Stripe Launches L1 Blockchain: Tempo
tempo.xyz
tempo.xyz
Importantly, none of these businesses are using crypto because it's crypto or for any speculative benefit. They're performing real-world financial activity, and they've found that crypto (via stablecoins) is easier/faster/better than the status quo ante.
There are gold tokens which I genuinely feel like it can be the best thing ever. Because bitcoin is "digital gold", lmao.... I laugh a lot on this statement nowadays because we genuinely have trustworthy way of having "digital gold" and we don't use that as much as there is hype about bitcoin...
But yes currently, it might benefit the us govt. overall
This end-run around foreign government monetary control has been touted by Stripe executives as one of the main selling points for USD stablecoins but I don't see how foreign governments don't clamp down on this is in the same ways the clamp down on other uses of USD in the country; most monetary transfers have some physical presence or touchpoints the government can control.
More importantly the US itself is eventually going to come to the conclusion that it does not want people holding US dollars for similar reasons: it also loses control over monetary policy, with excessive inflows un-intuitively leading either to unemployment or excessive debt (c.f. Michael Pettis)
That said, it's possible stablecoin networks succeed for other reasons, particularly having a widely-accepted "API" that is developed at the pace of modern technology companies instead of laggard banks.
That's part of it, but:
1. Progress often depends on evolving obsolete regulation.
Uber works much better than taxis (once upon a time, people could "call a dispatcher" an hour in advance, wait on hold, etc) and yet in the early years they had to work around taxi regs.
2. Blockchains are a fundamentally more robust way to run a ledger.
If any of you have ever written software touching tradfi custody you'll know about "reconciliation"--start of every business day, you get a dump of files in your FTP server in various proprietary formats. You parse the transactions and they don't add up. The Recon team hand-corrects and recategorizes edge cases so that the balance deltas match transaction totals and everything ties out.
This type of absurd duct tape is ubiquitous, and it's a major reason why trad rails have multi-day settlement times and even longer for international. Inflates team size and cost required to run a product. SWIFT is a messaging system -- bankers use it to essentially text each other about wires to figure out issue resolution. Some lower-level trad payments regulations are written assuming that this level of manual oversight is required to prevent ledgering errors and ensure sound accounting.
Stablecoins run on transparent, precise ledgers with machine consensus. This doesn't solve everything, but there are large categories of issues that can occur in trad payments that do not exist onchain.
3. Control is liability.
Some important regulations actually encourage blockchain-based payments. For example, money transmitter law places significant requirements on custodial money transmitters (you take money from Alice, with a promise to give it to Bob) that do not apply to noncustodial channels (you give Alice a mechanism to send directly to Bob).
My hang-up with crypto is that it solves the ledger-keeping part of running a financial system, but it isn't clear that's actually the hard part! Preventing and remediating fraud, money laundering, etc. are, and crypto makes those issues worse, not better.
This is a nice lens for looking at when stablecoins make sense.
If you're an American using your Chase account to buy coffee at Starbucks, the permissioned, heuristically fraud-checked, slow-settling tradfi system is well optimized for you.
If you are an importer buying $3m worth of bulk coffee from Kenya, you would much rather have an instant 1:1 USD transfer on beautifully efficient machine consensus.
In many countries in the world, the banking system is extractive and unreliable. The "confused employee" is not there to help you. The two weeks of money in transit is no benefit, just a source of additional counterparty risk, cost, and delay.
An immutable and transparent ledger is not for everything but it is a useful primitive.
Uber rides ARE taxis.
The innovation of Uber wasn't done by Uber it was done by everyone having a GPS enabled always connected phone and computing device in their hand at all times.
Uber is a whole bunch of things combined:
- very intuitive taxi ordering UX (for riders) and dispatching UX (for drivers).
- circumventing regulation so there are no more artificial limits on taxi supply in a given city.
- enabling gig economy: because you can use your own personal vehicle, you can work anytime you want for however long you want. You don't need to lease a taxi for an entire week or an entire month. You can choose to work for 4 hours on a weekend only during surge times if you wanted to. So it allows supply to be elastic to meet demand while also offering flexible work arrangements for part-time drivers.
[1] https://docs.google.com/document/d/1L0Me9si4iMclOq8n-oG2yNQf...
That's more or less exactly what this is. Stripe is launching an EVM L1.
The Ethereum Virtual Machine part gives it a mature tech stack with experienced developers and auditors. Plus, well-tested smart contracts that have already processed billions of dollars on other chains can be deployed on Tempo.
The "Stripe L1" part will ensure that it's fast, simple, near zero cost.
If we skipped the whole blockchain part, wouldn’t it be faster, simpler, cheaper? What value does the whole blockchain, EVM, L1 offer? Don’t they fully control the network? Don’t they decide “everything” anyway?
I’d love to understand it, I’m not a hater, just a developer who don’t quite get this announcement.
That can mean different things.
It can mean anyone can use it without needing to sign up.
It can also mean anyone can host a node, i.e. become part of the network, without needing to ask anyone for permission.
The question is how far they went with that and why people wouldn't use another L1 that offers similar features without having Stripe looming over it.
1- they start by owning all validators, maybe they expect to open validators to other entities at some point in the future. If these entities don't collude together, we could expect some sort of neutrality
2- Marketing - because crypto is coming at an ATH and why not getting some good marketing for free (or almost)
And people mentioning costs, this is not particularly relevant. L2s are extremely cheap by most standards, let alone by Stripe standards which charge horrendous fees.
Indeed you can! We even have a name for that! Its called a blockchain.
> This maintains many benefits of the blockchain and lacks many issues (fast, simple, near zero cost, controllable to a given extent -- no takeover possible, ...).
Blockchains can do all of these things.
Perhaps you are thinking of "bitcoin", instead of "blockchains"? Bitcoin, something that was created a whole 17 years ago, indeed has many drawbacks compared to modern blockchains.
Actually yes there is a blockchain. The word you are looking for is "Federated Blockchain".
https://101blockchains.com/federated-blockchain/
> Otherwise we can name everything
No, because we literally have a word for this already. Federated Blockchain. It is a well known concept.
M valid signatures of N authorities is a consensus mechanism that just needs public keys. You don't need a blockchain if you're prepared to trust a set of authorities like stripe and their trusted partners.
But as long as I don't see somewhat more transparent conversations with the people in your orbit like patio11, Matt Levine, Kyla etc, where you address how you'll actually tackle the non-technical challenges ahead, this GTM communication and site looks like every other 2019 JPM, HSBC etc "something blockchain" announcement and hard to get behind as something that might as well be really different this time, and not be killed/sidelined by vested interests. Including your own.
I actually view that as a plus though, they have experience and have seen what works and what doesn't.
And it sounds like this system targets global payments. Does that imply that some day users would be able to pay using Tempo? Where would we see Tempo?
Very genuinely curious.
Are there other uses? Surely a large and legitimate operation like Stripe and the companies they mention in the blog post would have found additional use cases?
You are literally in a thread whose top post is the Stripe founder describing use cases.
> For example, Bridge (a stablecoin orchestration platform that Stripe acquired) is used by SpaceX for managing money in long-tail markets. Another big customer, DolarApp, is providing banking services to customers in Latin America.
Let's say I make drinking water illegal, would you still do it? Sure you would, you need it to live, laws be damned.
In Argentina it was a similar situation, financially speaking, but with USD, as Argentina had like 1000% accumulated inflation since 2019, so basically the ARS melted in your hands, and the USD/Euros/crypto where your only safe havens.
So yes, the government made the transactions illegal, but the alternative was becoming poor (we ended up the previous government with around 55% poverty).
Today, if you want to transact between businesses or retail (folks like you and I), you need to find a route between the two entities' banks. This route might take several hops, passing through some central banks, and some of these hops might be instant or might take days to actually settle. On top of that, you need to pay the service that helped you find a route (SWIFT) and potentially the nodes your transaction goes through. Bottomline, it can be slow and a lot of middle men are taxing you.
This is why you see services like (Transfer)Wise, that basically try to bank everywhere, and allow you to send money faster by taking a shorter route (kind of like a wormhole :D). But they have to add liquidity everywhere, which they have to rebalance constantly, and it's centralized (single point of failure). FWIW it's great because for a long time this is the best thing we had.
Now, let's take a look at the other side. Using stablecoin is a matter of just creating a wallet. The openness by default of blockchains make it really easy to integrate with a blockchain as an entity (just use the SDK, it's there by design). Furthermore, it's in many cases instant and cheap (unless you're transacting on a slow blockchain, but then that's your fault).
That being said, the elephant in the room is that one stablecoin (let's say USDC) is now present on many blockchains. So if you have USDC on chain A, and I have USDC on chain B, we're back to our "tradfi" world where we have to find a route between our two chains, which might take us over many bridges, which can be slow and costly. The alternative, like with Wise, is to use centralized players who have liquidity on many different chains and can move things around by just updating their internal (and centralized) database. It's tradfi all over again :D
In Europe you can wire money across borders for free, you just need to know the account number. Arrives in seconds at 0 cost.
I feel like a lot of the fintech in the US is purely a result of a lack of regulation.
For the example of Argentina, the real reason that business is using crypto is because their currency is unreliable. It might be a good fit there but trading in dollars would've fixed that too.
And a wire, which is as close to sepa as I think you can get, costs 10s of $ each time.
Basically, the international business problem is real. The Argentina case is mostly lack of a domestic stable currency though. These are legit use cases, fast and cheap transactions aren't.
If you actually offered those US businesses with instant, verifiable transfers that cost nearly nothing, do you actually think they wouldn't move to that?
- https://en.wikipedia.org/wiki/Single_Euro_Payments_Area
I don't know if I'd call that a "unified economic zone" without some qualifications.
https://www.europeanpaymentscouncil.eu/about-sepa/sepa-timel...
I suspect that banks cannot solve this because it would be illegal for them to do so.
If many banks could send and receive money from across the world money laundering would become way way easier (in this sense the lack of privacy in many blockchains can be seen as a strength) and it is how offshore fiscal paradises work
Crypto here would similarly make very little sense.
And occasionally, they will withdraw that service for arbitrary and capricious reasons
https://news.ycombinator.com/item?id=44685011
Crypto stablecoins running on blockchain rails provide an alternative to that network.
do you mean "electronic funds transfer"? because "wiring" is an old school thing that uses Telex machines and and gets processed by people and I would doubt it carries no fee. (It's probably been modernised so that people handle virtual slips of paper, but it very much carries the feel of an "order on a slip of paper" type of transaction and is far from instantaneous.)
I'm genuinely asking, I only know about the US systems where electronic funds transfer is known as ACH which is an automated clearing house, and wiring is called wiring. From the US, I can wire to European banks. I can't ACH.
You are underestimating how toxic the Argentinian government was.
We did do that with capital controls, the problem is that it was illegal, and the Argentinian IRS is very active trying to tear you a new one. Argentina has long become a bimonetary economy, dealing with ARS for everyday transactions, but saving in USD and pricing assets in USD (real state for example).
To give an example where this would have helped, my parents in Argentina needed to send money to my brother in Europe. The government had made that illegal with capital controls, so I had to transfer him money through wise from a 3rd country and when at some point later I visited they gave me the cash.
People underestimate how annoying and distopic governments can be if given the chance.
If something can be accomplished on the blockchain, which requires N nodes, a business can probably replicate that same objective with less than N nodes because they don't have to pay the cost of verifying that nodes are acting honestly. This business is incentivized to be honest because otherwise they lose their business. Someone has to pay those costs for the N nodes on the blockchain - who will it be? Transactions seem cheap now because funding for these blockchains is often used to subsidize costs.
You mentioned ease of use, like the use of SDKs, but blockchain technology does not enable that. All blockchain can do is that if you ask it "hey i was told the state of the world was this. is it true?" and the blockchain will tell you yes or no. If you want to provide those kinds of guarantees to customers in a reliable way, all you need is cryptography, not blockchain.
So in this case, "this business is incentivized to be honest" might be the precise "problem" this is meant to solve.
Sort of like banks use customer money to offer loans to avoid the need of centralised liquidity.
The Blockchain technology is important to allow different exchanges to interact with each other in ways that I suspect would be not super legal through a central entity.
When A sends money to B both have an expectation that B is able to access such money through normal monetary systems like: seeing their bank balance go up, withdraw it as cash, or transfer it again to C which will have a similar recursive set of expectations.
Unless your database is the de facto central banck for the currency A and B use you will have to convice B's monetary system to believe B now has more money. The simples and almost only way to do that is to pay the appropriate price in a currency they like.
Which requires liquidity.
As an example if you wanted to install a bitcoin ATM with withdrawl* in a train station (or anywhere else) you would need liquidity in whatever currency the user want to withdraw.
* I suppose you could withdrawn bitcoin by giving out fresh wallets with the sum or by simply transfering it.
because it is the banks that do the transfer, so they need to have liquidity
> Bitcoin doesn’t transfer funds, it’s just a shared ledger of what funds have been transferred.
the bitcoin blockchain act as a single bank in terms of transfering between bitcoin wallets, there is no need for central liquidity because it is all "internal".
A perfect example is arbitrage between bitcoin exchanges, to my undestanding many exchanges do internal transactions off-chain and only interact with the public blockchains for deposits/withdrawals. If a user wanted to exchange bitcoin for ether and then withdraw the sum the exchange would need to have liquidity in ether for the withdrawal.
For business running the same code on their 1 node instead of N is not a replacement, because their counterparty has no reason to trust whatever is running on that 1 node.
Your reasoning re: N nodes are expensive is also flawed. Executing a single payment transaction takes a fraction of a second of compute. Even if it is replicated 10,000X, it's still extremely cheap compute-wise. The low cost of transactions has nothing to do with subsidizing.
I mean, why are you doing this kind of business with someone where you can't even trust that?
Aside from that, block chains only provide trust if they're meaningfully decentralized. These hyper specific b2b ones seem unlikely to pass that test. Exactly who all is running verifier nodes?
The only people that need to run a verifier node are those that don't trust the other verifier nodes to do it properly. It's opt in, most will not run one, but a business that has enough money at stake can if they want to.
Then the blockchain client software provides the framework for cryptographic assurance that the two copies of the ledger are in sync.
> This business is incentivized to be honest because otherwise they lose their business
is true. And it might be true if you assume perfect competition, low barriers to entry, no egregious regulations, no regulatory capture, no bundling to force decisions regardless of 'honesty' (or 'fairness'), etc.
So in a perfect world, maybe. But I think the niche in all the imperfections.
This is missing something important, which we can see by considering one of the major problems merchants want to solve right now.
The credit card companies charge them ~3% and then give ~1% back to the customer, implying that there is a ~2% net gain to be had by cutting out the middle man. So why hasn't this happened? Because the alternative with the lower fees is ACH, but customers are less willing to give out their bank account number than their credit card number to a random small business.
This is the easy case for some centralized service to fix it, right? Have some large trustworthy company take the customer's bank account info and transfer the money to the merchant for a very small processing fee. But this is the part where your assumption falls through. Once the merchant has signed up for this, the payment processor is the only one with the customer's payment info. In other words, it's hard to switch, and then the payment processor can charge higher fees (eroding the benefit) and the high switching costs also cause the market to consolidate. And because you're tied to a single payment processor, when their fraud AI has a false positive they can erase your business overnight by locking you out and not answering the phone.
Now suppose you don't have a centralized system. Instead, the customer acquires a store of value (Bitcoin, stablecoin, something else) however they want. Customer A can get it from Coinbase, Customer B can get it from Stripe, Customer C can get it by selling something on eBay and accepting it as payment, and the merchant doesn't have to do business with any of these third parties to accept payments from customers who do, because they all support the same transfer medium.
Now you have a competitive market. Currently a new payment processor has to earn the trust of a large enough percentage of the general public for merchants to be willing to use them; a new exchange would only need the trust of enough people to be doing enough business to cover their costs, a far lower threshold. If a merchant wants to switch payment processors or has a dispute with one of them, their own customers wouldn't have to do anything different because the means customers use to convert dollars to tokens is independent of the means merchants use to convert tokens to dollars.
> Someone has to pay those costs for the N nodes on the blockchain - who will it be?
That's the boring question. The interesting question is, can you have a blockchain with lower fees than payment processors currently have? And the answer appears to be yes, e.g. the transaction fee for Bitcoin Cash is around a penny.
If trust is an issue, the bank can provide cryptographically signed receipts that show they've confirmed the entire lineage of your account, in the same way a blockchain does, but they would be the only verifier. The question becomes about how the cost of the additional trust from the blockchain relates to the incentive of doing honest business. I imagine that trust cost is pretty high.
> can you have a blockchain with lower fees than payment processors currently have? And the answer appears to be yes
The transaction fee is not the only thing being paid. They are also getting mining rewards. If a blockchain has mining rewards, maybe in the form of Bitcoin Cash, then that will dilute the entire pool of Bitcoin Cash.
How is this any different than the Fed or the fractional reserve banking system creating new US dollars?
> nothing about the technology itself makes the concept of transferring money cheaper.
Nothing except for the thing that matters: If you have something fungible instead of something with high switching costs, it makes fees go down.
> if it became a threat to payment processors, my theory is that they could lower their costs more than blockchains potentially can.
And that's why blockchains are useful! To exert the pressure needed to make that happen.
It doesn't matter if the centralized system can have lower costs unless it actually does, and for that you need the competitor to exist as a viable threat.
The miners get the fees. The fed does not keep the dollars they make. They also adjust the rates to avoid things like recessions.
> Nothing except for the thing that matters: If you have something fungible instead of something with high switching costs, it makes fees go down.
The US dollar is considered fungible... Help me understand how any of this is specific to blockchain technology and not included in non-blockchain technology. Have you worked with this tech before? Also, what about things like venmo and zelle? zero fees, super fast.
> And that's why blockchains are useful! To exert the pressure needed to make that happen.
I'm not saying they are not useful. I am saying the technology behind them is irrelevant to the costs.
Somebody gets the money. Banks and government contractors get the money. It's not clear how that's any better than miners getting it, and either way it's creating new money that dilutes the value of your existing money.
> They also adjust the rates to avoid things like recessions.
There is nothing stopping the government from setting up a fractional reserve banking system denominated in a cryptocurrency. It works the same as it does in dollars. Alice borrows from the bank, pays the money to Bob and now the bank credits Bob's account and balances its books through the money that Alice owes the bank. If Bob wants to withdraw the money as physical cash or cryptocurrency in a non-custodial wallet then the bank either has enough reserves to do that or can sell the loan and use the proceeds to pay Bob. But if that doesn't happen -- which is more common -- then the balance credited to Bob's account only ever exists in the bank's computer and the bank has effectively created new money in that denomination.
> The US dollar is considered fungible... Help me understand how any of this is specific to blockchain technology and not included in non-blockchain technology.
US dollars as bills in your pocket, sure, but it's hard to transfer those over the internet without involving a middle man.
> Also, what about things like venmo and zelle? zero fees, super fast.
Venmo isn't a protocol, it's a company. It isn't free for businesses and they can still shut down your operations without recourse.
Zelle is a protocol, but it's designed for transferring money between individuals, not making purchases from a business or setting up autopay. What we need is a protocol that is designed to do those things, but the banks fight attempts to create it because they want to keep getting the 3% from credit cards.
> I'm not saying they are not useful. I am saying the technology behind them is irrelevant to the costs.
Suppose that something with the transaction fees of Bitcoin Cash was more widely used and therefore a viable way for small businesses to accept payments from ordinary customers. Which existing non-cryptocurrency service is a viable means to do the same thing for the same or lower fees? A real one, not a hypothetical cost structure that nobody actually offers.
You mean criptography and trust right?
if bank of america does something malicious, i can prove in court very trivially through those signed receipts that they did so.
So I don't need to trust bank of america - i just need to trust the courts to charge financial institutions that provably are breaking the law.
You usually can trust your bank, as long as you trust your government. Regulations make it difficult for banks to misbehave.
That being said, not trusting your government (which I can believe is a valid stance in some countries) is probably the only valid use case for blockchain IMO.
here is what you're missing, and is very easy to miss:
the third party, unaffiliated, developer experience is better on an EVM than it is is on a traditional centralized database. Than it is on a shared database with a bunch of signers. Than on any "web 2.0" cloud platform. the developers continue to bring their entire audiences with them, even though those audiences are quite small, they've grown in aggregate to be large enough.
in web3, of which EVM platforms dominate and are the most mature, there is a tiny payment for deploying your application once, and then it exists in perpetuity for free at unlimited levels of bandwidth. your users pay to update the state of your application, and in many cases you can earn from them doing that.
there is absolutely nothing in the cloud world that achieves the same thing at the same cost. the payment paradigms are entirely different, you have to pay for hosting, deployment, the thing that handles your deployment, additional workers to unbottleneck your continuous deployment, the bandwidth, bandwidth spikes, and get nickel and dimed on a ton of more things, or paying a premium to a service that handles all that for you.
additionally, the concept of "composability" is attractive in the web3 space, again spearheaded by standards on EVMs, the concept is that third party applications are automatically compatible with each other. there are infinite permutations of combinable operations one can do or enable amongst deployed applications. you can compose, or combine, applications in a far less cumbersome and less fragile way, than with REST and APIs of different people's apps in the web 2.0 world.
and on top of that, if one of those permutations becomes useful and you make it user friendly to do so, you can collect a toll for others doing that operation. this is just financial services, where "basis points" are collected by intermediaries.
a common application are forms of lending. initiating borrowing, trading the opportunity, and closing the loan within a split second, leveraging 3 - 10 financial services at once, is something that's better faster and cheaper than what has been possible outside of the blockchain space. the ability to do so is gatekept by the other financial industry and payment rails in ways that are no longer necessary to debate. now you can do these things with $3 in capital instead of needing $3 million dollars to pursue getting an API key from some old slow moving organization.
the compelling reason to create a new EVM are to change some basic parameters. block time, the size of contracts (the aforementioned operations) that can be deployed, and which standards are included into that chain, and of course the governance model - how are new standards deployed and how are transactions added. making stablecoins a first class citizen would need a new blockchain. how your governors/validators/nodes and RPCs function under load would need a new blockchain.
it is very attractive to developers that they can deploy applications "in the cloud" that have a very nominal cost, doesn't cost them to maintain even amongst spikes in bandwidth. they don't have to incorporate or do any formalities while having unlimited financial upside, solely because there is already hundred of billions of dollars in notional value sloshing around in that space to cater to already.
edit: I'd actually like to work with Stripe or other web3 organizations again on these kind of applications, now that I notice how boutique it still is to understand what's going on, email in bio
Take the spacex example above. They are using a stablecoin to abstract away a bunch of illiquid and unstable foreign currencies. Getting rid of that huge pain of carrying 100 countries’ currencies via various banks is the value prop. The API could be cobol and it wouldn’t matter.
> The API could be cobol and it wouldn’t matter
you can probably get cobol to transpile to bytecode that EVMs can use. I get the point you're trying to make that excludes blockchains, but you don't make that point
I’m saying the API can be complete trash and whether it’s a blockchain or a traditional bank, the thing that will drive the decision is money.
>the third party, unaffiliated, developer experience is better on an EVM than it is is on a traditional centralized database.
The developer experience is completely irrelevant when millions of dollars a week are on the line.
The API doesn’t matter.
This is definitely a take, given how easy it is to write a program with security bugs using Solidity due to specific concerns like reentrancy that only exist due to the unique way smart contracts work. The inability to "undo" a fraudulent or mistaken transaction without requiring all validators to fork the chain also makes this a non-starter for many developers.
> your users pay to update the state of your application
Also a weird thing to call a "feature" for developers when this actively drives away potential users.
while being a funnel of 1 step for the users already in the ecosystem that find your application
the ecosystems turns the entire Web 2.0 marketing funnel industry on its head because the initial call to action is a payment. All of the mystery of converting to a paying customer is obsoleted in favor of unbridled commerce
this just points out another way its optimal for developers with ideas, when aiming for revenue in a web3 architected project for crypto natives. they have frictions, you solve them, they pay you. If you aren’t catering to crypto natives already, don’t launch a web3 application. the space is already big enough to ignore other potential users, and if you want that to be your cause to help the UX to grow the space, you can do that too.
> security bugs using Solidity
To your other point, I don't see 2016's smart contract coding problems as show stopping criticisms, because this is the lowest hanging fruit of experience for anyone learning solidity, all while standardization of open source methods has solved those building blocks just like in other languages. additionally, you can write an insecure application in the web 2.0 space as well.
There are enough and a growing number of developers that aren't afraid of deploying code on a blockchain. a lot has happened in the last ... decade? developer tooling has improved.
(The many other crypto coins since then are mostly BS freud.)
Whether or not it was the point of Bitcoin from the start, "removing the middlemen" is bullshit because you still need exchanges, wallet providers, people running nodes, etc. Cryptocurrency in practice just transfers power from traditional middlemen to new technically-advantaged middlemen.
Miners now replace this since there is a network fee required to transact.
I'm not sure what the current state of affair is, but ETH gas fees were egregious last time I transacted ETH.
Normal people cannot function in a cryptocurrency ecosystem without these new tech middlemen. This is exactly what I mean when I say _in practice_. Average people are still left to the whims of cryptocurrency corporations that are worse than banks because they're unregulated, much greedier, and much less risk averse.
you don't need exchanges or wallet providers, or any other intermediary, to exchange Bitcoin -- those add layers of convenience (conversion, storage), but they do _not_ strengthen the web of trust and do not provide the same function as intermediary banks and clearing houses do
yes, you do need people running nodes, but they're not intermediate layers, and you can run a node yourself to benefit from the system (though in practice it's no longer profitable due to bitcoin farms)
A lever of power is never removed unless the act itself can no longer be performed. All you can do is take someone's hand off the lever and hope that whoever grabs it next is better than the last hand that had it.
I find it very unlikely that wresting power away from government—which at least has some level of citizen participation—will end up with it in better hands. The most likely scenario is that some billionaire will end up owning it.
Right. What you propose is that you take government's hand off the lever and a million users will all equally get to gently rest their pinky on it and distribute the power equally.
I have never seen anything in the history of the world or my understanding of sociology to indicate that such a power structure has any stability. If you give out power in a free-for-all, what tends to happen is:
1. All of the participants already have some unequal distribution of power going in.
2. Those who have more are able to use that to claim a little more of the new resource.
3. Once they do they, they are able to use the increased inequality to claim even more.
4. Go to 2.
The natural tendency is towards increasing inequality. It takes a ton of work to build and maintain structures that encourage any level of egalitarianism.
Non-fiat currency is the most egalitarian system possible.
No, it requires network control. Consensus among a large number of independent participants who agree on a change is one way to have that control.
But another way is to have a minority of participants that control a disproportionately large fraction of mining decide what to do.
The history of crypto shows that over time, miners tend to consolidate until eventually you have a small number of miners who significant leverage over the ledger. None of that should be surprising: economy of scale is economics 101 and certainly applies to miners who buy and run hardware in bulk.
> Non-fiat currency is the most egalitarian system possible.
Egalitarianism is a property of human behavior and social systems, not the hardware that humans may or may not be using as intended.
I could pretty much go on forever…
It's not a push in any sense of the word. And outside of the US quite a few of financial institutions are "up to date" in most of the areas that matter to people.
> there is no need to reinvent judiciary and executive institutions in this step.
Strange how "up to date" inevitably involves rediscovering all the reasons those exist in the first place and why the "outdated" institutions do the things they do.
The second question is, once you take away anything that’s not permissionless, what’s left in crypto?
- Buying a physical good? You’re trusting the person manufacturing it, storing it, shipping it. If it comes to your door and it’s defective, they’ve already got your money, and it turns out your trustless system actually makes this impossible to resolve.
- Buying some skin for a game or something? Unless the game is also run in a decentralized fashion, they can just choose not to render that particular skin.
So, like, can you give me an example of a single transaction that is rendered trust-less because of cryptocurrency? It seems to me like whenever anyone actually tries to do anything useful with crypto, it ends up being what you would describe as an obvious scam.
1) people who put their money into custodial 'banks' and then get it stolen
2) people rely on protocols whose consensus protocol is controlled by a small committee of appointed VIPs
None of which is germane to my original point. I'm simply saying that Im advocating for central banks not having the power to manipulate the currency supply at a whim And somehow you're forcing me into the position of spending an hour reading every trash crypto scam you can find. Not terribly interested in discussing how you can get ripped off with crypto or fiat cash.
Once again, this is what Stripe is doing here in this very announcement.
> Not a single one of these examples is trustless, decentralized crypto
You brought up trustless, so surely you can find an example. I didn’t pull that out of nowhere.
There is a case for banks that hold your hand as if you are 90yo and there must be a case for banking where I know what I do and I take responsibility for my actions.
If i send my coins to the wrong address its on me. But if I want to send 10k to someone - no one should ask me to wait 3 days, to do 100 verifications if I am not being forced or scammed.
I'd want that protection for my mom, sure.
But I want to remove all that crap for me. I don't have time and energy for it
It clearly demonstrates that people do not have the capacity to make critical judgments and have to be somewhat protected from themselves.
That's als what regulations are for.
I don't think that customers or businesses should see Tempo very much. In the success case, Tempo is a platform like SWIFT or ACH that others employ behind the scenes to orchestrate transactions. "Decentralized, internet-scale SWIFT" isn't exactly the right analogy (there are clearly lots of differences), but it's not totally wrong either.
Why are businesses finding crypto easier/faster/better?
Yeah, I think this is the natural follow-up question. The answer differs a bit based on the use-case, but there are a few common reasons:
* Instant on-chain transfers avoiding trapped liquidity. If you're transferring money from financial institution A to institution B, and the transfer takes a day, you're either slowed a day in taking the next step or you have to somehow cover that float. Depending on your movements and their predictability, that can require big buffers.
* Fees that are lower than cards. Card payments are instant, which is often valuable (and superior to many bank transfers), but card transactions are also expensive relative to stablecoins. (And while card authorization is instant, settlement is not.)
* Reliability. This sounds funny, but, when sending money between countries, there are many more manual processes involved at the associated financial institutions than one might think. Money is frequently just... lost, and humans are required to hunt for it. (We see this all the time at Stripe.) Crypto is punishing if you make a mistake, but, if you do things correctly, reliability is all-but guaranteed.
* Fewer currency conversions. Wholesale FX for major currencies is very cheap, but minor currencies can have bigger spreads, and the actual fee incurred by a regular customer (e.g. with their bank) can be significant. Stablecoins often make it possible to skip conversions that would otherwise happen.
* Access to USD-based functionality. The US is the world's most sophisticated financial services market. Having a stablecoin means "having an on-chain asset", but it also typically means "having a USD asset", and a lot of major parts of the ecosystem (e.g. US equities and credit markets) primarily, or only, deal with US dollars.
Acknowledging the obvious, a reflexive answer frequently invoked here is "it's regulatory arbitrage", but I think this is some combination of misguided and incurious as an explanation. First, stablecoins are now formally regulated in the US (with the GENIUS Act) and in Europe (under MiCA), so their use is now very explicitly regulated. Secondly, it implicitly assumes that the only reason one would seek an alternative to the traditional ways of doing things is because someone is doing something illegitimate. I think this usually indicates a lack of understanding of the challenges, complexities, and costs associated with high-volume cross-border money movement. Indeed, and somewhat ironically given the claim, one of Bridge's large customers is the US government.
And crucially, the reason to use crypto rails here is a legal one, not a technical one. There's no throughput, cost, or reliability advantage over existing centralized systems. Quite the opposite. What crypto offers is access to a regulatory regime designed through heavy industry lobbying, one that e.g. doesn't even require full 1:1 low-risk asset backing. That would never fly in traditional finance.
None of this implies illegitimacy. Regulatory arbitrage can be perfectly legal. But it does mean the uptake isn't about technological superiority. It's about governments creating a parallel rulebook after sustained lobbying pressure. That distinction seems important to keep in mind.
Other comments speak to this - but I wouldn't describe SWIFT (the predominant cross-border payments rail for high-value transactions that you couldn't just throw at a fintech eg. Wise) as centralized.
It's a bunch of hops, across correspondent (but separate) banks, that slow payments down, make them expensive + inconsistently traceable + introduce a bunch of manual ops burden along the way across each of the banks in the chain.
These are slow by design - abuse/fraud. How does blockchain solve that issue?
> * Fees that are lower than cards. Card payments are instant, which is often valuable (and superior to many bank transfers), but card transactions are also expensive relative to stablecoins. (And while card authorization is instant, settlement is not.)
Once again - CCs are instant because the % fee pays for fraud and customer service. What is to stop centralized blockchains from incremently increasing fees to the level of CCs over time? ...nothing.
> Crypto is punishing if you make a mistake, but, if you do things correctly, reliability is all-but guaranteed.
Once again - this is a feature not a bug. Things are slow because of bureaucracy AND abuse, not JUST bureaucracy. Crypto is only beneficial today because the actors using it are savvy. When the laggards join, we'll just fall back to the norm.
FWIW - the banking system in the US is awful and the experience to transfer money into other fiat is just as abysmal. However I think crypto's current idealism is a factor of the parties involved, not the technology itself. We're just reinventing finance...it's just this time with Silicon Valley in control instead of Manhattan.
Technologies are themselves disruptive, as their introduction can shape human behavior. Choice doesn't happen in a vacuum.
FWIW - I personally would choose a quicker and cheaper transaction all day, every day, but if it came at the expense of losing my money, I'd have to think twice about it. You yourself said it best "crypto is punishing if you make a mistake".
That is NOT TRUE! Technologies that are disruptive are those that intrinsically possess features that present benefits that exceed the switching costs of existing technologies. Therefore they are inherently disruptive. The timeline of product adoption is decided by consumers yes. Which is actually preceded by (and accelerated by) visionary leaders who can figure out what the benefits of said technology are, where to best use it and then tell people about it (market the technology).
Here's a simple example: graphical user interface. Anyone who saw it early on at Xerox knew it was so obvious. But the timing of its mass appeal, adoption and who would produce the preferred interface was questionable.
This comment alone makes me incredibly skeptical about the way you think.
A business can choose if they want
1. slow, pay for customer support and fraud protection
2. instant, lower cost, mistakes are irreversible
Are you really "once again"ing Patrick Collison on the issue of how payments work?
Then users will just go to a different chain that provides a better outcome.
Would you agree that "actual regulatory evasion" has been a top-three use case across the history of stablecoins? (That is: hackers, money launderers, sanctioned entities, and crypto exchanges do things with stablecoins expressly because doing them with dollars in banks would be illegal in an enforceable way.)
And, would you agree that GENIUS is a formalization of the low-regulation status quo of stablecoins? (That is: the bank system does KYC, AML, and reporting on both sides of every transaction; the stablecoin system generally only does that for onramps and offramps.)
This is not to say "regulatory arbitrage" is the only thing going on with stablecoins. Existing payment rails are imperfect and rent-seeking for reasons that don't have to do with the above. I'm just surprised you're describing the arb as such a non-issue.
Which misses the mark given the context, since the GENIUS provisions aren’t yet effective or enforceable, and Tether’s history shows that regulatory arbitrage does exist.
- SWIFT is really just a messaging protocol between a distributed, decentralized set of global banks that are all passing messages/money between each other. Your SWIFT wire might pass through an arbitrary number of correspondent banks, sort of like a flight route with multiple stops, until it reaches its destination.
- Consequently: money moves slowly (up to 5 days), is expensive to move (variable fees assessed either to the payor or payee, by every bank in the chain), and there is an indeterminate amount of manual ops burden, multiplied by every bank in the chain.
- As another commenter points out - services like Wise really just use massive amounts of liquidity spread out globally to try to minimize the number of true, bank-to-bank cross-border settlements required to get low-value payments from A -> B internationally.
Ironically, I think the great accomplishment of stablecoins is its "centralizing" of cross-border money movement into a single ledger -- reducing it to a "book transfer" of sorts -- where getting all the world's money to pass through a single ledger would otherwise be a very difficult (probably intractable) challenge _if it were not for_ the permissionless-ness + global neutrality of the blockchain that is tasked with doing so.
(I wrote about this in a slightly longer post here: https://text-incubation.com/The+great+irony+of+stablecoin)
A regular log or ledger file could accomplish the same thing as a blockchain for significantly less technical debt or ongoing expense.
And note that the best use cases Stripe could find for "real world" use cases were a company trying to complicate its FX cash management, and a cash transfer app with fees higher than most of their competitors.
It is kind of wild how a bunch of people hyping blockchains five years ago has resulted in a thermostatic reaction where a bunch of other people have decided that distributed computing is easy, actually, you just need a ledger file.
But it's still just a ledger.
With blockchain, you just get a ledger that's harder to use and dependent on external connectivity.
From the example given from Argentina, it bypasses capital controls, which until recently, made accessing foreign currency very hard/expensive/illegal. Argentina had a huge crypto boom because of them.
One way to see it is today the EVM ended up being the solution to a lot of other problems.
The banks are dying, their core banking is dying after 50+ years of service. There hasn't been any real investment since 2008, only minimal maintenance and cost cutting. Also generations of incompetent people at every levels created a situation with no escape.
Also things like SWIFT became very irrelevant in practice. I can assure banks did not really used it for a while.
When Ethereum and its EVM appeared 10 years ago a lot of people saw an opportunity to build a better "programmable money" platform but nobody really succeeded. At the same time Ethereum did not fail, improve and still secure the assets and run the smart contracts deployed in 2015. More than enough to convince the people on a sinking ship to jump on that boat.
My guess is the the EVM is becoming something similar to UNIX: a loose standard almost everybody will build on. Maybe not the best but something good and flexible to jump and we need to move forward.
Also the dollar urgently needed a new outlet so its on.
So it is not really about "crypto" it is more about the EVM as a platform.
I chose wire transfer. Which meant going to my bank, getting approval to get paid, fill out two forms, and making three total trips.
I now have contractors in Nigeria and Philippines who want to get paid in USDT. It's instant and there is a thriving local scene of P2P sellers for instant liquidity.
Like, blockchain technology to power distributed ledgers for peer-to-peer payments is pretty interesting and I think I'd prefer it exists, consequences be damned. Stable coins don't really fit the same use cases though, and generally do have at least some reliance on a central party, so it raises the question whether the desired technical properties can't actually be achieved using traditional technology.
Unfortunately, the answers pretty clearly center around not what kind of technology is used to implement the ledger, but rather the choice to implement one versus using existing payment networks. I don't think this is done in bad faith, but rather is the result of very different perspectives.
I think the blockchain skeptics have a point: even if there is something especially technically advantageous about using the blockchain for this purpose that really couldn't be accomplished some other way, so far the only obvious incentive to do things this way appears to be regulatory differences in how the blockchain is regulated versus traditional ledgers.
Very tangential, but seeing major entities and even governments adopt blockchain technology has made me think a lot about potential consequences in the longer term. I really wonder what happens to the properties of various cryptocurrency networks when and if quantum computers scale big enough to start breaking our cryptographic systems. I guess CryptoNote is just toast.
appears to be regulatory differences in how the blockchain is regulated versus traditional ledgers.
Hyper-inflation, censorship, corporate takeover of all interpersonal transactions, data harvesting, slow processing, fraud, offshore accounts, scams, laundering. The list feels almost endless.
Luckily we're talking about bitcoin right?
I've watched for over a decade how this forum utterly decimates any actual discussion of crypto (bitcoin) due to willful ignorance or blind naivety. So excuse my excitement when I get a chance to actually discuss its merits or disadvantages.
In this sense, I will agree that stablecoins are just a technological way of obscuring certain mechanisms in how fiat currency is distributed and is basically a derivative instrument that exists outside established regulatory framework (similar to how uber/airbnb operated for a decade until the govt caught up)
You just can't "invest" in this vision just as you can't "invest" into treasuries, I mean you could but they don't give 100x the returns.
I skimmed through and I don't see anything that promises a lot of returns and THAT'S A GOOD THING. Just like how things like (okay, I was thinking of some universally loved non ipo company and I thought of silksong which is going to get released, so team cherry!!) So if you want to invest into team cherry, the best you can do right now is maybe buy the game but that isn't investing I think its in the similar manner and its a good thing since it prevents frauds and false returns advertising
There is (usually) no free lunch. Nothing that can give 100x returns anyway, there is insane competition on things like on beating the market consistenly even with 1% is really hard and only very few companies do and even then, their past record doesn't indicate the future remains the same. Tldr: I am that salesman of index funds. also diversify, s&p have a huge concentration on AI stocks and so please diversify into world stocks or maybe even more into non american stocks since american markets are heavily focused on AI and I doubt that it will play out since the markets do feel like they are in a bubble right now
Checks crypto watch, ah, it's Latin America time again.
Even just paying a foreign contractor is a pain in the ass sometimes so if a bunch of banks and financial service providers around the world manage to make international transfer easier via the coins, that’s great. Not everyone cares about the inconvenience of KYC or reversibility of transactions sent internationally. These usecases feel more like shortcutting the complexity of transactions across state lines rather than the regulations we’ve learned about the hard way in a hundred years. Obstacles rather than safeguards.
As someone who actually worked on some crypto project (nanotimestamp) and also has got paid in crypto. I usually just convert it into stablecoins / gold coins for a short term (1 year max) where since I am still a minor, I don't have a bank account and so I mean, the end goal is to get my stablecoins out of the chain into real money not vice versa.
I had written something like this, just with a clickbaity title but its basically that I hate everything in crypto except stablecoins which I really like. Like there is paxgold which has gold and I genuinely like the fact that I think that we might be able to pay in gold or etc. stuff, I also like USDC too.
Here's my article: https://justforhn.mataroa.blog/blog/most-crypto-is-doomed-to...
This doesn't really help that.
KYC isn't an 'inconvenience' it's a legal requirement that you (or your employee) can go to jail over if you do not comply with.
> The company [SpaceX] partnered with Bridge, a stablecoin payments platform, to accept payments in various currencies and instantly convert them into stablecoins for its global treasury.
A little bit of trouble coming up with enough examples of anyone who wants or needs this, I think?
I'm no economist, but wouldn't shifting transactions from their currency to another (USD/stablecoin) inherently destabilize their economy even more?
I'm guessing the GENIUS Act had something to do with it too? Now that bank depositors have an incentive to hold bank-issued USD stablecoins given their priority in cases of bankruptcy[0], it seems likely there will be a lot more transactions with them as well
0. https://www.congress.gov/bill/119th-congress/senate-bill/158...
One sign of a technology becoming mature is when it stops needing to be the main character. It starts to make room for what it does, not what it is.
When thefacebook launched, it wasn't a PHP-based social network; it was a social network for college students.
Blockchain has been the main character for a very long time and it's really encouraging to see a product launch like this. Congrats to everyone involved in making this product a reality.
1.5%
$0.045 per credit transfer
$0.01 per request for payment message
$1.00 per liquidity management transfer
BTW, it is crypto. So the promise that none of these businesses are using crypto because it's crypto or for any speculative benefit is a provisional promise at best. Hyrum's Law argues an opposite future.
- It rang a bell but I had to look it up, figured I'd share to save others the trouble.
We charge 1.5% of the transaction amount (in USD).
Do they use it to arbitrate NFTs? (need more jargon)
Because SpaceX is definitely something that screams "finance" to me.
People can build their own smart contracts and speculate.
You mentioned sub-cent tx fees, 100k tps, and what I presume to be atomic swaps for stablecoins. Are you thinking about something like $0.10 fees or something like $0.0001 fees? At $0.10 fees at 100ktps that end up representing $100/s in tx costs which is about $8.6M/day or $3B/year. Presumably you expect to make more per year on this project in the ideal case, so are you intending to allow the fees or TPS to "float" upward, or to restrict participation in the L1 to only trusted partners, or for the network operators to make money off the interest from holding the stablecoins' currencies in reserve? What if demand exceeds 100k tps?
Since this will be a corporate backed project how do you plan to handle sanctions and government currency controls, eg if Uncle Sam tells you to drop support for Iranian currency, how will that work?
Will there be account/transaction privacy built into the network through ring cryptography or zk proofs? I'm assuming no, but if your answer is yes and Uncle Sam takes issue with that, what is your plan?
Bitcoin (and possibly a few others) is one of the few uses of blockchain that actually makes sense. The blockchain serves the currency, and the currency serves the blockchain. The blockchain exists to provide consensus without needing to trust any off-chain entity, but the blockchain relies on computing infrastructure that has real-world costs. The scarcity of Bitcoin (the currency) and arguably-fictitious reward for participation in mining is the incentive for people in the real world to contribute resources required for the blockchain to function.
Any real-world value given to Bitcoin is secondary and only a result of the fact that (1) mining infrastructure has a cost, and (2) people who understand the system have realized that, unlike fiat, stablecoins, or 1000 other crypto products, Bitcoin has no reliance on trusted, off-chain entities who could manipulate it.
You trust your stablecoin's issuer that they hold enough fiat in reserve to match the coin? You might as well trust your bank, but while you're at it, remind them that they don't have to take days to process a transaction - they could process transactions as fast as (actually faster than) a blockchain. But I imagine most banks would point to regulation as a reason for the delays, and they might be right.
So what are stablecoins really trying to do? Circumvent regulation? Implement something the banks just aren't willing to do themselves?
It makes no sense in the real world.
Bitcoin was an interesting idea. 20 years ago. It's entirely without merit now, but it will take decades to fade into obscurity, pumping out carbon the whole time.
Regardless, they don't need to use bitcoin for their day to day transactions. Just somewhere to put their savings that won't be inflated away. USDC would make much more sense of course.
> Just somewhere to put their savings that won't be inflated away.
What fucking savings?
And uhh, what are they doing, then, just making periodic conversions to fiat that is, as you point out, "inflated away"?
You're trying to have it both ways, "crypto is immune to inflation problems, that's why it's important to a lot of the world", and then when someone points out transaction fees, "Oh, you wouldn't really use crypto daily, you'd still use that fiat with inflation problems, you'd just keep your "savings" in crypto".
It is laughable how much fervor goes into these kind of statements that have had little to no critical thinking applied.
BTC was a first draft that somehow metastisized into a literal meme virus that consumes a stupifying proportion of the world power supply.
It's idea cancer. The fact that it continues to exist is a sign of a faulty memetic immune system in our species.
Except they are frequently _not_. I dislike crypto on principle, but you can't look at the exorbitant transfer fees and latency that a lot of banks charge for common transactions (Visa/MasterCard are especially bad) and say that crypto has no potential.
Yes, it would be easier if we could just trust our banks to offer instant settlement and very low fees, but they don't.
The problem with banks pointing to banking regulation is that they helped shape the regulation - and they did so to protect their business, not to help consumers.
We know that central banks are great at monetary policy. We know that decentralized protocols remove a lot of the more parasitic traits of banks. Why not have a central bank currency that can be traded on the blockchain, especially since converting it to real money will still entail KYC?
Because literally the only point is to avoid the existing banking system and you can do that with a postures database with much less cpu involved.
Blockchain solves that. Newer blockchain protocols especially an L1 is much faster, easier on the environment, and provides all the immutability, transparency, and traceability benefits.
Also, you always have to trust someone, in this case Stripe.
Regarding L1 blockchains, how exactly do they solve the speed problem for a distributed global database that needs to be replicated everywhere for the security guarantees to actually work?
What do they forgo out of https://en.m.wikipedia.org/wiki/CAP_theorem ?
Societies cannot function without trusted intermediaries, in finance and many other things.
If we are in a democracy then the government regulates such organisations and should punish those who do not comply.
Blockchain doesn’t scale as a replacement so the point is moot.
Postgres running on a single Raspberry Pi is something like 200 TPC-B read/write transactions per second.
Saying Ethereum “is not using very much CPU” is baffling to me. It is the state-of-the-art in this regard, and it uses something like six orders of magnitude more CPU than a normal database running a ledger workload?
You're spot on with CPU usage. However: how would you design a RasPi-efficient, fault-tolerant, decentralised ledger with strict ordering and a transparency log?
Consider CAP. Existing banking systems choose partition tolerance (everyone does their own thing all the time basically), and eventual consistency via peering - which is why all settlements are delayed (in favour of fraud detection / mitigation), but you get huge transaction throughput, very high availability, and power efficiency. (Any existing inefficiencies can and should be optimised away, I guess we can blame complacency.)
The system works based on distributed (each bank) but centralised (customer->bank) authority, held up by regulations, capital, and identity verification.
Online authority works in practice - we collectively trust all the Googles, Apples, etc run our digital lives. Cryptocurrency enthusiasts trust the authors and contributors of the software, CPU/OS vendors, so it's not like we're anywhere near an absolute zero of authority.
Online identity verification objectively sucks, so that is out the window. I guess this could work by individual users delegating to a "host" node (which is what is already happening with managed wallets), and host nodes peering with each other based on mutual trust. Kinda like Mastodon, email, or even autonomous systems - the backbone of the Internet itself.
Just a brain dump.
With zkrollups and a decentralized sequencer, you basically pay no penalty vs. putting transactions on L1. So far I think the sequencers are centralized for all the major rollups, but there's still a guarantee that transactions will be valid and you can exit to L1.
Scaling is improving too. Rollups store compressed data on L1 and only need the full data available for a month or so. That temporary storage is cheaper but currently is still duplicated on all nodes. The next L1 upgrade (in November) will use data sampling, so each node can store a small random fraction of that data, with very low probability of any data being lost. It will also switch to a more efficient data storage structure for L1.
With these in place, they can gradually move into much larger L2 capacity, possibly into the millions per second. For the long term, there's also research on putting zk tech on L1, which could get even the L1 transactions up to 10,000/second.
The only reason for this - it would seem to me - is the ability to have nobody in control who can be subject to law enforcement.
If you need this kind of decentralisation blockchain, and all its inefficiency, is the only choice.
Societies should not require such things though. They need to have trustable institutions and intermediaries to function, in finance and many other areas.
...which is more or less the same conclusion that I've arrived at by the end.
doesn't invalidate your point but it at least shaves off a few orders of magnitude
and a single PG node is not a fair comparison, we're talking 100% uptime global networks. Visa does about 70,000 transactions per second - how many servers do you think they run across their infra?
So uh, how do we scale etherum's 150tps to that?
Ethereum is actually very low resource intensive nowadays.
You can run a validator node on a RPI, a full sync node on a Intel N100 minipc with a big fast SSD and the "light clients" can probably run on something very small.
I have seen banks having to bring semi-trailers full of diesel generators to plug them to their mainframe because the current requirements were too high for the grid during big batch jobs.
1. Running a validator is inexpensive in terms of compute, but there are 1,000,000 validators or something, which adds up to a lot of CPU usage. Of course, I think it's insanely awesome that you can run some code on Ethereum and it'll be replicated on 1,000,000 independently-operated machines, but it's not a very CPU-efficient strategy. 2. Banks doing those batch jobs probably had much higher TPS than ethereum.
Yes the platform running in most banks, usually built on what we call "mainframes", is still mind blowing and with incredible performance. Also just one of those CPU is about the price of a house...
Also the requirements I cited is for running an Ethereum mainnet "Layer 1" node. And most "TPS" happens on the layer 2s anyway.
So it is hard to compare technically. But one thing for sure is becoming an active participant in the Ethereum mainnet has a very low barrier. They got rid of the whole intensive "Proof of work" part about 5 years ago. For a full sync node the waste is more at the bandwidth and disk levels.
The blockchain structure, the validation mechanism etc are still a very inefficient way to do general compute or database type functions.
I think everywhere but America has already figured this out.
Instant bank payments are pretty standard everywhere else, even third world countries.
All transactions must be derisked (there is a fallback if the transaction fails). This usually means backed with reserves, which also means they cannot be instant.
Now if you don't care for the risk management of a bank, sure, go ahead and do what you would like.
The real and continuing reason for the delay is to give time for repudiation and assessment of fraud, money laundering, and other financial crimes risk. The risk of instant transfer is instant theft or otherwise absconding with money that shouldn’t be yours. In fact settlement delay makes reserve problems worse because you effectively “hold” money that could potentially not be properly secured during the hold and cause a default on a transaction that was otherwise taken out of balance and pending transfer. Instant clearing and settlement makes this unambiguous. But it also makes transactions as risky as a cash transaction - instant and irrevocable.
For some customers this is legitimately ok. But by and large most customers benefit from the delays more than they’re hurt by virtue of having a window to repudiate a transaction that is illegitimate. It’s just they don’t recognize that value until they need it. We all benefit from a system that disincentivizes criminality overall. It’s hard to recognize it because we exist day to day with that benefit and it’s hard to prove the negative, but there were times without the protections against financial crimes and financial oversight and they were NOT better times. They were objectively worse, so our ancestors built a set of guard rails to prevent the endemic badness around us.
It appears though as they die off, and as we become less attuned to history, we are very busy ripping apart the guard rails our ancestors very carefully and thoughtfully built into our societies like some junior engineer who assumes every line of code written before them was written by an idiot. Take the American CDC as a case in point - the modern public health system was a very hard won victory against endemic diseases by generations - and as the generation who established it expires, we rip their legacy to tatters.
How long is settlement for you and what are the fees. Are you talking about banks for credit card payment processors A business needs a processor which will take fee and add some delay
Tether claiming they have the ability to back up their coins with USD lets crypto people claim their nonsense actually has value.
Of course the entire thing rides on the “trust me bro” guarantees offered by tether. They could erase a lot of the stink by going through an audit but for some reason they won’t.
They're required to by the new stablecoin legislation [0] in a provision that almost looks specifically targeted at Tether. Not sure what the time frame for this is, or if there's actually any appetite to enforce the law if they dont produce a clean audit.
[0] you can read the full text of the law here, too long for HN: https://www.govinfo.gov/content/pkg/PLAW-119publ27/html/PLAW...
Stablecoin is not a technology. It's an excuse. An excuse to do what banks do while not being regulated like a bank or using the infrastructure banks use. Similar to how Airbnb is not a technology but an excuse to do what hotels do without hotel's license.
So it makes no sense to compare it to database, a technology.
Will this excuse work? Banking is a heavily regulated field so it's less likely than Airbnb, but it's ultimately up to lawmakers.
It's awful how behind the times the US is when it comes to banking. 2 - 3 days to get money from one account to another is beyond embarrassing in the modern day. It took the US something like 15 years to get chip-and-pin.
Banks are still these monolithic entities that don't care to innovate or listen to customers because "what are you going to do, go to one of the other 4 monoliths that are all in cahoots with each other"
I don't know about you, but I'd rather use a system that allows me to do what I want with my funds without anyone else controlling it.
How do we know that this unusual transaction is you doing what you want and not someone else controlling and defrauding you?
A small well-understood amount of friction that significantly reduces everyone's risk is not an attempt to control your funds.
Old systems with arbitrary delays based on twentieth century processes should be replaced, but not everything needs immediate infinite speed to be valuable.
That's what they'd like you to believe, but fact of the matter is that you're still not protected. For example, at my last company, the finance department was phished into changing a bank account number and transferred $50k to another account. Bank just shrugged.
In the US, we already have credit scores, a system meant to reflect some sort of trustworthiness. Right now, it mostly determines your interest rates and access to capital. But why not extend that trust to granting people more freedom in how they use their funds?
If I want a large loan from my bank, I’m forced to provide endless paperwork and deal with people, despite having a great credit score. In DeFi, I just post collateral and instantly borrow against it. No gatekeepers, no conversations.
These limitations become even more obvious if you’re a nomad or frequent traveler. Suddenly you’re not just facing your local government, you’re up against borders and layers of extra regulation.
> Why not extend that trust to granting people more freedom in how they use their funds?
followed immediately by:
> If I want a large loan from my bank
with absolutely zero irony is very funny.
I’m fairly sure if you want a bank loan and are prepared to lodge cash in the bank to secure it they won’t need too much paperwork.
Usually people getting loans don’t have the funds in cash already. Defi is nothing like that its currency speculation at best.
If I have the money for a down payment, and I want to buy a house, I don't need someone poking around at my finances, even if I have nothing to hide.
> Usually people getting loans don’t have the funds in cash already.
Source? People get loans for all sorts of reasons. Loans are backed by some sort of collateral and if that isn't assets, it definitely involves having someone look at your records.
> Defi is nothing like that its currency speculation at best.
Wrong. DeFi itself has nothing to do with speculation. There is $57B locked up in AAVE on ethereum alone. It isn't a toy.
SEPA was a success but it was only a first step to modernise the banking system. The following regulations/directives like PSD2 failed in my opinion.
The ECB also had one of those CBDC built much earlier than people have been told. They already had something quite advanced around 2020, with a optimist launch date in 2022 I believe.
It obviously failed miserably and I read a few weeks ago that they are "exploring Ethereum and Solana for digital euro launch".
I would be curious what happened exactly but my guess is the banks just said "NO WAY".
> It obviously failed miserably
They had a CBDC but hid it from everyone... but then somehow it failed miserably. If it wasn't released, how? They even had it before they decided to have it (2021). This seems just like a load of bullshit.
A Central Bank do not share everything they consider/plan with the public. It is not really hidden or secret, but they also do not make a press release about it.
Also if they are fundamentally gonna transform our banking system they better start early because a lot of things can go wrong. I estimate the time to build such a system is about 10 years if everything goes well.
I do not know exactly what went wrong, my guess is the banks pushed back as much as they could because most of them would have been made irrelevant under that model. Now they are talking about Ethereum and Solana because they understood they have to fight against the Dollar in this arena.
My bank requires me to download a PDF on their website, print it, fill it out by hand, scan it, and then send it by mail. After a few days, someone will decide to allow it (or not). If it is refused, I don't get any reason why and have to call the client service for clues.
We are essentially trading the convinience of a tap for increased prices and unelected gatekeepers that can (and will) easily push sectors out of business, because they don't like what they do.
Regarding the parking, I much rather would be able to pay with cash than the $2 parking plus 50 cents cc transaction fee that you have to pay in many places in NZ.
[1] https://www.gao.gov/blog/why-do-banks-share-your-financial-i...
[2] https://www.thegamer.com/paypal-not-accepting-most-currencie...
They used "mostly instantaneous payments" as the carrot to get those individuals to use the service.
Banks have near zero obligations around Zelle transaction fraud - if they do anything, it's often mostly as a goodwill gesture for a customer.
Uber just captured wealth via operating at a loss until competition was absorbed or destroyed.
AirBnB just helped further drive up the prices of single family homes and didn’t really have much effect on the hospitality industry at all - it caused a minor observable loss in profit which ultimately resulted in nothing.
I don't think AirB&B really improved hotels, but it did organize and centralize the "vacation rental" market, making it easier to, for example, rent a beach cottage for the weekend.
Hotels and the hospitality industry did not improve at all.
None of those points refute me or support the argument I was contesting - that a “uber or airbnb of banking” would cause banks to “get their act in order”.
That's certainly... an opinion.
I've had next day ACH between all my various accounts for years now. Wires have also been a thing basically forever though most people need to pay to send and receive them. Same day ACH and FedNow are both out there too, though I've yet to see widespread implementation.
JPMorgan Chase, BofA, and their ilk have R&D budgets large enough to have already launched a dozen stablecoins by now. They haven't, not because they can't (on a technical level) but because they don't actually see the value to it (on a business level). They're simply paying lip service to crypto because it pumps up share value, the same way every business was bragging about their AI investments just a few months ago.
In the U.S., it is subject to a new set of regulations governing "rideshares" that are similar to the regulations governing taxis. The primary differences are that medallions aren't required for rideshare vehicles, nor are rideshare drivers required to know anything about the location in which they're driving.
Objectively speaking, the taxi drivers and companies that are still alive today provide better service than their rideshare counterparts. I can tell a taxi driver "the Z building" at the airport and they'll know what it is, where it is, and how to get there. Most rideshare drivers need to look it up, and they'll be damned if they actually follow the google directions to get there without getting lost on the way.
Also notice there's no option to automatically transfer received money into your real checking account. They are banking on you forgetting your money is there and they are earning the interest but not passing it to you.
For this reason I prefer receiving money via Zelle but pay with Venmo.
But the smart contracts they write look up a blacklist, which only they control. They can block, unblock or burn tokens.
To “reverse” something they could burn those tokens, and then just issue more and send the new ones to the original address.
So yeah it’s like PayPal or whatever. Except with blockchain thrown in so they can say the rules don’t apply to them.
The “solution” for decentralisation - proof of work - makes the system a lot more expensive (think: higher fees) than a centralised database.
You could replicate USDC with a website where you log in with a password and move money between numbered accounts and they don’t run any AML/KYC checks on you. If you did that it would be super illegal. In fact someone did exactly this, it was called Liberty Reserve and everyone went to prison.
But because it’s got the magic of the blockchain laws don’t apply.
The government has existed for hundreds of years before these sophisticated mechanisms of surveilling the money system and the people were introduced. And it will continue to exist should they be removed.
If your concern is effective taxation, there are plenty of methods that worked historically while preserving financial privacy like property taxes.
Drugs should be legal, so that's not a problem. Terrorism and human trafficking are more complicated topics, but basically I think they should be attacked more directly, not financially.
By making non KYC transactions easier, above becomes much easier and crime, fraud, scams and corruption significantly more profitable.
Stablecoins' success is also a reaction to the ever-increasing friction created by overreaching regulation. If you have a supplier in China, and need to buy some in-demand goods, you can sign the contract and send the money now, whereas with the classic banking system, you'd have to wait for two weeks to clear everything. This alone is brilliant and should be welcomed for its usefulness.
Almost all the crypto I have is from p2p or freelancing. Very few could connect my identity and my wallets.
I think it would be wholly better, in democracies, if we changed laws we didn’t like than tried to create technology to evade them.
The main proponent that dictates the regulations, the FATF, is a shady, unregulated body that is used for political and economical repression.
Not all blockchains are decentralized, it depends on the consensus mechanism
What is your source for stablecoins being "for crime"? I've seen many individuals from countries all over the world utilize stablecoins in ways legal for their jurisdiction.
https://blockchain.bakermckenzie.com/2025/07/01/the-225-mill...
It’s slower, riskier, with less protection and usually more expensive than a classical financial transaction. So it self selects for criminals.
Stablecoins typically being self-custodial, easier to transfer in large amounts, and internationally accessible seem like it would support criminals, but with stablecoins, funds can be frozen just like bank deposits can.
This is emphasized in the article you linked:
> The investigation began in late 2023 when Tether, the issuer of the USDT stablecoin, proactively froze 39 wallet addresses containing $225 million in stolen USDT after detecting suspicious activity. This immediate action was critical in preventing further dispersion of the illicit funds. Paolo Ardoino, CEO of Tether, was quoted as saying, “Tether’s work with the Department of Justice underscores our commitment to transparency, proactive engagement with law enforcement, and the protection of users across the digital asset ecosystem.”
And the number you quoted is for cryptocurrency at large, not stablecoins. I imagine the number looks a lot different when we filter for that subset of usecases. For the large amounts used in stories like this, banks would be a better indicator for comparison[1][2]. Venmo, Cashapp, and Zelle have had their fair share of scandals as well[3].
[1] https://en.wikipedia.org/wiki/Wachovia#Latin_drug_cartel_mon...
[2] https://www.reuters.com/business/finance/td-bank-appoints-co...
[3] https://www.freep.com/story/money/personal-finance/susan-tom...
Yes classical finance has had scandals because they're obligated to prevent these things, and in general, they have responded to court judgements by upping their internal controls. Crypto is built specifically not to have either internal controls or the ability to institute them in a meaningful way. It's the fundamental premise. One system is designed to stop this activity but fails sometimes, the other is designed to allow this activity by anarchocapitalist libertarian ethos and offers roughly zero recourse for those caught up incorrectly.
This argument is tantamount to "well, a plane crashed, so obviously the FAA doesn't provide any value, and we should just stop regulating aircraft entirely and yolo it." Same with drugs, well, a side-effect happened, let's just scrap the FDA and legalize the grey market Chinese sackloads of $5 peptides. While we're at it, we should let Walgreens sell em, why not.
If you think what the classical institutions are doing is wrong, you shouldn't say well, just let 'em lol, you should be arguing for stricter penalties and more control. If you think it's right, well, I don't know what to say.
Pepperidge Farm remembers when nobody in their right mind would just give all their money to unregulated offshore banks in the Caribbean. Remind me why that was again?
It must end.
The other major issue is it’s easy to get the stablecoins, move them around, cash them out, and by the time Tether freezes them the criminals have already been paid (in dollars, which is what they want really).
That always works out great.
Can't wait for the next explosion, followed by government bailout, followed by some portion of all our wealth vaporizing, all to the benefit of a small number of people.
The regulation that came after has in my personal experience privatized airbnb and now it's hard to find a private renter, when I started using it that was the standard.
Nobody cares about small tech companies breaking the law for a few users.
Everyone cares about {insert bad outcome from mass regulatory avoidance}.
(Also, of the 3 airbnb founders, one has delusions of being the next Steve Jobs and turning it into an everything app (Chesky), another now works for DOGE (Gebbia), and the last is sucking up to Chinese government data requests (Blecharczyk)... so, yeah, not exactly the sort of folks that should be trusted with light regulation)
More examples include Uber to bypass taxi regulation, and generative AI to bypass copyright regulation (as well as consumer protection regulation in both cases as well as labor protections).
I am under no illusion that if a user of AI requests an image of Indiana Jones and uses it in their art, the rights holders will issue a takedown an would succeed. The AI company that owns the model that generated the model will however not face any consequences, and have therefor successfully have bypassed copyright protections.
Similarly, in unregulated free market capitalism, there would be no copyright to bypass.
I am not trying to argue that either of these area panaceas but I feel like we are often in denial about how much collectivism is involved in the things we don't like about capitalism.
Yes ofc, on one specific aspect of regulation - the total qty of cars allowed - they did an end-run. But regulating the total # of taxis was always just a way of trying to limit land consumption by cars, rendered ineffective by only applying to cars used as taxis instead of all cars, all vehicles. So yeah, they benefited from a titch less regulation, but land in cities is so valuable that to give it away for free dwarfs the value gained from skirting any other regulation, so IMO it's still largely a collective non-market endeavour, just organized for the benefit of ppl in cars, rather than the public at large.
One reason the U.S government has to like stablecoins is because Tether is one of the biggest buyers of U.S treasuries that they use to back their stablecoins.
Pardon my very naive understanding of both subjects.
Anyone can print IOUs, but not everyone can legally call them dollars. That's the only advantage banks have over the rest of us.
Same on the blockchain but without the privilege of conflation. You can have a smart contract that has $100 of ether but trades in 200 shares valued at $10 each. But the blockchain systems prevent you from pretending that bank-ethers and cash-ethers are the same thing. You can label them the same but they're not the same and the system knows that. Even Wrapped ETH, a contract that literally just prints and destroys WETH 1-to-1 with the ETH it holds, i.e. a full-reserve zero-fee bank, isn't interchangeable with actual ETH.
The underlying asset can be rehypothecated, Celsius did this before going bust iirc.
Tether is also the underlying backer of crypto market cap, and has never done an audit of their assets. They've made loans to various crypto market participants.
In theory there are auto liquidation rules etc. In practice humans have not yet managed to create a financial system they can't make asset bubbles with
Algorithmic stablecoins[1] don't have a one-for-one backing in real world assets so can in theory create new coins "from thin air". The amount they can do this depends on the exact algorithm and the backing assets, and the practicalities of unstable crypto pricing make this difficult in practice.
For example the well-known DAI stablecoin[2] is backed by a mix of crypto assets, but is overcollateralized to avoid problems when one of the backing assets drops in value. The is sort of the opposite of "creating money out of thin air"...
Non-algorithmic stablecoins can do it by being backed by "high quality loan assets", in which case the conventional, non-crypto credit creation mechanism applies.
So far all algorithmically backed stablecoins have failed. Remember Terra Luna.
So that's a sample size of 2, and from those 2, 1 has failed. Not exactly "all"
Zero. Nada. There was always somebody somewhere exploiting it.
TerraUSD USN USDN Basic Cash
All failures so far, every time a death spiral.
FRAX started as algorithmic and had to move to over collateralization
Same with DAI
You really can’t call them like that once they become backed by USDC
> all algorithmically backed stablecoins have failed
Your motte:
> no undercollateralized, algorithmically backed $1 stablecoin has sustained a reliable peg at scale over multiple years
thats effectively what already happens with their own internal ledgers anyways
Person B borrows $100, all the coins move on the ledger.
The ledger could facilitate the transfer while the bank maintains an "IOU" for person A's $100. The bank would be betting that not everyone will come withdrawing at once, just like a regular bank.
Regulation is the only thing that can prevent this from being done with any sort of crypto. The same IOU-based business model as happened with cash, gold, etc, could very easily be implemented using the technology. If you don't like fractional reserve banking crypto isn't a magic bullet that makes it impossible, especially since the general public probably wouldn't be sophisticated enough to know how to stick to "true" crypto vs "IOU-based fractional crypto facades."
But generally regulatory regimes have decided that the productivity advancements offered by the investment-through-loans of major portions of deposits are worth the risks. I don't think the GENIUS act allows this, though, so there's one regard where stablecoins are more-regulated. I worry about the edge cases, though - seems like requiring stablecoins to be paid off preferentially incentives using them for deposits, which could harm circulation if the reserves or followed, or which could screw over non-stablecoin deposit-holders if an institution doesn't comply and then goes under.
(This is closer to how regular banking works than the naive "banks create money by incrementing a number in your account." After all, banks are generally either (a) expecting those loans to be spent or directly giving the money to third parties like car dealerships or home sellers - which is likely to physically move the money to other banks, institutions, or cash, not just recordings in their internal tables.)
You fire up Excel. Put some numbers in the boxes. Say those numbers are dollar bills you have under the bed.
Then you do SUM(A1:A10) to show your total funds. It has to be legit because Excel doesn’t lie right?
That depend on how you view money. Lending does increase the volume of money in circulation, in that sense it creates money. But that view is too simple to be useful.
The regulators that regulate, and in particular control reserve ratios (complex calculations that banks have to make about the relationships between their various assets) and base interest rates are the real creators of money.
The side stepping of those regulators is interesting. The conventional view is that it will lead to the same sort of financial instability as existed before the gold standard was abolished and we (pretty much the entire western world) moved to modern banking and fiat currency.
A hundred years of quite stable money was quite an achievement.
Far from being too simple, it is the primary method of money creation in modern economies.
> The regulators that regulate, and in particular control reserve ratios (complex calculations that banks have to make about the relationships between their various assets) and base interest rates are the real creators of money.
Simply setting rates does not create money. It can influence it, but it is not the ultimate cause. Lending is. Reserve banks can and do lend, but commercial banks are responsible for the majority of money creation.
Money is fiendish complex and cannot be counted with a one dimensional model
You are deceiving yourself that you understand
In a manner of speaking. You need to trust that the issuers have the reserve they claim. There's no way around this, unless the asset in reserve is equally ethereal (i.e. another cryptocurrency).
Tether, for one, almost certainly doesn't have the reserves.
They are now really backed. It might be they weren’t. Now they definitely are.
https://tether.to/en/transparency/?tab=usdt
All these years all this Fud and so far nobody demonstrated what you clam.
They are also the faster to block their stablecoin whenever there is a hack.
They got bad rep with zero proof
Tether claims accounting firms won't audit them, but that sounds like a convenient self-serving lie to me:
> In an interview with DL News, he said the Big Four accounting firms — Deloitte, PwC, EY, and KPMG — are afraid to work with Tether because they fear it will damage their reputations.
> “None of the Big Four companies will audit us,” Ardoino said. But he said securing one of them as Tether’s auditor is a “top priority.”
Is that credible to you?
[0] https://www.dlnews.com/articles/markets/tether-ceo-just-told...
Usdc is audited by Deloitte on a monthly basis.
It would be pretty stupid for Paolo to end up being naked, now that his business is printing money left and right.
To make it clear I am not pro tether, I am against visceral hate which was justified years ago but I feel it isn’t anymore. Tether gained my sympathy by freezing quite promptly funds from various hacks.
Circle on the contrary have failed every single time.
https://cryptobriefing.com/circle-lazarus-group-accusations/
Anyways this is totally unrelated
It will make for a good Netflix documentary once they get their audit
Tether started as a way to pump the Bitcoin price, under the guise of better facilitating payments on crypto exchanges. They’d issue Tethers out of nowhere and use it to buy BTC and wash trade.
It was so successful it got to the level many people thought of it as “as good as dollars”.
This led to massive demand for it outside of Bitcoin pumpers - with criminals, sanctions evaders, money launderers of all kinds. Your granny needs to buy tethers to send money to the scammer she’s on the phone to.
So yes I do think they’ve probably moved away from issuing unbacked tethers. But only because they’ve found another niche which is also extremely suspect.
There is nothing to commend these guys. It’s a massive scam.
Just pinkie promises. David Gerard discussed a while back:
https://davidgerard.co.uk/blockchain/2021/03/30/tether-produ...
You and I can't buy a house on a mere attestation of accounts - funnily enough, lenders want to see how we acquired that money. But these clowns can stand on stage at Davos and say "Yeah, we've banked over half a billion a day USD for the last two years, trust us, we don't need an audit". I know that comparing investment to revenue is not apples-to-apples, but to get an idea of what that incoming cash looks like? You're on the scale of Saudi Aramco. Samsung. Alphabet.
They kept firing their auditors. They had one done, and then refused to release it, saying "it was not of use to anyone because it was in Mandarin Chinese". What the actual fuck?
Their bad rep is their own fault.
"Tether and Bitfinex are completely independent and unrelated!" Oh yeah, why are the same two people who signed a loan contract on Tether's behalf ... the same two people who signed it on Bitfinex's behalf?
Or let's look at their bank, Deltec, who also made statements to "support" Tether... or specifically, let's look at some of the highlights from a fucking trainwreck of an interview their "Deputy CEO" gave to CNBC:
- was conducted from his gaming rig
- about Deltec's (and therefore Tether's) money movements being several times larger than all the banking in their country was due to people misunderstanding the country's two banking licenses, the names of which HE "couldn't remember right now" (the Deputy CEO of a bank who can't remember the name of the banking licenses where they operate?!?), and he "wasn't sure which [banking license] the bank has, but we might have both"
- oh yeah, said Deputy CEO's "resume": 33 years old, by his LinkedIn claimed to have graduated HEC Lausanne in Switzerland with a Master of Science at the age of 15... celebrating his graduation by immediately being named Professor of Finance at a university in Lebanon. While dividing his spare time between running hedge funds in Switzerland (called Indepedance [sic] Weath [sic] Management) and uhh... Jacksonville, FL.
Once CNBC's viewers started ridiculing and questioning both Deltec Bank and Tether, said Deputy CEO was hastily removed from Deltec's "Leadership Team" page on their website. Once that was questioned, he was re-added...
... and then the entire bank website was replaced with a low-effort WordPress template. Their online banking was Javascript hard coded to refuse all login attempts.
"Sounds legit to me", say the crypto bros.
Now they generate more than 10B per year in profits. And they have been using that to collateralize their usdt
It’s clear they are now fully backed. Another question is whether they want to comply with regulations (they don’t comply with MiCA, I doubt USDC does either) but that’s another question
Hate it or love it, they aren’t going anywhere anymore
If they are fully backed they’d get an audit. The fact they don’t should tell you all you need to know.
It's worth noting that no full-reserve bank has ever gotten a US banking license, even though many have tried.
Stablecoins are much more heavily regulated than banks, being required to have 100% reserves under the GENIUS act, unlike banks who generally only ever hold on to 10% of the money you deposit with them.
Using their infrastructure? Why?
banks are an excuse to have closed source ledgers that don't operate efficiently for internet capital markets
if they wanted to, they could open source their ledgers and let anyone make them faster, more interoperable, more programmable, etc.
stablecoins operate on infra that is more like linux for finance, anyone can contribute to blockchain rails and even run their own nodes
Stablecoins hold a sizable portion of the treasury market - https://fintelegram.com/stablecoins-became-a-top-20-us-debt-...
Contradictory requirements.
Circumventing sanctions.
This is missing the fundamental idea behind blockchain. You need a consensus mechanism and immutable ledger in order for it to be secure and truly transparent. Once you add those boom you have yourself another blockchain :-)
>So what are stablecoins really trying to do? Circumvent regulation?
No, stablecoins have less regulatory burden because of the public ledger removing the need for manual review and verification by various intermediaries. They are still compliant with regulation.
Consensus between who? The stablecoin issuer, stripe in this case, is a single party, who are they coordinating with that requires a consensus algorithm?
Blockchain consensuses: Which is the next block, Which protocol version must what quorum upgrade to before a soft fork locks in, Whether a stake should be slashed, Leader/supernode election (handled by the UNL text file in git in rippled, which underpins R3, W3C Web Monetization micropayments, and W3C ILP Interledger protocol (which FedNow implements)),
When there are counterparties and then they might as well just off-site replicate the whole database or blockchain locally, and run indexes and queries at their expense.
And then there is a network of counterparties willing to grant liquidity to cover exchanges that cover multiple assets and chains, who want to limit their exposure by limiting the credit they extend to any one party in the network and account for an entire auditable transaction. (Interledger ILP Peering, Clearing, and Settlement)
Private blockchain or SQL replication scaling woes? And then implement mandatory keys in an append-only application.
This or something like Trillian?
From "PSA: SQLite WAL checksums fail silently and may lose data" https://news.ycombinator.com/item?id=44672902 :
> google/trillian adds Merkle hashes to table rows.
> sqlite-parquet-vtable would workaround broken WAL checksums.
> [...] [cr-sqlite implements CRDT, which is one of a number of newer ways to handle consensus in SQL database replication ]
> (How) Should merkle hashes be added to sqlite for consistency? How would merkle hashes in sqlite differ from WAL checksums?
Do you understand how consensus matters with distributed databases and DLTs?
Do you understand the difference between WAL checksums and Merkle hashes?
If the WAL checksums are not sufficient, is the SQL database sufficient? Why are Merkle hashes not "bolted on" but native to blockchains?
How many integrity hashes should be bolted onto a SQL database for there to be replication with data integrity?
It's hard for the average non-US person to opt-into the US financial system. Sure, they could hold dollars in banks, but local monetary policy can nix that privilege at anytime by imposing foreign exchange controls. It's happened before, in some of the largest economies in the world: China in 2015, India in 2013, Argentina in 2011.
The current way users solve this problem requires a lot of resources. That's why you usually only see rich people have Cayman accounts, Canadian real estate, and shell companies in Panama. Stablecoins on permissionless blockchains make this process 100x more accessible for the average person.
So yes, stablecoins currently let you circumvent regulation.
But regulation can be a prison where you can pay to be free.
So what happens when it costs nothing to get out of jail? What kind of strains do this place on economies that people escape, as well as the economies that people join?
I guess we'll have to wait and see.
As opposed to no regulation where you can't? I don't understand this sentiment at all.
My point is stablecoins give you choice to opt out of that. The only way to opt out before was very expensive
It fundamentally misunderstands how foreign exchange works, or how government backed currency works.
You cannot "opt out" of the local currency: period. It is the only currency which can extinguish tax obligations. And even if it wasn't government backed, you can't trade in a currency no one wants in the first place.
This should be trivially obvious from the observation that how much water a gold bar in the desert buys you is going to be pretty highly variable.
I assume you've never experienced hyper-inflation? If you have, do you think it's fair that you were forced into a hyper-inflationary currency? And, if given the means to, do you think it's fair that people _should_ have the ability to choose?
If you live in a place then you have to trade in whatever the local currency is. You didn't "opt in" to a particular stable coin: someone has to be willing to accept that specific coin as payment.
And they can't just exchange it to another: the exchange has to want to sell that coin in exchange for the coin you transact with.
And to interact locally with the government, you need someone who is willing to sell coins in exchange for the currency you don't want.
In practical alternate market economies, the only currency which trades tends to be USD and the exchange rate will be bad because it's a grey market. I would go further and posit that where crypto has any impact, it's people because it's a window into being able to hold USD.
Certainly the only question anyone asks about Tether is whether they actually have the USD to cover their position: no one wants a Yuan based see stable coin.
Agree with the posit- stablecoins grew a lot during periods of strict monetary policy (ie capital outflow from China starting in 2015, hyperinflation in 2023).
Note my original post said disruptive, not good. Meant it in the truest sense of the word; both good and bad comes out of it.
- by USA government (indirectly) to re-dollarize the world without generating too much USA inflation, another IMF SDR mimicking China usage of foreign currencies to avoid hyperinflation;
- by many migrants in the I world to send money home, something in the III world could be converted to USD at a much cheaper rates and with much simplicity than classic banking/money transfer solutions;
- as a hedge against local currencies, considering dollar or some other currencies much more stable (see for instance the Argentina forcibly conversion overnight of USD accounts to ARS with enormous loss in 2002;
- as a decorrelated asset for DeFi trading on non-stablecoin cryptos (meaning market timing, buying BTC, ETH, SOL, ... when they dip, swapping then to some stablecoins when they top, waiting with the stablecoin for the next dip to buy).
In that regard the (unlikely) real existence of the collateral they claim is not much relevant: as long as most trade on stablecoins come from DeFi the Venezuelans, Bolivians, ... who choose them to bring USD home, the few company using them to pay B2B stakeholders in various countries are still happy anyway, as long as the stablecoin remain de-correlated to other crypto traders are happy anyway.
Tokenised stocks are more likely used to circumvent regulations since you can buy them swapping non-KYC coins against them avoiding capital gains taxes, at least partially.
The reasons why are left as an exercise to the reader :)
But I suspect that if you had to construct an actual argument instead gesturing smugly at innuendo that your point would fall apart.
Please explain your "100x" stablecoin argument and if you feel like it, your asset ratio of items denominated in USD vs USDC.
yeah and this is great. I couldn't care less for banks protection.
Revolut blocked my account with 8k on it for 8 months, though their app said it will be max 2 weeks.
Customer support ignored me for 6 months until I said I am going to court.
So yeah fuck them. The is a case for banks but there is also a case for me keeping a chunk of my money in stable coins so its actually mine.
Edit: and to clarify I didn't do anything illegal, after I threatened them they completed their whatever they did and unlocked my funds that have been locked for 8 month.
And guess what - no consequences for them leaving me at that time without my safety net.
Considering that stablecoin wallets can also be blocked what is the case for you keeping a chunk of your money in them?
What open-source shared ledger would you suggest is a better fit?
To get coins fully controlled by circle.
On a chain with low fees controlled by Coinbase (base) for example.
In this case this new L1 won’t even be distributed by anyone initially too.
It all seems like a Ponzi scheme or small utility for international users. Otherwise I don’t know why you’d trust these centralized authorities.
What stops someone at circle deciding to issue more usdc without real dollar backing
Well, the law now. The recent stablecoin legislation has a lot of new regulations.
If you mean what technically stops them, then nothing. But that's true of all the crimes I can think of, the law can only be enforced after the crime takes place.
I think the financial industry has figured out a way to do an end run around all financial regulations written since the 1930s.
I think like vaccine mandates, we will all have to "relearn" why we wrote this regulations in the first place the hard way.
They are arguing that stablecoins, specifically, require an off-chain entity that ultimately control them. And if you have an entity actually in control, why go through the trouble of blockchain? Then you can just have the controlling entity run a normal non-blockchain ledger.
I like the argument elsewhere in this thread that the actual reason is that it allows running a bank while pretending it’s not, bypassing regulation meant to protect depositors.
I think the unspoken part here here is that the lack of transparency is a feature for some users.
I'm generally a cynic on cryptocurrencies and I think they're kind of terrible for society in a lot of ways, so none of what follows should be taken as a positive opinion on cryptos. I'm just explaining how they work.
There will always be two competing interests with regards to currencies:
1. On the one hand, consumers make mistakes and get scammed, and want reversible transactions.
2. On the other hand, sellers don't want reversible transactions: if you sell a bike for currency and the transaction gets reversed, you don't get your time back even if you get the bike back in mint condition--and getting the product back at all isn't always possible, if the product was a tattoo, a class taught, or some intellectual property.
In traditional financial systems, anyone operating a financial system in a centralized way always gets bullied into reversing transactions. If you're the bank running it, you just screw over the seller most of the time because they are too small not to work with you and the customers you bring, and buy insurance for the rest of the time.
With stablecoins, so far, this hasn't happened. Sure, if you complained to Circle about getting scammed in USDC, in theory they could just un-issue your spent coins and issue you some new coins, but that would be in violation of their entire crypto ethos. Like fiat, the value of the currency is only based in belief in the issuing central entity, but unlike fiat, part of that belief in the issuing entity is built around them not reversing transactions.
Will that belief be enough to hold it, forever? I don't know, but I think it's definitely a stronger power than people believe it is, even if it's not literally the power of electricity being poured into hashing.
As a side note: not all stable coins are issued by a central entity. There are two other types of stable coins I'm aware of:
1. Collateralized: Examples: DAI, VAI, and I think MAO. Basically, anyone can borrow (mint) these currencies by storing other assets in the protocol. So for example you can deposit $1000 worth of Ethereum into the DAI protocol and that allows you to borrow some safe amount of DAI which is minted on demand, say 400DAI. If the value of your deposited Ethereum falls too close to $400, the protocol automatically sells the Ethereum to reclaim DAI which is then burned to keep the price of DAI from falling. But assuming your margins stay safe, you're able to repay your DAI at your leisure.
2. Algorithmic: Examples: TERRAUSD, IRON. These are paired with a second, unstable cryptocurrency (TERRA/LUNA, IRON/TITAN) which is used to stabilize the coin. If the price of the stablecoin rises above $1, you mint more and distribute it in some way, diluting the coin to bring its value back to $1. If the price of the stablecoin falls below $1, you mint more of the unstable coin and use it to buy back and burn the stable coin. In case it isn't obvious: this only works if the unstable coin has value for some other reason, and in both the example cases--it ultimately didn't and both coins came unpegged when the unstable coin crashed to 0. FRAX/FXS worked this way originally I think, but ultimately they've moved to a more collateralized model.
I’ve always wondered how disputes are handled under such systems.
International wire money transfer is far too difficult today. And after you've sent it, you still need to wait minutes (hours?) for the receiving end's bank to actually process the wire and move it into the recipient's account (correctly).
Then you need to nag the receiving party to check their account every few minutes so that they can inform you that they actually did receive it successfully. What if they're in a different timezone? 12 hours off?
Moving money on a blockchain is far simpler.
https://www.santandercib.com/insights/innovation/sepa-instan...
That becomes mandatory in October this year
Wise isn't great for paying suppliers. Their business account limit for debit/credit is $2k, and for ACH is $50k. They have higher limits if you fund with wire, but then we're back at the starting problem again...
And still, you have no way of knowing that the receiving party actually got it. On a blockchain, the source-of-truth "database" is public.
a Blockchain based system can maintain similar effects but with a balance of power
think about it
Though, its an issue for the company, as this allocates a lot of resources wrongly.
And if I send one I’m carful the details are correct, but I’m not completely doomed if I typo the account number.
And in a lot of places, they don’t. I haven’t had to wait days for a transaction for… more years than I can remember, in the UK or Australia.
I think that's it. We're very unlikely to see international transactions between banks happen as easily and as quickly as they can with a stablecoin, even though it's technically possible.
I think part of what makes it easier is that with crypto there's "no take backs" since it's largely impossible. Banks have to worry about fraud constantly because they're somewhat liable.
Otherwise they’re doing the exact same thing.
The US has regulated itself into a corner when it comes to AML/KYC. Those regulations ended up causing more problems than they solve, but they can't ever be undone. If something ever happens, like a terrorist attack funded by money laundering activity that the existing regulations could possibly have prevented, the blame will fall squarely on the shoulders of the politicians who decided to undo them.
It's much easier (and politically safer) to say that stablecoins are just a different asset class, and hence very different regulations should apply to them. This essentially lets politicians design a parallel, much more permissive financial regulatory system from scratch, with many lessons learned from the existing one. If something ever happens, it can always be blamed on "those pesky stablecoin issuers who keep prioritizing profits over the security of our nation."
From a purely technical perspective, any stablecoin could be replaced by a centralized database mapping public keys to balances, at much lower cost and with very little loss in functionality. That, however, would look too much like a bank from the regulatory side.
I'd argue the real value of money lies in contract enforcement. And I am talking about real world physical enforcement like police throwing you in jail. In financial engineering literature we don't really care about the real value of money, the only assumption needed is that contracts are enforced. If that is the case then you can hedge.
For example: You sign an employment contract where you get paid in USD. You also sign a rental and utility contracts in USD. If salary > housing cost, then you essentially have your housing needs hedged. You don't really care that USD has "real value". The value of USD lies in the fact that these contracts are enforced by the government.
The rarity of a currency is important in the sense that contracts don't make sense for all parties if the currency is too abundant. For example, if you can find USD laying on the street, then you would not work for USD. The rarity mechanism itself is not important.
stablecoin issuers are for all intents and purposes banks.
they'll try very hard to stop anyone from calling them that, but in essence, they give you a note (a crypto coin, in this case) in exchange for a promise that they'll give you back the amount of fiat printed on the note. this is the primary purpose of a bank.
Stablecoins are three raccoons in a trenchcoat who pinky promise you can trust them.
> they'll try very hard to stop anyone from calling them that
because they are banks at the core of what they do, but don't want to be regulated like banks.
It's very difficult for many folks to accept this, but the difficulty of producing something (mining) does not determine its economic value: https://en.wikipedia.org/wiki/Labor_theory_of_value
A narrow bank is a bank that takes deposits but doesn't make loans, basically parks the cash at the central bank or into risk free instruments. So it provides you with payment facilities, very low interest rates, without the credit risk that comes with a large bank that has exposures to all sorts of risky businesses.
Everything else is either temporary benefits of arbitraging slow moving regulations (but KYC, consumer rights, money laundring regulations, etc are quickly catching up), or as you suggest, some non sense about a zero trust system (crypto / public ledger) that fundamentally relies on trusting a custodian (so you might as well use an oracle database and spend in licensing what you save in energy cost!).
I had tried to describe this effect recently when Trump lowered bank reserve requirements, urging traditional banks to buy stablecoins with the extra funds this gives them.
My comment was that it increased risk (less reserves), without any potential upside in new economic activity. Basically all the money would flow to the govt in the form of treasuries the stablecoin issuers buy.
As opposed to the banks, you know, lending money to businesses.
There is also good regulation e.g. the EU made it so banks process transactions within "10 seconds", including and especially cross-border transfers for SEPA countries (Single Euro Payments Area). https://www.europarl.europa.eu/news/en/press-room/20240202IP...
So banks willingly being slow with transfers is perhaps a question for your local policymaker to remind them they can do better.
It is completely decentralized and doesn't use a flawed algorithmic stablecoin mechanism like Terra-Luna but rather creates synthetic cash exposure by shorting perpetuals against collateral the same way a TradFi investment manager would manage their asset allocation exposure. The perps are traded on DEXs and I believe the BTC and ETH is held in on-chain vaults.
This is a solid model and I believe the leading decentralized stablecoin.
Things like USDT and USDC are essentially tokenized real-world dollars. Nothing inherently wrong with that, for example the Eurodollar market has existed for decades, but it does require oversight that collateral reserves are what they are and also means they are not truly decentralized as you point out.
It's a hedge fund with a dual structure
I'm actually quite disappointed that this is how they implement the protocol because to me the main benefit of the hedged collateral model was that it was the one way to produce a truly decentralized stablecoin. Do you know of another project that implements the same mechanism fully on-chain and decentralized?
But now, the use case Stripe is talking about is basically the equivalent of creating WoW Gold for companies, and bypassing state money entirely, but IRL.
This is a dangerous idea.
Big corps have become immensly powerful, but they are still kept in check by the state for 3 reasons: the monopoly on law, violence, and minting money.
Lobbying is taking care of the law.
And now they are coming for the money.
Crypto currencies were supposed to taken the power of currency from big actors and back to the people. It's going to take it from the state to companies.
Soon, they will effectively have more power than the state, and citizens will be screwed.
When a stablecoin is issued on a public chain then the issuer cannot secretly censor transactions and the activity of the issuer in general is auditable.
You also get access to all the magical DeFi stuff.
Other than this you, as a person, don't need to be aligned with the current political regime you live in to open a stablecoin "bank account". This on its own is a huge breakthrough.
> So what are stablecoins really trying to do? Circumvent regulation? Implement something the banks just aren't willing to do themselves?
They allow businesses to act like banks without obtaining a commercial banking license. Initially this circumvents regulation, but over time, it allows entities to outsource solutions for those pesky regulations (compliance, audit, etc.) to third parties.
I completely understand that there are markets and customers that can find real utility in it, but I wonder how many businesses will really ever benefit from stablecoins.
We're in higher education, and potentially our international clients could avoid hiccups with regulation, delays, compliance, and more using stablecoins, but it's really a guess. In the meantime, the pricing model of stripe seems to prioritize bigger and bigger clients.
That being said from Stripe's perspective stablecoins an easy bet to make. They win by building payment infrastructure within the traditional payment ecosystem and win by providing an alternative completely outside of it.
"A diverse group of independent entities, including some of Tempo’s design partners, will run validator nodes initially before we transition to a permissionless model."
I think Zuck tried to do this. It was called Libra or Diem or I can't remember what it ended up being. Ultimately trust is what matters. In the end whether it was regulation or governments or anything else that killed it, it's only going to work if people can trust you. They trusted you with fiat payments, maybe they'll trust you with crypto. The thing to note, you'll win over the US centric crowd but it's unclear if it will translate truly across borders to Europe, Russia, China, etc. I'm guessing that doesn't matter but just remember what happened. Make sure to be honest about who's actually going to run the payment rails here.
Similar also happened with Visa... check when they were publishing in-depth reports from their crypto arm and then suddenly stopped.
Using crypto to dodge currency controls?
Of course I agree that currency controls are bad. But, if the use case for crypto keeps being fostering illegal transactions then it doesn’t solve anything a functioning economy needs.
In many countries what the economy needs to function well includes things that are illegal.
Then as the country’s economy develops the need for these illegal services disappear, or quickly gets you in trouble.
This is not necessarily the case given how large the online illegal drugs market is in pretty much every developed country. Just because weed was legalised, it doesn't mean all other narcotics will be legalised in future too.
Or do you suggest to send some stable coins when meeting the local dealer?!?!
Currency controls is what for example Argentine has been doing with set exchange rates and limits on conversion while mandating that all local businesses must be done in their currency.
It is not about controlling the currency, it is about creating hinders for capital movements in and out of countries.
The website is a bit painful to read but I thought it provided good general information for potential partners.
As as a dev, my questions are why did your team decide to build a new L1 chain instead of an Ethereum L2 and why did you all stick with the EVM architecture instead of looking at something like the MoveVM?
When your algorithm freezes a legit business's funds, you hold them indefinitely and can invest them for your own profit. The only recourse you offer is mandatory arbitration with an arbitrator Stripe chooses.
How is that a fair system?
Or can you explain how these bike importers are being hampered in fiat not by laws, but by technology?
Every time I look at this, the "clever trick" is actually law evasion / law avoidance, to borrow a tax term.
It's about as "clever" as lying to the IRS to save money on taxes. That was never a loophole.
By shifting flows onto a private stablecoin ledger, Stripe isn’t fixing inefficiency; it’s making it easier to route money in ways regulators and tax authorities can’t easily monitor. That’s not innovation, it’s the oldest trick in the crypto playbook: pretend you’re improving payments, when what you’re really selling is a way around the rules.
Does Stripe have a perspective on the unique systemic risks that stablecoin exposure might end up having in the new regulatory landscape?
SpaceX using crypto? Are any of their customers seriously going to pay using crypto? Are they gonna pay any of their bills using crypto? I'm not trying to piss in your Cheerios. But making real world use cases not die of uselessness is going to be a challenge.
I'm not surprised, capital controls come and go there, and when they come, they stay for several years.
You could achieve the same things with a proof-of-authority ledger instead of a "stable" coin
It's inevitable that agentic AI will handle a lot of workload online eventually. We can't expect these agents to work on existing payment rails, what with their fees and slow settlement and international payment hurdles.
AI agents that can pay each other when necessary - even tiny fractional amounts - will be a massive use case.
Are you tracking all of this for tax purposes? These transactions all have to be reported to the IRS even for stable coins. This is the biggest thing making crypto payments a non-starter. What's the story here from the end-user's perspective?
I as an individual have no interest in stacking stable coins if when I spend them to businesses, I have to meticulously track each transaction and report it. Whatever you're doing for businesses doesn't seem like it would solve this problem for individuals, if you're even solving it for businesses themselves that is.
https://www.wired.com/story/genius-act-loophole-stablecoins-...
I can less immediately expand "easier" and "faster".
Easier: on chain VMs are far from simple or easy, recovery from mistakes is far more complex. Some other aspects such as the implicit common standard might reduce some amount of need for "green field agreement", and the implicit openness of the protocols avoid some of the traps of "here's a rest api, go", but is this the focus? When you look at a wide variety of the big ticket items in everything that needs doing, is the total set easier? Are there surprises there?
Faster: similar to above, this claim is surprising. There's a lot of by-design overhead to a cryptographic ledger system. Lots of things that can be done to make it wider, to reduce latency and increase throughput, but at a fundamental level core operations such as transaction creation require a lot more processing going into a ledger than into a traditional database, even one at scale. Maybe faster here isn't about system faster, but time to product delivery? If so is that common standards? Are there surprises here too, what were they?
Edit: I see elsewhere in the thread you provide some answers in a slightly different framing. A potentially unfair paraphrase and summary seems to be that this enabled integrations to bypass expensive incumbents and comparatively poor traditional infrastructure. If that's a reasonable approximation my question is this: what if you dropped good sized chunks of the blockchain part that is the main system bottleneck, but kept the rest of the properties (shared micro computation model, shared transaction model, common API standard and protocol, eradication of foot dragging incumbents etc).?
Faster: Payments settle lightning fast compared to ACH/Wires, permanently and internationally.
Better: I don’t need anyone’s approval to be “banked” and I don’t have to operate in fear of clawbacks. Programs are the ultimate unbanked, and that’s the “agentic economy” that is emerging.
No third party: Almost certainly as a user there are still third parties involved, this isn't (AFAICS and based on other discussions) a user facing chain (edit: correction, they do say the chain is public, but here I really mean user facing value: you aren't minting stablecoins, you have to get them from somewhere). At "envisioned" transaction rates you would in practice not be syncing the chain and interacting with it yourself in any meaningful way.
Settlement: chain settlement is different from financial settlement. Between clearing ends there will still need to be sufficient demonstration of KYC, exchange of some form of actual holdings and so on. Typically the attraction of /to stablecoins is that they're used to perform transactions ahead of movement of actualizable value in target currencies. A possible alternative model is that all invested parties sink actual value into a global sink fund backing the stablecoin that is sufficiently protected to ensure that it does not devalue. In practice organizations almost certainly aren't going to part with wealth on those volumes and will operate secondary private exchange markets and settlement in bulk to escape concerns of short term loss, leverage, inflation and many other dynamics.
So I get it I guess!
Edit: I’m only joking a little bit
It must be ignorance on my part or perhaps I’m just lucky with residency and clients, but I get paid through services like Wise frequently. Taxes are pretty reasonable and I receive the money instantly on my bank account from US, Europe or Latin America. I don’t really know much better it needs to get.
I can never understand what problem stablecoins are trying to solve.
Did you look at a non crypto/stablecoin solution to perhaps find something even better for legitimate businesses (and perhaps worse for crooks)?
Long term I'm still more optimistic on crypto than AI. I think part of the problem with crypto is it needs to be around longer than some government money to prove to people it has staying power. Only then will financial people start doing things like recommend a small crypto stash for your retirement just in case. The average person is not going to make the necessary critical mass move into crypto without some sort permission saying its ok and not going to risk all their money or jail time.
> Private blockchains are completely uninteresting. (By this, I mean systems that use the blockchain data structure but don’t have the above three elements.) In general, they have some external limitation on who can interact with the blockchain and its features. These are not anything new; they’re distributed append-only data structures with a list of individuals authorized to add to it. Consensus protocols have been studied in distributed systems for more than 60 years. Append-only data structures have been similarly well covered. They’re blockchains in name only, and—as far as I can tell—the only reason to operate one is to ride on the blockchain hype.
In particular, using the term "blockchain"/"crypto" to talk about something more centralized / permissioned than e.g. Bitcoin is missing the point: these systems already existed before.
So what do you mean by "crypto" exactly? Distributed systems? I don't think you'll find many distributed systems skeptics on HN.
I genuinely do not understand this example. What is spacex actually doing? And why do they even have money in “long tail markets” at all?
One can look at Stripe's list of investors...
I still don’t quite understand the point of using crypto then - there’s no advantage in it theoretically being decentalizable since practically it is not. It might as well be an implementation detail.
Or are there decentral aspects to how it works? Does it ease auditing? Is it the improved ease of financial/regulatory engineering?
To add some context: our clients in LatAm use DolarApp to spend internationally with a card at the best rates, send and receive cross-border transfers (not just remittances, but also payroll), and to keep their savings pegged to the dollar. Stablecoins let us deliver a much better user experience and significantly lower fees — in some countries, up to 10x better than incumbents.
That said, most of our users don’t care about the underlying infrastructure. They care about the benefits. It’s similar to how someone using a bank card at an ATM doesn’t know (or care) that the system might be running on COBOL.
We see it as our job as product people to absorb that complexity so our users get the benefits without having to deal with the complex mechanics behind them. That’s what we believe is helping unlock a platform shift.
https://www.linkedin.com/posts/jasonmikula_fintech-partner-a...
When this bank employee expressed skepticism of "DolarApp" he was faced retaliation:
https://ia800508.us.archive.org/28/items/gov.uscourts.flmd.4...
"10. In and around the spring of 2023, Mr. Ibrahim became uncomfortable with certain practices and activities in which the Bank began to become involved. These included practices that, in Mr. Ibrahims opinion, jeopardized the Banks compliance with anti-money laundering laws, federal safety and soundness requirements for depository institutions, and compliance with specific OCC regulations and requirements that were particularly imperative due to the fact that the Bank was already considered a Troubled Institution
14. Mr. Ibrahim further objected to Axioms initiation of new business programs, without first obtaining non-objection letters from the OCC and without review by the Banks internal New Product Risk Committee, as required by written policies. One such project, DolarApp, was of particular concern to Mr. Ibrahim as it entailed cross-border movement of funds, which triggered significant concerns as to whether the Banks BSA/AML controls are sufficient, among other things.
15. But when Ibrahim raised these concerns with the CEO, Ross Breunig, he told Ibrahim to the effect that he did not want to hear it and shut down the conversation.
18. Almost immediately after Mr. Ibrahim objected to these practices, Axiom and Mr. Breunig began a pattern of retaliation. After the April 2023 leadership meeting where Mr. Ibrahim raised concerns relating to CSI and the DolarApp, Mr. Breunig began canceling Executive Board of Director meetings that Mr. Ibrahim attended.
19. Following a leadership meeting in May 2023, where again Mr. Ibrahim raised concerns about CSI, DolarApp and the overdraft positions, Mr. Ibrahim began receiving email cancellations to multiple committees and Board meetings.
20. Upon inquiry, Mr. Ibrahim learned the meetings were not being canceled, but rather he was being uninvited without explanation. Mr. Breunigs hostility with Mr. Ibrahim also became noticeably apparent during this time."
Of course Stripe, Inc. is neither a Troubled Bank nor an untroubled one
Anyway, it sounds like DolarApp could be useful for evading anti-money laundering and bank secrecy laws
"Importantly, none of these businesses are using crypto because it's crypto or for any speculative benefit."
That's only one of the many reasons people might be skeptical of crypto. See above
"They're performing real-world financial activity, and they've found that crypto (via stablecoins) is easier/faster/better than the status quo ante."
How much of this "real world financial activity" is not criminally culpable
100% no doubt
Otherwise why not just use normal digital payments? I fail to see why a blockchain is needed to log the transactions.
I’ve heard stable coins are beneficial for the owners of the coin because it’s basically an interest free loan to the token owner.
Stripe processes a LOT of money. The customers that get that money need to move it around. Often to banks. Stripe makes no money on that.
Over the last few years, stablecoins have become a preferred means to hold and move money (for convenience, etc).
Stablecoin providers make money on their float -- selling stablecoins means you get free deposits, and risk-free rates are presently around 4%. For every $1M in stablecoins your customers hold, you can make $40k/year. Stablecoin providers like Circle pay about half of that back out to partners that sell the tokens.
Stripe is huge, and well-trusted by customers for handling payments. By adoption stablecoin infrastructure to control financial flows into stablecoins, they can amass huge amounts of stablecoin sales.
If even ~3% of their transaction volume gets held in Stablecoins, and they make 1% a year on that, it's about $1B a year in bottom line.
~$10e9 (daily avg vol) * 365 * 3% (converted to stablecoins) * 1% (net income) = ~$1B
I'm not in that space, but how stable is that 4%? What is it correlated to?
[1] - https://coingeek.com/tether-bitfinex-prohibited-from-operati...
[2] - https://ecoinimist.com/2024/09/20/concern-over-tether-audits...
[3] - https://finance.yahoo.com/news/sec-fines-tether-former-audit...
That doesn’t make it…less of a scam. I bet drug kingpins make bank too, doesn’t make them any more valid.
Right, but isn't this... bad? Like so bad that it could bring down the entire capitalist system if it is allowed to grow unchecked?
I’m typing this shortly after buying my groceries with a visa debit card that was funded 30 seconds before the transaction over Lightning Network with Bitcoin that was sold at a 0.1% fee for USD and immediately then transacted on Visa debit payment network.
The reason banks are lobbying so hard recently to close “loopholes” in latest US legislation is because with stablecoins you even need them less and less to hold dollar exposure.
The days of traditional banks are likely numbered and the crypto skeptics commenting on HN have their world models upside down. At least that is my view currently.
The debit card issuer is a non-bank issuer on the Visa payment network.
LN coins are self custody origin coins.
No banks I see, except the grocery store’s on the other side of me. But soon they will accept LN directly in a few years or less.
To serve a tiny percentage of their customer base that just ends up finding an already supported method anyway?
Where exactly is the value for them?
The value proposition for everyone, consumer and vendors is both lower fees and ability to easily diversify their income/assets into non depreciating digital assets.
Somewhere there is a Steak n Shake presentation that explains their investment into accepting Bitcoin (via LN) has already paid for itself in fees.
In your world you would be the one holding the loss if your card is compromised in some way. This is of course beneficial to merchants. But as a customer I would always prefer a card network backed transaction all things being equal as my personal loss liability risk is considerably lower - almost non existent. This is why credit cards are generally better for the payer. I have no incentive other than ideological to use any crypto payment method.
PayPal, Venmo, Cash App tend to not be merchant based transactions but cash like transactions by either people that are unbanked for whatever reason, or doing business person to person, or transacting with a merchant who doesn’t accept credit cards. Stripe (and square) make the logistical side of that less an issue than it was, and today it’s mostly about fees and loss liability transfer back to the originator of the money (as in a theft scenario it’s not the payer whose money is at risk).
Paypal has USD savings accounts that pay interest, ACH support, and also issues standard credit cards if you like. On top of that they support multiple major cryptocurrencies and allow instant conversion to USD.
A high percentage of restaurants and stores in my area now accept CashApp payments directly along with other payments. Many people are using PayPal and Venmo also with merchants in person, and online Paypal is dominate.
Square is in the process of rolling out Lightning Network Bitcoin payments to all it’s POS terminals later this year with the merchant having control over how they want to handle such payments, auto convert, partial convert, custody Bitcoin. Could get interesting fast if merchants start offering discounts for non-credit card transactions, which they are fortunately now allowed to and the credit card companies can’t terminate them, what happens when USD stablecoin or Bitcoin payments are offered further discounts by the merchants due to their cost savings and preference?
I’m thinking about moving all my ACH auto pay payments over to either CashApp or Paypal also. And remember they both support ACH direct deposits.
What services are left for the traditional bank to provide me? FEDwire and international SWIFT wires … and … investment accounts for stocks and bonds …
I’d say they are on shaky ground as I know crypto focused companies like Coinbase are looking at how to get into traditional equities and bonds and guess what Robinhood already does that and has gone the other direction and acquired crypto companies.
The bigger mystery in all this discussion is why such a significant fraction of HN readers and commenters are so out of touch with what is happening in the real world and real economy with these systems?
For bank transfers, again, you gain repudiation. You have a window during settlement to dispute the transfer. It’s short but it exists. This is seemingly inconvenient and not obviously useful until someone is trying to steal your money. Then it’s suddenly very useful.
As a general society the friction that transfer hold periods provide generally globally reduces financial crimes everywhere and provides global stability to the financial system that didn’t exist prior. These seem like stupid fuddyduddy things banks do but there was a time these didn’t exist and there was a reason they were created and that time was not a better time. It was materially worse for everyone everywhere. Having never existed in such a time makes it hard to understand that such a time might have existed and why it was bad - but for those interested there do exist books that explain how we got here.
Obviously time will tell if there's enough margin to even offer a valuable discount to the purchaser and if merchants will become savvy enough to offer this dual pricing scheme.
In developed states (so, not the USA), regulation that protects the consumer.
I wouldn't write off banks that quickly.
[1] https://www.federalreserve.gov/monetarypolicy/reservereq.htm
Crypto isn’t going to take over anything.
The processing fees are lower for vendors than credit card fees if they accept LN Bitcoin. For me the “savings” account is completely self custody held in a non-inflationary non-depreciating currency called Bitcoin.
Massive value for everyone by cutting out the legacy banks. As I said earlier, unless you actually do it, and use it, you won’t understand how rapidly crypto is embedding itself and likely will take over in next decade for sure.
it's flawed and it can be improved, no question, but improvements need to reflect a basic understanding of the lessons learned by past experience, regulations were created for a reason, etc.
I think I'm confused. You paid 0.1% on this transaction, but if you'd done it with just a Visa debit card tied to a traditional bank account you would have paid 0.0%.
Am I missing something?
Some cryptos are doing better than that, so it's certainly possible to beat, but I wouldn't chance the volatility. Unless it's doing better than that.. then I think inflation is eating the crypto, not the other way around?
Edit: I see, because Bitcoin isn't adding additional coins, it's "non-inflationary". I think this is moot when you ultimately have to transact through fiat, so the only thing that matters is BTC-USD conversion rate.
0.1% is fee to convert to USD and in context of converting anything to USD, like stocks or anything one would hold in an investment account it’s a low fee. This means I keep my liquid capital in Bitcoin which has a strong tendency to increase in value and yet whenever I need to spend it, it’s instantly spendable in multiple ways, literally instantly and for a very very low conversion fee.
I can also use a CC company and I agree there is a 2% cash back. There are multiple companies that are crypto focused and have issued CC and Paypal issues CC and I can settle the monthly balance using Bitcoin also.
What I predict is coming soon, maybe next year or so, if POS support in the US to offer that 2% cash back directly to the consumer from the merchant should they settle in alternative currencies, like Bitcoin, like USD stable coins.
The combined issue of interest payments on stable coin balances (custodial) and legal settlement rebates is what has the banks literally freaking out and starting to try and spread FUD about USD stable coins. They know their business models in the payments space is eroding and soon the money markets space is under pressure.
What is blocking its adoption?
One I can think about is it is hard to accept that if I pay $20 for a pizza today, 6 months later that pizza might have cost me $40. It is a bit irrational but it will prevent most people from using it.
This is where the stablecoin thing is genius, one can decide/optimise when get in and out of crypto.
There's no native web experience that makes it easy to use Lightning in a browser; this forces everyone to step outside the box to figure out a way to (e.g. install extension or download an app)
There's also not much of an app ecosystem for it providing enough utility for people to use it each week/day
The core Ethereum stuff is pretty elegant but once you want to build an UI you get trapped in hell to plug it to the "web".
Maybe the biggest problem of "Web3" is it was built on Web2.
Part of the very high level play is the US Govt seeks to diversify away from depending on nation states for borrowing, and to promote tech companies to the status of reserve holders.
This doesn't add much to the consumer however. I think in fact we are looking at a "fragmented currency" future where you hold like 36 different stablecoins in your wallet because certain platforms accept certain stablecoins. The GENIUS act doesn't offer strict guarantees for getting out of a stablecoin into USD, so I predict dark patterns and "incentives" to make it hard to get out of a stablecoin.
Stable coins are new enough and have not catastrophically crashed yet so there is less oversight.
It's also a very open secret that the largest Tether stablecoin is not actually 1:1 backed with USD, as they very often claim https://paymentexpert.com/2025/07/24/tether-stablecoin-regul...
However there are use cases like running a marketplace, where the platform would like to be able to direct the flow, maybe hold things temporarily in case there are multiple transactions or to split a transaction up between different clients, before paying it out daily or weekly as a lump sum. Often it’s just to avoid fees, because the marketplace operator charges their fees in a different way (like a flat monthly invoice) and they want to assist with money logic as a service, but not be the custodian of the money.
Even just knowing that money has moved at all can be useful, without any ability to touch it, and it’s difficult to get permissions from conservative financial institutions, whereas permissionless ledgers make it easy.
Crypto can help add that nuance. It’s still your money, but you can give a third party the ability to do some things to assist you, without giving the ability to transfer it all to themself and run away with it.
This would also serve to counter the drop in global Treasury demand due to recent tariff stuff where presumably our traditional debt holders are losing appetite for US debt...
It also creates a kind of strange situation where stablecoins are basically spendable "Treasury tokens". So you give 1 USD to Uncle Sam (via a middle man like Stripe), get back 1 stablecoin. Then you go and spend the stablecoin, and Uncle Sam goes and spends the USD. It's like a weird double spend situation. Prior to stablecoins, you buy a treasury bill with USD, you hold this unspendable treasury bill while Uncle Sam gets USD to spend.
Moving money, sure. Holding money, only for chumps. The oldest grift in the cryptocurrency book is "unpegged no-audit stablecoin" and vanishingly few tokens actually put their money where their mouth is. Anyone can spin up money out of nowhere, but only a few businesses can survive a true bank-run scenario.
This seems like a threat to put pressure on CBDC to be pro-business or else the private sector will take over part of their job for them. A rational administration would probably want to put a stop to this, letting the private sector print it's own money will invariably end in heartbreak.
For avoiding regulation.
What an amazingly blatant example of Orwellianism.
What if your home country has made trade illegal? Well guess what your home country does not support free trade.
It supports limited trade, which is a perfectly fine position.
This isn't some radical, cyberpunk extremist, this is just pure trade. We have technology to facilitate this but we've been held back for decades by greed and legislation.
I’m sorry that your fellow humans don’t want you shitting up the place, but don’t blame the bog standard norms of civilisation on some sort of government conspiracy.
"Protecting" free trade from "bad actors" is just an extension of the state to control what "free trade" is from what it considers "bad actors".
Bad behavior does exist, but current technology far exceeds the capacity of bureaucracy to implement free trade, protection from bad actors, and most importantly Trust. The state itself becoming a bad actor is an increasing risk, which technology helps to hedge against.
I think it's important to remember that the Government IS PEOPLE. How are the people in Government any different from "normal" people.
They're not.
And so the people in government will be just as misguided, corrupt, fallible as any other organization of people. Technology helps us hedge against those failures.
That's ad hominem. You can make that argument for any player (stripe, any intermediary, the customer etc).
Personally I trust the state (at least mine) more than any corporation. But that's just me.
The founders of the USA believed the counter to tyranny was to keep government weak, so that when even the slightest hint of restriction on life, liberty, or property crept in it could be stomped out by the people. The Founding Fathers too were fallible and built a form of government which could not long guarantee those desirable characteristics. I argue the USA is a bad actor in many regards, and I trust it not. That said, it's the best of a bad lot, IMO.
If that was actually true, why do you put up with The State? Why do you not overthrow it? Seriously: if the state/government is bad why do you even have it?
Is the (municipal) State being a bad actor when it paves roads and runs water-sewage? Is the (state/provincial) State a bad actor when it runs schools? Is the (federal) State being a bad actor when it protects waters with Coast Guard and Navy and enviornmental regulation, when it inspects food, funds science and medicine?
It seems to me you get what you expect: the (e.g.) Nordics expect government to be a good actor and try to live up to those expectations; (some?) Americans expect government to be a bad actor and try to dismantle it… creating a self-fulfilling prophecy. Perhaps if more Americans expected and fought for / 'demanded' better government they would get it.
As for why we have government: the alternatives are unstable and devolve into government, or are weak easily brought to the submission of other states (those powers having a natural incentive in land, people [historically: slaves], and other natural resources to invade weak or disorganized neighbors).
Re. your other points, if we can have those discussions we're likely not in the grips of tyranny. Tyranny has a way of making you accept the potholes and the fact you don't have water 5/7 days (beats dying in a labor camp, and you probably don't have fuel for your car anyway).
Since you asked, though: Paving and water/sewage are not inherently tyrannical. Acquiring the right of way may be. Schools are not inherently tyrannical, but may be used subversively to produce a populace willing to be governed under tyranny. Protecting territorial waters it not inherently tyrannical, but military might can certainly be used in a tyrannical manner. Inspection of food and funding of science and medicine are not inherently tyrannical, but the taxation required for that funding may be, as could be e.g., requiring the use of the output of that funded medicinal research.
In summary, I'm saying that every government must be watched carefully by its citizens lest it devolve into tyranny. By assuming this trend (demonstrated time and again through history) to be indicative of future risk, I am prepared for that eventuality. By continued vigilance, I implicitly fight for the opposite. By continued discourse, I demand the same of my peers (and they of me, mitigating my own tyrannical traits).
Personally, I wouldn't trade my government (imperfect though it may be) for a 50% nominal tax rate and sub-arctic climate. That said, it's no surprise to me that the Kingdom of Norway, a parliamentary monarchy with 4% the land area and less than half the population density vs. USA, populated by 80% ethnic Norwegians, would have a very different form of and perspective on government than the third largest country (by land mass), de-facto world hegemon, a federated republic populated by 360 million children of colonists and immigrants. Horses for courses.
Technology helps to mitigate the fallibility of people.
Technology is similarly indifferent, and it's common that cryptocurrency is deliberately designed to exacerbate the fallibility of people. Unpegged stablecoins, shit memecoins, rugpull tokens... that's what I would call "consumer fraud" in a functioning economy. Or "gambling" at the very least.
It seems that this is a quintessential argument that's often made and is, plainly speaking, entirely stupid.
What do you think "people" means? "People" means an organization of humans.
How that organization structures itself produces various different kinds of results.
Religious organizations, political organizations, corporations, etc. are all People, but the results are very very different from organization to organization.
Why? Because of incentive structures.
The Enlightenment "indifference of the state" can actually then be extended to the "indifference of organizations".
Cryptocurrencies/the internet are no different in that sense as it is a new organizing principle for groups of people.
But what it is deliberately designed to do actually is to facilitate transactions.
What you're actually interested in is Fascism/Authoritarianism, where the state takes a paternalistic stance to protect the poor and stupid, the "masses", from the freedom to transact among themselves.
What actually needs to be prevented is the monopolistic and excessive accumulation that concentrates transactionary powers.
Limiting transactions is then the real authoritarianism, whether that is from a government or through the accumulation of wealth to a small segment of the population.
The issue simply that there is an asymmetry where certain people should have greater powers than others because they are verifiably better, but how much better and to what extent can such persons actually accumulate that power is a difficult question.
That's where the organizations of various kinds come in. They accumulate for themselves so as to protect the individual through the collective. This is the feature of any organization but again it ends up in the same situation. Organization can accumulate excessive powers and limit the freedoms of others, just as an individual can.
This dynamic is the problem. How to resolve? Can it be resolved? Who actually knows.
Cryptocurrencies, really the internet and computer technologies as such, are just another instance where we're re-evaluating the values and re-organizing ourselves around those principles. It'll address some of the old problems, it'll create new ones, but it's not any different than any other previous technological revolution.
I trust the state in aggregate no more than the least-trusted corporation, because corporations are, as creatures of law rather than nature, manifestations and exercises of state power.
The state as a bad actor is controlled by democracy, not technology.
Aside from that, in payments the bad actors you need to actually worry about are malicious vendors and customers and hackers stealing your details and your money. None of which Cryptocurrencies make better, mostly they make that worse, because they were designed as digital cash.
I can elect representatives and I have a direct vote multiple times a year to shape national policy.
The banks and corporations are not. I trust them purely based on their reputation and trust in following the rules that we have put in place.
I can assure the cost of those regulations is enormous for the banks. They were forced to make the SEPA transfers free but you ended up paying for it everywhere else.
and then let's not even talk about the instantly part, that is just simply not true.
So yeah, it’s not about regulation. If crypto can help streamline all this, it’s a net positive
Also, I think you're neglecting to point out the rigmarole involved with making a Wise account — connecting your bank accounts etc. And the recipient might also need a Wise account for instant transfers (but I believe Wise becomes a custodian for your funds in that case).
Crypto wallets can be generated by the click of a button. I think I taught my mom how to make a crypto wallet at some point. She didn't understand how to keep her crypto safe, which is its own issue, but wallet creation is easy.
I'm far from a crypto maximalist, but nigh-instant transfers with very little fee is a very attractive benefit of crypto.
If she doesn't need that then wise without a linked account or PayPal or etc is the exact same outcome without the crypto wallet security risk.
I personally use a Ledger device for my crypto. It was super easy to set up (though I wouldn't advise it to my mom, because she tends to misplace things). I linked my crypto wallet to my bank account fairly easily. So we can still get nigh-instant crypto transfers and fast selling of crypto into local currency (Speaking from US here, I think it usually just takes up to one business day). It's still faster than bank-to-bank transfer for large sums, which again, can take weeks for whatever reason they decide.
> wise without a linked account or PayPal or etc is the exact same outcome
PayPal without a linked account is actually pretty terrible. I did a Google search of PayPal frozen funds and this was the first result.
https://www.reddit.com/r/smallbusiness/comments/1kq14uk/payp...
Wise may have similar issues, I haven't really dealt with them outside of the occasional transfer, but I never let money sit in my wise account.
If you have custody of your own crypto wallet (IE not coinbase), no one can freeze your funds.
Again, I have my qualms with crypto, but the existing shitty state of ways to transfer money makes crypto very attractive. I have trouble even transferring money between my wife and my joint bank account and my personal account (held at two different institutions).
Go look at the subreddit of any of the major exchanges and they all regularly have stories of locked funds. Given the scales it would be far more likely there.
That's not a natural state of banking though that's a issue with your country. I have accounts at 4 different banks in Australia and regularly transfer funds between them without issue(I think my cap for instant transfer is around $5k though above that is usually only a few hours). Canada had a similar system(interac payments).
Yeah that's why I wouldn't suggest anyone keeping a lot of funds on an exchange, and having custody of your own wallet. "Harder" is irrelevant (and relative) because a one-time setup in order to send money instantly — something that I need to reiterate that if our country's banking systems allowed us to do, I wouldn't look twice at crypto — is worth it.
> That's not a natural state of banking though that's a issue with your country.
Yeah I think that's my point though. If my country ("the great US of A") prevents me from easily moving money from me to me, and I've also had nothing but trouble trying to manage joint finances with my wife because of the difficulty of transferring money, then yeah I don't wanna play that game. In countries where bank transfers are instant then yeah, crypto doesn't make sense.
On march 16th 2022 I sent $500 to my cousin in the USA, the transaction was completed on may 2nd 2022 after 9 back and forth emails with support. The first email on march 16th was asking me to confirm some information which I did same day, the other 8 back and forth emails was me asking when was my transaction going to be completed... at that time I had been an active wise user for 3 years...
The limitations you're describing are only in place because the countries that are subject to these bank limitations present significant issues (money laundering, terrorism, etc).
What is the breakdown of transaction volumes?
But if it was true, then so what?
Huh?
In the western world this is nonsense. I move 6-7 digits regularly, internationally, even between continents, for free. Convenience of cryptocurrency? Lol. Maybe if I want to send money to Nigeria or North Korea.
Cryptocurrency was never more convenient. It's cheaper than Western Union when that's the only alternative, but boy is that a low bar and an edge case.
Traditional banking is getting faster and cheaper by the year, so your claim is getting less true every day, not more,
These are the things companies want. With current methods you must take on risk to move money cheaper, faster, or without chargebacks/etc.
How do you mean? Some banks and bank accounts don't charge.
> how long does it take
It depends. Some transfer types are bank opening hours only, though then it's seconds. Some are batch overnight ones. For some use cases you can do an "internal" transfer internationally instantly, with an international bank. And then on both sides it's domestic instant. With others you don't need that trick, and it's just instant by default.
While this has greatly improved (part of what I meant by stablecoin supposedly being more relevant in the last few years being nonsense), yes the overnight thing is something that's not perfected yet.
Compare this to stock sales. We're down to T+1 settlement now, depending on the market. Imagine someone saying we need to replace the whole idea of money in order to reduce from T+5. We don't.
> without chargebacks
Cryptocurrency advocates talk about chargebacks as if it's a law of nature they managed to find a loophole in.
What exact use case are you thinking of? Customer payments to a business? If you want to reduce (though not eliminate) chargebacks and risk, those businesses are already declining CC, and only accept debit card and bank transfers as payment?
There's a reason most companies don't want to do that, because there's a good reason customers choose to just go elsewhere if they do.
Chargebacks were not an accident, just like "being stuck in KYC" was a deliberate design choice.
"If we do this then we can't get stuck in KYC" is not clever, it's just indistinguishible from crime, and quite possibly is crime. (structuring)
It's not a glitch. It's by design.
> and what happens if something goes wrong?
If something goes wrong I have a chance to get my money back. Unlike with cryptocurrency, where it's just gone forever.
If fact things have gone wrong with fiat, and it's always been fixable.
Are you being sarcastic? That's literally the most broken thing about cryptocurrency.
Does this mean that you agree with me that when sending money within the developed world and its functioning banking system, cryptocurrency makes no sense?
I ask this because many times when people say "but what about sending money to the unbanked, or developing world without modern banking?", they don't actually mean it. They just want to drop that there, and then use that as a reason to try to convince you that cryptocurrency is awesome for sending money from New York to San Francisco.
> maybe you don't care about them.
Cryptocurrency people absolutely do not care about them. Not at all. I do. I don't want them poisoned with that terrible burden. It's incredibly condescending to say that modern banking is good enough for us in the west, but poor countries should just be given garbage instead.
So: Are you highlighting that part of what I said honestly? And we can then talk about the unbanked without implying that developed banking, where it exists, is anything but superior?
If yes, then the solution is clearly to bring modern banking to the unbanked, not to give them second class status with cryptocurrencies. At least in the long run.
If no, well then I don't see how you highlighting this use case is honest. And I see many cryptocurrency advocates being dishonest on this issue.
I'll assume that you're being honest, and replied yes.
So what do we do about sending money to Nigeria or North Korea? I'll admit to not knowing first hand the practicalities of that, not having actually done it. Have you? US sanctions still allow up to $5000 per year to family or friends in DPRK.
A quick Googling from other countries to DPRK quotes me ~0.7%, with no transaction fee. Western Union seems to charge 4% (actually I expected worse). If 0.7% is accurate and includes currency exchange, then that's actually not that bad. Credit cards here can have worse foreign transaction fees.
But OK, let's say the choice is WU or cryptocurrency, nothing else being available. If you're unbanked, do you have a computer, and the skill to manage a cryptocurrency wallet? If not, then I guess you'll need to find a middleman.
WU seems to charge 6% to Nigeria. I don't have data about what an agent / middleman would charge, but chatgpt says it'll be about 5-15%.
And even if it were 5%, would you trust one of these agents as much as you would trust Western Union? For this 1% discount? Can you trust them not to screw you, and trust them to not get hacked? For 1%?
I'd be happy to hear better data on this, if you have it.
So again, what is the solution for Nigeria? Is it to go cryptocurrency with its enormous complexities, costs, and trust issues, or is it to bring them modern banking?
Again:
> stablecoins have become a preferred means to hold and move money
lol.
What do you think the unbanked would like more: A cryptocurrency wallet to manage directly, a guy in the village with a computer he's "pretty good with", or modern banking with FDIC deposit insurance?
They do if you charge in a foreign currency, e.g. in USD and transfer it to the bank account abroad, e.g in CHF.
These numbers only work while short term rates are high (relative to recent history) and the share percentage is low. The lower the rates and the tighter the margins, and it drops like a rock.
Nobody with a sizable balance is going to accept the risk of a system like this without being paid a premium over traditional bank deposits. If my bank gives me 4% I’m not going to give stripe half of that in exchange for losing FDIC protections.
The US gov let Circle be a less-regulated bank than other banks. This is called "regulatory arbitrage". You can take advantage of it by checking the box that you have a "blockchain".
Stripe noticed "wow, things labeled blockchain are nice for some people to use" because of this dumb inconsistent banking regulation situation.
Stripe doesn't mention that the underlying tech is impotent, they just have to play along, and here we are.
I think it is useful and is here to stay
Right now they say USDC:Yes and USD:No. They could easily say yes or no to either one at any time. Blockchain as technology is irrelevant.
Many other banking regulations also don’t apply. No FDIC insurance and most importantly none of the regulations that apply to true fiduciaries since they are only “custodians”.
Okay, so one: Obviously pointless from a tech POV. There is nothing that a Stripe controlled blockchain could offer that a database could not.
But then, why? Sadly, as someone who does like the ideals of true cryptocurrency, yet another way to make sure "real" crypto doesn't happen, much like what is happening to BTC.
Here's hoping (yeah, it's a long shot) people see through all of this and maybe, MAYBE, get into the actual ideals of cryptocurrency again.
I’m curious to know more.
Thanks
The others aren't doing well right now despite the fact that the tech that runs them can do what crypto promised, often better. It will all come down to whether people will buy in?
One way of thinking about a blockchain is to think of it as a shared datastructure to keep databases in sync. Any time you want to distribute your database over more than just a single central place, in a cryptographically secure way, you're probably going to re-invent a blockchain to do it.
Even more specifically, a blockchain is for when you want Byzantine fault tolerance, i.e. you don't trust one or more of the actors involved. This is the main distinguishing feature of blockchains IMO, the reason we have proof of work, proof of stake, etc. It's also the main thing I saw people getting wrong when using blockchains during the earlier waves of cryptocurrency fever; most proposals for blockchains did make sense as distributed public ledgers, but didn't really need the extra computational overhead because only trusted parties were adding blocks to begin with.
Often yes. But also blockchain's can be useful simply for backups and scaling: by cryptographically linking every bit of data together you can be confident that you actually have a complete copy without any errors.
Git is basically a blockchain for this exact reason: starting from a git commit hash, git works backwards, checking that every byte of data is what it should be. Similarly, modern filesystems like btrfs use strong (if not cryptographically strong) hashes for this same reason.
Though in a sense, you're still correct: the "actor" you aren't trusting here is your own computer hardware.
Stripe, nor any other bank or bank-esque thing needs this because they have already well solved their problem of "trust."
"Blockchain" is pointless overhead here.
- an intermediary credited another institution only to realise later they didn't have the money, and have to beg pretty-please to return the payment over a SWIFT message (there is no guarantee here, at best there is "market practice" which is basically just manners, but for banks)
- an intermediary failing to credit the next institution because of a processing error, but when inquired from remitter claiming they had in fact credited it
Many of these cases are very expensive to resolve. Far more expensive than the value of the payments in question. And for that reason they are often left unresolved.
Now I don't know if I'm convinced on stablecoin remittance, I find many of the counter-arguments extremely compelling, but some days I sure do think gee it would be nice if everyone was transacting on a shared public ledger and I could have some certainty of the status of a transaction.
But this situation is not made any better by a blockchain - there's still no way to reverse a transaction except asking nicely and hoping the other party obliges, right?
I haven't the foggiest if stablecoins solve these problems any better. In theory I think all participants having visibility into the ledger would at least answer the problem of "where actually is the money", but I'm not even sure of that though because of fiat on/off ramps, custodial arrangements, roll-ups that might happen off chain, etc.
I don't know if you could use smart contracts to encode a recall/dispute resolution process into transactions but that's very hand-wavey and possibly collapses under scrutiny!
All in I've no idea if crypto helps us here but I do think we have a long way to go either way.
blockchains solve a self-invented problem
There absolutely is. Its called having access to the ecosystem. The money features that exist in the current blockchain landscape are simply a better developer ecosystem, with many more features, than the non existent "Database driven", uhh money tools.
Blockchains are no longer about the singular feature of having a trustless ledger that bitcoin tried to provide. No, instead it is about a whole variety of money related features and developer ecosystems that simply do not exist outside of the crypto space.
Recreating all that exists in the crypto space, but using a database instead, sounds like a lot of wasted work when you can just use the tools that are already available.
Like what? Speculation?
Are you claiming here that things like banks and stock markets don't exist?
Genuinely curious though; what kind of 'money related features', that have no non-crypto counterparts, are you referring to?
No, I am claiming that I couldn't spin up a bank or a stock market on my laptop, that is compatible with all the other stock markets, by forking a git repo.
> that have no non-crypto counterparts, are you referring to?
The git repo fork button, that slots right into a whole ecosystem that has 10s of thousands of contributors to it.
Ease of use, and developer experience and existing markets and existing integrations with all of these businesses is a big deal. It doesn't matter if someone could hypothetically spend 1 billion dollars recreating all of that, using a database. Because that would require 1 billion dollars.
yeah, and that's kind of very much by design -- regulations that prevent this kind of yolo nonsense are a feature and not a bug
Ok, so then Yes I have brought up a valid and in demand usecase, you just don't like it.
Yes the point of all of this stuff is to make this usecase easy. Thats a real usecase. You just don't like that its easy.
we used to have markets that worked exactly like what you're describing, it immediately led to disastrous consequences for the broad base of society, and when we figured that problem out, we solved it with rules and regulations specifically designed to prevent abuses
you can suggest reifications of those rules and regulations to make them better, but what you can't do is suggest throwing them out altogether, that's pure regression
> but what you can't do is suggest throwing them out altogether
Actually, that seems to be exactly whats happening. Bitcoin has been around for 17 years, and it and other blockchain technologies have only become better, more prevalent, more mainstream, and most importantly, more legal.
The freaking president/vice president seem to be pretty pro crypto as well. I've been following bitcoin since 2010, and never in my wildest dreams back then would I have thought that the president would launch his own "Trump coin", for example.
Crypto won. Beyond everyone's most extreme expectations. The "regulators" lost. Its over. You can cry about it, but that doesn't change the fact that it won.
crypto won??
get out of your bubble, my dude, you're high on your own supply
Its an exemplar of "The government definitely isn't going to go after the crypto space, as even something as ridiculous as this is allowed". |
This is because you previously said "what you can't do is suggest throwing them out altogether".
But if freaking trump coin exists, then it looks like, yes, we actually can throw out all the rules.
> crypto won??
It won the regulation war, yes. Its not going away. If the president launched his own meme coin, then everyone else is safe.
trump coin is obviously illegal, it has no bearing on any discussion of policy
but you're obviously fully bought-in to the hype, so, you do you my dude
Yes that is what I was talking about. Its why I said:
'Crypto won. Beyond everyone's most extreme expectations. The "regulators" lost. '
You see that 'The "regulators" lost' part? That is where I was referencing the regulation war. Its why I used the word regulators. Crypto won, extremely, in the regulation war.
It was in direct response to this statement: "but what you can't do is suggest throwing them out altogether"
> trump coin is obviously illegal
Ok. So then yes crypto was able to throw out the rules altogether. The rules are gone. They have been thrown out. Your original statement of "you can't do is suggest throwing them out altogether" isn't true.
None of those things require a blockchain and are all made less efficient by doing them that way.
Again, truly decentralized cryptocurrency ADDS slow clunky overhead; that's the price of decentralization. Everything you're imagining is ALL done much easier with good ol' databases et al.
Actually, you can just use a federated blockchain.
> Everything you're imagining is ALL done much easier with good ol' databases
There is an ecosystem of 10s of thousands of developers that can run specifically ethereum contracts on a database, while being compatible with all existing stable coin onramps?
You have to show me the 10s of thousands of developers is the point. Thats an ecosystem. It means that you can connect to all of these existing apps and on ramps, and smart contracts and more. There isn't a database version of that.
Hint: the point of "proof of work" is to do more work than necessary
Well one major thing is what I just brought up that is more efficient thing is the developer experience.
Being able to fork an open source integration that has all of these money and smart contract features built in is much easier than trying to figure out how to design a smart contract system from scratch that doesn't use a blockchain.
Very optimistically -- what you're saying is correct. There is a best case scenario in which Stripe et al observe all of these already working and perhaps popular financial use-case things (perhaps to compete with bigger banks or just because they see/believe it as the future) and encourage adoption.
I'd bet this won't much happen, but I really do hope I'm wrong.
It's not for lack of trying that traditional, "database driven" cross-border payments are costly and unreliable. SWIFT have thrown technology at this problem: GPI, Swift Go, ISO20022, etc.
Unfortunately the ecosystem has an extremely weak technical culture. Banks rarely follow the standards as written – your perfectly crafted API payment may be re-keyed by a low-paid human operator on a slow, buggy UI written a decade ago.
I could believe that the developer experience and technical standards of the participants is where the value lies right now.
The one thing I'm not sure on is to what extent those ecosystems depend on reduced regulatory scrutiny compared to banks.
(but also, as OP, Stripe will almost certainly not have any use for this)
Etherium itself is not a computer, that's marketing speak.
In other words, I can unilaterally and without permission deploy code to the Ethereum chain, at the price of "writing the code" and "paying the Ethereum fees to do so." And when I do that, the ENTIRE CHAIN must follow.
That's closer to "a computer" that just "a listing of optional scripts."
To host validator node you stake ETH which is serve as collateral in case your node misbehave, go offline, etc.
If specific validator cheats at any point and end up approving bogus data he'll be punished by loss of staked ETH and penalty grows with each attempt to cheat. If multiple validators commit the same bogus data they'll get even more severe punishment for coordinated attack on chain.
It doesn't take a supercomputer to host ETH node so there is absolutely no incentive to cheat unless you actual bad actor who is attempting 51% attack. And to perform said 50% attack you will need like $75-100B+ of ETH stacked since currently there is $150B of ETH stacked for Proof of Stake. So this kind of attack really doesn't make any financial sense.
All these people harping on about: "Bro I just need to move my money without trusting anyone!, I just need a trust-less way to send currency bro!"
Trust is a good thing! Banks and financial middlemen aren't the devil. Look at how many TPS the visa network can do thanks to trust.
If it weren't for some minimum of social/institutional trust the whole of society would collapse anyway and your digital coins would finally converge to their true value (zero - or actually negative once you add in the externalities).
A database cannot resist tampering by somebody with admin access to the database. It may be the only thing that blockchains have going for them, but it's a big one.
Never trust a cryptocurrency developed by a for-profit corporation.
Because I feel pretty confident that it is dwarfed by the volume of money that has been unlocked by tying crypto to ransomware.
Oh, wait... I've been handed a piece of paper...
Ethereum had a surgical state change on a smart contract via hard fork that implemented that change, so it had 0 effect on other blocks.
Stablecoins require trusting that the coin issuer doesn't print money. This goes against the core premise of blockchain being trustless!
This is just a payment API with extra steps (all of the integrity and identity features use cryptography that works without blockchain, unless your definition of blockchain is broad enough to include git and matrix chats, then the stripe thing is a blockchain too).
https://www.irishtimes.com/business/technology/stripe-takes-...
The reason Stellar was appealing was because Stripe invested into it. I wonder if Tempo is using a similar consensus mechanism as Stellar (and/or Ripple)
If Stripe’s closed-loop system scales, banks and card networks could lose significant transaction volume, fees and even merchant relationships. Merchants and customers win with lower transaction fees. This marks a very credible and large-scale effort yet to challenge the Visa and Mastercard duopoly.
Obviously not perfect and other questionable projects have stained blockchains reputation but it is a net win, no?
Blockchain is used as an umbrella term to lump useless systems like this and ripple into the same category as actual decrentralized cryptocurrencies.
I am actually optimistic that, finally, there could be a convincing answer, because stripe does not strike me as the type of company that would do this without a very good reason. (I am slightly less optimistic, because the page itself does not offer an answer to this question, and instead argues for tempo against other blockchains. But only slightly.)
I don't really get the draw either - what is the point of having a distributed blockchain if it is controlled by a single entity?
I will end with this thought: If we can get to a new local equilibrium where global transaction costs are 10x lower and >30% of global GDP can get paid faster / with better price signals / etc., shouldn't we try even if the tech is non-optimal?
Stablecoins are a sort of “glue” between global banking infrastructure that otherwise would be difficult to set up as a provider (due to regulation), slow (due to bank technology for global payments being slow), and opaque (due to the shortcomings of global payments between financial institutions).
If the goal here is to overcome regulation isn't all this threatened by the possibility of new regulation that recaptures this behavior?
The conventional system is slow, insecure and does not interoperate well because of regulation.
This whole scheme is just dressing up a centralized payment provider as a cryptocurrency to avoid regulation for a short period of time.
I mean FFS the dang tokens are literally pegged to the dollar.
I never got the idea how for that reason there is any guarantees that you can get money out in those less served locations.
The whole thing is just asinine. The killer use case for crypto is dodging laws & regulation. Not even judging because that’s REAL utility!
"EVM-compatible, built on Reth" => they're essentially building a private Ethereum fork with a fancy validator selection process.
Couldn't they just get these benefits (predictable fees, fast settlement) by ... running a database between these financial institutions?
If Stripe controls the validator set (even indirectly), then ... just a distributed database with extra steps, no?
Fancy validator selection sounds like the individual financial institutions are still responsible for managing and maintaining their nodes, which gives them a fair (as in balanced not fair as in a lot) amount of liability/responsibility/control.
A distributed database, afaik, while geographically distributed, entails more centralization of power/control.
Sure, but they wouldn't get all the legal and regulatory bypass benefits of using cryptocurrency.
In some countries, regulators simply point to these companies and say "Ok, so you're driving people around for money thus you are a taxi? How would we not regulate you as a taxi?".
And this should apply for a bank or financial institution that tries to avoid banking regulations through technical means, no?
To have deployed some blockchain layer 1 nodes, it's actually quite similar than deploying a distributed database.
Nowadays, it's actually just easier to fork geth/reth or other engine, and just deploy it. There are so many doc and tooling that can then be reused.
They cut out a lot of work for themselves expecting stable coins to materialize on their own chain. It's Stripe, so maybe they are allowed to mint their own USD stable coin, but that's one coin. They might have been better off making an L2 on Ethereum. Otherwise they are going to have to run Uniswap in their EVM implementation and hope that liquidity shows up.
I can see Stripe's customers wanting to use a solution that just works and is backed by Stripe's own distributed ledger, but I can't see their customers' customers wanting to do the same. Their customers' customers are going to want liquidity to other tokens, and privacy. At this point I don't think that a payments protocol can succeed unless it provides privacy comparable to Monero, liquidity to a major L1 and its family of tokens, and of course, fast finality.
I assume there will be bridges to other chains so even if, say, USDT is not natively issued on Tempo you can bridge it.
It's Stripe, so maybe they are allowed to mint their own USD stable coin
Stripe has USDB. https://www.bridge.xyz/news/usdb
That being said, I'm not entirely sure it's a bad thing...especially outside of the US/europe banking I get the impression that banking regulations are arbitrary and political and if all we get from crypto is escape from those regulations it may be worth the extra fraud and so on.
Historically, there have been hundreds of blockchians that were basically slightly modified forks of Ethereum clients, operated by a small group of validators that sacrifice decetralization in order to achieve higher throughput. This seems to be a slightly higher effort verson of that.
I did not see the mention of decentralised BTW, why would it matter here? You trust business entity at the end of the day.
There are some legitimate advantages of ethereum (multiple independent validator software implementations) but decentralisation of the L1 isn’t one of them, even more so when you consider most ethereum transactions happen over centralized L2s.
I can hardly see any value in "yet another private blockchain" — just use a database, duh.
Most of these L1s will likely end up becoming L2s in the near future, especially if they can rake in revenue via sequencers
We're looking at stable coins for the following use cases:
1. Instant clearing and settlement of 'floats' & liquidity - EG moving liquidity between our network to support instant/same day payouts or instant funding of a spend card.
2. Instant cross border payments (lots of people doing this already in companies that operate multinationally). EG, our USD top-ups today take 3 days in fiat, which can cause operational issues.
3. Offering our merchants (who are typically small businesses) optionality to hold USD in countries that have volatile currencies.
I'll also note that many people forget that the cost of a payment network isn't merely the movement of money, it's also KYC, dispute resolution, fraud prevention etc...
I wonder if the tempo team has looked at AI automating dispute resolution and fraud detection/prevention 'on chain'.. The network could fund the compute required for the AI to complete these tasks.
Does this mean these companies are about to start accepting stablecoins as payment (via Tempo?) some time in the future? Seems out of the ordinary to work with these companies otherwise.
Wouldn't that just mean that the whole schtick is to avoid regulation? If I as a regulator saw this, I'd just schedule it for my next meeting, since you want to avoid having companies doing regulatory exploits "until regulation catches up". It's Uber all over otherwise.
Blockchains (in general) enforce not only open code, but open data.
Technically, nothing prevents traditional banks to offer standardized easy-to-use and easy-to-onboard API access to their financial data, but in reality incentives are not there (quite the opposite).
Blockchains are a contrived way to enforce open code and open data. There are other technical ways to do that, but none of them has been found to actually work in reality.
Sure, some people thought buying tokens was a way to become rich quick and lost money. Yes, some projects were not regulated and the regulators need to catch up. But overall progress is impressive imo.
I actually don't understand how they were allowed to exist, it's impressive really.
I'm cautious about these
If you can't make it economically viable, it shouldn't exist. Pure and simple.
they will censor you and block you in blockchain level so literally db for few big companies, lol.
Both of these are the antithesis to censorship resistance because not only are all transactions publicly tracable but also non-fungible making censorship not only possible but viable on a large scale.
https://cryptodefendersalliance.com/blacklist
Monero is actual censorship resistant currency.
https://www.getmonero.org/resources/moneropedia/fungibility....
So now it’s official? The other blockchains were designed for gambling?
Anyone know what this actually means? Both literally (what is Reth?) and what it means qualitatively: are Stripe’s crypto efforts competing with Ethereum or strengthening it?
Reth - ethereum protocol client written in rust. https://github.com/paradigmxyz/reth
Reth is a rust implementation of the EVM used for running nodes, made by a very prominent research and venture group.
By volume of real world usage, the standard is the Solana virtual machine though.
Is this an actual public "blockchain"? Can anyone read it and archive all the transactions? Are there multiple validators who have to agree? Or is this really just a proprietary database?
> Attributes: High motor
What is meant by that?
[1] https://jobs.ashbyhq.com/tempo-xyz/aab97703-13e2-42e8-9fb9-9...
There’s a physicality in the definition that doesn’t really describe the best programmers I’ve worked with.
> In sports, "high motor" describes a player who consistently exerts maximum effort and intensity on every play, showing relentless energy, enthusiasm, and a refusal to take plays off, even when tired or the game situation is difficult.
Feeling defeated is important too to rethink your strategy.
Recruiters want Übermenschen probably.
In this day and age, countries need not be beholden to the pile of duct tape that is the credit card system and its innumerate middle-men and inefficiencies.
This is a good thing.
Something claiming over 20-30 tps onchain is usually a big blocker. Big blocker design is well recognized as insecure: no end user is able to run a full node locally, only datacenters are able to keep up with 100k tps load. Which diminishes entire purpose of creating a blockchain. Could have been a database with 100k tps or 3-of-4 validator multisig like Hyperledger, wouldn't matter.
> A diverse group of independent entities, including some of Tempo’s design partners, will run validator nodes initially before we transition to a permissionless model.
> Protect your users by keeping important transaction details private while maintaining compliance standards.
Sounds like it actually has potential. This could enable global QR-code payments using and open, decentralized, and private system. Something like fiat cash payments, but digital. I hope that Valve is keeping track of it, for starters.
In what currency? As I understand it, Stablecoins are bound to an underlying currency. If you do not wan't to tie it to a currency, bitcoin would be the prime candidate. And with its layer 2 solutions such as Lightning, there is already a decentralized system for fast, cheap and private payments.
Lightning is not a solution. Having to run a node that's online 24/7 is unreasonable, and so is having to convince others to allocate inbound liquidity to you. Any wallet which does not require this is heavily centralized and often custodial.
I agree, but with trampoline payments approaching standardization (it is in use by electrum and ACINQ/Phoenix wallet already) and async payments, the 24/7 issue should be gone.
I DO agree that stablecoins are different and probably have a different setup - they are still centralized and require trust (that the underlying asset is held accordingly), while Bitcoin/L2-Lightning are completely decentralized.
This one is: https://coinmarketcap.com/currencies/toncoin/
* https://www.nist.gov/blockchain
Specifically the yes/no flowchart on whether "you may have a useful blockchain use case" (Figure 6 - DHS Science & Technology Directorate Flowchart):
* https://csrc.nist.gov/CSRC/media/Projects/enhanced-distribut...
"Are the entities with write access having a difficult time deciding who should be in charge of the data store"
The vast majority of pointless blockchaining come from organisations that have already decided that they are going to be in charge. Which is just great for them, but it doesn't induce others to join them. I wonder how much of promoting blockchains is to project the illusion of relinquishing a degree of control. I guess all the ones doing it just because others were doing it are looking at AI now.
Once it's truly "open", you can't have any sensitive identifiers in there, so you need another protocol/system for correlating opaque identifiers with real-world entities (thus defeating the purpose).
And if financial institutions are involved, they'll want the ability to do what they do now: rewrite history whenever they feel the need (or are compelled by governments). Another strike against using blockchain.
Who would of thought?
Asked a crypto friend how to manage it in 2025, he pointed me to a service that I could use with Google Pay. Mental. I was just walking into normie places and paying with my ill-gotten gains.
It's gone mainstream for sure.
I wonder if that's intentional or left in from debugging the animation when it was being created. As-is felt like a nice easter egg and I appreciated it being included.
I do think it's possible they put more money/talent onto the problem after it happened though.
The one that really stands out to me is
“ 03 :: Predictable low fees
Transform your cost structure with near-zero transaction fees that are highly predictable and can be paid in any stablecoin.”
I question why some of large companies that are named here as partners would want this.
Being a Stripe customer from Country XY, charging my customers in USD and getting charged a hefty fee by Stripe for the conversion when I have a payout, I wonder how this would affect their business model.
For example, in markets like Latin America, stablecoins aren’t just ‘faster payments’—they’re an escape hatch from broken financial infrastructure. That makes them feel less like a new technology experiment and more like electricity or the internet: invisible, but transformative.
The interesting question to me is: what happens once small/medium businesses start building on top of this instead of just using it for payments? Could we see the same pattern as the early web—where it started as “publishing pages” but turned into entire industries?”
> Stablecoins enable instant, borderless, programmable transactions, but current blockchain infrastructure isn’t designed for them: existing systems are either fully general or trading-focused. Tempo is a blockchain designed and built for real-world payments.
What is different in the details, no idea.
Regulations in payments tend to be very technical, and inserting some crypto/distributed plausible deniability in the mix could get them 5 more years of delay (until the next generation of regulations). It will depend on how those regulations take shape in the coming months.
I can't see this as a positive because of how Stripe has behaved in terms of preventing transactions in the past. Although Tempo is behaving more like a b2b model or fintech-specific orgs in this case, the shoe-drop is when they decide a particular bank, or fintech org, or product is not allowed to perform the transaction on their network after the market capture takes place.
This sounds like a „private blockchain“, which loses a lot of the advantages to me, but, if designed correctly, it may still produce a very solid and long living platform if there are many parties interested in keeping it running.
Do consider me skeptical that Stripe will actually cede enough control for this advantage to materialize since that’s just not what companies are incentivized to do.
I run e-commerce business and I’ve received bullshit chargebacks before. But I’m also a consumer and I’ve filed legitimate chargebacks before.
Related: I’ve also had my bank send money to the wrong place before.
There must be some means of reversing transactions in some cases. Some arbitration mechanism. Some dispute resolution procedure. Some means of doing escrow.
You already have binance b2b and similar stuff that do escrow and it works ok
So effectively yes, you need (a) decision maker(s) in the loop.
Can anyone answer this? (I'm not asking to be rhetorical or negative, just critical but inquisitive).
Tempo is a purpose-built, layer 1 blockchain for payments, developed in partnership with leading fintechs and Fortune 500s. With support for all major stablecoins, Tempo enables high-throughput, low-cost global transactions for any business use case.maybe you are just stupid?
This isn't even for you or I, nevermind grandma.
Yeah I can't wait to run my operations on a KYC-guarded, AML-choked blockchain in the US jurisdiction.
(and I'm saying that as a huge crypto/blockchain optimist)
Tether has now moved to Bukele's paradise El Salvador and its backing is managed by Howard Lutnick's Cantor Fitzgerald. Previously Tether's funds were managed by Deltec in the Caribbean, a bank with a colorful history.
https://www.ft.com/content/b3c5b67d-1df8-4417-8dd5-2c86d76d6...
Do you have any information which geopolitical actor controls tether? Is it China or Russia trying to circumvent SEPA? Or North Korea because north korean hackers have so much bitcoin from their ransomware operations?
[1] https://cointelegraph.com/news/tether-us-treasury-holdings-s... [2] https://yellow.com/news/stablecoin-giant-tether-slashes-trea...
For example, in markets like Latin America, stablecoins aren’t just ‘faster payments’—they’re an escape hatch from broken financial infrastructure. That makes them feel less like a new technology experiment and more like electricity or the internet: invisible, but transformative.
The interesting question to me is: what happens once small/medium businesses start building on top of this instead of just using it for payments? Could we see the same pattern as the early web—where it started as “publishing pages” but turned into entire industries?
There is no technological replacement for trust. To think otherwise is a bit daft.
All financial instruments are expressions of trust / promises or more informally known as IOU's.
I'm yet to see someone do a thorough economic analysis of how all this blockchain stuff will positive impact this.
I have no bias - please bring me well formed arguments. I want to see them!
TerraUSD (UST) NuBits DEI flexUSD
USD has been here all this time. And is a safer bet than any stable coin.
In my finance experience, the answer to the "why blockchain" question is settlement. Every banking system (local, international) has a settlement process.
Settlement is where bank counterparties have to tally up who owes whom, and pay each other. That process still takes time internationally, and is complex because of the parties involved.
A more concrete example (I've audited interbank settlements for a local bank in my country):
When I buy something from Amazon as a crossborder transaction with my Visa, my bank and the merchant/bank that Amazon use enter into a counterparty obligation, where in a direct way they'd have to pay each other, incl moving funds between countries. If these 2 banks are the only banks in the world, they can both tally up the transfer of funds to each other, and then pay each other the difference. That'd still take time, right?
Now, we have hundreds of counterparties, using different systems, Visa, MasterCard, Amex, local clearing houses for EFTs, etc. There's also merchants like Stripe who'll be doing the processing, central banks who also ultimately settle currencies among each other. They all have to wait for proof of funds clearing at some level.
If I'm doing an international transfer to my friend, their bank won't want to just credit their account instantly because the time it'll take for them to receive settlement of those funds isn't instant. Else they're going to pay the cost of a deposit that isn't there (let's assume my friend earns interest on positive balances).
The process is that the banks have to recon each clearing house's balance, aggregate that to a list of values like:
* Amex: owes us R200m * Visa: pay them R300m * Clearing house: etc.
Typically the bank's treasury department then effects those transfers. Don't know about other banks, but the bank I audited, it was done by a person daily, their responsibilities are to ensure those settlement aggregates are received/paid, and to resolve differences.
Beneath this person, at that bank, was a team of people who did recons all day. This was in 2012, so hopefully things changed, but I know that team still exists.
Once settlement's taken place, there's another team that verifies international settlements and then approves transfers to my local account. As a data point, it used to take me ~7 days to receive my salary from a US employer while in South Africa.
With crypto, my experience has been that settlement gets delayed, virtualised and distributed because you have a single layer (or still fewer layers across chains).
You send me USDC from wherever, we already don't involve:
* Payment processors like Visa * Central banks as no balance of payments processes are affected * Banks who need to reconcile cross-payments and settle them
Instead, if we're using an exchange (if you're using a local exchange), the funds arrive in the exchange's wallet shortly. The exchange has a constant flow of users buying and selling their local currency. They're in charge of settlement between their wallets and bank accounts.
I'll sell my USDC into my local currency ZAR, and if I withdraw it, the exchange keeps ZAR in local banks, and they send me that money immediately. My crypto salary would be in my bank as ZAR in 30-60 minutes.
Now, I said that crypto delays settlement. My exchange will eventually run out of fiat currency, or need to rebalance. They'll trade some other counterparty exchange, and settle that transaction through SWIFT/equivalent. That settlement will take the 5-7 day process. They just delayed it for their client.
I said it's virtualised because they've skipped the whole process of moving net flows and relied on a central entity, the blockchain, to do that. Ultimately it's a faster process than that backoffice of the bank.
And distributed. Every exchange or remitter has now become their own micro clearing house, and they participate in the banking system by earning their own fees, running their own process.
They only need to interact with each other at higher levels if they need to convert their USDC to US dollars. Interestingly that process happens at one place, but as long as cash and tokens move bidirectionally, the process can get relayed to the point where only a few US banks need to deal with the issuer of USDC.
Immovable object: The perennial HN hate for all things blockchain, complete TLDR energy when it comes to crypto
This should be interesting
1. We all desperately need a sane digital instant means of transferring money between “institutions” that just works
2. No-one believes that a third party solution would not end up with that third party holding everyone over a barrel (Visa but on steroids). So any simple “use Postgres” is out
3. So it’s either a trustless, open blockchain (bitcoins blockchain or possibly this Tempo). But there are huge drawbacks to The Blockchain - apart from the ratty reputation it has so far, there are problems with making a reversal of payment of both parties don’t agree, and other issues as nauseum.
I don’t get how well tempo solves any of this.
4. We end up with what I think is likely to be the solution(s). Islands of “trust groups” that replace SWIFT and its like with blockchain in a piecemeal fashion, but the cost benefit ratio is totally subsumed by the massively high costs of replacing the towers of process, regulation and software balanced on top of SWIFT etc
4.a. Or the central banks introduce their own “stablecoins ” - and people punt all the complicated bits of law and regulation and reversals over to the existing legal regulatory frameworks.
In short the ultimate problem is that sending a signal moving 1 million dollars from Kenya to Kansas is simple (wooden sticks did this a millennia ago).
The problem is a legal, cultural, social framework that all parties can trust and believe will fix their grievances. That’s basically … the global Legal framework we have now, with the solutions we have now including following court orders.
If the electronic system cannot follow the current frameworks requirements (ie the old lady did not mean to send her life savings to that wallet, get it back) then the electronic system still needs overlays that can - and there is not just a lot of complexity - there is an incredible amount of complexity
I get the feeling I’m yet again talking myself out of thinking we can have a sane digital currency for similar reasons to why we can’t vote electronically.
I’m paying for my round at the bar in cash.
Why does Stripe want to creatively ruin their reputation by venturing into crypto / blockchain?
I don't see anyone in the real world using blockchains at all.
I get AI as it was a real world paradigm shift, but I have never seen anything in this blockchain / crypto space that has reached 100-500 million users let alone 1 billion users, that isn't based on speculation.
People use it for selling accounts, usernames, cheats and probably much more for it. Many of these also use Stripe (major cheat providers offer payments via Stripe and crypto, so why shouldn't Stripe also try to capture the value of Crypto payments?).
Many companies are using stablecoins for cross border transactions, and for payouts in countries with volatile currencies. There's clear value for these use-cases.
Not to mention lower fees and 24/7 availability.
Ah yes, the good old "permissionless" blockchain, that's 100% centralized for just the first 100 years of operation, give or take [subject to updated timelines after 100 years]
https://coinmarketcap.com/charts/number-of-cryptocurrencies-...
Bitcoin is decentralized because the sun distributes energy somewhat evenly across the globe.
The other 206701340 crypto projects, including this one, are decentralized because ... ?
From the very sparse info on the page, it seems this project does what so many other chains do to make payments faster and cheaper: They log them on a database that is synchronized across only a few computers.
In other words: I can't find any info on that page explaining how they plan to achieve decentralization.
Second, permissionless does not mean decentralized. You can have all validation of a POS chain ending up on a single computer.
There are mild returns to scale in running large-scale mining operations and as a result mining power seems to actually be somewhat centralized under the control of a small number of players: https://digiconomist.net/cryptocurrency-decentralization/
Not to mention that "decentralization" is a technical property and not necessarily desirable in itself. Users might care about fairness, avoiding sanctions, purchasing illegal goods, etc, but these are only weakly connected to technical decentralization.
In March 2023, the New York Times identified a list of
just 34 Bitcoin mining facilities (controlled by 22
different entities) in the United States, which
represented about a third of the total worldwide
Bitcoin mining network at the time.
34 such $365M/year entities would have to collude to attack bitcoin. And accept that their business is severely damaged afterwards.
So much for the decentralization and security of Bitcoin.
How does the situation look like in other chains?
Good luck to Stripe though. Building the network effects necessary for an L1 is very difficult.
So not decentralized at all. The only reason to not open source validators and allow the public to run their own is to make insiders rich. Another crypto grift that will mint a few millionaires before either being forgotten or merely being used as a speculative instrument.
Stablecoins enable instant, borderless, programmable transactions, but current blockchain infrastructure isn’t designed for them: existing systems are either fully general or trading-focused. Tempo is a blockchain designed and built for real-world payments.
- First line in TFA
How?
> existing systems are either fully general or trading-focused. Tempo is a blockchain designed and built for real-world payments.
What makes existing systems not suitable for instant, borderless transactions? What makes this new chain suitable for instant, borderless transactions?
Any system with an API is programmable.
That says nothing of political idiocy which will surely follow as new levers are tested, but payment processors are in the business of making money, and ostensibly want as many transactions to happen as possible, regardless of origin or the particulars of any sale.
They shouldn't be gatekeeping goods and services for legal transactions, and I'd be willing to bet most of them absolutely don't want to be in that position.
I imagine there's also a chargeback scam reduction and accountability benefit to this, which reduces losses, and ostensibly prices.
There's a surveillance and privacy hit, but it's not like the systems currently being used aren't completely compromised and surveilled already, so maybe this adds some accountability at that level as well.
But I had literally said that stripe should've actually ventured into and created their own cryptocurrency or something...
Tada, I might be one of the happiest person thinking that I actually really predicted something by my own observations.
here's the blog post: https://justforhn.mataroa.blog/blog/most-crypto-is-doomed-to...
By what I meant most crypto, I meant anything aside from stablecoin (like gold backed/usd backed)
Now that being said, I am still a little critic as to I don't see any offical stripe message and I don't see a way on how it would be implemented?
Like one of the things that I wished in my article was this idea that someone on twitter originally asked where currently if you had money in stripe and wanted to pay it anywhere else, you had to have it enter your bank which might take 14 days and then lets say you want to give it to someone else who has stripe(think anthropic), then they would get it back again after 14 days
So someone basically asked to create something similar to a stripe card. I think that this blockchain is it, except I feel like that you could send money to anyone in a non kyc manner too via this which is again a plus point for sometimes where I feel like that in this world every transaction is usually tracked and as such something like this change is really welcomed.
Once again, can someone really explain what is going to happen in tempo's future as maybe its me who couldn't focus in such a website. I actually went and read the article that the other company that partnered with stripe (paradigm), so I just read paradigm's article: https://www.paradigm.xyz/2025/09/tempo-payments-first-blockc... and they say that it is a new incubator/partnership b/w stripe and them, but would that mean that this tempo is going to be integrated in the stripe ecosystem or no?
I always thought that stripe and stellar had some deep connections but honestly I couldn't care less about it. I don't care about these fake tokens but rather stablecoins/gold stablecoins
Eg if Australian locals suddenly switch transacting cocaine at scale in Tether instead of AUD, the US government can borrow more money by providing that collateral to Tether.
Edit: Izzy Kaminska recently had a, as always, solid and less snarky summary at https://www.financialsense.com/blog/21379/redollarization-an...
Second, Tether is not a regulated stablecoin in United States.
The bonds are sold en masse, and the value of those bonds will be hit, driving up gov borrowing costs (plus they just lost a source of demand), meaning the stablecoin “bank” could be bankrupt, right?
With stable coins you’re really trusting a private company to invest your money in a way that is robust to a drop in confidence. Isn’t this high risk? If a coin gets large enough, is it a threat to government solvency?
But I guess we will find out in a 2027 Bessent presser announcing the Fed stepping in.
More serious answer: the bigger risk is trusting SV types to be content with a couple of percent in spread, and not starting to pull all kind of shenanigans to juice returns to a point where it becomes much harder to bail them out vs just taking back the treasuries.
US government solvency seems, as crazy as it sounds, less of an issue, as evidenced by the brief tantrums with absolutely no real effects beyond a couple of protesting headlines in the recent months. Where else are people around the world going to put their money? But as gifted as the current gov crew is at turning privilege into disaster, we're probably going to find out soon enough if there are any actual limits to that.
I honestly thought this was fake and not from stripe the first time I saw it. (I kinda still do with that domain.)
According to this Krebs article https://krebsonsecurity.com/2024/12/why-phishers-love-new-tl... 13% of the xyz domains was related to phishing, not as bad as .top which ahd 30% but still bad.
I would love for stripe to start paying appropriate VAT on transactions between their merchants and EU citizens, I've been on their ass about it for nearly a year now. I've reported multiple merchants to them which simply refused to provide an VAT invoice for any transactions. Legally, merchants outside EU are required to pay VAT on their B2C transactions if their EU transaction volume goes above a certain limit, and provide VAT invoice for B2B transactions (but with 0% VAT because it is B2B).
But unfortunately Stripe doesn't seem to have the technology to do a SUM(*) in their database, or check if an email address ends in '.de' or '.it' when they take the payment. So they simply do not give a damn if their merchants provide an invoice with the transaction or not.
Oftentimes it was the problem to actually get an invoice document which has company name, company registration number, street address, city, and tax ID. Extremely basic information which is required on all EU invoices. Many times I have submitted invoices from Stripe merchants to my tax accountant and my tax accountant told me that those are not proper invoices and to please reach out to the merchant to get EU-legal invoices.
Stripe has the technological capabilities to implement proper compliance checks, but they choose to let their merchants send you rubbish self-made PDF invoices with a big red "paid" stamp without any information or "official" Stripe invoices with total fantasy names and fantasy company information. You never know if your merchant is sitting in an embargoed country or is just some schmuck from San Francisco trying to hide their ties to a website.
If other HN users from the EU have been fighting Stripe to get EU-compliant VAT invoices for their B2B or B2C purchases, please feel free to reach out. I've been doing a big stink about this and to me it feels like a deliberate pattern of enabling their merchants to ignore EU VAT obligations.
It's really sad that my extremely positive impression of Stripe has been deeply tainted by this kind of experience across various purchases and subscriptions with Stripe merchants. I had to spend so much time pleading with them to provide proper invoices.
You're trying to get Stripe to force merchants to conform to some arbitrary document format for an invoice that isn't even part of Stripe's transaction flow, based on a regex on emails for certain TLDs?? Is Stripe the world's paperwork policeman?
Maybe just don't order from merchants who won't supply you documents in the format you like, instead of trying to get Stripe to act as judge, jury, and executioner in the court of Stripe. Or talk to your government representatives and get them to lift these rules so you can do business like everyone else in the world.
So if Stripe doesn't force their merchants to provide an invoice which has company name, company address (jurisdiction!) and company registration number (for me to check if it actually exists) then the invoice is rubbish and to be used as toilet paper.
Simple principle, but in my interactions with Stripe they fight tooth and nail to implement and/or enforce it. And even if their merchants "enable" Stripe invoices then Stripe doesn't stop them from putting random addresses into the forms.
Of course the shitty-invoice merchants often have domain privacy enabled and self-claim to reside in a country without any imprint laws on their website. You can pay to them with VISA/Mastercard via Stripe but have no idea which country they are in. Stripe knows exactly in which country both seller and buyer are located at the time of transaction, and they do not use that information to apply the proper tax rate to the transactions. Also even if you show them that a merchant has been skirting VAT payments for years I think they do not force the merchant to state proper invoices for all impacted transactions during that timeframe.
In my opinion these are systemic compliance deficiencies at Stripe and the lack of technological remedies for this problem is apparent (like checking email TLDs to see if customer is in EU). It result in a significant tax theft problem negatively affecting EU member states.
None of this has anything to do with the format of any invoices. If you wrote a receipt on a piece of toilet paper, that's fine as long as you can prove that you then sent 30-50% of the money you received to the US government. I believe this is more generally a feature of common law legal systems which prioritize honest intentions over box-checking.
Whatever other requirements exist in other countries are not really a US business's concern, unless those countries start turning their merchandise away at the border. In any case, expecting a random payment processor to act as world paperwork policeman for the EU is hilariously ridiculous.
Stablecoins are way better, albeit on more decentralized chains like Ethereum.
Actually even then I still consider it nonsense.
Blockchain's primary usefulness has been to evade regulations, and due to the rapidly changing nature of the technology, representative democracies with legitimate legal institutions have lagged behind when it comes to regulating it.
The country that wins (prevents fraudsters and scammers who exploit crypto) will be a dictatorship solely because a dictatorship is the only form of government fast enough to either rein in lawless cryptofinance, or exploit it maximally.
When enough actual value creating people who bought in to the libertarian crypto fantasy finally realize that they're slaving away to make ends meet in an economy that enshrines meme coin shills and folks who use crypto to evade the law, it will have been too late.
—-
+-----------------------------+----------------------+--------------------------------------------------+
| Discontinued Offering | Discontinuation Date | Notes |
+-----------------------------+----------------------+--------------------------------------------------+
| Bitcoin Payments[1] | April 2018 | Phased out after decreasing adoption |
| Verifone P400 Reader | Jan 29, 2025 | Fully non-functional |
| BBPOS Chipper 2X Reader | Jan 31, 2022 (orders)| Still usable if already in customer hands |
| SOFORT Payment Method | March 31, 2025 | Merged into Klarna’s solution |
+-----------------------------+----------------------+--------------------------------------------------+
NOTE: This table was generated by ChatGPT, I didn't fact-checked it.