Do Cryptocurrencies Provide ANY() Real-Economic Value at All?
110 comments
Can a non-techie and member of a hunted class share a scenario?
What if a Foundation formed in, Belgium, let's say because of their emphasis on human rights, hands out "charge coins" to those who might be subject to pulling over for, oh, I don't know....air fresheners. Normally, such a person would have no bail money and would lose their jobs, housing and potentially their children to a asylum filled with people who prey specifically on us.
But this Foundation pays the bail, in any currency the court system prefers, and additionally...this "charge coin" gives the bearer access to lawyers. Lawyers from countries were the possibility of innocence is actually investigated, where they actually give a damn about preserving life. A country where 10K citizens dead in ridiculous crimes that even a blind man could tell were genocide were hired and paid to take an interest... no more kids in a "system" to be corrupted and used, no more nurses losing jobs because they spent days in jail because they couldn't afford bail, no more lost housing because Section 8 recipients are targeted to get them kicked out so that others could take their places.
I think the real issue for all you who spend your days poking holes in new ways of doing things that don't directly benefit you...is that you've had money, privilege and access for so damn long you can't see the forest for the trees. You've been in charge and in power forever...and you have literally no idea what Mr. Nakimoto or whomever he is has really done. The genie isn't going back into the bottle. The ability for under-represented groups to set their course free of your suppression and interference is here. NOW.
What if a Foundation formed in, Belgium, let's say because of their emphasis on human rights, hands out "charge coins" to those who might be subject to pulling over for, oh, I don't know....air fresheners. Normally, such a person would have no bail money and would lose their jobs, housing and potentially their children to a asylum filled with people who prey specifically on us.
But this Foundation pays the bail, in any currency the court system prefers, and additionally...this "charge coin" gives the bearer access to lawyers. Lawyers from countries were the possibility of innocence is actually investigated, where they actually give a damn about preserving life. A country where 10K citizens dead in ridiculous crimes that even a blind man could tell were genocide were hired and paid to take an interest... no more kids in a "system" to be corrupted and used, no more nurses losing jobs because they spent days in jail because they couldn't afford bail, no more lost housing because Section 8 recipients are targeted to get them kicked out so that others could take their places.
I think the real issue for all you who spend your days poking holes in new ways of doing things that don't directly benefit you...is that you've had money, privilege and access for so damn long you can't see the forest for the trees. You've been in charge and in power forever...and you have literally no idea what Mr. Nakimoto or whomever he is has really done. The genie isn't going back into the bottle. The ability for under-represented groups to set their course free of your suppression and interference is here. NOW.
In controversial-but-legal industries (think adult entertainment, gambling, cannabis), it can be difficult to get traditional banking and payment processing services that are taken for granted by more normal businesses. I've seen crypto used in this context for B2B transactions (paying for IT services).
Also, it's a decent option for international transfers. International wires are more expensive (even when compared to current BTC tx fees) and slow (2+ business days). And if either the sender or the recipients doesn't have a bank account are reduces to Western Union or similar, which is simple robbery. I don't know what SEPA Instant Transfer Credits are, but I suspect you need a bank account.
The original use case related to international transfers was remittances... ie, immigrants sending money home. In reality I suspects it's used much more often for getting money out of certain countries like China that have set limits on outgoing transfers.
Also, it's a decent option for international transfers. International wires are more expensive (even when compared to current BTC tx fees) and slow (2+ business days). And if either the sender or the recipients doesn't have a bank account are reduces to Western Union or similar, which is simple robbery. I don't know what SEPA Instant Transfer Credits are, but I suspect you need a bank account.
The original use case related to international transfers was remittances... ie, immigrants sending money home. In reality I suspects it's used much more often for getting money out of certain countries like China that have set limits on outgoing transfers.
SEPA is a vommon framework for payments inside the EU (and associates) that means instant payments, retrievals and transfers in Euros. And yes, you need a bank account in one of the member countries, but by same logic you need a wallet to receive btc.
The requirements for setting up a bitcoin wallet are met by a lot more people than the requirements for setting up an EU bank account.
So far, I haven’t seen any.
Consider an NFT with smart contract which apportions a percent of each future purchase to the original seller.
Now consider a stock issued by a company as the NFT.
With traditional stocks, the issuing company only obtains funds one time. All future value gains are captured by traders.
Finally, consider issuing stock that as NFT with the contract above.
In this model, as a stock rises in value, both the company and traders gain.
Now consider a stock issued by a company as the NFT.
With traditional stocks, the issuing company only obtains funds one time. All future value gains are captured by traders.
Finally, consider issuing stock that as NFT with the contract above.
In this model, as a stock rises in value, both the company and traders gain.
Is anyone doing this for real? It doesn’t seem like it adds any value over a real contract since it’s still relying on the courts for enforcement, and it seems unproven that there’s much demand.
Adding a blockchain also adds a number of complexities which would lower the value: you need to hedge against bugs in the smart contract (the Ethereum folks probably won’t rewrite history again for you), there’s a complex and expensive tech stack you need to support instead of a sheet of paper, and you have limited your potential buyers to those comfortable with that and on your particular system rather than another one.
Adding a blockchain also adds a number of complexities which would lower the value: you need to hedge against bugs in the smart contract (the Ethereum folks probably won’t rewrite history again for you), there’s a complex and expensive tech stack you need to support instead of a sheet of paper, and you have limited your potential buyers to those comfortable with that and on your particular system rather than another one.
People really are writing tokens with custom transfer functions that do this sort of thing. The main use case seems to be allowing artists to collect fees on non-first sales of an NFT. This whole genre of program is a bit suspect to me though, because if you had a trusted counterparty or an escrow you could just sell them the private key for the account containing the NFT, and they could conduct a "sale" for $1 to their own wallet.
That is what I meant by the value being enforced by the courts: the artist could cheat me by selling my “exclusive” purchase again or in different locations, I could cheat them by making copies elsewhere or hiding part of the transaction, etc. and in each case the remedy is a court case just as with a normal contract making the same claim — the difference is that I don’t need to pay to maintain an expensive IT operation as well.
There will never be a real secondary market for NFTs.
How are people going to re-sell an NFT when its metadata points to a file that 404s.
How are people going to re-sell an NFT when its metadata points to a file that 404s.
NFTs that point to particular IPFS proxies or that point to IPFS files that nobody pins are not a great start. There are technical solutions to this problem, like using Arweave instead.
Overall I don't really like or care about NFTs.
Overall I don't really like or care about NFTs.
It doesn't rely on the courts for enforcement, it relies on the underlying crypto-network. The contract is built in to the original sale.
Think about this beyond the sales pitch: I accept your offer, taking a lower price because you double pinkie swear that you’ll share part of any future sales of an object, profits from a company, etc.
At every point, you (the person who controls the thing with actual value) can choose to simply ignore the blockchain in many ways: not sharing profits with shareholders, selling a real-world object outside of the same blockchain, making copies of a digital object or listing the same thing on many NFTs, using a smart contract with a bug or unreliable oracle which you can exploit, etc. My recourse is my ability to sue you for breach of contract.
At every point, you (the person who controls the thing with actual value) can choose to simply ignore the blockchain in many ways: not sharing profits with shareholders, selling a real-world object outside of the same blockchain, making copies of a digital object or listing the same thing on many NFTs, using a smart contract with a bug or unreliable oracle which you can exploit, etc. My recourse is my ability to sue you for breach of contract.
The company can buy its own stock and benefit if it rises in value. There is nothing to gain from using a smart contract to achieve the same result except in a more convoluted, less transparent fashion.
I don’t think blockchain has much real world value in a legal sense.
We’ve been running various pocs on it, with major and minor suppliers, crypto-people? (not sure what to call those techie/artist/idealists or what they call themselves) and the universities for the better part of two decades now in the European public sector. We’ve never been capable of finding a reason to use it. I do get the argument about stuff like land ownership in more corrupt countries, but you it still sort of turns into an utopian dream, because no-one in those regimes really care if you’re right. All the proof in the world doesn’t stop people with guns from taking your positions.
I think Maersk and it’s containershipping business, and it’s blockchain based proof of container authenticity is one of the few examples where the technology actually works better than anything else. And that’s mainly because Maersk itself is big enough, and has big enough legal support, to refuse containers that are tampered with. Sort of like the corrupt government situation, but inverse.
For finance it has no real value for legal purposes, again because trust is sort of worthless when your authorities aren’t with it. You can’t deny it’s “get rich quick” schemes of course, and it’s extremely valuable for white-washing money, dealing with black-Market goods and various forms of fraud. Which isn’t really value to dismiss, considering how big a GDP international crime has.
We’ve been running various pocs on it, with major and minor suppliers, crypto-people? (not sure what to call those techie/artist/idealists or what they call themselves) and the universities for the better part of two decades now in the European public sector. We’ve never been capable of finding a reason to use it. I do get the argument about stuff like land ownership in more corrupt countries, but you it still sort of turns into an utopian dream, because no-one in those regimes really care if you’re right. All the proof in the world doesn’t stop people with guns from taking your positions.
I think Maersk and it’s containershipping business, and it’s blockchain based proof of container authenticity is one of the few examples where the technology actually works better than anything else. And that’s mainly because Maersk itself is big enough, and has big enough legal support, to refuse containers that are tampered with. Sort of like the corrupt government situation, but inverse.
For finance it has no real value for legal purposes, again because trust is sort of worthless when your authorities aren’t with it. You can’t deny it’s “get rich quick” schemes of course, and it’s extremely valuable for white-washing money, dealing with black-Market goods and various forms of fraud. Which isn’t really value to dismiss, considering how big a GDP international crime has.
> I think Maersk and it’s containershipping business, and it’s blockchain based proof of container authenticity
Literally nothing in that project requires blockchain.
And nothing that a blockchain has proves anything about a container's authenticity: it's a slow, inefficient database of the same data that has to be manually entered by multiple people in multiple places.
Literally nothing in that project requires blockchain.
And nothing that a blockchain has proves anything about a container's authenticity: it's a slow, inefficient database of the same data that has to be manually entered by multiple people in multiple places.
Time is more valuable than gold. Crypto saves time. Some experiments to test for yourself and measure the time elapsed:
pay someone in a foreign country. Do it again except at 2am on a Sunday.
Wire someone some money. Now do the same outside bankings hours. Now do the same but try and do a test transaction first.
Try setting up a new company. Add a vesting clause. Now handle actual distribution of dividends. Measure the time and legal fees in the non crypto version.
pay someone in a foreign country. Do it again except at 2am on a Sunday.
Wire someone some money. Now do the same outside bankings hours. Now do the same but try and do a test transaction first.
Try setting up a new company. Add a vesting clause. Now handle actual distribution of dividends. Measure the time and legal fees in the non crypto version.
So have you measured the time that you save in any of these situations by using a cryptocurrency? It seems that you make a series of questionable claims and we just have to believe that what you say is true.
Reading "Some experiments to test for yourself" as "we just have to believe that what you say is true" is an interesting interpretation.
BAT - basic attention token is paid to you if you enable ads in brave browser. The benefit here is that it's anonymous (at least to the point when you want to cash-out).
If you live in Turkey right now and want to move capital out that cesspit, cryptos are a pretty good option (even if they've just been made illegal).
Crypto is not illegal in Turkey, or for that matter other financial instruments including foreign exchange or gold. The central bank regulated crypto for payments as of April 30. Apparently the only place that offered crypto as a payment form was the Rolls Royce dealership.
“This week Royal Motors, which distributes Rolls-Royce and Lotus cars in Turkey, became the first business in the country to accept payments in cryptocurrencies.”
https://www.reuters.com/article/turkey-crypto-currency-idINK...
What other countries do you consider a cesspit? What is your criteria for a cesspit?
“This week Royal Motors, which distributes Rolls-Royce and Lotus cars in Turkey, became the first business in the country to accept payments in cryptocurrencies.”
https://www.reuters.com/article/turkey-crypto-currency-idINK...
What other countries do you consider a cesspit? What is your criteria for a cesspit?
you cant handle the truth
Q1: The benefit is that as long as you are connected to the internet, you can make the transfer. It doesn't matter if your bank or your police wants to stop you, you can do it.
Q2: Because when central banks become unreliable, or hyperinflation kicks in (Venezuela, Greece), trade using the central bank currency may become hard. You wouldn't transfer USD→COIN→EUR, but USD→COIN, and then use the coin directly.
Q3: Laws are not computer programs. They are ambiguous and execute in the brains of a few humans. Smart contracts are precise, and they require the entire population of coin users to disagree with the computed outcome.
Your conclusion does not take into account the case of not trusting government institutions.
Q2: Because when central banks become unreliable, or hyperinflation kicks in (Venezuela, Greece), trade using the central bank currency may become hard. You wouldn't transfer USD→COIN→EUR, but USD→COIN, and then use the coin directly.
Q3: Laws are not computer programs. They are ambiguous and execute in the brains of a few humans. Smart contracts are precise, and they require the entire population of coin users to disagree with the computed outcome.
Your conclusion does not take into account the case of not trusting government institutions.
"Smart contracts are precise, and they require the entire population of coin users to disagree with the computed outcome."
Lol every month or so some smart contract bug gets exploited and coins get stolen.
Lol every month or so some smart contract bug gets exploited and coins get stolen.
All your arguments has this implicit assumption of a central authority that you trust to do its job:
- "SEPA is pan-European credit transfers". Emphasis in "European". Good luck _reliably_ sending money to China or across Atlantic _in_several_days_. Reliable 10s is a dream there.
- "Every country already has its native currency." Emphasis on "country". With a central bank that manages the supply.
- "All (democratic) countries have courts in place." Again, emphasis on "countries" and "democratic" (which you obviously felt the need to put in).
How would a smart contract work in the case of, say, a residential tenancy agreement? How does the smart contract know if the terms of the agreement have been met or not? And how would the contract be enforced, for instance, if the tenant fails to pay rent?
I’m not a smart contract dev, but here’s my understanding.
You have three fundamental tools to worth with: money, time and signaling consent. The only way to enforce consequences without lawyers is collateral.
So, you could have a contract that requires two months rent as a deposit to start. From there you can have simple rules: if the contract expires, the tenant gets the deposit back. At the end of the contract, the landlord can take up to 1 month’s rent from the deposit to cover damages. If the contract is canceled, the tenant does not get the second month-worth of deposit back. The contract is canceled if the rent is not paid on time or if the landlord + some notary-like third party sign off on cancellation. Etc...
You have three fundamental tools to worth with: money, time and signaling consent. The only way to enforce consequences without lawyers is collateral.
So, you could have a contract that requires two months rent as a deposit to start. From there you can have simple rules: if the contract expires, the tenant gets the deposit back. At the end of the contract, the landlord can take up to 1 month’s rent from the deposit to cover damages. If the contract is canceled, the tenant does not get the second month-worth of deposit back. The contract is canceled if the rent is not paid on time or if the landlord + some notary-like third party sign off on cancellation. Etc...
This smart contract has no way of knowing if/what the damages are, whether the rent was paid in cash, or whether a million other legal issues are happening.
For example, in most places, tenants may stop paying rent if their heat breaks in the winter and the landlord won't fix it promptly.
The central authority will always be human courts. Smart contracts can't observe or record anything except crypto, which makes them useless in 99% of contractual disputes.
For example, in most places, tenants may stop paying rent if their heat breaks in the winter and the landlord won't fix it promptly.
The central authority will always be human courts. Smart contracts can't observe or record anything except crypto, which makes them useless in 99% of contractual disputes.
Yes, you will always need humans to make human judgements but they don't need to be part of a court or central authority. With reputation and consensus incentive systems in place, these judgements can be made by trusted 3rd parties and feed back into the smart contract without the need for a single central authority.
The point isn't to get rid of humans or trusted 3rd parties. It's to get reduce the reliance on a single centralized entity that may be corrupt, inefficient, or malicious.
The point isn't to get rid of humans or trusted 3rd parties. It's to get reduce the reliance on a single centralized entity that may be corrupt, inefficient, or malicious.
> It's to get reduce the reliance on a single centralized entity that may be corrupt, inefficient, or malicious.
This makes sense only in places with very corrupt legal systems.
But if the legal system is corrupt in favor of one side (let's assume it's the landlord), why would the landlord mutually agree to arbitration?
Please provide a very specific example of something that happens now that a smart contract would fix. I can't think of anything.
This makes sense only in places with very corrupt legal systems.
But if the legal system is corrupt in favor of one side (let's assume it's the landlord), why would the landlord mutually agree to arbitration?
Please provide a very specific example of something that happens now that a smart contract would fix. I can't think of anything.
> Please provide a very specific example of something that happens now that a smart contract would fix. I can't think of anything.
They already did, asking again isn't going to get you the answer you want.
You described the renting market as having a high threshold for bias in order to be ineffective. I don't really think this is true, it's quite difficult in most states to go to court to seek damages for rental property. Even the eviction process is not straight forward and requires the participation of both a court and a marshal to serve notice. What smart contracts replace is a lot of the court mechanisms that are low hanging fruit. It takes some stress off of the system, but certainly not all, and that seems like it could be "good enough".
They already did, asking again isn't going to get you the answer you want.
You described the renting market as having a high threshold for bias in order to be ineffective. I don't really think this is true, it's quite difficult in most states to go to court to seek damages for rental property. Even the eviction process is not straight forward and requires the participation of both a court and a marshal to serve notice. What smart contracts replace is a lot of the court mechanisms that are low hanging fruit. It takes some stress off of the system, but certainly not all, and that seems like it could be "good enough".
> They already did, asking again isn't going to get you the answer you want.
The person I was responding to gave only generalities.
> What smart contracts replace is a lot of the court mechanisms that are low hanging fruit.
What court mechanisms?
Let me give you a specific example.
I'm a landlord with a rental contract. In my state (as in many states), there are hundreds of statutes dictating the boundaries of this contract. There are also thousands of cases in common law that influence what I can and can't contract. For example, my tenant cannot contract away certain rights, even if they sign a legal document saying that they did it.
Scenario A: I use a smart contract stipulating that if there are damages, I can hold the security deposit.
Scenario B: I have a paper contract stipulating the same (although in many states there are statutes that say this, so the contract is just repeating existing law).
Now let's say I find "damage" and the renter disputes it.
How has the smart contract helped me? What difference did it make? In many situations, the smart contract enforcing itself without 100% understanding of the physical world or existing law would violate the law.
So that's how specific I'm asking you (or anyone) to be: give me a specific scenario where the smart contract enforces something in a reliable, efficient way that is significantly better/safer for either party.
The person I was responding to gave only generalities.
> What smart contracts replace is a lot of the court mechanisms that are low hanging fruit.
What court mechanisms?
Let me give you a specific example.
I'm a landlord with a rental contract. In my state (as in many states), there are hundreds of statutes dictating the boundaries of this contract. There are also thousands of cases in common law that influence what I can and can't contract. For example, my tenant cannot contract away certain rights, even if they sign a legal document saying that they did it.
Scenario A: I use a smart contract stipulating that if there are damages, I can hold the security deposit.
Scenario B: I have a paper contract stipulating the same (although in many states there are statutes that say this, so the contract is just repeating existing law).
Now let's say I find "damage" and the renter disputes it.
How has the smart contract helped me? What difference did it make? In many situations, the smart contract enforcing itself without 100% understanding of the physical world or existing law would violate the law.
So that's how specific I'm asking you (or anyone) to be: give me a specific scenario where the smart contract enforces something in a reliable, efficient way that is significantly better/safer for either party.
> So that's how specific I'm asking you (or anyone) to be: give me a specific scenario where the smart contract enforces something in a reliable, efficient way that is significantly better/safer for either party.
And I'll doubt you'll get that specific of answers because those implementations are fairly new. You'll likely see proof of concepts developed to streamline or back up existing processes first, the underlying technology adjusted to fit the usecases, rinse, and repeat. All that to say, it's not going to holistically solve every problem for you up front, as the commenter pointed out.
What I can see is that it streamlines some of the mediation and court intervention processes. What our notable gains from that would be remain to be seen, but for my parents who are landlords that have had to evict tenants it could mean that simple cases don't require a court. Maybe they get some review by someone who would best be described as an auditor or mediator to check the outcome.
And I'll doubt you'll get that specific of answers because those implementations are fairly new. You'll likely see proof of concepts developed to streamline or back up existing processes first, the underlying technology adjusted to fit the usecases, rinse, and repeat. All that to say, it's not going to holistically solve every problem for you up front, as the commenter pointed out.
What I can see is that it streamlines some of the mediation and court intervention processes. What our notable gains from that would be remain to be seen, but for my parents who are landlords that have had to evict tenants it could mean that simple cases don't require a court. Maybe they get some review by someone who would best be described as an auditor or mediator to check the outcome.
Smart contracts are not going to instantly replace government with a techno-libertarian utopia. They are going to make government, lawyer and bank services a lot less necessary. And, they are going to provide a lot of alternative services to people without access to effective government/financial services.
Smart contracts can’t observe anything but time, crypto and signaling from users/automated services. For disputes you need an independent third party to cast a deciding vote. A government judge is common option. But, you and I can agree to grant that vote to a non-government agent instead.
Legal rental contracts are non-trivial. A rental smart contract would similarly require more rules than we care to spell out here. But, “If the tenant and the notary both vote that there is bullshittery going on with the property, rent is suspended.” sounds like a reasonable thing to include.
Smart contracts can’t observe anything but time, crypto and signaling from users/automated services. For disputes you need an independent third party to cast a deciding vote. A government judge is common option. But, you and I can agree to grant that vote to a non-government agent instead.
Legal rental contracts are non-trivial. A rental smart contract would similarly require more rules than we care to spell out here. But, “If the tenant and the notary both vote that there is bullshittery going on with the property, rent is suspended.” sounds like a reasonable thing to include.
> “If the tenant and the notary both vote that there is bullshittery going on with the property, rent is suspended.”
First, I think the word you're looking for is arbitrator. Notaries don't resolve disputes.
Second, you've simply replaced a judge with a "notary", and left many questions unanswered. Who is this trusted 3rd party? How are they accountable? Can you appeal their judgements? Do they have an ongoing business relationship with one of the parties? And so on.
I suspect that by the time you've answered all those questions, and dealt with all the issues that arise that require human judgement, you'll have reinvented government. Or worse, digitized mandatory arbitration.
First, I think the word you're looking for is arbitrator. Notaries don't resolve disputes.
Second, you've simply replaced a judge with a "notary", and left many questions unanswered. Who is this trusted 3rd party? How are they accountable? Can you appeal their judgements? Do they have an ongoing business relationship with one of the parties? And so on.
I suspect that by the time you've answered all those questions, and dealt with all the issues that arise that require human judgement, you'll have reinvented government. Or worse, digitized mandatory arbitration.
"They are going to make government, lawyer and bank services a lot less necessary."
Except when a third party finds bugs in the smart contract code and diverts the rent payments to themselves.
Except when a third party finds bugs in the smart contract code and diverts the rent payments to themselves.
> They are going to make government, lawyer and bank services a lot less necessary.
All the benefits of smart contracts are available with regular old software.
Why hasn't software destroyed these services already?
> “If the tenant and the notary both vote that there is bullshittery going on with the property, rent is suspended.” sounds like a reasonable thing to include.
Why do you need a smart contract for this? The tenant can do this right now without any software help or public ledger.
All the benefits of smart contracts are available with regular old software.
Why hasn't software destroyed these services already?
> “If the tenant and the notary both vote that there is bullshittery going on with the property, rent is suspended.” sounds like a reasonable thing to include.
Why do you need a smart contract for this? The tenant can do this right now without any software help or public ledger.
So, literally not better than an existing contract, but with the added complexity of coding it and having both the landlord and the tenant be programmers versed in esoteric languages to verify it.
That’s a super-bad-faith argument. Did you personally write the legal contract for the last place you were a tenant of without any involvement from a lawyer? No. Your landlord might have hired a lawyer. Mine used an off-the-shelf legal contract.
For common situations like rent, open-source contracts are inevitable. This will give people who could never afford lawyers (think 3rd world) access to much of the results middle class Americans take for granted.
For common situations like rent, open-source contracts are inevitable. This will give people who could never afford lawyers (think 3rd world) access to much of the results middle class Americans take for granted.
> Did you personally write the legal contract for the last place you were a tenant of without any involvement from a lawyer? No
When I was renting my apartment in Sweden, the contract was literally one page long. It was written in such a simple language that I could understand it even with a rudimentary knowledge of Swedish.
When I was buying my apartment, the contract was four pages long, and the language wasn't much harder.
Now, with an Ethereum contract I would have to learn an esoteric programming language, look at the contract's source code, verify that it actually corresponds to an actual contract that we already agreed to.
And all that even without getting into the question of who's going to enforce this contract, and how.
And don't forget, in many jurisdictions an "IOU $50" written on a napkin is a legally binding contract requiring zero lawyers.
When I was renting my apartment in Sweden, the contract was literally one page long. It was written in such a simple language that I could understand it even with a rudimentary knowledge of Swedish.
When I was buying my apartment, the contract was four pages long, and the language wasn't much harder.
Now, with an Ethereum contract I would have to learn an esoteric programming language, look at the contract's source code, verify that it actually corresponds to an actual contract that we already agreed to.
And all that even without getting into the question of who's going to enforce this contract, and how.
And don't forget, in many jurisdictions an "IOU $50" written on a napkin is a legally binding contract requiring zero lawyers.
My last lease contract was written in English, which I can read. If it was written in, say, Solidity (Ethereum programming language), I would have had to hire someone to read it for me, or sign it without understanding it. That was the point.
Most countries include some kind of arbitration when something is disputed e.g was the damage caused by negligence or wear and tear? The smart contract can't settle disputes like this without a trusted party.
Yes. But, as elaborated elsewhere in this thread, the reputable dispute arbitrator does not have to be a government agent. In countries where government agents are installed through corruption and paid in bribes, handing the 3rd vote on who gets the Bitcoin to someone based on reputation rather than appointment is a great boon.
Ah yes. The tired old "3rd world countries".
Even in 3rd world countries you will need someone to understand programming and contracts to verify that the smart contract actually implements what you've agreed on.
So you're replacing "government agents installed through corruption" with "saints beyond reproach because smart contracts"?
Even in 3rd world countries you will need someone to understand programming and contracts to verify that the smart contract actually implements what you've agreed on.
So you're replacing "government agents installed through corruption" with "saints beyond reproach because smart contracts"?
" In countries where government agents are installed through corruption and paid in bribes"
And somehow this won't also end up artificially boosting the "reputation" of potential arbitrators?
(Or perhaps the government will make it clear that anyone who acts as an arbitrator without government authorization will spend a long time in a small cell.)
And somehow this won't also end up artificially boosting the "reputation" of potential arbitrators?
(Or perhaps the government will make it clear that anyone who acts as an arbitrator without government authorization will spend a long time in a small cell.)
Contracts can't enforce themselves.
Where in this article does it describe how I get tenants out of my rental when they don't pay into the smart contract?
That's what enforcement is, not just some rules in a spreadsheet.
That's what enforcement is, not just some rules in a spreadsheet.
Actually, it's some rules in a spreadsheet. You get tenants out of your rental because someone is getting paid to do it - their salary is in some spreadsheet - and then their work is verified by someone else who is also getting paid to do that. These complex systems of incentives are currently managed by humans.
You could setup a similar incentive system as smart contracts. If your tenant does not pay, you could get him evicted much fatser and automatically, because another smart contract can pay the enforcer. And the overall fees are subsidized and tradeable.
Of course we're far away from doing that and both approaches have pros and cons, but it's arguable that the "human-managed" approach is clearly superior.
You could setup a similar incentive system as smart contracts. If your tenant does not pay, you could get him evicted much fatser and automatically, because another smart contract can pay the enforcer. And the overall fees are subsidized and tradeable.
Of course we're far away from doing that and both approaches have pros and cons, but it's arguable that the "human-managed" approach is clearly superior.
You are giving for granted that there is a private someone that is payed to evict people from an house, but that's not how it works in many places in the world.
In Italy (and I bet in many other European countries) this is the public force that is in charge of doing this and there are a lots of exceptions (for instance, here, you cannot easily evict a family where there are children or sick people).
And if you involve the pubic force, then you are inherently accepting the concept of a central trusted authority, hence the decentralisation fails as a requirement.
In Italy (and I bet in many other European countries) this is the public force that is in charge of doing this and there are a lots of exceptions (for instance, here, you cannot easily evict a family where there are children or sick people).
And if you involve the pubic force, then you are inherently accepting the concept of a central trusted authority, hence the decentralisation fails as a requirement.
In your description, you used the word 'enforcer' for the entity that does the important bit. That entity isn't the contract.
What do you mean by "That entity isn't the contract"?
Yes, the enforcer is not (necessarily) part of the contract. But if the right incentive system is in place and there is consensus that physical enforcement should happen - anyone approved could take that job/risk and be the enforcer.
With such a system you may not even need a physical enforcer since the risk of not getting the tenant out could be tradeable (like an insurance) and the owner would get his rent even if the tenant cannot be evicted immediately. In case of the tenant, there would be huge negative financial incentives to stay.
Yes, the enforcer is not (necessarily) part of the contract. But if the right incentive system is in place and there is consensus that physical enforcement should happen - anyone approved could take that job/risk and be the enforcer.
With such a system you may not even need a physical enforcer since the risk of not getting the tenant out could be tradeable (like an insurance) and the owner would get his rent even if the tenant cannot be evicted immediately. In case of the tenant, there would be huge negative financial incentives to stay.
The tenant is mentally ill, has a gun, and is refusing to leave. The enforcer says "f that". What do you do now?
This is a spectrum similar to taking out loans and performing liquidations. If the person you are giving a loan too is sketchy you may refuse the loan or charge higher interest.
The same principle applies here as physical eviction is fundamentally about risk. There is an "auction" on the eviction and potential evictors can decide how risky the eviction is. More risky evictions will require a larger payout.
The same principle applies here as physical eviction is fundamentally about risk. There is an "auction" on the eviction and potential evictors can decide how risky the eviction is. More risky evictions will require a larger payout.
So the ability to get out of predatory situations depends on how much money you have.
The point is that such a contract requires a central authority that must be capable of evicting the tenant. A "smart contract" which is just some code running on a computer certainly can't do that.
Why do you require a central authority? What you require is this:
1. An incentive to evict someone. Money. Someone needs to get paid to actually do the eviction because they are taking on some risk - physical in this case. It doesn't matter how they get paid. A smart contract can do that.
2. "Social/Legal consensus" that performing the physical eviction is the right thing to do. The person performing the eviction should not get punished for it. If the state and breach of contract is transparent on the blockchain this consensus could be achieved.
3. A way to confirm the eviction to pay the evictor.
1. An incentive to evict someone. Money. Someone needs to get paid to actually do the eviction because they are taking on some risk - physical in this case. It doesn't matter how they get paid. A smart contract can do that.
2. "Social/Legal consensus" that performing the physical eviction is the right thing to do. The person performing the eviction should not get punished for it. If the state and breach of contract is transparent on the blockchain this consensus could be achieved.
3. A way to confirm the eviction to pay the evictor.
Yeah, that should work very well. Say if the third-party (from your description, apparently a band of mercenaries) in charge of enforcing the contract is motivated by economic incentives, what stops any of the parties from providing a stronger economic incentive to the mercenaries so that they don't enforce the contract?
Who is this mysterious evictor/enforcer?
Also, you are ignoring the fact that, at least where I live, only one entity can legally evict a tenant - the county sheriff (in their role as an agent of the court). You cant just hire some random thugs.
Also, you are ignoring the fact that, at least where I live, only one entity can legally evict a tenant - the county sheriff (in their role as an agent of the court). You cant just hire some random thugs.
> An incentive to evict someone. Money.
Welcome to mafia shakedowns
> "Social/Legal consensus" that performing the physical eviction is the right thing to do.
That "social/legal consensus" is called laws, and they are enforced through a central authority.
> If the state and breach of contract is transparent on the blockchain
Who exactly is deciding "the state and breach of contract"? You can start from the fact that smart contracts are not even written in a human language.
> A way to confirm the eviction to pay the evictor.
People were paying each other for thousands of years without smart contracts
Welcome to mafia shakedowns
> "Social/Legal consensus" that performing the physical eviction is the right thing to do.
That "social/legal consensus" is called laws, and they are enforced through a central authority.
> If the state and breach of contract is transparent on the blockchain
Who exactly is deciding "the state and breach of contract"? You can start from the fact that smart contracts are not even written in a human language.
> A way to confirm the eviction to pay the evictor.
People were paying each other for thousands of years without smart contracts
What if the tenant offers the enforcer ownership of the landlord's home if the enforcer evicts the landlord instead?
It would require a larger deposit to act as collateral. Maybe 3-4 months rent. If they stop paying rent, they don’t get the deposit back and you have 3-4 months to call the cops about the trespassers.
While it's understandable that some could write this off as trite, it's the best way to obtain high-quality illicit substances and to sell them through the internet.
This is very important to some people and the current economic systems don't allow that to occur. It's "real" economic value even if you don't think it's right.
This is very important to some people and the current economic systems don't allow that to occur. It's "real" economic value even if you don't think it's right.
Yes, it shields you against your own government by giving an alternative they can't stop or ban.
In some parts of the world, government is hostile towards their own population, either by incompetence or malice. Debasement of the national fiat currency is theft perpetrated by the government and crypto provides an alternative for that.
Can you just use US Dollars? Sure you can. But your government can search you for the bills. Or they can block the specific website you're using or the US banks can be hostile towards citizens of your country (Neteller, skrill and several others outright banned Venezuelan citizens, and some US banks are making difficult the process to open bank accounts)
But how about volatility? Sure is a problem. But with fiat you know is only going down, at least with crypto it can go up.
Is always interesting seeing the threads on HN on crypto and how it never considers an actual hostile government.
In some parts of the world, government is hostile towards their own population, either by incompetence or malice. Debasement of the national fiat currency is theft perpetrated by the government and crypto provides an alternative for that.
Can you just use US Dollars? Sure you can. But your government can search you for the bills. Or they can block the specific website you're using or the US banks can be hostile towards citizens of your country (Neteller, skrill and several others outright banned Venezuelan citizens, and some US banks are making difficult the process to open bank accounts)
But how about volatility? Sure is a problem. But with fiat you know is only going down, at least with crypto it can go up.
Is always interesting seeing the threads on HN on crypto and how it never considers an actual hostile government.
> Yes, it shields you against your own government by giving an alternative they can't stop or ban.
How? If your government decides to take your stuff, they’re not going to say “some nerds in another country said no, guess we have to let them keep it” - they’re just going to fine, jail, or abuse you until you turn over the keys (better hope you can convince them you didn’t have anything more which you aren’t still concealing). Blockchains helpfully give them your full transaction history so it becomes exceptionally dangerous to engage in transactions with anyone you know in country since you don’t know whether they are or will ever be giving that data to the authorities.
The underlying problem is the repressive government. This is not a technical problem and you’re not going to be able to solve it with a complex, easily tracked technology which preserves a full history of your non-compliance for prosecution.
How? If your government decides to take your stuff, they’re not going to say “some nerds in another country said no, guess we have to let them keep it” - they’re just going to fine, jail, or abuse you until you turn over the keys (better hope you can convince them you didn’t have anything more which you aren’t still concealing). Blockchains helpfully give them your full transaction history so it becomes exceptionally dangerous to engage in transactions with anyone you know in country since you don’t know whether they are or will ever be giving that data to the authorities.
The underlying problem is the repressive government. This is not a technical problem and you’re not going to be able to solve it with a complex, easily tracked technology which preserves a full history of your non-compliance for prosecution.
Yes, of course. The problem here is the repressive government. But as everything, they have tools. Crypto takes one of the tools for them (Debasing the currency and strict control over local banks). Any tool we can take from them is good.
Even a not-really-hostile-goverment-but-more-like-incompetent can do a lot of damage by debasing the currency. Now the citizens have tools to fight their incompetence.
If only for this reason, is better to have crypto than not have it. I can came up for a lot of reasons why I think Tik-Tok is useless, but is useful for a lot of people, so no reason for me to to bash it.
Even a not-really-hostile-goverment-but-more-like-incompetent can do a lot of damage by debasing the currency. Now the citizens have tools to fight their incompetence.
If only for this reason, is better to have crypto than not have it. I can came up for a lot of reasons why I think Tik-Tok is useless, but is useful for a lot of people, so no reason for me to to bash it.
> Crypto takes one of the tools for them (Debasing the currency and strict control over local banks).
How? Nobody needs cryptocurrency to pay their bills and statistically nobody uses it - many, like Bitcoin, are designed to discourage regular usage – so all the government has to do is control exchange points in the local economy. Until you can pay taxes or rent, buy groceries, etc. that gives the government more control than they get with cash.
Since cryptocurrencies provide a full irrepudiable audit trail, that also makes it extremely risky to try to skirt local regulations since any attempt to do a transaction under the table has an inherent risk that the other party, willingly or not, is or ever will be giving data to to government. Since we’re talking about systems which have spent many years failing to be capable or desirable for routine use even in countries which don’t have strict rules limiting use, it seems unlikely that this would provide any significant protection in a more repressive regime.
The other thing you have to remember is that the quasi-religious desire for deflationary behavior from cryptocurrency proponents isn’t what most people want. Deflation causes economic contraction and favors rich asset holders who have reliable revenue streams – unless that’s you, the modest inflation targeted by most central banks is a much better deal.
How? Nobody needs cryptocurrency to pay their bills and statistically nobody uses it - many, like Bitcoin, are designed to discourage regular usage – so all the government has to do is control exchange points in the local economy. Until you can pay taxes or rent, buy groceries, etc. that gives the government more control than they get with cash.
Since cryptocurrencies provide a full irrepudiable audit trail, that also makes it extremely risky to try to skirt local regulations since any attempt to do a transaction under the table has an inherent risk that the other party, willingly or not, is or ever will be giving data to to government. Since we’re talking about systems which have spent many years failing to be capable or desirable for routine use even in countries which don’t have strict rules limiting use, it seems unlikely that this would provide any significant protection in a more repressive regime.
The other thing you have to remember is that the quasi-religious desire for deflationary behavior from cryptocurrency proponents isn’t what most people want. Deflation causes economic contraction and favors rich asset holders who have reliable revenue streams – unless that’s you, the modest inflation targeted by most central banks is a much better deal.
Until people can buy food and essentials with crypto, it has little value on its own. The US government can ban any bank or credit processor from exchanging crypto with any individual right now.
The coins aren't any good unless you can spend them. And for the foreseeable future, governments have complete control over that
The coins aren't any good unless you can spend them. And for the foreseeable future, governments have complete control over that
> And for the foreseeable future, governments have complete control over that
Actually.... governments are demonstrably losing control over that.
Governments worldwide are in process of destroying their currencies.
CBDBs will be social credit mechanisms of control.
Cryptos protect you from government. This year's run is because institutions are figuring out that bonds are dead and fiats are headed for hyperinflation, and CBDBs will be constructed in a way to preclude savings and capital formation.
Actually.... governments are demonstrably losing control over that.
Governments worldwide are in process of destroying their currencies.
CBDBs will be social credit mechanisms of control.
Cryptos protect you from government. This year's run is because institutions are figuring out that bonds are dead and fiats are headed for hyperinflation, and CBDBs will be constructed in a way to preclude savings and capital formation.
Did PayPal provide any real economic value at all? Shouldn't credit cards already provided everything already?
If you agree PayPal did provide real economic value, you admit the system before it was imperfect.
So PayPal fixed the last hole in the system?
If you agree PayPal did provide real economic value, you admit the system before it was imperfect.
So PayPal fixed the last hole in the system?
I think there are a very few projects out there with actual working products that provide real economic value.
VeChain [0] for example, has been quietly establishing itself as a viable solution for supply chain transparency [1]. Walmart uses VeChain through its Food Traceability Platform [2].
[0] - https://www.vechain.org/
[1] - https://seekingalpha.com/article/4415383-vechain-is-blockcha...
[2] - https://traceability.walmartmobile.cn/walmart/p/100074210400...
VeChain [0] for example, has been quietly establishing itself as a viable solution for supply chain transparency [1]. Walmart uses VeChain through its Food Traceability Platform [2].
[0] - https://www.vechain.org/
[1] - https://seekingalpha.com/article/4415383-vechain-is-blockcha...
[2] - https://traceability.walmartmobile.cn/walmart/p/100074210400...
I got rich with Bitcoin, the value in my life has been quite tangible. I live in big house, drive a nice car, I don't have to work unless I want to. This is how I would pretty much define value.
Q1. by accepting and preferring BTC as a payment for my services, I was able to retain better value/purchasing power from my labour long-term. By changing my fiat currency to BTC I was able to also increase my purchasing power. Clear value to me. I don't know if this has some externalities and don't care really. My transactions are legal and counterparties have been as happy as people in typical business transactions are.
Q2. It doesn't have to exist, it happens to exist and you can choose not to use it.
Q3. "Smart contract" is a marketing term and "smart contracts" are not replacing traditional courts in any sensible way. The whole claim is just nonsense (there is much bullshit in crypto).
Q1. by accepting and preferring BTC as a payment for my services, I was able to retain better value/purchasing power from my labour long-term. By changing my fiat currency to BTC I was able to also increase my purchasing power. Clear value to me. I don't know if this has some externalities and don't care really. My transactions are legal and counterparties have been as happy as people in typical business transactions are.
Q2. It doesn't have to exist, it happens to exist and you can choose not to use it.
Q3. "Smart contract" is a marketing term and "smart contracts" are not replacing traditional courts in any sensible way. The whole claim is just nonsense (there is much bullshit in crypto).
Luck/intelligence != value
There are plenty of people who have been ruined by bitcoin as well. The fact that you were either lucky enough to ride the right waves, or smart enough to see the bad ones, does not equate to any value at all.
There are plenty of people who have been ruined by bitcoin as well. The fact that you were either lucky enough to ride the right waves, or smart enough to see the bad ones, does not equate to any value at all.
My life has improved a lot thanks to Bitcoin, that equals very objective value for me. Maybe you are talking about "value for society" or something more abstract? Value is very simple concept and Bitcoin obviously provides it to many in rising fiat value. These "doesn't provide value" just seem to throw the commonly used definition out of the window and talk on another definition plane.
Q1. I don't live in Europe. Wire transfers from my US bank can only be sent domestically, cost me $20, and require me to fill out a form and then stay up until 2AM so that a person can call me on the phone during business hours in the US and I can confirm that I did in fact fill out that form. Wire transfers from my Japanese bank are more reasonable but cost 10000x as much money to send and (under ideal conditions - during business hours long before closing on a weekday) take longer to settle than modern cryptocurrencies.
Q2. Why should Apple stock exist when we already have dollars? Why should Brazilian Real exist when we already have dollars? I wouldn't trade USD for BTC for EUR. I would probably trade USD for EUR directly. As a consumer, the best place I can do this is FTX, a cryptocurrency derivatives exchange, because they provide end-users with the extremely competitive forex rates of a Hong Kong bank's OTC desk. The second-best place is probably IBKR which provides extremely competitive rates because it's literally a forex broker but takes days to wire money in and out. The third-best place is probably Shinsei Bank, which is one of the two most popular banks for foreigners in Japan and provides suspiciously good forex rates compared to all other consumer banks in the world.
Q3. "Smart contracts" are not really a replacement for the legal system. They are, at least for now, mostly a way to build non-custodial versions of traditional financial products. Again, this is sort of like saying "Why do we have oil futures and SPY puts when you can just buy oil or sell SPY?"
Re: Conclusions: Ok, but did you try to use the internet to let your US customers pay you dollars which you would then give to your US creators who create pornography for your customers? How many providers accepted this proposal? What fees do they charge?
Q2. Why should Apple stock exist when we already have dollars? Why should Brazilian Real exist when we already have dollars? I wouldn't trade USD for BTC for EUR. I would probably trade USD for EUR directly. As a consumer, the best place I can do this is FTX, a cryptocurrency derivatives exchange, because they provide end-users with the extremely competitive forex rates of a Hong Kong bank's OTC desk. The second-best place is probably IBKR which provides extremely competitive rates because it's literally a forex broker but takes days to wire money in and out. The third-best place is probably Shinsei Bank, which is one of the two most popular banks for foreigners in Japan and provides suspiciously good forex rates compared to all other consumer banks in the world.
Q3. "Smart contracts" are not really a replacement for the legal system. They are, at least for now, mostly a way to build non-custodial versions of traditional financial products. Again, this is sort of like saying "Why do we have oil futures and SPY puts when you can just buy oil or sell SPY?"
Re: Conclusions: Ok, but did you try to use the internet to let your US customers pay you dollars which you would then give to your US creators who create pornography for your customers? How many providers accepted this proposal? What fees do they charge?
You conclusion is a very limited case and IMO is better met by allowing sex works to be a first class work and not by inventing a huge environmentally unfriendly solution.
Beside this, like the OP, I also fail to see clear cases where the cryptocurrencies provide significative advantage, let alone blockchains outside the cryptocurrencies.
Beside this, like the OP, I also fail to see clear cases where the cryptocurrencies provide significative advantage, let alone blockchains outside the cryptocurrencies.
The consensus network I prefer to use is more environmentally friendly than banks.
All other merchant accounts also charge more money in fees than the consensus network I prefer to use. It's just an extreme example to probably not even have a merchant account.
"why not just fix every government policy everywhere" doesn't sound very practical to me. it has my support though!
All other merchant accounts also charge more money in fees than the consensus network I prefer to use. It's just an extreme example to probably not even have a merchant account.
"why not just fix every government policy everywhere" doesn't sound very practical to me. it has my support though!
Why not get an account at a US bank with a presence in Japan?
This is a good suggestion. I'm seeing about BofA's stuff for Japanese residents. I don't know of any competing options.
The potential applications of cryptocurrencies are far-ranging. Sadly, however, the current actual applications seems to be mostly just get-rich-quick schemes and highly speculative investing that's stimulated by the extreme volatility.
If the crazy stuff settles down, it might maybe someday become an actual currency that people can use to exchange legit goods and services safely. Currency should be boring.
I wonder a lot if the crazy aspects of crypto currency are by design or if I utterly misunderstand even the fundamental nature of currency. For one thing, why have the computational simulacrum of mining? Why does crypto currency NEED to use outrageous amounts of power solving puzzles to "mine" bitcoins? Is this manufactured scarcity really needed to bootstrap it as a currency? The white papers I've seen don't seem to address that kind of stuff, but are perfectly happy to obfuscate the "why" aspects.
If the crazy stuff settles down, it might maybe someday become an actual currency that people can use to exchange legit goods and services safely. Currency should be boring.
I wonder a lot if the crazy aspects of crypto currency are by design or if I utterly misunderstand even the fundamental nature of currency. For one thing, why have the computational simulacrum of mining? Why does crypto currency NEED to use outrageous amounts of power solving puzzles to "mine" bitcoins? Is this manufactured scarcity really needed to bootstrap it as a currency? The white papers I've seen don't seem to address that kind of stuff, but are perfectly happy to obfuscate the "why" aspects.
Crypto currency seems to have major technical issues. Transfer times and fees become ridiculous at times of peak popularity. I can't imagine how the current models and architectures could handle even a fraction of daily commercial transactions. It's fair to say "that will get worked out over time". but it's seeming increasingly likely that the idea of blockchain and mining will be have to be abandoned entirely
[deleted]
There are some test applications and fringe uses cases, some of which are mentioned in this thread, but I've come to the conclusion that crypto is so early that's is more of a movement than anything else. It's a movement to 1. cut out the middlemen and make the same financial ecosystem globally accessible to everyone and 2. make the financial ecosystem programmable from the ground up without the need for clunky add-ons.
We're far away from both because, like you said, countries, governments are regulations are not going away anytime soon. But I do think it's inevitable that things will change and "global programmable finance" becomes the standard. I think it will follow something like Planck's principle [0] - it's not going to happen because people are going to be convinced by crypto, but because the next generation will adopt crypto as more of a default.
At least for me, that's the reason I'm involved in crypto. I can't think of a tangible benefit I get from transacting in crypto, but I would much rather live in a world where countries, governments, and banks are less powerful and more transparent than they are now.
I think in 100-200 years we may look back and ask ourselves how we could ever live with inefficient and corrupt governments, financial, and legal systems that are based on geographical locality instead of them being internet-based. We probably won't be using the current incarnation of crypto, but I doubt the current institutions will survive, and crypto is a step towards that.
[0] https://en.wikipedia.org/wiki/Planck%27s_principle
We're far away from both because, like you said, countries, governments are regulations are not going away anytime soon. But I do think it's inevitable that things will change and "global programmable finance" becomes the standard. I think it will follow something like Planck's principle [0] - it's not going to happen because people are going to be convinced by crypto, but because the next generation will adopt crypto as more of a default.
At least for me, that's the reason I'm involved in crypto. I can't think of a tangible benefit I get from transacting in crypto, but I would much rather live in a world where countries, governments, and banks are less powerful and more transparent than they are now.
I think in 100-200 years we may look back and ask ourselves how we could ever live with inefficient and corrupt governments, financial, and legal systems that are based on geographical locality instead of them being internet-based. We probably won't be using the current incarnation of crypto, but I doubt the current institutions will survive, and crypto is a step towards that.
[0] https://en.wikipedia.org/wiki/Planck%27s_principle
bgitarts(1)
The real value is in the democratization of the control. Sure no crypto network is 100% in this realm yet, but all of the reasons you see on this page tie back to the fact that central regulatory bodies are both bad for innovation, and bad for personal privacy.
I don't need a government, bank, or anyone besides the other side of my transaction to be involved in it.
I don't need a government, bank, or anyone besides the other side of my transaction to be involved in it.
If you, like some of us, live in a country where the government of the day can seize your bank accounts because of your political views, storing your assets as crypto has real-economic value.
For me the only utility lies with the likes of Sia, Filecoin etc. To an extent doing to storage what AirBnB does to homes.
Cryptocurrency provides economic incentive to support a blockchain, and a blockchain provides support to a decentralized, distributed service.
For example:
1) Money transfer - with no central point of failure or central point of control, a blockchain database provides trustless support to verify and maintain a history of transactions. But to do the work, economic incentives to workers must be applied.
Example: Bitcoin
2) Storage - once again, no central point of failure or control, with a blockchain providing the history and data regarding what is stored, and with cryptocurrency providing economic incentive for someone to provide storage to the network.
Example: Siacoin
3) Contracts - trustless contracts or escrow, maintained in a blockchain database with code for execution maintained on the blockchain as well. Verification and execution of code is done by workers who are incentivized by cryptocurrency.
Example: Ethereum
Why use cryptocurrency instead of USD? Because USD isn't electronic and is heavily regulated. As much as we like to think our money system is electronic, its really only hacky applications on top of our existing banking system. I used to work at a very large bank in the payments processing division, and you have no idea how many times they screwed up payments across the entire world. Sunday morning deployments often involved double-charges, missed charges, and overall screwing up virtually every merchant in North America. The only reason our monetary system hasn't collapsed is because people work very, very hard to fix all of these hidden failures. Cryptocurrencies remove the human element and provide a more efficient, error-free system.
For example:
1) Money transfer - with no central point of failure or central point of control, a blockchain database provides trustless support to verify and maintain a history of transactions. But to do the work, economic incentives to workers must be applied.
Example: Bitcoin
2) Storage - once again, no central point of failure or control, with a blockchain providing the history and data regarding what is stored, and with cryptocurrency providing economic incentive for someone to provide storage to the network.
Example: Siacoin
3) Contracts - trustless contracts or escrow, maintained in a blockchain database with code for execution maintained on the blockchain as well. Verification and execution of code is done by workers who are incentivized by cryptocurrency.
Example: Ethereum
Why use cryptocurrency instead of USD? Because USD isn't electronic and is heavily regulated. As much as we like to think our money system is electronic, its really only hacky applications on top of our existing banking system. I used to work at a very large bank in the payments processing division, and you have no idea how many times they screwed up payments across the entire world. Sunday morning deployments often involved double-charges, missed charges, and overall screwing up virtually every merchant in North America. The only reason our monetary system hasn't collapsed is because people work very, very hard to fix all of these hidden failures. Cryptocurrencies remove the human element and provide a more efficient, error-free system.
Globale employment of digital workers is a breeze to do with a fast blockchain based solution.
The workers can be onboarded using their wallet, their contributions can be logged on the blockchain, and their rewards can be directly paid out to their wallets.
Their work can be analysed without the need to know which gender they have or where they come from. This opens the door for unbiased reputation and reward schemes. A true equaliser.
This is an application of blockchain technology that becomes much more expensive without it. The hassle of hiring people around the world, paying them, and rating their work objectively is expensive and very difficult.
This is an application of blockchain technology that becomes much more expensive without it. The hassle of hiring people around the world, paying them, and rating their work objectively is expensive and very difficult.
Yes. Everything you described relies on central authority. For those who would like to not rely on central authority - cryptocurrencies provide real economic value. It’s trivial to the point where it’s impossible to distinguish you from a troll.
Why a troll? I asked a question and provided reasonable arguments for my belief.
- "Not wanting to rely on a central authority" is a political theme.
- In my opinion saying "I use crypto because I do not agree with my governing central authority" is not really a good application (as I asked for in my question). You don't even have to commit illicit activities in a universal/ethically right way. It suffices to do "illicit" activities in the view of the government to get you into real trouble (jail time or worse). So to say "I use crypto as an expression of protest" seems like a questionable application to me
> I use crypto as an expression of protest
that is your opinion. for me it's real value. you do realize that all value is subjective?
that is your opinion. for me it's real value. you do realize that all value is subjective?
> Q2. ... Suppose you want to transfer USD-->EUR. Why transfer USD-->BTC-->EUR instead?
USD->BTC->CNY or CNY->BTC->USD is much easier than USD->CNY or CNY->USD in a lot of cases.
This is a clear case of economic value.
USD->BTC->CNY or CNY->BTC->USD is much easier than USD->CNY or CNY->USD in a lot of cases.
This is a clear case of economic value.
> "Smart contracts". All (democratic) countries have courts in place to settle legistlative disputes between two parties.
The case for smart contracts is, you can't have disputes. No need for attorneys, that will bleed you dry. It does not add an additional layer, instead it removes them all and becomes the sole layer.
The case for smart contracts is, you can't have disputes. No need for attorneys, that will bleed you dry. It does not add an additional layer, instead it removes them all and becomes the sole layer.
Suppose we two make a "smart contract": I say I pay 100k, you say you sell me a functional car. Let's say you then deliver a broken car.
Now what? How can't we have disputes, we did a "smart contract"?
Now what? How can't we have disputes, we did a "smart contract"?
You and I can agree on an independent 3rd party as a notary. If within a six months of the sale both you and the notary sign off that the deal was not fulfilled (the car is junk), you get the $100k back.
That means I can’t spend the $100k directly for six months. But, I can easily take out a six month loan against it. That way it’s liquid for me and still safe for you. The loan agent is taking on the risk in exchange for the interest.
That means I can’t spend the $100k directly for six months. But, I can easily take out a six month loan against it. That way it’s liquid for me and still safe for you. The loan agent is taking on the risk in exchange for the interest.
Good point, but are cryptocurrencies then needed (adding currency trafo risks)?
Further, how do you select the trusted 3rd party--can't you get screwed here if there are "multiple" 3rd party notaries? As far as I can see, you can't get rid of some "central" authority
Further, how do you select the trusted 3rd party--can't you get screwed here if there are "multiple" 3rd party notaries? As far as I can see, you can't get rid of some "central" authority
At some point you have to trust somebody. Who is more trustworthy for your situation: a government agent, a financial officer or some reputation service? Think about that as someone in a third world country...
It's not that simple. Have you ever had to do anything with real legal complex matters? For example for patent suits, I am not sure if I didn't prefer a qualified and experienced set of judges over an anonymous hobby crypto arbitration court..
Don't kid yourself, you can get (and will) screwed in every which way.
I also don't know much, but I think there is a lot a lot of illusion going on about "smart contracts"
What value does the smart contract add in this situation? Every part of that arrangement could has been done for thousands of years. What are you really getting to balance the extra expense and risk required to use a blockchain?
If the answer is “corrupt third world countries” ask yourself why the demand is driven by affluent Americans trying to sell things, and how effective “but it’ll go down on your permanent record! In a different country!” will be when the local capo’s buddy tells the notary the car was fine when you bought it.
If the answer is “corrupt third world countries” ask yourself why the demand is driven by affluent Americans trying to sell things, and how effective “but it’ll go down on your permanent record! In a different country!” will be when the local capo’s buddy tells the notary the car was fine when you bought it.
Who writes those contracts? Who debugs them? Who settles disputes if one the parties feels that the other isn’t honoring them?
This replaces attorneys by creating attorney-programmers who charge more and have less recourse when someone makes a mistake.
This replaces attorneys by creating attorney-programmers who charge more and have less recourse when someone makes a mistake.
The assumption that smart contracts are going to cost more than attorneys is presumptive. For the common cases, open source contracts will be inevitable. This will give the world’s poorest options that were never available before.
Kind of like the way standard contracts have been available for many common needs for many decades? Remember, there’s no reason why you can’t have open source contracts now - the challenge is that knowledge of the law is not trivial and liability is a very real concern (want to risk being charged with practicing law without a license?). Adding a separate source of problems might distract from that but it doesn’t make the hard problem go away.
Reading a variety of comments over the years, the value seems to be in a negative sense, i.e., it lacks features of regular money that some people don't like, or that are too inconvenient or expensive.
Regular government money has a clear purpose because it is manipulated to make certain purposes obvious (in the way that a bicycle or scissors have a purpose), in turn making their value relative to how well they serve those purposes, such as:
* Temporary store of value * Medium of exchange * Tool of government monetary policy
Crypto is just too small potatoes to necessarily have any two people using it for the same thing, so in that sense, it is still at the stage of its value being whatever you want it to be. It could be a way of extracting value from subsidized electricity.
The value could be in the experiment. We're learning how crypto and blockchain technologies work and don't work. As a scientist, I get paid to do failed experiments. ;-)
Regular government money has a clear purpose because it is manipulated to make certain purposes obvious (in the way that a bicycle or scissors have a purpose), in turn making their value relative to how well they serve those purposes, such as:
* Temporary store of value * Medium of exchange * Tool of government monetary policy
Crypto is just too small potatoes to necessarily have any two people using it for the same thing, so in that sense, it is still at the stage of its value being whatever you want it to be. It could be a way of extracting value from subsidized electricity.
The value could be in the experiment. We're learning how crypto and blockchain technologies work and don't work. As a scientist, I get paid to do failed experiments. ;-)
All of your arguments assume that all parties are in good standing of well-functioning governments with well-functioning financial systems that all get along. But, then politics, corruption, bad monetary policy, bureaucracy, etc get involved and sometimes things aren’t as simple for people who aren’t middle class Americans.
Bitcoin is basically a giant IOU distributed throughout the world without the involvement of any country or company. The tiniest bits of that trillion dollar IOU can be transferred and traded between the lowliest individuals around the world without restriction, without involvement from any bank, without interference from any government. A homeless man in LA can perform international trade with a programmer in Russia and an artist in Cuba completely by themselves without requiring the blessings or assistance of Citibank, Western Union, Biden, Putin and Díaz-Canel. And, with smart contracts, this extends out from payments to loans, collateral, corporations and all kinds of financial instruments. All without borders or lawyers. Basically any rules you can imagine based on money, time and signalling consent.
It’s turning out that Bitcoin and Ethereum aren’t great on their own for buying lattes. But, they are turning out great as a foundational layer for a whole new financial system. Rather than basing a macro-scale credit system on the federal reserve or stock/real estate derivatives, we can now use tiny or huge chunks of BTC and ETH as collateral, as a loan basis, as a settlement layer, etc and build up from there.
Bitcoin is basically a giant IOU distributed throughout the world without the involvement of any country or company. The tiniest bits of that trillion dollar IOU can be transferred and traded between the lowliest individuals around the world without restriction, without involvement from any bank, without interference from any government. A homeless man in LA can perform international trade with a programmer in Russia and an artist in Cuba completely by themselves without requiring the blessings or assistance of Citibank, Western Union, Biden, Putin and Díaz-Canel. And, with smart contracts, this extends out from payments to loans, collateral, corporations and all kinds of financial instruments. All without borders or lawyers. Basically any rules you can imagine based on money, time and signalling consent.
It’s turning out that Bitcoin and Ethereum aren’t great on their own for buying lattes. But, they are turning out great as a foundational layer for a whole new financial system. Rather than basing a macro-scale credit system on the federal reserve or stock/real estate derivatives, we can now use tiny or huge chunks of BTC and ETH as collateral, as a loan basis, as a settlement layer, etc and build up from there.
Bitcoin has no value over the long term.
There are no controls on who is allowed to send and receive money, and funds cannot be confiscated by government if necessary.
A system that permits individuals complete custody over money is not something that should be allowed to exist in a modern society. There is too much room for criminal activity.
The current financial system works better and should not be circumvented.
There are no controls on who is allowed to send and receive money, and funds cannot be confiscated by government if necessary.
A system that permits individuals complete custody over money is not something that should be allowed to exist in a modern society. There is too much room for criminal activity.
The current financial system works better and should not be circumvented.
[deleted]
[deleted]
I am aksing myself if cryptocurrencies provide ANY "real-economic value" AT ALL! I would be glad if anybody could convince me of APPLICATIONS where cryptocurrencies provide any real-economic value.
My thoughts:
- By "real economic" value creation I consider eg the introduction of the "SEPA Instant Credit Transfer" schemes (pan-European credit transfers in <10 sec). This creates real economic value by minimizing both (i) speed and (ii) fees. This really benefits general society.
- Q1. What is the benefit of using cryptocurrencies over such schemes? I see none. On the contrary, cryptocurrencies add an ADDITIONAL (and therefore, if not yielding a benefit, by definition unnecessary) LAYER.
- Q2. Why should cryptocurrencies exist at all? Every country already has its native currency. Why introduce another one? (In fact, why MULTIPLE ones?) Suppose you want to transfer USD-->EUR. Why transfer USD-->BTC-->EUR instead? This incurrs (i) 2 instead of 1 currency trafo risks and (ii) 2 trafo fees.
- Q3. "Smart contracts". All (democratic) countries have courts in place to settle legistlative disputes between two parties. What's wrong with this arrangement. Again, blockchain-based "smart contracts" would just an ADDITIONAL (unnecessary) LAYER.
Conclusions:
- ALL you need for the creation of future "real-economic value" is the INTERNET. Currencies are in place. Legislative institutions are in place. You just have to further digitize. There is no need to add additional (unnecessary) cryptocurrency layers.
Comments:
- I am not anti-crypto (owned quite a bit until I came to above conclusions, and definitiely consider it valuable at least from a academic perspective). I just can't see how "it is useful" beyond "speculation".
- I don't accept explanations like "Bitcoin is Gold 2.0", "Hedge against inflation" unless they are really founded. To me these sound just like made-up hype narratives.
Best regards