If cryptocurrencies are so good at transferring money what's stopping them from replacing existing solutions? Literal billions have been poured in the tech and it still fails to reach any significant adoption outside of get-rich-quick schemes.
In 2017 during the previous bubble I asked people on this forum how long it'd be before cryptocurrencies actually delivered on that mythical "tech" and we'd get actual mainstream real world applications. A couple of people replied that it would take a year or two. Can I get an update on that?
What, precisely, are you looking for cryptocurrencies to “show” you?
Transactions work today. Plenty of people use them for exchanging actual value, quickly and anonymously (or pseudonymously) across the world.
> If cryptocurrencies are so good at transferring money what's stopping them from replacing existing solutions?
Why would the financial industry do anything to encourage the adoption of crypto? It strips them of their power. They rely on you keeping and sending money with them - the democratized platform of cryptocurrencies are a potential threat.
> Literal billions have been poured in the tech
Sorry, billions have been poured into a worthless speculative market. The developers are not receiving billions, they are still volunteers. And yet there has been a massive amount of development in the crypto space over the past 12 years. NANO enabling instant transactions, XMR allowing for privacy, etc.
> how long it'd be before cryptocurrencies actually delivered on that mythical "tech" and we'd get actual mainstream real world applications […] Can I get an update on that?
I ask again, what exactly are you looking for?
In terms of real-world usage, well, crypto has been used for years. Drug/Darknet markets, for one. Ransomware for another. These are stress-tests for any currency and prove that crypto can work to exchange value in a real market setting.
Further adoption is really up to people, and it will likely happen anyways as the technology improves. A lot of work has been done, but there is a long way to go.
Those aren't real market environments by a long shot and far from stress tests. These markets have transactions that are low-volume but high-value. Me, what I'm looking for is something along the lines of "How many grocery transactions globally can crypto do per second?", i.e., high-volume, low-value. Now _that's_ a stress test.
Quick Google survey tells me that BTC can do 10 transactions per second _tops_. That's far from a workable state of affairs. It's not even "promising tech".
They are definitely real markets. You buy something at a free market price and get something in return.
They are definitely stress tests in that they prove that crypto can be used as digital cash. You can not buy drugs safely with a PayPal, Zelle, wire transfer, or ACH, but you can with Monero. This fulfills the original vision of cryptocurrency: decentralized, uncensored exchange of value without being at the mercy of another.
There is not really a more difficult stress test that tests the ideal and purpose of cryptocurrency.
> Me, what I'm looking for is something along the lines of "How many grocery transactions globally can crypto do per second?"
Again, why does HN expect crypto to be perfect today? It will improve over time. For what it’s worth, today,
- NANO transactions confirm instantly. The network can handle over 7000 TPS, more than Visa’s peak of 4000 TPS. Nano TPS scales with the size of the network.
- XMR transactions confirm in <2 minutes. XMR can max out at about 1700 TPS, which is much more than what is actually needed. XMR TPS will scale with the capabilities of XMR nodes (mainly network speed).
In the coming years,
- ETH2 with Optimistic Rollups can scale to 100,000 TPS.
- Lightning on BTC will enable millions of TPS.
Again, this is a technology in its infancy. I do not understand the disappointment - Rome wasn’t built in a day.
Replicating the concept of exchange of cash digitally, in a global, decentralized, trustless manner is no small feat. If it works, we free will users of digital currency from the mercy of banks, and give them back their financial privacy.
> XMR transactions confirm in <2 minutes.
> ETH2 with Optimistic Rollups can scale to 100,000 TPS.
Do you have figures for how much compute power they need for those too?
I could write an ACID-compliant DB that could do 1M TPS but if to achieve that I had to buy a gaming rig or two, run it at basically full capacity, then it all sounds less impressive.
> Again, this is a technology in its infancy.
But when will it stop being in its infancy? At what point do we cut our losses and say this approach isn't working (if I may add, a question every scientific experiment should reckon with)?
> I do not understand the disappointment - Rome wasn’t built in a day.
But we move at a faster pace than the Romans now and if a technology hasn't matured after 11 years, then that's reasonable grounds for disappointment don't you think?
NANO uses around 0.112 Wh. Barely any energy at all. At its peak, NANO might consume about as much as energy as a single shopping mall.
XMR is about 60 Gwh. Such is the price of truly anonymous electronic payments, at least until more cryptographers work on XMR to figure out how we can increase efficiency.
Energy consumption is an issue, but it’s overblown. There are trivial things that have a far greater climate impact than crypto, but provide less potential value to humanity. If people spent half as much time worrying about the climate impact of their own choices, our crisis would be all but solved. Finger-pointing is easy, changing yourself is hard.
Still, most cryptos are rapidly moving to reducing their energy consumption by a factor of 100-1000 by moving to proof of stake.
> I could write an ACID-compliant DB that could do 1M TPS
Your system is neither distributed nor trustless. Users will be at your mercy. Hardly the ideal system for humanity.
Try designing a similar system that works across hundreds of thousands of disparate nodes, many of which may be malicious or differently configured and in poor network environments. You will very quickly arrive at a similar model to modern cryptocurrencies.
> At what point do we cut our losses and say this approach isn't working
Certainly not when development speed has been rapidly increasing over time?
These are early stage projects. A few years for a volunteer-designed global electronic financial system that frees humanity from the mercy of banks and financial censorship is not bad.
Especially when you can’t take an Agile “move fast and break things” approach.
> But we move at a faster pace than the Romans now and if a technology hasn't matured after 11 years
Why do you keep saying the technology hasn’t matured after 11 years? I feel like you barely read my reply - how are NANO, XMR, and ETH/ETH2 not massive indicators of the improvement in the crypto sphere? Each alone represents a significant generational stride beyond BTC as it was originally defined. NANO brought us fast transactions, XMR brought us anonymity and censorship resistance, and ETH brought us smart contracts.
That's not a comforting analogy. A shopping mall processes payments that confirm almost instantly too, even on exchange, on top of running lights, security, maybe a movie theater, some music over PA, running escalators, cooking food, etc.
And that's just energy consumption. NANO also has hardware costs that scale linearly with the size of a network.
> XMR is about 60 Gwh...at least until more cryptographers work on XMR to figure out how we can increase efficiency.
Educate me if there's an approach I'm missing here but computing experience so far suggests that there will be little improvement in these figures for a damn long time. As it seems to me, P will have to equal NP before significant strides are made in this domain, at which point of course we've opened a Pandora's box that renders most crypto (not just -currency) insecure.
> There are trivial things that consume far more energy than crypto
Of secondary importance to me but I'm really curious what you think these things are.
> Why do you keep saying the technology hasn’t matured after 11 years?
For the record, you are the first person in our exchange to suggest that this tech is still in its infancy. To quote your previous reply:
> Again, this is a technology in its infancy. [https://news.ycombinator.com/item?id=27262914]
Actually, in your very post that I am replying to, you say that,
> These are early stage projects.
My point is, they may be massive improvements, generational strides from BTC, but if after 11 years there are still roadblocks to wider rollout (like, as you concede, efficiency), it's just rational to second-guess the approach.
(Footnote: I feel like the purpose of my ACID DB analogy flew over your head. The whole point of it is not to impress but rather to show why raw throughput without specifying the hardware offers little insight. But that's a moot point here.)
A decentralized world financial system with the transaction capacity double that of VISA consuming as much energy as a shopping mall during peak load is perfectly fine. Our current financial system consumes more. It is literally a negligible cost.
> there will be little improvement in these figures for a damn long time
Some preliminary explorations have shown that it may be possible to adopt anonymity on a Nano-like protocol.
Regardless, it won’t be fixed for a long time but that doesn’t matter. I would support Tor if it used 60 Gwh, and so the same go for XMR. Both are essential in guarding people from censorship and authoritarianism.
> Of secondary importance to me but I'm really curious what you think these things are.
In terms of raw environmental impact? The factory farm industry. But, that’s another discussion entirely.
> if after 11 years there are still roadblocks to wider rollout, it's just rational to second-guess the approach.
Designing a decentralized exchange of currency is a hard problem to solve. 11 years doesn’t seem concerning to me with the improvements we have seen in the time span. Especially given that these projects are mostly developed by volunteers.
There are improvements to be made, mainly around usability. But, those can come later, when the networks and protocols have matured.
This has not been true for some years. There's been a lot of ICO money, and some of it is used to pay full time developers.
Every coin launched subsequent to Bitcoin has been a money grab dressed up in heaps of ludicrous marketing lingo, defended by paid-off law firms and celebrity VCs on the take, obscured via technobabble, and powered exclusively by FOMO and greed.
All this shows is that you haven’t spent even 5 minutes trying to understand crypto, and yet you judge it regardless.
- The introduction of true anonymity (as opposed to mere pseudonymity) with XMR has been significant.
- The introduction of rapid, feeless transactions with NANO has been significant.
- The introduction of smart contracts with Ethereum has been significant.
Each of these solutions completely change the crypto sphere and significantly expand its potential use case. Each of these provide something at the protocol layer that Bitcoin does not. And there have been plenty of significant developments beyond these. But bitterness is blinding.
I would be fascinated to hear your evidence for why these are “a money grab dressed up in heaps of ludicrous marketing lingo, defended by paid-off law firms.”
Will it pan out? IDK. But the use case and implementation (For those not aware, a Helium 'miner' is providing a low data rate wireless access point, and you get coins for providing coverage over an area) seem far more feasible from a conceptual standpoint.
The technology has a future and more applications may come out from more evolved concepts and so far the security seems to be holding well and there's very little to be bitter about.
Both are rather tiresome.
This is a million years in tech. They are still absolute unusable junk with a million problems. It's not early days, it's the twilight of a failing technology.
> It's not early days, it's the twilight of a failing technology.
This would be true if there was no active development, but development has only been increasing in pace year by year.
You haven’t made your expectations for crypto clear, to be honest, so it’s difficult to understand why you think it has failed when it is rapidly improving even today.
I don't know personally, but burning time on the internet just to type out words and try to convince other people of your opinions - this does not speak to me. I put my money in play and that speaks volumes.
Generate a bank account with code, no bs paperwork or going through bank clerk. Then immediately send store of value to that account, or anyone in the world. Check it on a node(you can host the checker YOURSELF, or anyone you trust) within the hour, and the transaction is set in stone. Irreversible.
If I want to give cash to my favorite niece, I don't need to go get permission from a bank. I hand it to her. So why is it so hard to understand that as a citizen of the information age, we all need to have the equivalent option of direct transfers with minimal meddling?
Many arguments against cryptocurrencies are weak - they're not unsolvable problems.
Slow transaction times arguments could be analogous to slow computer times in the 90s. Better tech and algorithms will patch it.
Volatility in the long term can be solved with higher adoption since the supply is tiny relative to the dollar. Or a clever incentive scheme like dai.
Security screw ups are due to people not being educated and not having separate devices. Intuitive devices for security have not been made and it will take time.
Transaction irreversibly can be solved when stores build on top of the blockchain platforms. Or escrows.Satoshi hints at this on the FIRST page of the bitcoin white paper.
Smart contracts requiring good faith from people to run it? Sure, but it's still better and more automated compared to the systems we have now.
At the end of the day, robots in the future are not going to interface with multiple shitty bank apis that take 5 business days to settle entrenched by tech debt running shitty Java code. They're going to go through one of new universal platforms that have attributes like Ethereum.
So the question is - which horse do we back???
Not useful to most people
> the transaction is set in stone. Irreversible.
An anti-feature.
> we all need to have the equivalent option of direct transfers with minimal meddling?
We have direct transfers, and nobody has ever stopped one of mine.
You're trying to find a revolution in things most people don't care about, at all. Non-solutions for non-problems.
> Better tech and algorithms will patch it.
Demonstrably untrue - BTC is still king, and the market follows it slavishly. The BTC community (miners, big exchanges and developers, not users) has demonstrated that they aren't interested in change, by continuing to limit transaction throughput, sticking with PoW etc. The users have demonstrated they don't care either, by continuing to support BTC over others. It's speculation and brand recognition, not tech, that people are interested in.
> Security screw ups are due to people not being educated
Which they never will be en-mass, making a system with irreversible transactions a poor choice for widespread use.
Smart contracts are a joke, and have unsolvable problems when it comes to interfacing with anything that happens outside of a blockchain. They are effectively database triggers, not a revolution.
At the end of the day, robots in the future are more likely to talk to standardised central bank APIs or standardised retail bank APIs.
You are missing the point. It decentralizes a centralized system that IS useful to most people.
Furthermore, 31% of the world population is unbanked. Maybe “most” people don’t need crypto but a lot of people could use it, should it improve over time.
> We have direct transfers, and nobody has ever stopped one of mine.
Your “direct transfers” take days to settle. And again, a centralized solution. I can’t understand how someone on HN doesn’t see how decentralizing digital finance is not a big deal.
People on HN will understand the need for about decentralized computing, sing songs about it, and self-host what they can - but as soon as it comes to finance it’s “we don’t need that” and “the big players do it for us with their proprietary, KYC solutions.”
Do you really not see the need for being able to send someone money electronically without being at the mercy of a big bank?
> Demonstrably untrue - BTC is still king, and the market follows it slavishly. The users have demonstrated they don't care either, by continuing to support BTC over others. It's speculation and brand recognition, not tech, that people are interested in.
Again, you haven’t done any research. Darknet markets and ransomware alike prefer XMR over BTC and have for some time.
> Which they never will be [educated] en-mass
Good thing we have developers working on simplifying the technology and making it idiot-proof?
> a system with irreversible transactions a poor choice for widespread use.
There is a system like this that already has “widespread use” - cash. If you hand someone cash you can’t take it back either. The immutability of the blockchain is a good thing.
Businesses are legally required to provide refunds if you pay with cash. It would be no different with crypto.
> Smart contracts are a joke, and have unsolvable problems when it comes to interfacing with anything that happens outside of a blockchain
Demonstrably incorrect. DAI is an algorithmic stablecoin worth $1 (+/- $0.01) on the Ethereum network with a market cap of over $4.1 billion. It controls its price by understanding the price of Ethereum, which necessarily happens “outside of the blockchain.”
It is a trustless way to convert ETH to a USD equivalent, requiring no reserves and no auditing. I don’t know how anyone here can’t look at DAI on ETH and see the power of and potential of cryptocurrency - a decentralized, bank-less, trust-less, reserve-less algorithmic currency exchange that anyone can use pseudonymously. It’s incredible.
You still haven't told me why it's interesting or good to decentralise getting a bank account, you're just asserting it.
> Your “direct transfers” take days to settle.
No, they transfer pretty instantly and the funds can be used instantly, and whether there is some background process that takes longer is not really relevant to me or the people I transfer to.
> And again, a centralized solution.
Again, why should I care?
> “the big players do it for us with their proprietary, KYC solutions.”
KYC/AML is a good thing. It is good to be able to keep an eye on, and regulate, the flow of cash. It is an important set of tools in combatting all manner of crimes.
FYI there is a vibrant fintech startup ecosystem, that works with and within these regs. There are even a number of startup (challenger) banks these days.
> Do you really not see the need for being able to send someone electronically without being at the mercy of a big bank?
I genuinely, 100%, do not care a single iota, no. Being "at the mercy" of a bank provides me with all manner of insurance, assurance, protection and regulation.
> Darknet markets and ransomware
And I should support those things? They are a great argument for KYC/AML in themselves. And even so, these are niche compared to the speculative market.
> Good thing we have developers working on simplifying the technology and making it idiot-proof?
Irreversible transactions are not idiot-proof by nature.
> Finally, if you hand someone cash you can’t take it back either.
Sure, but you don't keep cash in a file on an easily compromised computer, and you don't keep all of your cash with you all the time, you keep it in a bank where someone else is responsible for custody, can reverse things out etc.
> Demonstrably incorrect. DAI is ...
Running on a system of 'trusted' oracles, which is not trustless.
> a decentralized, bank-less, ..., reserve-less algorithmic currency exchange that anyone can use pseudonymously. It’s incredible.
And entirely superfluous to any need I can think of.
(Plus, you know, unregulated financial products and services, doesn't that just scream "bad idea!" to you?)
Not being financially censored by the government or banks? Not having to be at their mercy for your money? The benefits seem pretty clear.
> and whether there is some background process that takes longer is not really relevant to me or the people I transfer to.
Clearly you have never had a low balance and had to wait for your money to settle in your bank. A reality most people deal with every day.
> And I should support those things? They are a great argument for KYC/AML in themselves.
You asked for a real-world example of crypto being used for goods and services. I gave one.
Feel free to let the government decide what you’re allowed to buy and ingest. A lot of people want freedom from that. It goes further - assume a malicious government, as all governments historically fail their citizens - only cash and cryptocurrency will be reasonable exchanges of value.
PayPal and Zelle might work for you, today, but to suggest that they’re a viable long- or even medium-term solution for digital currency amongst humanity is ludicrous.
> Sure, but you don't keep cash in a file on an easily compromised computer,
Neither do you with crypto. The vast majority of your savings would be in a hardware wallet, presumably easier to use by the time crypto is mainstream.
> Irreversible transactions are not idiot-proof by nature.
The concept is as idiot-proof as cash, which has clearly proven enough for humanity for thousands of years.
> doesn't that just scream "bad idea!" to you?
Nope. It reduces trust, reliance, and censorship on or by entities that don’t have your best interests at heart.
I suppose we simply have different priors. You trust banks and the government. You are okay with forfeiting your financial privacy. I am not.
This is of no interest to me whatsoever. The 'benefits' are not being able to recall money from rogue merchants, not being insured against thefts and fraud, all sorts of "benefits" that look to most people like lunacy and huge steps backwards. I have never felt at the mercy of big banks, they are heavily regulated and work well, and if I don't like their services I can switch to another.
> Clearly you have never had a low balance and had to wait for your money to settle in your bank
This is not something that happens, bank transfers are instant here.
> Feel free to let the government decide what you’re allowed to buy and ingest.
Oh I definitely think it's a good thing that governments can keep an eye on transactions, for stopping fraud and other financial crimes, and that's just a start. Like I said before, this is a positive of the banking system, not a drawback.
> PayPal and Zelle might work for you, today, but to suggest that they’re a viable long- or even medium-term solution for digital currency amongst humanity is ludicrous.
I don't use those for transfers, but you haven't said why using banks or these sort of services is ludicrous, just asserted it.
> The vast majority of your savings would be in a hardware wallet, presumably easier to use by the time crypto is mainstream.
And when you lose it? As many, many people will? This is no solution to widespread use by people not versed in computer security. And they shouldn't have to be versed in computer security to keep their money safe
> The concept is as idiot-proof as cash
Except it's not, because it involves key files and computer security.
> It reduces trust
It certainly does, I wouldn't ever put my trust in unregulated financial instruments. And I said before, I have no issue with financial "censorship", it's an important mechanism to fight crime, limit cash flows to rogue nations, terrorist groups and despots etc. It's a good thing.
> You trust banks and the government.
More than cryptocurrency miners and developers, yes. Hell yes. More than sellers in any given marketplace, where we have thousands of years of evidence that people will be ripped off at every turn? Yes. More than my own computer security skills? Still yes by a long way.
> You are okay with forfeiting your financial privacy. I am not.
And you are OK enabling ransomware, widespread fraud, and ordinary users losing everything because they are not equipped to manage their own affairs (they really, really are not). I still have financial privacy, and what's more I have a ton of financial protections, if something goes wrong then things can be reversed, tracked, traced and compensated. These benefits are real rather than idealogical, and I don't buy into your ideology. Democratic government is far from perfect, but it's generally better than the alternatives.
We will have to see what happens 10 years from now. There are equally good defenders from both sides. Buffett and co are either trained on old data, or are trained on large amounts of data(through reading). We will find out!
It's not a case of not being convinced - I am quite convinced cryptocurrency can deliver some of those things like immutable transactions and lack of government ability to monitor or block cashflows - but I am also quite convinced they are backward steps.
What other technology today provides rapid exchange of unlimited amounts of value, instantly? What other technology today can do so in a censorship-resistant manner?
ACH and wire transfer take way longer to settle. The same goes for PayPal, Venmo, and CashApp to hit your bank. Zelle works, only sometimes. All solutions are centralized, proprietary, and KYC. There is no way for the average person or small community to exchange value without being at the mercy of a big bank.
What we have with crypto is a way to exchange actual value in a decentralized, democratic manner in anywhere from <5 seconds to just a few minutes (depending on your currency). We also have a way to recreate many financial concepts with smart contracts. This could be a huge win for humanity - the democratization of finance, banking the unbanked, and bringing financial privacy and power back to the individual.
And sure, crypto has an energy problem today. A lot of cryptos are solving this. This is a temporary, intermediate problem. In the meantime, I guarantee you that plenty of things that provide less benefit to humanity but consume more energy.
Again, I don’t know where everyone suddenly decided that crypto has to be perfect today. Rome wasn’t built in a day. Crypto is very much in its infancy and a ton of work is being done at the protocol level across all cryptocurrencies every day.