I've been deep into crypto for years and I was a big stablecoin supporter. I was fascinated by the tech and I still am. But everything outside the tech itself is just trash, scams, and gambling. I've come to believe that "pure" decentralization is neither practical nor particularly convenient. The only real use case that makes sense to me is giving people in developing countries access to a stable currency they can actually hold, trade, and invest in, meaning USDT or USDC. Outside of that, as an EU/US citizen I don't see why I'd hold stablecoins instead of fiat. It's actually riskier in every meaningful way, and I already have access to every form of investment I could want. It's genuinely fascinating to think about a technology that can empower people who otherwise have no access to financial tools. But that comes at the cost of millions of people around the world gambling with money they can't afford to lose, convinced they're investing their way to wealth.
Crypto was initially interesting to me because scarcity based economics is failing us and crypto give us a way to explore alternatives. But so far, nearly everything we've built with it has just been a clone of some scarcity-based thing that already exists outside of crypto.
Since then I've come to the conclusion that it's never worthwhile to buy crypto with fiat. Any scheme which asks that of its users creates too much continuity between the old way and the new way--it allows the illegitimately rich to continue to be illegitimately rich even after switching to the new system. Anything with that property doesn't deserve to be the new system.
What we need is a discontinuity. A system that wants not your money, but your participation, and which doesn't acknowledge the value of your old money. Today's crypto isn't it.
Isn't the whole point of an economy a method of resolving scarcity? Money is a proxy for participation; it keeps me from having to agree to paint the miller's fence in exchange for some flour.
That's the perspective that our current systems are based on. And back when the majority of the problems that people were up against had to do with there being not enough of something to go around--when it took half of us working in the fields just to feed the rest of us--then the system worked relatively well. 9 times out of 10, when somebody got a loan (which is the event that injects dollars into the system) it had something to do with alleviating the not-enough-stuff problems that we faced.
The quickest route to profitability had something to do with solving problems in ways that--by happenstance--let them stay solved. This is relevant since profitability is how banks decide whether to grant a loan, and loans are what cause USD to enter the system. Previously, we mostly had good reason to want people's ventures to succeed.
But nowadays, most loans are for zero-sum ventures that have more to do with capturing a share of some fixed resource (attention/influence mostly), or building something that helps some of us at the expense of others (missiles, datacenters, planned obsolescence, surveillance, etc). It's no longer clear whether we're better off with the success or failure of a randomly chosen business venture. Maybe that venture seeks to harm us.
The quickest route to profitability has changed. Now it's about making things worse for the many while benefiting the few (since it's the few who have all the money). Yet we're still treating dollars as valuable despite the fact that they're issued on the basis of profitability, a property that no longer has much to do with making our lives better.
So I think we need a system that understands consent. When I accept some abstraction from my employer in exchange for my labor I need to be able to look at it and decide whether accpepting it helps people who are helping me, or whether it helps people who want to poison my drinking water for their mining endeavor. Dollars don't carry enough information to enable me to make that decision, and so far neither does crypto.
We don't have to banish scarcity entirely before building monetary systems that are not based on it. Once we figure out the better way, it'll likely be crypto-shaped, except it won't ask you to buy it, it'll just ask you to use it. It'll be a rejection of the old ideas about value.
> When I accept some abstraction from my employer in exchange for my labor
That abstraction is simple debt. Your employer is, in exchange for what you've given them, promising to return to you something of value (food, shelter, entertainment, etc.) in the future. Money is the account of the promise made. The alternative is to forgo the debt and trade something of equal value at the time of the transaction. However, any negative externalities associated with you choosing what item of value you want to trade for exists whether you demand it immediately or defer acceptance until some time in the future. Trying to find a new way to practice accounting isn't going to change anything.
Simple debt isn't cutting it anymore. The "Debt to whom, and what outcomes does that person value?" question is important. Ignoring it and continuing to buy and sell simple debt traps people in situations where their economic way forward involves contributing to outcomes that makes their material situation worse. It's time bomb, each generation has diminishing incentives to participate.
> alternative is to forgo the debt and trade something of equal value
"equal value" is only a well defined concept when we have shared interests. But when half of us are trying to go to Mars and the other half is trying to prevent the first half from going to Mars so we can instead dedicate those resources to healthcare... when we're fighting over the steering wheel rather than fighting against a common enemy... then we can't usefully coordinate around a single untyped notion of "value". We're just running in circles negating each other's efforts. Our current economy is mostly waste.
New ways of accounting that don't obfuscate conflicts of interest the way that simple debt does will indeed change things.
> The "Debt to whom, and what outcomes does that person value?" question is important.
It may be, but it is one you, the employer, can easily ask during the interview. If a prospective employee doesn't align with your values, you don't have to hire them, and thus won't have to make them any promises to deliver anything that you don't feel comfortable with. This isn't only theoretical. "Cultural fit" is considered by a large swath of employers to be one of the most important aspects of hiring.
I know the typical HN account loves to over-engineer solutions to mundane things, but you really don't have to invent some new type of accounting for this. All you have to do is talk to the people in your life.
If the debts were spread around evenly, I'd agree with you. But the vast majority of debt is not peer to peer, but instead goes through a bank. If you're going to restrict a bank from using your mortgage to enable loans for endeavors that will hurt you (or selling the debt to somebody who will do this), I think you do need a new kind of accounting.
Accounting predates banks. You do not need to invent some kind of new accounting system to rid yourself of banks.
That said, banks do provide a useful service for many people. However, that service doesn't magically happen. One has to choose the bank they are comfortable employing. Which, again, requires an interview before accepting a bank to work for you. That is where you can make sure the bank you choose to utilize the services of aligns with your "cultural fit".
Talking to the people in your life is all you need here.
It's totally impractical to interview everybody who has ever offered you money for some reason, figure out how they got it, and how they got it, and determine if that set of people is working to undermine your efforts, just so you can decide whether to accept the money. The information burden is just too high, so people simply don't do it. We turn a blind eye to the cases when our work harms our neighbors, they do the same regarding us, and we all end up with less because of it. We could all have more if we automated that computational burden and instead just refused to participate in the negative externalities by refusing money that drives them.
But it requires types of debt which are not exchangable for one another. Whether it's working to take us to Mars or it's working to provide healthcare to our neighbors is something that debt should declare directly, it should not require a duplicate investigation at each transaction.
> figure out how they got it
They got it by you accepting their promise to deliver something of value in the future. If nobody out there is willing to accept their promise of delivering future value, they don't have anything. That's the whole abstraction. It is materialized out of thin air when you agree to accept the promise.
Some new kind of hypothetical accounting system cannot possibly change anything. It will always be a hindsight account of the promise that was made. The only possible change is for you to tackle the promises themselves. Which requires talking to people. That is where the promises are made.
Hey thanks for this discussion. I've gotta run, but I appreciate the willingness to engage with my weird ideas, even if you're unconvinced that it's a problem that "something of value" means something wildly different things depending on who you ask.
Thanks for sharing your perspective. It’s reminding me of how I was feeling about crypto in the early days. I begin specifying a project on those lines way back when and the ideas behind it are still interesting. Maybe you’ll enjoy: https://www.wired.com/2014/07/document-coin/
Wow yeah, the wired description of it really rings a lot of bells in my head. I've got a lot of design work in a very similar direction.
Did you ever get a chance to turn it into something worth sharing? I'd be interested in an account along the lines of: "here are the decisions I made at the time, and now, with a decade of hindsight here's the ones I like and the ones I'd change if I were to try again."
I found this: https://www.infoq.com/presentations/document-coin/ which I guess addresses the first part of my curiosity.
>But nowadays, most loans are for zero-sum ventures...
That's an enormous claim and I really doubt it.
All I can say is that I've been trying and trying to find work that actually solves a problem, and each time I become familiar with a business it seems like we're actually causing most of the problems we solve.
The exceptions to this pattern that I've come across don't have enough money to be hiring people.
Maybe I've just been unlucky.
each time I become familiar with a business it seems like we're actually causing most of the problems we solve.
Do you mean, in general, as a society/culture, or are you just having an incredible run of jobs where each time that business is the problem?
I don't really agree with your framing.
Something like Amazon is a partnership between the capital class and, to zeroth-order, everybody else, to screw over a small slice of the proletariat (their own employees and retail / warehouse workers) and the bourgeoisie (brick-and-mortar store owners).
It sucks when the capitalist Eye of Sauron focuses on however you make your living as a thing-to-make-more-efficient but when it lands on how someone else makes their living shit gets cheaper.
Used to be, but now it's agree to paint Musk's fence in exchange for nothing, or else you aren't even allowed to exist, because the system has been thoroughly gamed. Usually when a metric becomes too gamed it's imperative that we stop using it as a metric (Goodhart's law) or else very bad things happen.
I live a perfectly fine, productive life not contributing to musk's empire. Are y'all really buying Teslas and blue twitter checks? The fact that he has a bunch of money really has no bearing on me.
> not contributing to musk's empire
You are if you've got a 401(k), just not voluntarily.
The SpaceX IPO is basically a scam designed to force pension funds to buy in before the stock price falls to where it should be.
The whole society is pandering to the people with the most money, you can't separate yourself from that. For instance more of your customers - no matter what you do - are Musk fans because that's what gives them money and makes them more likely to become a customer.
Somebody sells a tesla and then buys something from you with that money... and now you're contributing to musk's empire. Our money is set up so that you're not in a position to consent to it or even be aware of it.
Sounds like I sold something and therefore made money! glad to hear my business is doing well.
Sure, but at what cost? Maybe you made $10, by doing so did you enable musk to do $9 of harm to you, or was it $11?
Almost certainly less than $1.
What kind of harm do you have in mind here?
You're not accounting for all of the government contracts that US taxpayers fund.
> Are y'all really buying Teslas and blue twitter checks? The fact that he has a bunch of money really has no bearing on me.
The lives of many people who have never given Elon Musk a dime have been materially worsened by the fact that he has a bunch of money, since that money bought political power and he used it in a way that was very destructive to a lot of people across the globe.
Happy for you that you weren't impacted, but a lot of people were and still will be.
> scarcity based economics is failing us and crypto give us a way to explore alternatives
The entire field of crypto was an attempt to create scarcity where none existed, by turning scarce electricity into special numbers.
It was about creating a rules based monetary system. It made engineering sense to start with a mimic of a system that was already known to be consistent (gold), but the feeling I got was that it was much more about letting the people choose which rules they wanted to follow, and less about favoring any particular ruleset (i.e. ones that create scarcity).
By that logic, Musk breaths air which probably eventually mixes with the air you breath, thus there is no escaping him.
Come on dude
I don't know what you're talking about. We build society either out of rules or out of threats and favors. Preferring innovation on the rules side has nothing to do with who breathes whose air, unless you want to make a rule about that and enforce it with software--which you probably shouldn't, because it's dumb.
My comment got attached to the wrong thread…nvrmnd
https://github.com/CirclesUBI/whitepaper/blob/master/README.... seemed interesting because it uses a different model that's not interchangeable with any current system. It died in 2024 however.
Yeah, that was my favorite one so far. Although I didn't much like the pact that if we're friends we assert that each other's tokens are equal in value. I know that's in the spirit of UBI but if you're building a web of trust then it seems like a missed opportunity to create incentives around being so damn useful to your community that people treat your tokens as more valuable than somebody who is less useful. To make position, and not amount, the desirable thing. To make trustworthiness profitable.
How would that work? I (an important person who is very loved and trusted by thousands of people) agree to give you (a nobody) 0.20 of my tokens for every 1 of your tokens? That smells like financialization, I'd effectively profit 80% on all of your transactions through me.
Well, if I had it fully worked out I'd be telling people to try using my system. But vaguely...
In circles the agreement is that trust creates a 1:1 value ratio. I value the tokens you mint periodically as equal to my own, and this influences the number of tokens I give you in exchange for a loaf of bread or something. If I value the bread at 6 of my own tokens, that's the price I change you: 6.
But maybe we value each other's contributions to society differently, perhaps we consult the graph and end up with a 2:3 ratio where I trust you more than you trust me. This ratio influences prices. That loaf which I value at 6 of my tokens (times two, divided by three) I offer to you at a price of 4.
Or maybe you're working to cause me trouble, damming the river I drink from or somesuch, so the trust graph gives us a 5:1 trust ratio. In this case I'm going to need 30 of your tokens in exchange for this bread because I'm aware that by feeding you, I'm giving you energy that you'll spend harming me.
After exchange, the tokens get wrapped in a layer that indicates me as well. Since the next person to accept it will be benefiting both you and me by doing so (contributing to a system that supports our various activities), they'll have to consider the trust ratio between themselves and both of us in order to determine whether to value it. This creates a risk on my part: maybe I'll accept your token and be unable to find anybody who will subsequently accept it from me because everybody I associate finds your activities problematic. (These dynamics are all implementation details, humans just scan a QR code and see a price that was determined by the weighted trust graph).
You don't encounter tokens with problematically large stacks of wrappers because demurrage counteracts inflation. We're constantly minting new tokens for ourselves, and the value of existing tokens are constantly degrading so nobody has a token that's 100 years old. That is to say, they have a half life, they decay out of existence eventually, so there's an incentive to continue to be trustworthy and useful, rather than just hoarding enough that you can then opt out of being trustworthy for the rest of your life.
> I (an important person who is very loved and trusted by thousands of people)
The ratio we end up will not be a function of how many people trust you, or how many people trust me, it'll only consider cases where I've trusted somebody who trusts you, or where you've trusted somebody that trusts me. We opt-in to the asymmetry by using variable degrees of trust to enable or prevent the activities of our peers. It restores balance to the "vote with your wallet" situation. Currently, the only way to vote with your wallet is to vote yes or to abstain. This lets you vote no.
For a first pass I'm considering using https://github.com/cblgh/appleseed-metric for the trust graph. But I don't intend to start by making apps like the one I've described here--nothing so politically charged as money. I figure I'll get the protocol working with things that are low stakes and easy to get on board with and try my hand at making something money shaped only once it's performing well for other stuff.
I think all or nothing sounds better. There was a top HN story yesterday about the curse of excessive granularity. Not only does it require excessive attention to maintain the right values - and now you're requiring coin selection as well - but can also lead to outcomes being contradictory to your intention.
Circles trust isn't about how much I actually trust you to deliver the product I bought and not harm me - it's about how much I trust you to not be a Sybil clone. But if Musk is harming me then I'll not trust his coins and people will have to find someone else to pay through.
You also have to make sure your intended outcome is a Nash equilibrium. In your system it sounds like I can set up a relay that pays out 1:1 (or 1+fee:1) without wrappers, which will quickly become a requirement, making the system harder to use, capturing a financial fee from normal system users, and unsolving the problem you wanted to solve.
It was inspired by this mural I saw when I visited Chile. There was this whole saga of exploitation by outsiders, terminating with a brown person shoving another brown person's hand into a blender and accepting a credit card from a white person (it's right outside the street art tour place in Valparaíso). It was pretty striking to be there, a white tourist with a credit card in hand, and to see how the locals felt about the way foreign money was impacting their society.
All or nothing means that we have to chose between excluding outsiders entirely, or treating them as equals. A rich outsider shouldn't be able to use a pile of money that the locals don't have a say in and act like a king, but on the other hand there should be a gradual path to gaining the trust of the locals which has to do with whether you're helping or harming them.
I'll have to think about Nash equilibria. As for making the system harder to use... I guess there will always be the problem of displaying different prices to different people based on how trusted there are, but I think it's a small price to pay compared with avoiding the exploitation that rich foreigners visit upon poor nations: exploitation mediated by the fungibility of money. As for the other complexities of use, that's just software implementation details.
My guess is a lot of people had too much expectations for blockchain and crypto.
I remember here on HN 10 years ago everybody wanted to put everything on a blockchain. Some were betting on the collapse of the financial system.
None of those things happened but ethereum created a neutral, stable, secure cheap and transparent programmable financial platform.
Because it is neutral a lot of people ported the bad things happening in the traditional financial system to crypto: the scams, debt, speculation, etc.
And then most people started to hate it.
I guess 20 years ago most porn was hosted on Apache web servers, now it would be nginx. Should we hate nginx because of porn?
I have mixed feelings there. I agree that crypto has inherited a lot of troublesome behavior from the traditional system which may not have been, at the outset, crypto's fault. But on the other hand, presumably we built a new one because we thought it could be better than its predecessor, and it still isn't. At some point we've got to acknowledge that the culture that springs up around a system, wherever the people were previously, is a consequence of the merits and flaws of that system.
So, Eyeball Coin?
Oh hell no. Biometrics on a blockchain are a terrible idea. But web of trust stuff along the same lines as https://github.com/CirclesUBI/whitepaper, figuring out where PGP went wrong and getting it right, yeah.
I'm not really excited about blockchains at all actually. They put you in the wrong sector of the design space that falls out of the CAP theorem. CRDT's and partition tolerance however, I think there's something useful in there.
'stable'coins are a lie though. They just hide the risk, they do not make it go away. (At least bank accounts are insured up to a certain amount.)
I got into crypto in 2017 when I came across the phrase "money is a technology". That idea fascinated me. But fast forward several years later, and it's obvious that money might be a technology in the sense that it's a tool, but more importantly, money is a culture.
People have made crazy stories up about "the origin of money" for a long time; Adam Smith makes up a zany story about people agreeing to use chunks of metal to make change for bartering because it's too hard to keep chickens in your wallet when you need to break a sheep[1]...
The notion that people gravitate to metal vs "fractional sheep" is without historical evidence. People in fact, a long time ago, did trade things like IOUs or pieces of broken reeds or sticks[2]. Those sticks acted like IOUs and were often traded around far past the original parties to the contract.
Money is a contract between you, your peer/counterparty, and whatever organization you "trust" to mediate if someone really isn't happy with the outcome of a situation.
Money is, indeed, culture.
[1] https://www.adamsmithworks.org/documents/chapter-iv-of-the-o... [2] https://en.wikipedia.org/wiki/Tally_stick
Or if you read Sapiens you'll know money is a story we tell each other. You can't literally do much with a coin or bank note or numbers on a screen but as long as we all believe it has value, it does. It becomes part of the culture, as you say.
Crypto also has to tell a story about why it's valuable. There was a lot of anti government rhetoric and fear mongering (from libertarians) but the public never really believed the story was true. It was a lot of FOMO.
NFTs failed completely to sell their story but crypto is still hanging on among its supporters. AI is telling a similar story about the value of tokens which is being well received
Fiat currency isn't just a matter of belief or stories. If you interact with the US financial system in any significant way then you're likely to end up owing some income taxes, and those can only be paid in US dollars. If you don't pay then eventually law enforcement officers will seize your assets (real estate, cattle, gold, cryptocurrency, whatever) by force and auction them off to settle your tax debt. And if you try to stop them then they'll shoot you. Overall this is a good and stable system. The cryptocurrency clowns never seem to address the sovereign taxation issue.
While that is true, the overarching point is that it fundamentally still is, just a story. You're just describing real world consequences, precisely because humans/societies believe in that story and enforce it.
By that logic, most everything other than a club to the head is "just stories". Hume points out in a Treatise on Human Nature that most of how we interact with the world is through a coherent hallucination provided by sense organs that tell very narrow stories, but when stitched together form a cohesive whole. You're almost doing the equivalent of saying that gravity is "just a theory".
Society is a story, not a chemical reaction. People like the story of money because the stories that had gold coins or barter sucked a lot worse.
So what you're saying is that you can pay your taxes in dollars, real estate, cattle, gold, cryptocurrency or whatever.
> Fiat currency isn't just a matter of belief or stories
... Then how do we, as a society, determine how much a dollar is worth?! We do use force to enforce the stories we tell about fiat. But 'believe this story about how much a dollar will buy you and how much you owe, or else we will send thugs to your house' isn't disproving the point at all.
"but as long as we all believe it has value, it does".
Would one argue that an airplane is a _story_ ? If no one believed in the technology and lost faith in all pilots no one would fly. But that doesn't change the reality of the technology and competence of the pilots.
I get the sentiment, but I am not sure _story_ is the right word.
Well no, an airplane is a tangible thing that can fly, and as long as the safety culture of the people responsible for flying airplanes is strong enough, so crashes are very rare, people will fly with it.
Currency OTOH is basically a (forgery-proof) piece of paper with a number written on it, or even just a number in a database on some (hopefully well-protected) server. So it can only be used to buy stuff as long as we all agree that it's worth something. Of course, it helps if a government and/or a central bank is behind it, but even without a functioning government, a currency can limp on for decades, such as in Somalia, where the last banknotes were printed in 1991, but people still used them as the lowest "rung" of a three-tier system consisting of the Somali shilling, the US dollar and mobile phone payments, until recently when businesses sort of agreed to not accept them anymore (https://www.theguardian.com/world/2026/may/11/poorest-somali...).
> but crypto is still hanging on among its supporters
From what I last heard about crypto miners, the price of mining is not enough to justify price of rig + electricity, so they are quietly switching to AI.
Wonder how long the second scam will last.
AI can’t exactly be turned into money the way crypto shenanigans can.
You can sell inference, but it has to actually be real.
You can sell scams -- LLMs may be dubious at many tasks, but they're probably good enough to use to write personalized email or texts convincing random people to send you money.
> There was a lot of anti government rhetoric and fear mongering (from libertarians) but the public never really believed the story was true.
The public never believed it because it runs squarely into the basic fundamentals that underpin the global financial system.
The finance industry learned long ago that currencies have to be stable and predictable in order to be trusted, and therefore NOT financial instruments to speculate heavily on. There's been this reality distortion field that crypto can be both a currency and speculative asset, but that hasn't borne out. If your digital dollar can gain/lose 5% of its value in a day, how do you trust it to transact with?
Crypto has been speed-running into many lessons we learned decades ago from the "Free Banking" era before the Fed, back when states ran their own banks, currencies, etc. Government got involved in banking management as a way to improve the stability and security of the financial system since things like fraud were rampant.
Honestly as much as people complain the US Federal Reserve really just proved their enormous value and thoroughly vindicated fiat currency. The financial crisis of 2007-8 should have been a new Depression and it wasn't. Instead we've seen uninterrupted growth for close to 20 years. Markets have really internalized that the US economy is indestructible and the Fed will always protect us from disaster. Will it last forever? Of course not. But like Keynes said, "in the long run, we're all dead".
Euros, dollars, pounds, francs, and yen are all more stable and easier to use than cryptocurrencies.
It gets even easier once you toss in Visa, Mastercard, Discover, Amex, various debit card and regional networks, and ubiquitous banking services. Checks and online ACH payments are free or nearly free. Payment card platforms are cheap in consideration the value you get for them.
Meanwhile actually spending crypto is quite expensive - worse than Visa’s transaction fees, and far less consumer and merchant protections.
The key difference is that they all require identity to use and can be traced back to a person.
Cash requires no such thing. Neither do easily available gift cards. There is a little more friction involved.
As a merchant I have zero desire to sell online to an anonymous buyer because the fraud risk is too high. I have to know whom I’m shipping to and how they’re paying for it.
That is by design and is a good thing to everyone except cartels and communist governments.
What about people wanting to buy abortion pills?
Cash, at a pharmacy.
Crypto doesn’t make that any better.
Neither does online ordering. Online orders have to have a degree of KYC.
Banks racked up huge losses on subprime mortgages, get bailed out to save customer deposits which the banks continue to profit from, most bank execs walk away scot-free, and that's a vindication of the system? They literally gambled with customer funds, lost it all by enriching incompetent sellers of bad MBS, and got it replaced by the government. With the money supply being inflated from the replacement, the only people who benefitted were the bad actors who still have a share of the now diluted supply of customer funds.
The fundamental structural problems from 2007-8 are still here. The system has been running with paper over the cracks in the foundation for almost 20 years.
Every system ever has been a patchwork. Dodd-Frank and it's orderly liquidation rules are a genuine benefit. We had a commercial bank collapse a few years ago and there was no contagion.
Most of the market is now in shadow banks. What happens when they collapse?
I mean, cultures are also a kind of technology, arguably one of the first we developed as Homo Sapiens.
In my view the actual issue has always been that cryptocurrency folks don't understand what purpose money serves, mostly because they're all basically gold bugs. To strain the "money is a technology" metaphor, this is a product-market-fit issue -- like trying to build a cloud orchestration framework that only works on DIY Belwulf clusters or a web framework that only looks nice on teletype.
Crypto exists to make early crypto holders money.
You get in on the speculative promise of making yourself wealthy. It's sold to you by the people at the top, and the message is amplified by the grifters and the pick mes in their orbit.
It's never been a convenient exchange of money. If they'd focused on this, maybe the argument would have worked. Instead, it's wacky and has the worst UX of any banking apparatus in the world. Including giant US banks stuck in 2005. This sucks because this is literally the value being sold, and it doesn't deliver on it at all.
By the time quantum chips can attack crypto's underlying hardness (2029?), most of the coins won't have the engineering talent and support left to migrate to more secure cryptography. We'll start seeing shit coins popped left and right, which will cause mass panic. That will cause sell offs, even if the big name brands manage to secure themselves temporarily.
Post quantum cryptography is not fundamentally that hard, the only issues are the signatures are bigger (so the chain is less efficient), and migration of existing chains (biggest problem).
Quantum computers might harm BTC or some other chains if the devs can’t get their house in order soon enough, but there’s no reason to think it fundamentally alters whether cryptocurrency is mathematically viable
Migration for certain prominent projects is already underway, e.g Ethereum.
It's too late.
How are you going to mass migrate all of the cold, dark wallets?
It's not going to happen because it requires conscious, deliberate, careful migration on the part of the wallet owners. You won't even be able to contact or warn most of them, let alone get them to understand the process.
Probably half the value in Ethereum and Bitcoin will be popped this way.
[dead]
I live in less developed countries so it is actually useful for me but I see it the same way as you wrote here.
Low-life businessmen ruined the technology outside of some spaces where there is strong tech leadership. They did too much damage to reputation of the whole industry
They did the same butchering to LLM/AI tech.
Silicon Valley was a place of engineering invention, and then the money-people saw, "Oh, there's riches to be made here!"...
They explicitly built cryptocurrency as a way to hoard more wealth. It was the "engineers" not just the money people.
I worked at blockchain companies for 4 years and this is not true.
The ratio of degenerate engineers is maybe 30% but business people is 80%.
People I have worked with were much better compared to other companies I worked in like aviation or consulting
Same here. I’ve met a lot of smart, passionate people in the space that are very respectable.
I absolutely believe this, it attracts developers that can see the idealistic potential. It is worthwhile to do your part for an ideal future.
The fact that you your vision is undermined by a determined group of profiteers doesn’t diminish the value of what you can accomplish toward an ideal future.
I don’t think I’ve ever worked with anyone in engineering who I would consider degenerate aside from the occasional crypto supporter. Even 30% seems like a scary high percentage of degenerate engineers.
All it takes is for the engineer in charge to be degenerate and the others willing to go along with it, that's how you get a Meta, etc
Silicon Valley came up as a result of the military industrial complex in the Cold War.
Money was always the point.
When people in a developing country cannot hold foreign currency it is a result of a deliberate decision by their government. That creates a number of issues. They may well be breaking the law holding stable coins. It means practical difficulties in buying stable coins (they need someone who will sell stablecoins in their currency).
> (they need someone who will sell stablecoins in their currency).
It's pretty hard to really lock people out of stable coins really. You really just need someone to sell you some type of cryptocurrency that can be eventually exchanged for stablecoins. You can even do "peer to peer" trades if the government really cracks down on holding crypto.
I agree with the sentiment of this article but atleast some parts of the world with poor currencies like Latam have seen some benefit from stbales.
Right! It's not that stable coins are decentralized, it's that the centralized holder is not in your jurisdiction and so your jurisdiction can't deface their money!
The only bad thing with USD based stable coin is you have to trust that the USA will keep paying its debts longer than you hold the stable coin.
The US has no reason not to pay its debts. Its debts AFAIK are USD denominated. How often has a country defaulted on debt in its own currency? I can think of one example and I thought it was a stupid thing to do at the time (it was forced by creditors, presumably as a punishment) and it was not a complete default, but a haircut.
That sounds like a good bet.
The fact that governments might not be able to stop people from using stablecoins affects the laws, though.
The governments cannot stop people holding physical notes either, and they still have the laws.
>the only real use case that makes sense to me is giving people in developing countries...
The markets hasnt accepted that. In gaza the cost of using crypto for foreign exchange far exceeded the cost of using cash, or prederably a US bill.
People just simply trust paper bills in developing areas
Technological solutions to social problems only tend to work when the problems are of the type "I wish it were easier to rid people of their money".
There are plenty of technological solutions to social problems. This is a tired trope.
Agriculture. Plumbing. The printing press. Electricity. Vaccines. Fiat money itself, which is a technology that is better than the technology of barter, which is better than each person having to grow or make every material thing they need.
"How do we remove feces from our living spaces" and "how do we stop dying from pathogens" are not social problems.
Those are perhaps the biggest social problems that humanity has ever faced.
Toilet technology helped with the social aspects. There's a fascinating museum in India about the history of toilets.
I can’t think of many better examples of social problems than sanitation and public health.
I think it would be a reasonable definition of "social problem" that it requires two people to have it, and that they must have it in relation to each other, which is to say, some sort of social interaction or communication must be involved as well.
Sanitation is a problem for one person as well, as is health. Social problems arise specifically with the interaction of two people. You can't have a scam without two people, for instance.
Definitions that collapse the entire space under discussion into one category are useless. If sanitation is a "social problem" then everything is a social problem, and the reason why that is useless is just that a definition that does not distinguish has no utility. In mathematical terms, to say that something conforms to that definition yields zero bits of information. "Public health" is its own category. In the real world no two categories can ever be fully separated from each other but just because plausible scenarios can be spun out in which sanitation becomes involved in a social problem doesn't mean that on the whole it is much better understood and talked about as a separate category.
Crypto has social problems. If one person sits in a basement and "does crypto" by themselves who cares? They can declare they own as many basement-coin as they like. It takes a second person to have a problem.
The original post said plumbing, not sanitation in general. Plumbing mostly solves a problem that arises when you have large groups of people. An individual or a small tribe can keep the waste and drinking waters separate by walking downstream a bit.
>If sanitation is a "social problem" then everything is a social problem
Social = society, keep that in your head.
The vast majority of problems you are going to face in your life are social problems because you live in a vast interconnected society with millions/billions of other individuals.
And it is important to remember that almost all problems are social problems, we get a quite a few of the libertarian types on HN that think "I'll just ignore other people and now I've solved every problem in the world". It's why this group of people thinks this way, it makes the problem way easier if you ignore reality.
Money, and the assorted scams around it, regardless of what type of money it is, is a social problem by definition.
> And it is important to remember that almost all problems are social problems, we get a quite a few of the libertarian types on HN that think "I'll just ignore other people and now I've solved every problem in the world". It's why this group of people thinks this way, it makes the problem way easier if you ignore reality.
You see this a lot from people who have been lucky enough to live in places where problems get addressed somewhat automatically. When you spend enough time in places where that isn't true, you quickly realize how indoor plumbing - or almost anything, really - becomes a social problem.
Sanitation: If your neighbour has unmanaged sewage, it is certainly not a problem that is limited to them.
Health: If your neighbour has a contagious disease, that is going to be an issue for society as well.
Are we going to pretend that COVID as a problem doesn't fit your chosen definition perfectly: "two people to have it, and that they must have it in relation to each other, which is to say, some sort of social interaction or communication must be involved as well."
Sanitation and health are social problems because if they are not handled they have an extreme effect on society in general. Hell, for plumbing we ONLY care about it as a social problem. If you go live somewhere far enough away from people, we don't care if you shit in a bucket. If you live in a city, we absolutely care about the social effects of not having sufficient plumbing.
If my neighbour has a broken TV, that's a problem that will never affect society. If my neighbour has a contagious disease, or even a non-contagious condition, there are a LOT of ways that affects society.
Same with a neighbour with plumbing that isn't up to code. There's a reason we send government agents in to verify plumbing installations, but we don't give two shits about your TV setup.
I suspect that anyone that says that plumbing or health is not a social problem is living in a place where those things are handled well enough as a social problem that you have never seen what happens when they aren't handled.
I agree with you on the uselessness of definitions that don't distinguish anything, and I think your conceptualisation of a social problem as being something that requires multiple people to interact (like a scam) is useful, admits a very clean boundary, and deserves a name. I would call such a problem a purely social problem. But I think there is a broader concept of "social problem" that makes sense too, even though it lacks such sharp edges.
I think it's reasonable to say that a problem is a social problem to the degree that its severity as experienced by one person depends on other people's behaviour.
If I accidentally drop a rock on my own foot, this seems to be obviously not a social problem. But if I am more likely to be carrying a rock in the first place, or less likely to be wearing protective shoes, because of how society is organised, then to that extent I claim that it is a social problem. This is not an abstract example: Over time, changes in society's attitudes to dangerous kinds of work have directly, and indirectly through health and safety legislation, led to massive reductions in workplace harm since the Industrial Revolution.
Under this rubric, all it takes for a problem to be social is for it to be possible to imagine that society being organised differently would lead to a different level of suffering. Does this lead to nearly all problems being classified as social problems? Yes -- but that is not a problem in itself, that is just an accurate picture of reality! It is still useful -- indeed much more useful -- to place problems on a spectrum of social-ness; nothing "collapses" unless we are determined to make a black-and-white distinction.
In that case, what are examples of non-social problems you can think of?
A broken TV.
If my neighbour has a "removing raw sewage from living spaces" problem, it is very much a concern for me.
If my neighbour can't watch TV, I don't care.
Even a broken TV can be a social problem in some circumstances.
TV breaks because entropy doesn't like you = personal problem.
TV breaks because manufacture designed it to fail 3 months after warranty = social problem.
if you do not consider public health a social issue, what do you consider to be one?
You're putting words in my mouth. "Public health" deals with social problems regarding health, but it's a subset of "health" which also includes problems that are not social in nature.
There are absolutely social issues around vaccines — how do we fund their development? how do we distribute them? how do we convince people to use them? — but as a technology I would say they solve a problem that is mostly independent of human relationships.*
* Obviously, you could say that vaccines actually do solve a social problem because pathogens are often passed between humans, but I think then the definition of "social problems" becomes so broad as to be meaningless.
>You're putting words in my mouth.
"how do we stop dying from pathogens" is like, the textbook public health problem. it's pretty much the question which the entire concept of public health spawned from.
so, if you specifically wanted to talk about the technology of vaccines or whatever instead of general pathogen prevention, you should just say that instead. i cant read your mind.
Maybe read a couple ancestor comments up to figure out the context of what I'm responding to?
How do we maintain large urban communities is a squarely social problems, and parts of it are amenable to technical solutions such as wastewater management, supply chains, large scale agriculture, etc.
All problems are social problems in that sense, but that's not what I meant. And if fiat money (as in, a type of social contract) is a technology, then anything is a technology.
What did you mean? I can't really understand your first comment, and this one doesn't explain it any further.
I think the point that is missed is all of these solved real problems that needed solving. I feel over the last decade we have exhausted the obvious benefits of the Internet revolution and more often than not we were seeing clever technology being developed, that wouldn't solve any problems. Then long and painful search for applications of that technology would ensue. Cases in point: crypto, llms.
You’re comparing crypto and LLMs?
Yes. In fact, crypto is ahead, because it does have a legitimate use case. Two, actually - money laundering and sanctions evasion.
I'm not sure I agree on your definition of legitimate...
If we want to say that any value generating - including crime - is inbounds, then LLMs are FANTASTIC scam machines. There are incredible uses for LLMs in a lot of stealing money spaces.
I'll admit I was being a bit provocative with wording there ;)
Exactly. Cryptocurrency is useful as as a backup system against failing/weak institutions. Just that. Like insurance, it was not there to make anyone's lives better but simply to become a safeguard to avoid complete collapse.
If it was just a backup against failing/weak institutions it would be relavively benign, but the problem is that it incentivises machiavellian types to undermine society and nation states for their own personal profit - see e.g. The Sovereign Individual[0].
Combined with effective accelerationism[1] you can see why we could be heading towards somewhere a whole lot worse than The Bad Place.
[0] https://en.wikipedia.org/wiki/The_Sovereign_Individual
[1] https://en.wikipedia.org/wiki/Effective_accelerationism
Proponents of weak and failing institutions would make this exact claim about any sort of backup or alternative.
Two things can be true at the same time.
[dead]
Let's talk;
You're in Crimea right now. You want some gasoline. You have some magic numbers in your magic rock. It needs you to cast a spell to transmit those magic numbers to someone else. I guess it probably also needs ... some electricity and some network access and some time to make those magic numbers update in the gas station's magic number.
In what way is this actually going to help you in a total collapse? Let's stand around over my iphone and cold wallet and spacex terminal while we wait for things to beep the right number of beeps?
In the off-chance you find yourself in this situation, what's to stop the party with the gasoline from just pointing a gun at you or your corgi and asking you to add some zeros to the number of magic beans you're zapping into their magic number?
Now, perhaps you as an international agent of mystery, can use some shiny rocks or magic pieces of paper to make your escape, and you can then, once safely back in a stable society, use your magic numbers and spells to transfer "wealth" to some organization closer to your new physical location (let's say belize?) -- in which case, to avoid a bunch of tedious laws and such, perhaps that magic trick will work in the way you suggest.
But, when things go haywire and there's just Hobb's all against all, I'm not sure a magic cold wallet of certificates is going to do much.
If your only idea of "institutional collapse" is "living in a war zone", then I envy you and your sheltered life.
Can you describe a "society collapse" where your cold wallet _can_ get you out of trouble, and why that particular situation isn't subject to "I will shoot your corgi." coercion?
If you're dealing with a peer you can't trust (like the US government) that will ask for your passphrase and then not torture you for it if you refuse, I'd suggest you're not really in a situation where society has broken down.
It's not even useful for that, it's controlled by those same institutions now.
It doesn't even do that. If there's complete collapse, there won't be a reliable network to transact over, and not reliable electricity to run the network and do the processing.
What are you thinking of when you say "complete collapse"? Zimbabwe's currency collapsed yet they still had access to electricity and a networks. It sounds like you're envisioning an apocalypse.
However, I think there's an argument that the existence of that backup, or at least its marketing, might of itself encourage people to make the institutions fail so they can profit from it.
That's a weak argument. If the institutions can collapse because a few powerful people can work against it, then the institution has already failed in the first place.
Trump and the general rise of Populism is not the cause of the fall of Western democracies, it is a consequence.
You don't seem to grasp that the answer isn't "oh well, Western democracies were just going to fail I guess"
The answer to what?
The answer to institutional collapse, the topic of the post to which I replied.
You're going to have to show your work on that one. Western democracies are suffering not because they are failing, but because they have been chipped away at for decades by fanatical right wing billionaires intent on eliminating taxes and securing their place in a perpetual oligarchy.
> Just that. Like insurance, it was not there to make anyone's lives better
This is revisionism. That is not at all how it started.
> Exactly. Cryptocurrency is useful as as a backup system against failing/weak institutions. Just that. Like insurance, it was not there to make anyone's lives better but simply to become a safeguard to avoid complete collapse.
Meh, it's arbitrage against slow moving financial regulations.
There are times when financial regulations are "bad" in a way that this trait is desireable - i.e. your failing institutions use case - but in many cases these regulations are, actually, there for a reason.
And now in practice crypto transactions for "normal" people are performed by bank-like institutions who log every transaction anyway, so this characteristic is really only valuable to the people deeply involved in the crypto world who are using it mainly to do "normal" crimes.
Except it requires institutions in order to work.
Yes, but the institutions don't need to be performing their function particularly well.
I've played with crypto enough to be amused, like you I like some of the tech - especially the Hedera eco-system. Dabbling in crypto helped me help the wife start a plant store we had for a couple of years. It's always been a hobby. I think things like decentralized IDs (DID) - while not directly crypto related, often land in tech discussions of such - and the like could likely be useful for some of the AI related identity work going on at the identity level.
Some nice loss harvesting in the past will help with some other financial moves down the road. I'm definitely checking in now and then, but mostly see it as background noise.
From a stablecoin perspective holding USDC or USDT is almost like having a bank account with a bank who, for the most part, allows you to maintain your privacy as an individual. They don't need a name, address, phone number, etc. They also run on infrastructure that exists beyond any single jurisdiction and spans countries and continents. This means that bank account can be used anywhere that has internet and people willing to transact. No government can keep you within their confines by holding your funds hostage nor can political leaders (or others with positions of power) use those controls to silence public outcry or civil disobedience.
> It's actually riskier in every meaningful way
That statement is only true to you, not everyone.
> neither practical nor particularly convenient
My only take away with crypto is, think of that one movie "In Time" but instead of the whole time = currency concept and the arm clock, what if crypto could be applied to a physical piece of e-paper like thing, where it says what its worth, and its worth what it says, you can transfer it on a whim from the paper to your phone (to a wallet) and back and forth.
If anyone figured that out, fully seamlessly, fault tolerant, that alone imho would be worth investing time and attention into.
Basically make the crypto real and physical, something fluidly tangible to where everyone can hold it and understand it.
No one can hack your wallet if all your "crypto" is not in it. You can spin up new wallet on a whim.
The only real way I can think is something like how monero works, where whoever owns a coin can "decrypt" said coin (or that's my limited understanding of how monero works).
I think you just described cash.
That's the idea---to my mind---that's worthwhile for crypto to work toward. Something that has all the traits of cash but that can be used over the internet.
This. Something that elevates cash, can be cash, and go back to digital.
There have been a number of Bitcoin physical bearer instruments. Take a look at Opendime/Satscard, for example.
As an outsider not paying too much attention, how do you beat the ledger problem? Crypto only works if there is a ledger. I don't want a ledger of every transaction I made. Seems like an insurmountable fundamental privacy issue.
Framing the ledger as the problem seems strange. It's more accurately the solution. The problem being how you transfer value through the internet in a trusted manner.
Re: privacy though, there's many solutions. Single tailored chains for privacy, mixers, encrypted tokens, permissioned chains, etc.
In my experience, privacy, while important, is not something users actually care about enough to demand a solution for. Most web3 users today just want to degen and gamble, and they're okay with KYC to do so.
Ethereum based research projects are addressing this. There is a currently active and usable project called Railgun which allows for hidden balances and transactions. Aztec network is launching soon which is a fully private L2 chain. It has taken a really long time but it seems the next few years will bring real privacy.
Monero solved it
There are plenty of solutions to this problem. See eg the Zerocash paper and the Zcash chain, both decade+ old now
Remittances is the other interesting one and why libra/diem was even on the table.
I was trying to send some money to my parents the other day and it’s still slow and expensive.
I highly recommend the recently published The Almighty Dollar: 500 Years of the World's Most Powerful Money by Brendan Greeley. It's an accessible look at how individuals, governments, markets, and value all intertwine to create a stable and widely used currency.
> The only real use case that makes sense to me is giving people in developing countries access to a stable currency they can actually hold, trade, and invest in, meaning USDT or USDC. Outside of that, as an EU/US citizen I don't see why I'd hold stablecoins instead of fiat
The logical conclusion of this train of thought (which I agree with) is that people who heavily invested in crypto may significantly benefit from weakening strong currencies and institutions. Make of that what you will.
I use crypto for exchange between friends (US + EU) and myself (SE Asia).
Our options are IBAN (slow!), WesternUnion (fees, denials, hassles) or crypto (10min, cheap). We chose crypto - because it’s the practical path from their bank to mine. CashApp and Coinbase interface with my actual bank accounts, on my end.
If you don’t do international banking, then much of the utility is diminished — so I’m not surprised by your perspective. But once you try to move money between continents, even with ID and documentation, you’ll understand that Coinbase is a godsend.
This actually applies to the US as well. Anytime you need to send $1k+ to a stranger the process is a pain in the ass.
> ACH, most bank does not allow send to stranger, and it takes 1~3 days for settlement among those which allow.
> Wire, expensive ~$30 per transaction.
> Paypal/Venmo/CashApp, Schrödinger's fraud trigger you never know it's gonna work or not. Plus they report to IRS so more paperwork during tax season.
> A lot of banks report every transaction of your checking account to credit bureaus.
So stable coin is my preferred way, and luckily among my circle it is widely accepted. Any amount is instant with a few cents fee at most.
I guess Zelle is the replacement. I've sent thousands to strangers with it with zero problems or fees. I don't like it at all because it is private and in my view a way for banks to avoid accountability.
But also zelle isn't really an option if you are anything bigger than a single person business.
Very similar use case but even for smaller amounts. I try to be as free software as possible so USDC is my go to alternative to Venmo/Apple Pay. I would use GNU Taler if it worked with U.S. banks.
Aren’t there fees to convert fiat from/to crypto on both ends?
You can make the fees rather than pay them if you make the market. There are decentralized exchanges where this can be done ~trivially for even low amounts. The fees are for those who want instant gratification.
Yes — there’s fees converting from/to fiat and when sending the crypto.
You’ll generally have the conversion slippage and transaction fee regardless - so the difference is the second conversion.
In practice, that isn’t too expensive and worth it for the speed; though that may change if you’re sending larger or smaller amounts than I am (in $1k-10k range).
Edit:
Replying by edit due to rate limits — but subcontracting and personal loans, eg, until a client pays.
Being a consultant is hard; being a consultant with no support network is harder.
I’m curious - under what circumstances are you exchanging $1k-$10k with friends internationally?
They send me packages with contents I distribute to my friends and neighbors.
I know we're not on Reddit, but have to say - username checks out.
I use Wise often to move money between USD, EUR, and AUD, and it plugs right into my US credit union and brokerage accounts. International transfers settle in under a minute to Australian and European bank accounts in my experience.
Wise, like any other fintech is fun until it randomly closes your account and bans you. No one can ban you / freeze your assets with Crypto, that's a good selling point imo.
Only if you stay in cryptoland. As soon as you hit someplace with fiat rails, in a jurisdiction that requires adherence to regulatory requirements, your account is just as regulated.
Crypto has its own failure modes: https://www.web3isgoinggreat.com/
(day job is in US financial services, have consulted on implementing aml/kyc/sanctions support for where crypto rails meet traditional finance infra)
Wise, like any other fintech is fun until it randomly closes your account and bans you. No one can ban you from Crypto, that's a good selling point imo.
When you send USD to an AUD account via Wise, no money actually travels between the US and Australia. Wise maintains massive pools of local currency in bank accounts all over the world. When you deposit USD, it goes into Wise’s US bank account. Wise's software detects the deposit and instantly triggers an internal payout from Wise's Australian bank account to the recipient's AUD account. Because Wise is using local banking networks on both ends (like FedNow or RTP in the US, SEPA Instant in Europe, and NPP/Osko in Australia), the transfer can settle in seconds. It’s essentially a matching engine, not an international wire.
Credit risk and identity dictate the speed of the funding step. If you stripped KYC out of the equation entirely, the bottleneck wouldn't just be speed — the legacy banking system would refuse to route the transaction at all.
It is important to distinguish that you are fundamentally involved in a credit network, pulling funds not pushing funds, that just gives the illusion of speed. For verified users, the sub-minute speed is a mix of local real-time banking rails and Wise extending short-term trust that the incoming funds won't bounce. For an unverified or high-risk user, Wise forces a holding period until the money physically clears, dragging the process back down to standard banking speeds.
Neither does money "travel between the US and Australia" for a regular old SWIFT and correspondent banking based international bank transfer. When you send money internationally, your bank also "taps into pools of local currency" of their various correspondent bank(s). All of this could also happen instantly if they wanted it to; SWIFT is a real-time messaging network.
Wise's innovation was to provide their service "over the top", i.e. unbundle wire transfers from your bank's default offering. This has driven down both speed and pricing, in the same way that dial-through (e.g. calling card based) long distance carriers created massive competition and drove prices down in long distance calling, while under the hood it was all still just regular phone calls.
When you send USD to an AUD account by any mechanism no money actually travels between the US and Australia. Usually USD is transferred from one US bank to another, and AUD is transferred from one Australian bank to another.
Or a service like Wise which is cheap and takes a few minutes most of the time.
Never had much of a need for other services when transferring across the globe.
They're not available everywhere, and the neo-banks in general are tightening their processes to a point where they're becoming difficult to use. I've had multiple situations now where Revolut denied things like a tap payment at a restaurant in NYC because it was an "unknown recipient". Of course they don't notify you of it, leading to an awkward 5 mins with the waiter while I rummage through the app to figure out why I can't use my own money this time. Fast and convenient it ain't
I suspect parent is using "a service like Wise" even though they believe they're using Crypto. That's because for an end to end transaction to complete in under 10 minutes it has to be performed by an exchange (not actually settled on chain). There are many cases like this where the "crypto" part is just theater. Money is being moved the tradition way by altering records in a non-distributed database.
Depends on the chain. Some networks are quite fast.
But it could also be theater, yeah. A friend of mine buys USDT on a P2P exchange and immediately sells it (so, sends money to a stranger’s bank account and then gets paid by another stranger). It could just as well be some e-wallet thing like WebMoney or whatever, but the fact that you can move USDT to your own wallet instead of immediately selling it makes it a bit more reassuring I guess.
I'm not into it but I'm fascinated by the cryptographic aspect and the legal aspect of it all.
> Outside of that, as an EU/US citizen I don't see why I'd hold stablecoins instead of fiat.
Especially as an EU citizen: in the EU it is illegal, by law, to have stablecoin yield. So for example the HN unicorn Coinbase can give 3.5% yield annualized (or whatever the current yield is), automatically, to anyone in the US that owns USDC. But in the EU the very same Coinbase is forbidden, by law, from giving the same yield on the exact same USDC.
Now I'm not saying the yield on EUR on a EUR bank account is exciting: what I'm saying is holding a currency losing to insane inflation and which doesn't give anything back is wild.
And it's only for stablecoins: for example as an EU citizen on my brokerage account, where I have real USDs, they automatically yield when they're idling.
So it's not that you cannot get yield on currencies in the EU: it's the way they categorized stablecoins.
Now as I understand it there are ways to get yield on stablecoins in "smart contracts" but that's another can of worms for IIUC atm there have been scams upon scams upon hacks upon thefts upon neverending shenanigans.
So yup: stablecoins as an EU citizen, not good.
> as an EU citizen on my brokerage account, where I have real USDs, they automatically yield when they're idling.
"money market fund". If they're yielding, they're holding bonds. Normally this distinction doesn't matter, but we're deep into financial plumbing here.
An emerging use-case is a bank account for AI agents. I read that Coinbase 'Base' Ethereum layer2 is popular for AI banking.
Or you could just give your agents a debit card number loaded with only as much money as you specify.
You spin up agents and want them to paid without opening a bank account... or spin-up hundreds of agents... or your country isn't very well integrated with western banking rails. I think there is more to consider.
You don’t need to open a bank account to get a prepaid debit card.
This is highly country dependent. Anonymous prepaid cards aren't as widely available as you might think, and often they have very high user-paid fees.
Which reloadable debit cards have no KYC requirements?
The amount of money you can load or receive into a debit card is limited without doing enough KYC overhead you could have gotten a bank account with the same effort.
If you try automating bots to do KYC for debit cards what you'll be doing is basically looking like a money launderer and get all your accounts shut down.
If you're fine with the usual 0.20 - 0.30 USD of processing fees, you definitely can. Cards work well for many things; micropayments are not one of them.
I believe with x402 and USDC you can pay as low as $0.000001 per HTTP request with no fees.
The existing "credit card" infrastructure is not designed to compete with that.
Now some actors like Paypal could have come up with an HTTP 402 standard and implementation 25 years ago but they never did. I am not sure why.
> I believe with x402 and USDC you can pay as low as $0.000001 per HTTP request with no fees.
On-chain transactions are still not free. x402 isn't settled in batches or rolled up anywhere AFAIK, so large volumes of tiny payments are still not cost-effective. Facilitators such as Coinbase only subsidize transactions up to a point: https://docs.cdp.coinbase.com/x402/core-concepts/facilitator
There are ways around this, but with tradeoffs.
I recently set up an agent with a Base wallet and made a few x402 API calls. Pretty convenient!
>The only real use case that makes sense to me...
Cryptocurrencies have a great and really boring application. You have to think "who needs a reliable ledger distributed among many entities?"
The answer is institutional banks the likes of JPMorgan. They have a few cryptocurrencies, you need to be another large bank to use them. Big banks send each other large sums of money constantly back and forth. In no sense do they send each other "real" money, it's just accounting... a ledger.
"Cryptocurrencies" are better thought of as mathematically proven accounting software than money. Plenty of organizations need to be able to keep track of money is between a collection of mostly-trusted peers. With cryptocurrencies they can ditch a lot of the transaction and accounting software.
But a regular database can do that with PKI. Crypto isn't just a reliable ledger -- it's a reliable ledger between an arbitrary number of mutually distrusting parties. Which doesn't really describe banks in a regulated, functioning economy.
What's your definition of a "regular" database? If you need a distributed, well-sequenced, auditable trail of cryptographically signed operations representing the transfer of value, that quite literally can be fit to match the definition of a blockchain.
People who haven't done it probably underestimate the incredible amount of fiddly nonsense is involved in actually writing accounting software to handle a ledger.
Banks and brokerages very often use software written 40 years ago because it's so much trouble to get correct.
Not that I don't agree, but PKI relies on a trusted authority which can be compromised. If you're running a trustless system, basically any party can be compromised but the blast radius is limited to just the compromised infrastructure and money, not the entire system.
No, a regular database can't do that "with PKI", you have to write ledger software on top of it and you have to have one party operating the software.
cryptocurrencies are the ledger software, API, and data store layer -- and you do need trust between peers because the JPMorgan will take actions to reverse transactions if there are problems that need fixing.
It's not magical, but it is convenient for the actual ledger actions to be mathematically proven instead of the result of accounting rules in code.
> In no sense do they send each other "real" money, it's just accounting... a ledger.
"Real money" these days is exactly that, i.e. accounting entries on a ledger, and has been for the better part of the past century or so.
> Plenty of organizations need to be able to keep track of money is between a collection of mostly-trusted peers. With cryptocurrencies they can ditch a lot of the transaction and accounting software.
What is blockchain technology if not even more complex accounting software? It has its uses, but a network of mostly trusted peers is probably not one of them.
The fascinating thing for me to watch in real time is Crypto Bros discovering in real time exactly why the financial system works the way it does. It didn't happen by accident. It's 5000+ years of incremental changes. Reversible transactions? Feature, not a bug. Expandable money supply? Feature, not a bug. Fractional reserve lending that essentially creates money? Feature, not a bug.
I remember saying this about Google Wave: it was a solution in search of a problem. Cyrpto specifically and blockchain in general is absolutely a solution desperately in search of a problem. And I honestly think not enough people were honest about their motivations. They saw Bitcoin go through the roof and were eager to be on the next rocketship, which never happened (well, there's Ethereum but it kinda happened at the same time although it started later).
It's been a sea of shitcoins and rug pulls ever since. Anyone rmemeber NFTs? Just another scam on top of a scam to sell more crypto.
Sometimes there's an advantage to an outsider's perspective on a problem space. It's the essence of disruption. But way more often than not, it's just snake oil salesman looking for a quick buck. And trying to disrupt the financial system without understanding it has shown itself to be a dismal failure, kinda like the graveyard of "Google killer" search engines in the 2000s and early 2010s.
>Outside of that, as an EU/US citizen I don't see why I'd hold stablecoins instead of fiat.
because fiat can be taken away from you.
Hate to break it to you, but anything can legally be taken away from you by the justice system. And fighting the government can put you in prison, too.
It's just LARPing.
> It's just LARPing.
Usually LARPers are conscious that they don't have magic or any sword skills. I'm pretty sure the person who you respond too really think what he wrote.
Yet the government went out its way to ban bearer shares, bearer bonds, numbered anonymous bank accounts, large denomination currency, anonymous companies, and all the other methods of anonymous banking.
Seems they were having trouble "taking it away by the justice system."
For the same reason government across the world have pressured or banned exchangers of monero.
GP added the "by the justice system" where OP only said "can be taken away". Both digital and fiat currency can be taken away from you through courts, legislation, trickery, or coercion.
Crypto is surrounded by vast amounts of misinformation, misdirection, or misunderstanding. So you get these myths and generalization propagated through lack of education. "I heard crypto is completely anonymous", "I heard crypto can't be taken away from you". Then someone gets tricked out of their crypto, or uses BTC to commit some crime and gets a quick reality check.
If you toss a bag of cash in a hole buried under a grave in Timbuktu, or toss a bitcoin seed phrase in there. Cover it up, leave Timbuktu back to your western country. Then vow to die before giving up the location (you can claim torture or whatever works, but many people in history have decided to be tortured to death without giving up the information). You can be essentially 100% assured it will never be taken. Possible with both fiat and crypto, though you'll be digging a bigger hole to bury an upward amount of dollars, yet crypto is infinitely scalable with the same size hole.
From a black and white viewpoint the possibilities are the same but the practicality is a bit different (then realize with crypto the hole might only exist in your mind). Maybe the government has control over your body but there is some victory in not letting them have your assets even if they take your life and without having to destroy the underlying value.
Personally I think a cleaner distinction is bearer assets vs titled assets. Both can be taken but bearer assets can be made impractically difficult to seize, especially against the masses at once, whereas titled assets (like bank accounts and deeds) can be taken by the government trivially (ex: in US, IRS can freeze without even a warrant) and at mass scale quickly.
If you're being detained for the rest of your life while your money languishes in a hole in Timbuktu, it has been taken from you. Money is only valuable because it has utility. If you can't use it, it's not yours.
Then you've already yielded the difference in practicality. Executing or detaining a person for life is less practical for the government to do in western countries (and even most shitholes, as ungovernable militia back regions would resist such violence) than seizing your titled or banked assets.
The mere fact you've delayed the use of money doesn't mean the value is gone. I can't do dick with my money until I've at least logged into amazon or driven to the local walmart, yet it's value remains, of course the longer I have to wait to spend it the worse it is. The time value of money means its less valuable to me if I'm locked up for decades before I can get it, but even in jail indefinitely I could secretly reveal it to a friend who could share the money to get some nice ramen packets or cigarettes.
> You can be essentially 100% assured it will never be taken.
If we take the creative approach, then according to the equivalence of inertial reference frames in the principle of relativity, taking you away from the money is exactly the same as taking the money away from you. Taking the money from you don't imply someone else must have it, just that you don't. Someone could take your HW crypto wallet even if they can't access the money, happens a lot with wallets confiscated by the government.
But ok, the original goalposts were set at the difference between stablecoins and fiat with regards to how easily they can be taken away from you. There is no difference for all practical purposes in any non-hyperbolic situation.
>If we take the creative approach, then according to the equivalence of inertial reference frames in the principle of relativity, taking you away from the money is exactly the same as taking the money away from you. Taking the money from you don't imply someone else must have it, just that you don't. Someone could take your HW crypto wallet even if they can't access the money, happens a lot with wallets confiscated by the government.
It's not the same. That's why governments and the FATF at great cost and effort spent decades snuffing out anonymous bank accounts and bearer assets, they didn't do it for the lolz. If you take the person away from the money then any surviving persons can escape and reclaim the money. The person in jail can utter the code/location to a comrade, maybe even before they go to jail. In a western country, the person might even be released from contempt after a time (decades+ contempt sentences are so rare they make headlines) and if criminally charged they will often be out on bond where they can utter the location/codes to others. It's a completely different animal than the government seizing the actual asset and putting it in its vault guarded by armies of police or military as non-human seizure.
>There is no difference for all practical purposes
Only if you ignore the practical differences.
> Only if you ignore the practical differences.
You'd think that it would be easier to just name a few but here we are discussing burying a bitcoin seed under a grave in Timbuktu.
I used that because it was charitable to the fiat argument because you could put both the fiat and crypto into the hidden hole in a way that would make seizing fiat money as difficult as seizing the crypto. If you don't like that, you can simply memorize a seed phrase in your head, it will accomplish essentially the same thing in a far more practical and more commonly practiced manner. If you insist on the realistic case it's far more charitable to crypto than fiat but I stretched it to be kind to your argument -- clearly a mistake since you only took it as an opportunity for hostility.
Why do you think stablecoins cannot be taken away? There are already many cases where eg Tether got a court summons and handed over the contents of certain wallets to the local authorities.
The original stablecoin, DAI, used since 2017 by a lot of people living in countries ravaged by horrible inflation cannot be taken away.
It can just be a smart contract with overcollaterised crypto backing it. And the idea is kind of genius.
All the USDT and USDC which appeared later on a just "proxy" for "real" dollar hold by Tether or Circle. There is nothing permissionless or decentralized about them.
So "stablecoin" can mean very different things in practice.
DAI (now called USDS) is largely backed by assets well within reach of US financial regulators these days, no? Even a few years ago, it was mostly backed by USDT and USDC, which both can be frozen by their respective issuer.
I don't think any of the non-custodial stablecoins had a very good track record even just in the medium term. Overcollateralized crypto-backed stablecoins are exposed to the market value risk of their backing assets; algorithmic stablecoins have had a tendency to death spiral.
Yes.
So DAI is a distinct system from USDS. The relationship is the creator of DAI is the same as USDS and I believe his new organisation maintains the legacy DAI contract and system.
If I remember correctly, the DAI model was beautiful:
- Instead of getting your DAI from an exchange, you could deploy your own instance of a vault, lock your ETH as collateral in it and mint DAI.
- So it was not a unique vault for every DAI but you could choose your collateral assets from an authorized list for your own vault.
I am not sure if in the case of a collapse of USDC and USDT you would have been the only one able to close your own vault and get back your good collateral assets...
Those "decentralised" stablecoins are complex and feel like they had to start from a blank page and create USDS to stay relevant in a more competitive and regulated crypto world. For example USDS has the mechanism to block it for specific holders (like USDC and USDT) but it hasn't been activated as far as I know.
This is why when there is a hack ETH, BTC and DAI are used because they are the "better" money...
In the end I agree, if you can back a decentralized stablecoin with a centralized stablecoin, how good is that system really?
The best stablecoin is the one you deploy a vault for, back it with over-collaterized (anywhere between 3 and 10x) uncensorable cypto (like ETH) and are the only one who can close the vault unless it get liquidated.
That's a beautiful model only on paper. In practice it didn't quite work out, DAI has several times broken its peg (often upwards, but that's still a problem), and they switched to backing it with more and more traditional stablecoins for stability. This was all before the rebrand to USDS.
> Instead of getting your DAI from an exchange, you could deploy your own instance of a vault, lock your ETH as collateral in it and mint DAI.
Most people that might want to use stablecoins don't have any suitable collateral lying around, so they're dependent on being able to buy or sell it at par. If that peg breaks, the utility of the stablecoin decreases.