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Comment by ArtTimeInvestor | Hacker News Reader

I think this is about the stage we are at in regard to decentralized finance at the moment.

I often think about how strangely archaic our financial system is.

For example when you start a new job and the first payment comes in after 4 weeks on the job. In the future, the payments will flow realtime.

Or when I want to check the price of some stock and the stock market is closed, like it is most of the time. In the future, prices will be set on a global market with no downtime.

Or when I talk to people who run online businesses and the plethora of problems they have with credit card payments. Because a credit car payment is not a payment. It's a something where the receiver of the money is held responsible when the one who pays plays dirty tricks on them. In the future, an electronic payment will be simply a payment.

Let's hope we don't need over 40 years from theory to reality like it took for the internet.

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Please dont pollute this video demo with the degeneracy of "crypto"

I thought we are at the stage of DeFi where most people realized it has flaws that can only be fixed with centralization.

Most crypto users are already using online exchanges and wallets, so from their perspective it already is centralized.

True decentralized crypto only has niche applications outside a small number of enthusiasts.

    only has niche applications outside a small number of enthusiasts

Like the internet in 1968.

The internet didn't exist then, and it's still an Apples and oranges. Billions of people have access to crypto technology now, and there are no gatekeepers preventing them form participating.

Arpanet was started 1969 and you had to be part of a small number of institutions to have access.

You me and everyone else on this thread are here getting value out of it. That’s more than the number of people who get value out of crypto.

speaking more broadly than defi, there is an intrinsic tradeoff between decentralization and efficiency that is probably something like natural law or tautology. the promise of decentralized tech built on cryptography, to me at least, is that it offers a working alternative where there previously was none at all; almost everyone will probably end up using centralized and custodial systems due to their benefits, but the breakthrough is that you don't have to. you can always choose to trust in the presence of trustless system, but you can't choose trustlessness in its absence.

Do you think that most businesses have the consistent cash flows needed to pay out wages every hour?

I’m not sure this is a technical problem, I guess. Maybe a financial engineering problem but is the demand there?

Most businesses have loans from banks and have some sort of line of credit (a business credit card, if not an actual line of credit at a bank) to draw from that could be used to pay employees from.

>Or when I talk to people who run online businesses and the plethora of problems they have with credit card payments. Because a credit car payment is not a payment. It's a something where the receiver of the money is held responsible when the one who pays plays dirty tricks on them. In the future, an electronic payment will be simply a payment.

That last sentence indicates you have failed to understand the problems. A payment that is "simply a payment" is a huge step backwards from those credit card systems. If fraud prevention and legal recourse to undo fraudulent payments is not baked directly into your system, that system is worthless.

You mean worthless like those trillions of dollars worth of cash out there?

Worthless like anything people used to trade for thousands of years before credit cards arrived?

Oh, and there is no fraud prevention baked into credit cards. That's what I said. Sellers hate credit cards because they have to deal with all that fraud:

https://hn.algolia.com/?q=credit+card+fraud

> You mean worthless like those trillions of dollars worth of cash out there?

...which is getting used less and less in the developed world. In an increasing number of countries, carrying cash is a thing of the past, or done as a rarely-used backup.

> Worthless like anything people used to trade for thousands of years before credit cards arrived?

And which have fallen or are falling out of use when competing with systems that better serve the needs of the users. And safety from fraud and theft is a pretty big need.

> Oh, and there is no fraud prevention baked into credit cards.

Admittedly it's more bolted on than baked into (since the system is so old), but it most certainly is there.

> Sellers hate credit cards because they have to deal with all that fraud

Which doesn't mean there's not fraud prevention, just that it often fails. As it always will in every system, because it's a really hard problem. And a human problem, not a technical problem.

Crypto thinking is always basically some version of how modern finance is broken, yet the solution is basically “hey consumers, whenever you buy something you’re at risk that you could have no recourse.”

Of course individual merchants dislike cards, they create a wedge between consumer and merchant -/ but that wedge also enables people to freely spend more than they’ll ever extract from falsifying things, thereby benefiting all merchants.

Crypto logic ignores that the modern banking system is actually far more logical than it sounds at first blush when you just take the perspective that not everyone should be trusted all the time.

Modern finance is broken in multiple ways.

As an example, let's start with the very first step of a transaction.

The payer puts some "secret" numbers into the website of the payee.

With those "secret" numbers, the payee contacts some middleman and says "Heyho, your customer agreed to pay $12345 to me. Here is proof of this: The secret numbers". This is already absurd, as the payer gives those "secret" numbers our all the time. So they are not secret. And the $12345 could be completely made up.

The way this is handled is that the middle man tries to cope with the clusterfuck that is the result of this. And everybody suffers along the way.

The payer has a bad user experience. What is the latest UX ploy to get fraud under control? Was it 3D-Secure-Name-Your-First-Dog-Name-Plus-Another-Secret-Number-Or-Hey-We-Have-An-App-For-You-That-Creates-Random-Card-Numbers-Each-Time-You-Pay-Oh-And-Hello-Do-You-Support-Apple-Pay? I lost track.

The payee has to constantly tinker with fraud detection and fraud handling.

Just like the middleman, although the middle man likes it this way because they get paid for it.

Credit card usability is bad but crypto usability is 100 times worse

"Sellers hate credit cards ..." That's news to me. The truth is that sellers hate cash. So much so that around here several establishments display "card only" at the entrance, even though cash is legal tender - i.e. they can't by law refuse cash. And still: They do. (And "card", in this context, includes debit as well as credit cards, but as credit cards are so extremely common.. I, for one, haven't dealt in my native country's cash in some twenty years, and that's pretty common.).

At least where I live, legal tender means that you cannot refuse cash for settlement of an already existing debt, but you can definitely say you don't want to accept cash for transactions that haven't yet occured.

So a "card only" announcement at a shop is perfectly legal.

Well, not here it isn't. These establishments have been fined several times. They still don't buckle.

As for the reason they do it - it's because it's more expensive handling cash than handling cards, and much more hassle (i.e. the opposite of what the comment I originally replied to was alluding to). So, by accepting cards only they cut costs, and by that they also gain an unfair advantage to competing establishments, which is why they want to continue despite being fined, though this is of course not liked much by said competitors.

This is straining away from the original thread, but the essence is that cards are considered a pretty efficient and safe payment method. Crypto I wouldn't touch. It's got everything wrong.

> In the future, the payments will flow realtime. Aside from not having to wait four weeks before the first payment, what would be the advantage of that?

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