, you're simply immediately subject to whatever their whims are. That is utterly unacceptable, even if it does theoretically reduce some risk for some people sometimes.

In a society that was not a cyberpunk dystopia, the price for instruments that allowed you to circumvent said tyranny would probably be much lower than it is. But this is not that world, I guess.

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