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submitted 9 months ago by themaninblack@lemmy.world to c/memes@lemmy.ml
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[-] Tehhund@lemmy.world 77 points 9 months ago

Sure, but what real-world problem does a trustless solve? I thought this was all very interesting years ago but now that we've had blockchain for years it seems it's only good for illegal or morally questionable transactions.

[-] LesserAbe@lemmy.world 17 points 9 months ago

There's a case to be made for a currency that facilitates illegal transactions, or transactions that corporations object to. Just because something is legal in your country doesn't mean it might not be unjustly restricted. Or could just be unjustly illegal in your country or another country. The problem of course is that distributed currency also facilitates things that should be illegal.

But WikiLeaks is a good example - their legacy is a little mixed now, but when they first came on the scene they were doing work which was a valuable service to the public. If you wanted to donate money to support wikileaks you couldn't because the credit card processors shut them off. Blockchain lets you get around that.

Likewise it's the combination of distance and direct - I can give $5 in cash to my local leaking consortium, but I can't give $5 to the leaking consortium on the other side of the world without relying on the knowledge and consent of third parties.

[-] Tehhund@lemmy.world 5 points 9 months ago

I agree there's something to be said for this — If you have a above-board business that credit card companies don't want to service because they think it makes them look bad, that should not shut you out of electronic payments yet that's basically where we are at least in the US.

This is a little hard to balance with the fact that the same things that let you circumvent gatekeepers like credit card companies also make it attractive for genuinely immoral things, but that's a trade-off. Every currency can be used for immoral things and just because cryptocurrency might make it a little easier doesn't mean it's inherently immoral.

[-] psud@lemmy.world 4 points 9 months ago* (last edited 9 months ago)

You totally can give cash anywhere in the world. You post it as a letter

This was common before electronic transfer

[-] LesserAbe@lemmy.world 8 points 9 months ago

Mailing someone cash means you need to know their address, you have to wait however long for the mail to arrive, you can't prove they received the cash, it's possible the cash was stolen en route and anyone who might wish you harm like an adversary government can observe the transaction.

[-] nom345@sopuli.xyz 3 points 9 months ago

With crypto you face similar problems. You need an address, waiting is shortr, rugpulls and other scams are one of the biggest use cases so getting crypto stolen seems common. You might be able to verify that crypto was revceved but as with any trustless paymet solutions the issue is that getting the item you ordered is the part where trust is needed the most. Good luck asking back money when you get an empty box.

[-] LesserAbe@lemmy.world 1 points 9 months ago

You're right about ordering goods and not having a recourse if they're not delivered. Of course in the case of supporting an organization that will be less of a consideration.

In the case of needing to know an address it's much different to give out an arbitrary string of numbers as an address than information which represents your physical location.

No disagreement that there are myriad examples of problematic uses for crypto. My first comment was in response to the question about what are valid use cases. It seems clear there are some, even if it's not as universal as some true believers claim.

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[-] dantheclamman@lemmy.world 8 points 9 months ago* (last edited 9 months ago)

I was hoping it would help me save on international transfer fees when I was an overseas postdoc, but it would have actually cost more between the exchange fees and my time setting up all the exchanges in various countries, meanwhile also introducing risk in me being robbed of said money and screwing something up and introducing myself to some sort of tax liability. Needless to say, I continued to just pay for the bank transfers

[-] Tehhund@lemmy.world 5 points 9 months ago

That's really the thing, isn't it? In my experience cryptocurrency fees are quite high. I bet there's a way to find a lower fee but then I'd have to do a ton of research and hope it's accurate. I'd rather just pay a bank that requires me to do no research.

[-] General_Effort@lemmy.world 3 points 9 months ago

It cannot be cheaper, other than by avoiding taxes and regulation.

Consider sending money from US Dollar to Euro:

Sane way: An intermediary (IE a bank) handles this. You give them USD and they give the receiver Euros. This involves some service costs and 2 bank transfers.

Because people exchange money in both ways, the banks need not run out of either Euro or USD. In the background there is the currency market, on which the proper exchange rate is haggled out, which takes care of imbalances in cash flow.


Crypto way: You give a crypto exchange (an intermediary) USD and they give you crypto. This already involves 2 transfers and service costs. One of those 2 transfers is a crypto transfer, which is much more expensive (IE uses more resources) than a bank transfer.

This is already more expensive and then you have to do the same thing again to cash out.

And then we are still not done. Say there is an imbalance in that more people transfer money from USD to Euro than vice versa. That means that crypto becomes more expensive in USD and cheaper in Euro. There's more demand in terms of USD and more supply for Euro, right?.

That creates an arbitrage opportunity. You can exchange USD for Euro, and then buy crypto for Euro to sell for USD. This closes the circle and puts everything back to the initial state. But to do that, we still have to exchange the real currencies. So now the markets bake the cost of exchanging currency into the crypto prices. At a guess, for some currencies (probably not so much Euro/USD), that would have a significant effect. I'm thinking smaller, poorer countries that send many migrant workers, who send money back home. These workers would not only end up paying the insane overhead of the crypto system, but also, still, most of the normal, direct exchange costs (if they relied on crypto).

[-] TropicalDingdong@lemmy.world 6 points 9 months ago

Also, the unbanked.

Also, privacy and anonymity (to an extent).

Also, complete predictability in the system (its at least domain constrained).

[-] psud@lemmy.world 5 points 9 months ago* (last edited 9 months ago)

There's no privacy, it's an open ledger, only anonymity

It's a bad way of hiding money if you're about to be investigated for crime

[-] TropicalDingdong@lemmy.world 5 points 9 months ago

Monero seems to be holding up in terms of privacy.

[-] redcalcium@lemmy.institute 2 points 9 months ago

the unbanked

Can the unbanked still benefits from crypto these days though? How can you cash your crypto without doing KYC? Even localbitcoin got folded due to increased regulation. If you can pass KYC, then you're probably not the unbanked. Less and less business accept crypto these days, it's hard purchase daily necessities without cashing out your crypto (except probably in venezuela).

[-] TropicalDingdong@lemmy.world 1 points 9 months ago

except probably in venezuela

I mean thats really what I'm talking about. Africa, Central and South America, I know they benefit substantially from technology, because local banks can be so unreliable.

An older article, but relevant:

https://www.forbes.com/sites/oluwaseunadeyanju/2021/09/14/bitcoin-opportunity-africa-adoption-rate-is-highest-globally/

[-] Tehhund@lemmy.world 0 points 9 months ago

Thanks for your input, dingdong.

[-] ComradeKhoumrag@infosec.pub 5 points 9 months ago

Trusting Humans is literally a security flaw. Any system with trust you can find examples with fraud and abuse from those who held power by holding that trust.

We trusted bankers to invest our money, and some short sold the housing market with that money

I could go on, but trust really is a security issue. Decentralization has its efficiency issues, but saying "Bitcoin uses as much power as the 90th largest nation" is peanuts when you consider the energy inequality that America spends and compare what Bitcoin delivers with that energy versus how much energy centralized banks need to deliver a system that's easier to fraud

[-] xthexder@l.sw0.com 17 points 9 months ago

Trusting Humans is literally a security flaw.

Exactly, and using Bitcoin does not solve that because you still have to transact with humans. If you buy something with Bitcoin and the seller never sends you anything, you're out of luck. Your money is gone.

If you use a regulated financial system you have some options. If you paid with credit card you can charge back and dispute the charge. Your money in the bank is backed by insurance that is guaranteed by the government.

Bitcoin only cuts out the middleman. Every other issue of trust with the recipient still exists, and those are the problems regulation solves, and the reason fraudsters love Bitcoin so much.

[-] moormaan@lemmy.ca 5 points 9 months ago

Amen, exactly.

[-] Tehhund@lemmy.world 14 points 9 months ago

Ah yes Bitcoin, famously free of fraud and abuse.

More seriously, every system can be used for fraud. The question is whether the solution is actually better overall. We could prevent all wire fraud by returning to a cash-only economy. But that would be hugely inconvenient and therefore create a huge drag on the economy compared to a world where we can do electronic transfers even though electronic transfers open us up to wire fraud. Returning to cash-only is not worth the increase in security, and it opens us up to other issues (e.g., bank runs and someone stealing all the money under my mattress).

And while power use is a problem with Proof of Work coins, it's not my biggest concern about cryptocurrency because Proof of Stake can fix that issue. It's a shame that the biggest coin now is PoW but hopefully that will change. The bigger issue is "is cryptocurrency better than traditional currency?" So far it hasn't proven to be better except in extremely limited circumstances. And a lot of the ways cryptocurrency is better will go away if governments start regulating it like other forms of finance. Having your money in cryptocurrency won't protect you from the police and courts.

We trusted bankers to invest our money, and some short sold the housing market with that money

Okay? You could do that with cryptocurrency if traders started accepting cryptocurrency for shorts. The only reason you can't do that today is traders won't accept cryptocurrency for shorts, and that's basically security through obscurity.

[-] ComradeKhoumrag@infosec.pub 0 points 9 months ago

Sure, drugs and fraud surround Bitcoin, but drugs, fraud, and banking imperialism surround the petrodollar

[-] Tehhund@lemmy.world 5 points 9 months ago

I didn't say cryptocurrency was any better or worse for fraud and abuse than regular currencies. Honestly I have no idea which one is better or worse for fraud and abuse. I'm just saying it's not clear that the particular way that cryptocurrency is more secure than regular banking is actually beneficial.

[-] Psychodelic@lemmy.world 4 points 9 months ago

it's only good for illegal or morally questionable transactions.

Good thing laws are always just and everyone agrees that following every law is the most important thing a human being can aspire to do in their lifetime.

^^/s

Seriously though, I'm someone that uses credit for 90% of my purchases, but I also enjoy consuming cannabis and I'm well aware how horrible it would be if it wasn't possible to make "illegal or morally questionable transactions."

[-] killeronthecorner@lemmy.world 3 points 9 months ago

Bingo. Capitalism has thus far rejected the blockchain, which is generally evidence that it doesn't solve an important problem either efficiently, safely or cheaply.

[-] ComradeKhoumrag@infosec.pub 27 points 9 months ago

Capitalism rejects solutions to climate change as well

[-] grue@lemmy.world 22 points 9 months ago

To be fair, there are plenty of other reasons capitalism might have rejected blockchain: market failure, interference by government, etc.

I'm not saying that to defend cryptocurrency, by the way, but rather to point out that capitalism isn't perfect at allocating resources in every situation.

[-] tryptaminev@feddit.de 16 points 9 months ago

capitalism is generally terrible at allocating ressources. It will always win to externalize costs, and if the people footing the bill cannot participate in the market, like for instance future generations, the result is always a self destructive system.

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