It's effectively just one. To make illegal transactions. That's a long list of things: drugs, hiding wealth, evading currency controls, extortion, and so on. Otherwise, existing currency and transfer mechanisms are more or less available and convenient.

Normal, real G7 currencies moving full percentage points in a day is a big deal, 10% moves in a day are very rare, 20% is a once in a lifetime event.

You would expect the different cryptocurrencies to move in different directions and speeds depending on their relative prospects. Instead you have these crazy days where they all go up 5-10% or down 5-10%, over and over. I hold about 8 of them in my wallet and yet still see pretty normal 10% daily moves.

The closest thing this reminds me to is trading bank stocks in 07-08 when everyone was gambling on which would go out of business.

A currency that regularly moves this violently is not an inflation hedge as a savings instrument store of value, nor is it a useful medium of exchange as how do you agree on a price when its moving by the hour.

It is clearly not a unit of measure either given that all the crypto apps report the value of your portfolio in.. fiat. Even these crypto give aways as exchange sign up bonuses or conference prizes are always worded as "$5 of ETH" or "$500 of bitcoin", haha.

A currency that can move 5% on a Sunday afternoon (again) because of an Elon Musk tweet (again) is not something to be taken too seriously (still).

Consider that by comparison, when the UK voted to Brexit, which was not what polls indicated.. a huge economic change with profound generational implications for both GBP & EUR ... GBP-EUR only moved 7%!!

It's as electronic as a stock, as purely abstract as a piece of gold, as resistant to inflation (theoretically) as anything having an intrinsic value that won't depend on currency.

Ofc, criminal transactions are also supposed to be eased but you know what, I think a bank made entirely to dodge annoying regulators will have a bit more success than an amateurish exchange: they'll give all your info, and therefore all your public transactions at the first little threat, while a big bank like Credit Suisse, would try to leverage lobbying power at first.

Stocks are ultimately anchored in a company, and it's ability to pay dividends to it's owners. The historical average of the value creation for S&P 500 for dividends are about 40% so it's not an amount that can be disregarded.

Since crypto doesn't have any similar mechanism, and all of the value is instead tied to what other persons want to buy it for, I argue that it's better to compare it to an online casino rather than an stock market. That would be more fair for those that are new to investing.

Edit: Wait! It is so and Bay Area has been selling this pyramid scheme for years. lol.

Your argument boils down to "Only criminals use Tor"... Not very useful.

1) https://kb.newegg.com/knowledge-base/using-crypto-on-newegg/

There was this idea, back at the start, that crypto would bring a new era of low-fee finex (especially for people in countries suffering under exploitative currency manipulation). The dream was that you'd be able to freely and cheaply transfer digital currencies and avoid the hardship of happening to live in a country that's experiencing high inflation. However, it seems like every time a crypto currency gets enough support and utilization that it might really be an alternative to the local currency, that popularization also pushes up transaction costs or exchange rates above the fiat finex rates. So we get the world we have now where all the big currencies have high costs and aren't even practical for transactions in the wealthy world, much less the developing world.

To me, it really feels like a repeat of the system that crypto folks critique: the banks. They too are uninterested in providing low-fee transactions, despite their energy costs per tx being far, far lower. The general idea is that they are greedy (and obviously banks are) but I'm very sad that crypto hasn't produced many real world examples to demonstrate that the banks are obviously greedy in this way.

There is also the problem of transaction volume. No coin can currently handle anything close to the number of transactions the visa network can.

Sadly, as much as I hate how its being pumped, that was one thing doge got right - cheap and fast. And for years the price was stable. This made it really nice for transfers between exchanges.

Anyway - glad to hear its going down. The Eth gas prices are really showing how much of a killer transaction costs can be. (On top of all the places that stopped taking Bitcoin when the xfers got so expensive)

Bottom line is - one size doesn't fit all...

I was assuming US persons doing a transaction in the US. If you are in another country, there will be other retailers that offer services in your currency. Also NewEgg supports transactions in many currencies.

you might not be a US citizen

Citizenship is not relevant to purchasing items for online retailers.

assuming you have a credit card

Debit cards can be used just as easily. Fewer protections, but it works just fine. Also PayPal, etc.

Proof of payment is basically instant, is globally accessible

This is true with credit card, debit card, paypal, etc.

I don't have to jump thru the 'verified by visa' bullshit

This is hardly an issue. Takes a few seconds, a total non-issue for 99% of people who just want to purchase something.

Also, no spending limits - I've ordered equipment from newegg and payed for next day delivery, only to have the equipment show up late because my visa 'helpfully' twigged an 'unusual purchase'

Yes, there are fraud detection features for credit cards. I'm pretty sure this occurs very rarely. If you don't like this, use a debit card or paypal with a bank account.

I've also had banks tell me there are daily spending limits on debit card that are too low to buy a high end system

I have never run into this because I never use my debit card, ever. However, it seems this be fixed by calling your bank and raising your limit permanently.

Bottom line is - one size doesn't fit all...

That's right. Crypto might be right for you. But 99% of consumers who want fast, easy, and simple mechanism for purchasing items at any retailer, credit or debit will be the best choice.

and in the end, you walk it back to "Crypto might be right for you". Which is what I've been saying all along. I don't claim crypto is right for everyone/everything. Just that there may be times when it is right for somepeople/somethings.

Says who? And if its a 'feature' - why can't I opt out? Default limits on debit cards are non-intuitive to say the least.."you have $10 in the bank, but can only spend $5"

I'm glad you get to decide whats good and bad..really, it must be such a burden having to make that decision for everyone.

It's totally reasonable to ask how useful something is for you. However, other people might have other answers to that question. For instance, if existing solutions suited everyone - why are zelle and venmo so popular? Hell, I zelle money between MY OWN accounts at different banks just cause its faster, cheaper and easier then the alternative ACH/Wire transfers.

Edit: Hmm - if I could zelle to my brokerage account I probably wouldn't have missed out on that AMAT I'm salty about. :-P

But let me ask: why use zelle to move money between accounts? Why not crypto? Or let's say you're sending money to a friend to split a check or something; would you use crypto vs any of the other "cash" transfer mechanisms?

I don't think that existing financial systems can't and shouldn't be replaced with something better, but so far cryptocurrency ain't it. I should also say that I'm not particularly susceptible to the ideological arguments on its behalf, which seem to be a big bonus for many. Maybe it's just not for me.

My bank/brokerage doesn't take crypto. So Zelle is the next best thing given how slow and expensive wiretransfer/ACH is. (Wasn't wire transfer supposed to be 'fast', it generally seems slower then ACH?). And yes, I do use crypto to send 'cash' to friends.

I do agree wholeheartedly with your statement crypto isn't ready 'for the masses' yet. For one thing, no coin can handle anywhere near the transactions Visa can. But I don't see that as a reason to vilify it, shut it down, or pretend that only criminals use it.

In HN vernacular, I see crypto's as 'startups' - some will pan out, the vast majority won't. Hopefully, each generation of coin will improve on the ones before it.

as for "just not for me" - I'm only putting beer money in. I think most of us that have been in it for a while are in that position. Certainly none of us are out mortgaging our houses. Being skeptical of the hype is a good thing. Maybe in a few years/generations crypto will be in a place that's more useful to you :-)

edit: formating s/any/and/

Because if you want people to switch from credit/debit/paypal to crypto, the idea is that it needs to offer some tangible benefit.

There are people in the US who cannot get a credit card easily.

Yes. Debit or Paypal can be used then. The only clear benefit I see from crypto are people who are completely unable to get ANY bank account. But still with crypto, you need a way to purchase it. Not easy without a bank account, but possible if you can find a way to buy it with cash.

This seems to be the crux of our conversation. I _don't_ want people to switch unless they're ready to take the risks. Crypto is still in its infancy, is definitely not ready for mass market. But I don't think that means we should totally give up on it either.

I see it sorta like the stock market. Picking stocks is (more)risky, so I stick to index funds. Sometimes I'll throw some beer money at a 'pick' I like, but that's the extent of it. (still salty I missed AMAT at $110 because 'wire transfer')

Crypto is the same way - sometimes I throw some beer money at it. I'm not claiming it's right for everyone, or the be-all-end-all. Just that its worth exploring.

P.S. - I was a Paypal 'early adopter', worst experience of my life. They still have $200 of my money, because at the time they had no way of dealing if your email account went away. I guess its gotten better since then.

Your perspective is limited. Check out my general intro [1] and other articles [2].

TL;DR: at least one legitimate use case is to keep up with inflation.

[1] - https://danuker.go.ro/intro-to-cryptocurrencies.html

[2] - https://danuker.go.ro/tag/cryptocurrencies.html

Why do you think that will happen?

The "get-rich-quick, evade-taxes, and evade-scrutiny" thing is front and center of the whole intent of cryptocurrency. How long has it been going now, 10 years? How much longer?

It would be nice to have a crypto-currency where real people can use it like real currency. However, to be able to do that would mean eliminating the danger that a mere typo or some unintended consequence of "code-as-law" would wipe someone out and give another an insane windfall-- all in a millisecond.

I think the cryptocurrency can work, but it has to have sane and civilized features. These have to be designed-in from the beginning. Otherwise, it's just an endless libertarian circle jerk.

This really isn't so different from the centralized financial system where we have built complex structures (exotic derivatives, structured products, etc) to give you certain types of exposures. The difference is that DeFi is globally accessible and permissionless.

Even if DeFi never moves beyond these "financial speculation" use cases, if it replaces what's currently centralized in government-regulated financial markets, that's a multi-trillion dollar opportunity.

I'm doubtful we'll see any retail use cases or mass option beyond speculation soon, just like your average retail user does not buy exotic derivatives. That doesn't mean it's not useful.

There are also DeFi projects that are based what you call "real investments" such as stablecoins, synthetic assets for stocks and commodities, etc. When the backing/staking mechanism for these works as intended, they are just as real as any derivatives on these assets in the traditional financial markets.

In the case where tokens are not backed by anything they are often governance tokens, which are kind of like startup equity. Startups without much IP or real estate are commonly valued at millions of dollars. This is no different in that anyone is a VC investing in e.g. future governance rights.

[1] - https://www.ft.com/content/529eb4e6-796a-4e81-8064-5967bbe3b...

Risk is risk - in stock, crypto, or life in general.

Theranos, B. Madoff, and others seemed to feel that was just a suggestion :-P

Also, businesses are not required to buy their stock back from you, so they are not 'backed' any more then crypto is.

If a company goes broke, and you hold common stock - you get nothing

edit:s/there/their/

This one statement reveals that you have zero idea what you’re talking about and are just presenting yourself as knowledgeable. Why do that?

However, any money the company invests in itself raises the intrinsic and shareholder value of outstanding equity, just like share buybacks, and dividends.

All these are examples of DeFi parasitising conventional finance products. Also none of these are decentralised or "trustless". Notice how all the main stablecoin issuers have to provide regular third-party attestations assuring that the coins have appropriate backing.

GME stock is a valid contract with a proportional ownership share of all GME tangible and intangible assets.

What crypto has the rights to any tangible assets? Even stablecoins are unaudited.

That is a very weird take. It assumes that privacy is somehow always linked to illicite activities. Even if I'm buying candy, the government doesn't have any right to track it. Hiding my life from the government should not be automatically labeled criminal.

You want privacy, buy in cash. Most cryptocurrencies don't provide added privacy and they usually end up decreasing privacy since all transactions are on the public ledger.

The type of thing I am talking about is people transferring money out of an economy in ways that are forbidden by the government. Governments can want to prevent this for legitimate reasons like trying to stop money laundering and tax evasion. They can also do it for illegitimate reasons like the government trying to retain authoritarian control over its citizens or to prop up a failing currency. Either way it would mean the transfers are illegal, but not all of them are necessarily immoral. That is why I dubbed it "criminal-like behavior".

It is a matter of regulatory clarity, and processes and infrastructure (of which some of these projects fill) until we get hard non-crypto-related security tokens etc.

Things are starting to fall in place but things have to prove themselves in the current market before

Hmm...2008 housing crash and the recession that followed beg to differ.

that's not what I'd consider having a 'real investment' at the heart of them. And the value of the real estate didn't cover the losses on the loans, prompting bailouts.

A better example might be the average investor in a company. The average investor loses everything if a company goes under. Some creditors might get paid, and if they're lucky some 'preferred stock' holders might get something. But the average person (common stock) loses everything they put in..

I'm not really seeing much of a difference ? There is risk in everything...If you can't afford to lose, then don't bet?

The difference is that intrinsic value provides a floor for potential losses and therefore reduces risk. If you can't understand why a worst case scenario of losing 20% of your investment is better than a worst case scenario of losing 100% of your investment, then I don't think you and I are going to have any constructive discussions about investing.

And you specifically go out of your way to pretend you didn't see it/understand it? Yeah - 'constructive' doesn't seem to be likely

But we should just throw out new systems like crypto because they still have issues that need "to be countered with effort" ?

I'm not claiming any system is perfect, but it seems odd to shrug at the issues in one system and demonize another system for having issues...

We need to fix the existing system, yes, and it requires real work - real relationship building, real trust networks of competent critical thinkers - a meritocracy, hierarchy of competent to form and be strengthened; regulatory capture is a multi-industry, multi-institutional issue.

Certain issues inherently to Bitcoin's issues are unavoidable pitfall and not fixable. The issues with government are fixable, and arguably the US government, democracy and capitalism has been highly successful for getting innovation to where it is today. Next step is making sure people/businesses are paying their fair share into the system and then redistributing a UBI to the largest segment or largest cog in the machinery - consumers, so then the machine has the fuel to run.

BTW - I agree Bitcoin has issues (speed/cost being the 2 biggest). It was literally the first generation coin. Other coins are trying to solve those problems. Personally I like Cardano/ADA for that reason - its trying to fix some of the issues with first gen. coins.

Also, if you think you can get people/businesses to pay their fair share...I think your dreaming. I really hope you can, but I don't see it happening in the next 20 years.

I agree about consumers. Its annoying so much energy is spent talking about the 'minimum wage', when we really need people with a 'middle class wage' to drive the economy. Seems like we're more interested in keeping people at the bottom then actually increasing the numbers of people with disposable income to drive the economy.

"Biden Wants to Hire 87,000 Additional IRS Agents to Go After Wealthy Tax Dodgers" - https://www.reddit.com/r/politics/comments/nibk03/biden_want...

"Biden's $80 billion plan to beef up IRS audits may target wealthy small business owners" - https://www.cnbc.com/2021/05/05/bidens-80-billion-plan-to-be...

So the mega rich get off again...

Aannd of course, govt's are already trying to carve out provisions for their local pet industries in the G7 15% corporate tax talks..

That would be wealthy small business owners who aren't paying their taxes, I presume. And you're making an assumption "so the mega rich get off again..."

Why?

I'm not sure I understand your last sentence, escrow is a common mechanism in traditional finance, which seems to work for financial operations including loans. But you may well be right on this point, I just don't really understand what you mean.

Thanks for your patience in making me see what you meant!

1) the traditional options with varying risk profiles are mostly legitimate. The ratio of scam to authentic project is much higher in crypto. Or if not "scam", products where the creators (as pointed out in this article) might be perfectly happy if the product turned out to be successful, but mostly don't care because they make their money up front: reward with very little risk. Retail customers take all the risk. Traditional financial products align incentives better because if no one want is, no one is making transaction or management fees either. They're (mostly) only successful if customers are successful

2) Financial products based on crypto have no real-world assets backing them, making their prices much more volatile. If you're investing in traditional high risk product that ultimately relies on a real-world commodity like oil, you can make reasoned predictions on where oil demand might be headed. Your might make a high risk bet that oil prices are going to bottom out from their current peak due to decreased demand after the Summer and a minor resurgence in COVID as more and more people go back to work and then kids stop distance learning and mostly go back to school in the fall, etc. You might be wrong, but you can see an actual underlying asset with real-world utility to make better reasoned decisions. It is much harder to do that with crypto when a tweet by some high profile billionaire (Elon comes to mind) or rumors of regulatory scrutiny could send prices soaring or plummeting. This is very rare in traditional financial products.

I also don't think crypto will ever ever ever replace government regulated markets. It may become part of them, but not replace. The government (at least in the US) is already regulating crypto. CTR's are already required, the SEC has stepped in pretty heavily to classify most crypto as securities, complete with the requirements that comes with that, etc. It can be decentralized but still regulated, and governments are simply not going to allow crypto to take away their ability to control their own monetary policy. Plenty of governments may wish to move on from the USD being the default world reserve currency, but that's because they want it to be something they have more control over. Crypto doesn't fill that role.

All the US would have to do is regulate how every US bank works with crypto, and require that US banks only work with foreign banks that follow similar requirements. Any foreign bank wanting to do business even remotely related to the US-- which is nearly all of them, would have no choice but to follow. Or the US could regulate how businesses are able to accept crypto as a currency. Businesses don't operate in a decentralized abstraction layer: They operate in physical locations. It might be difficult to seize their crypto assets if they violate the law (though not impossible) but still very easy to seize & shutdown their physical assets, throw people in jail, etc.

Sure, if crypto could somehow avoid all of that until it became the de facto medium of exchange, governments would have a much harder time doing this. But it's not like governments aren't aware of what's going on, and as I said the regulation has already begun.

I think governments will be perfectly fine with crypto becoming just another part of the financial infrastructure. And I think the countries dominant in the financial industry will squash anything that looks like a threat to their ability to control their own monetary policy.

In other words ignore all the bullshit projects and look at the ones who are structured like banks, financial instruments, or risk management. Then the use cases of cypto become very clear.

Except that's not clear at all.

It's currently less efficient than electronic bank ledgers by many orders of magnitude, in any way you measure -- energy consumption, cost, speed, etc.

And it's paradoxically less secure, as tons of successful hacks/thefts have proven. If my bank gets hacked, I'm still FDIC-insured. The courts will make me whole. Crypto is exactly the opposite.

And there is no indication any of this is changing. Crypto is inherently inefficient because of the need for proof, and for the average person it's far riskier so your money is far less secure in that sense -- and that's inherent too because illegal transactions like hacking and theft can't be undone, by design.

So the use cases of crypto are... not at all clear, except, really, for illegal transactions. Which is why the main real-world use cases, so far, have been... ransom payments, online recreational drug sales, and cross-border transactions. Not even remotely the "banks, financial instruments, and risk management" you're suggesting.

My wife and I just had a major fiasco trying to transfer mortgage payments from one major bank to another. Our credit score was damaged severely. I’ll spare you the details but the diagnosis was eventually determined to be “not enough time for clearance” as in I need to have the money transfer start a full week before it needs to be in the second account. This allows for the typical BS 1970’s SWIFT transaction clearance time, including of course that these transactions “can’t” process on the weekends.

If I could pay with USDC on either the Ethereum or Solana networks, my transaction would clear a few orders of magnitude faster (irreversibly buried in the blockchain within an hr). A friend who works in real estate foreclosures told me that everyone he works with is using stable coins now for this very reason.

In the very rare case you need to make a domestic wire transfer, yes it's currently slow, but that's not a technological problem, it's a political/institutional one. Plenty of countries have instant bank transfers as well.

AND -- instant bank transfers should be coming to the US in 2023, when FedACH is supplemented with FedNow (settles in seconds) [1].

So the slowness of wire transfers is just a temporary problem that's already been solved or is being solved. Crypto isn't necessary here at all.

[1] https://en.wikipedia.org/wiki/FedACH

Wire transfers are a bit better in this regard (my understanding is that "clawbacks" are quite difficult / impossible), but they tend to be expensive for consumers, and take a few hours domestically, days internationally. My employer regularly has to deal with overseas wire transfers, we would hands down use USDC instead if it were an option.

To me the fundamental difference between crypto and legacy finance is that my crypto is mine. I can move it when and how I want. With legacy finance, I am effectively asking a custodian to move the funds for me, and I'm tied to whatever antiquated system they use.

[0] https://twitter.com/bweidlich/status/1403084816665354241

Clawbacks are an entirely different matter.

And while yes, the absence of clawbacks means your money is then "yours", it also means that if you're hacked or defrauded, there's no way to recover funds because it's now "theirs".

For people who aren't engaged in illegal activity, the ability for banks and courts to retrieve illegally (or even accidentally) transferred funds is widely seen as a feature. Most people prefer the legal system to be able to ultimately determine who owns money (or real estate or shares of a company), instead of something anonymous and irreversible. After all, enforcement of property and contracts is the main reason government even exists, if you're a libertarian -- which means restoring property in case of theft and fraud and breach. (If you're a regular liberal or conservative, then it's one of the main reasons.) Are you suggesting it's beneficial for cryptocurrencies to be outside the realm of property rights and the legal system?

Your concerns about your funds being "yours" are really only worth worrying about if you live in a failed/anarchic/warlord/etc state... which fortunately isn't the case for most HN'ers, or most people generally.

Sure, the row in the database is instant though.

I agree it is a feature for a bank to be able to undo mistakes. The problem happens when a bank commits the mistakes and refuses to acknowledge it.

This is akin to all of us submitting to google and gmail, its great unless our account gets flagged by an algorithm by mistake. No mistake, i would be screwed.

Further, both will be totally instant vis-a-vis your actual bank account in a few years as RTP rolls out. No crypto needed. [1] I'm led to believe the delays in implementation were ensuring small community banks had a risk model.

> This is akin to all of us submitting to google and gmail, its great unless our account gets flagged by an algorithm by mistake. No mistake, i would be screwed.

Have you met typos?

[1] https://www.theclearinghouse.org/payment-systems/rtp

Perhaps crypto is an improvement over some archaic US banking standards but in the UK transactions will clear basically immediately and cost nothing. A money transfer is asymptotically just updating a couple of database records in a transaction. Execution speed is a technical problem, and one that is not solved efficiently by cryptos.

Finally, most western countries offer an analogue of FDIC for bank accounts. Countries which don't have such a scheme in place need to install one, again its not something that cryptos solve in any (novel) way.

Same goes for half a dozen countries in Europe that I had the fortune to live in.

Canada to Japan, Canada to Poland. Each time it takes more than 2 weeks to arrive or be accessible in my account.

Whenever I "wire" crypto, it shows up in my account and is accessible in hours.

Crypto financial services are a huge step forward in environments with broken banking systems. The US is one such place.

You're living in comfort and wealth in a civilized nation with modern regulated banks, so your perspective is narrow.

How exactly does that work? Have trustees started accepting stablecoins for deposits? Are there auctions where you can pay with stablecoins? Or is it just for payments from foreclosure buyers to their representatives who make bids on the buyers' behalf?

That sounds really vague. A proof of funds letter has nothing to do with money transfers. You can walk into a bank branch and get a signed proof of funds letter right there. The people actually selling the property that require a proof of funds letter are going to be either a trustee or court auction (foreclosure), or when making an offer to a bank for an REO/bank-owned property (what some people mistakenly call foreclosures).

It would be really interesting if those parties started accepting stablecoin signed messages as proof of funds letters, but I do not know of any that do. The real interesting part in that scenario would have nothing to do with cryptocurrencies - it would mean the widespread acceptance of public key cryptography for legal and financial documents and transactions. Once that happens there would be even less reason for the really shitty distributed database part of cryptocurrencies anymore. Not a popular opinion, but one I have held for a long time, and if you think the system through it is hard not to arrive at the same conclusion. "You mean this all could be done with PGP in the 1990s?"

What it sounds like is happening is that third-party companies involved in foreclosure buying are accepting stablecoin signed messages to act as financing intermediaries. That really does not mean a lot - there are even financing companies out there specializing in supplying "instant" proof of funds letters to house flippers that are really conditional loan offers.

Well it is when you realize the main feature of crypto is a decentralized bank and not a centralized one. A concept which makes it truly revolutionary in the time scale of humans using banks, but also very challenging as a technology.

The speed and security is constantly being worked on, there are other protocols like Solana which has a peak of 65k transactions per second.

Crypto is still a baby, saying it's slow short sighted to say the least.

Nobody in the real economy uses crypto as a unit of account. Most tokens are too volatile to be very useful as media of exchange, and this use case has traditionally been limited to goods (drugs) and services (hitmen) you can’t legally buy in the dollar system. “Store of value” is in the eye of the beholder, of course, but generally speaking you don’t want your store of value to be something that can depreciate 40% against the dollar in two days.

I wonder if this was half of the motivation behind Tesla no longer accepting Bitcoin.

"crypto has the potential to be more efficient and secure" Sounds charmingly vague.

Banks make money with money + effort. They provide loans and vet the recipients of those loans, because the banks are exposed to the risk of default (at least, ideally, obviously this failed in 2008). If you want a small business loan, then you typically have to have not only a good credit rating, but a business plan. Sounds like a real use case to me.

Want to buy a house? (Mortgage) Want to spread out the cost of a large purchase (car/boat/appliance)? (Credit card, consumer loan) Want to borrow money to pay contractors for home improvements? (HELOC) Want to pay for a coffee with a payment that is accepted in seconds? (Credit/Debit card or you know.. paper money) Want to save excess income in an interest-bearing account? (Savings, Money markets, etc) Want to invest excess income in partial ownership of income producing businesses? (IPOs, stock market) If banks don't make money with real use cases, please close all your accounts and attempt to live a week or a month without any interaction with the banking system.

The banking system matches borrowers and savers of different risk profiles & durations so that people can go about their lives in a more convenient fashion.

Right now DeFi is replicating some aspects of this in a fraud-laced decentralized manner except with an alphabet soup of crypto "money" which you can't do anything with other than trade it for more/other crypto "money" or the dirty-word "fiat".

Does crypto do that? I highly doubt that. Real-world economies based on crypto are none existent, or so small they are insignificant. I feel like what you are saying is a huge simplification and may not be true at all.

There are a lot of people in the world for which the law itself is unethical.

I don't know the root cause exactly, but it is a pretty annoying trend.

Crypto was always just a way for nerds to legally get rich quick. (When before that opportunity was limited to various finance types.)

Whether that's good or bad is up to you. (It's not like the various non-digital "financial instruments" we've had for a long time before crypto were doing much good for normal real world transactions.)

I'm 100% sure that there is some manipulation going on but I can't figure out why (though I have some wild theories).

Bitcoin: Uses the electricity of a country to process 2 transactions per second. Layer 2 solutions such as Lightning Network have some significant drawbacks which make them unpractical and vulnerable to multiple attacks. They've been trying and talking it up for years - No results.

Ethereum: Doesn't scale. The entire ecosystem (including all ERC20 tokens) together cannot process more than 30 transactions per second. New ERC20 tokens have to pay the same HUGE (e.g. $20 per transaction) fees as the mainchain; all tokens slow each other down (compete for resources from each other and drive up each other's transaction fees). They said that sharding was essentially ready years ago but now they've basically canceled it (or 'put it on the backburner' as they like to call it) in favor of extremely complex and vulnerable layer-2 ZK-Rollups solutions which are completely unproven (we don't know what will happen when many projects start adopting rollups; expensive on-chain interactions still need to happen).

Polkadot: They claim everywhere to have 'Parachains'. The reality is that this feature doesn't exist yet. The way it's designed is extremely complex and the scalability benefits are limited because there can only be a limited number of parachains.

Also, one thing which almost all the projects have in common is that they're mostly targeted at developers... Yet as a developer, there is almost always a MASSIVE amount of friction involved in setting up and integrating the blockchains with other systems. For example, Ethereum requires minimum 300GB of disk space to run a node (you need to run a node to do any serious integration testing). Also, the Ethereum node doesn't even provide a basic search feature; you need to use CENTRALIZED third-party services in order to search the blockchain data (that's because the node writes to a file instead of a proper database)... OMG. I could go on and on and on. There is just so much money behind these projects that the entire community will constantly twist the facts and present a severely distorted view of reality.

There is no limit to the amount of deception and self-deception when there is money involved.

By way of analogy, I remember the ruby on rails really struggled with scalability for a long time, and it was a big problem that lots of people, both proponents and opponents, talked about a lot. Nonetheless it turned out to be quite useful and definitely not a scam. I saw similar dynamics in both AngularJS and React. I'm trying to think of a good example on the other side, something that was hyped but criticized and didn't really succeed due to its criticisms being right ... maybe something like Meteor, it seemed promising but flawed and never really overcame its flaws. But none of these were "scams", just different flawed projects that succeeded or failed despite or because of their flaws.

By my lights, the top two you mentioned (I don't know enough about the third to say) fit very much into this same mould, I think they are flawed projects that will succeed or fail despite or because of widely recognized flaws which are or aren't eventually overcome. But not scams.

I think scams have to have a component of intentionality, that all effort at appearing legitimate and promising is conscientiously only for show. Contra that, I think lots of people are making a good faith effort to make bitcoin and ethereum useful. They may very well fail, but I don't think most people involved are conscientiously doing the work just for show.

Then, your future rounds of investment are conditional on demonstrated success. Your A can be a bridge round based on traction or a materialized idea. However, your B is generally based on hard numbers.

ICOs tend to get series F/G money up front on a hope and a prayer.

Circle CI raised $100M in a Series F. Check out this whose-who of token failure that all raised the same amount or much more on day 1 (https://decrypt.co/53950/the-10-biggest-icos-heres-where-the...).

> Bitcoin: Uses the electricity of a country to process 2 transactions per second. Layer 2 solutions such as Lightning Network have some significant drawbacks which make them unpractical and vulnerable to multiple attacks. They've been trying and talking it up for years - No results.

Can you be more specific about the drawbacks with layer 2 solutions such as lightning network? I use lightning from both the business and the consumer side, and from my perspective, it works just fine. I am able to make payments with negligible fees that settle instantly, and people are able to pay me (business) without any real problems. At this point, the vast majority of Bitcoin transactions I do settle on a layer 2. Frankly, it just kinda "works".

> Ethereum: Doesn't scale. The entire ecosystem (including all ERC20 tokens) together cannot process more than 30 transactions per second. New ERC20 tokens have to pay the same HUGE (e.g. $20 per transaction) fees as the mainchain; all tokens slow each other down (compete for resources from each other and drive up each other's transaction fees). They said that sharding was essentially ready years ago but now they've basically canceled it (or 'put it on the backburner' as they like to call it) in favor of extremely complex and vulnerable layer-2 ZK-Rollups solutions which are completely unproven (we don't know what will happen when many projects start adopting rollups; expensive on-chain interactions still need to happen).

What makes ZK-rollups "extremely complex and vulnerable"? And perhaps touch on optimistic rollups as well (since these are about to launch and will have dramatic increases in throughput as well)?

It seems to me that you are making grandiose claims of problems without any real evidence.

> Polkadot: They claim everywhere to have 'Parachains'. The reality is that this feature doesn't exist yet.

So it's a scam because it doesn't exist yet and it's planned on the roadmap?

That's like saying Ethereum 2.0 is a scam because it doesn't exist yet.

It's extremely easy to call projects scams when you're not the one doing the work.

When Stellar started, they were all about 'Quorums'; trying to imply that this was the secret sauce which would allow it to scale unlike any other blockchain. I initially thought that quorums were like separate shards but after asking around years ago, I found out that it was not the case; all transactions pass through all nodes; exactly the same as a plain old blockchain. These days they barely even mention the concept of a 'quorum' because it was never anything more than a scammy marketing tool.

I don't know too much about Cardano so I won't criticize too much but when I skim-read their whitepaper about 1 year ago, it sounded over-complicated. This is a red flag for me. Also, they are yet to implement smart contracts; so there is a long way ahead. I don't like that they keep bragging about their all-PhD team. In my experience, PhDs aren't good at delivering good developer experiences or limiting the amount of complexity.

I wouldn't say that XRP/Ripple is a scam; but only because they don't make it a secret that they are essentially a centralized crytocurrency with multiple nodes for redundancy. But some could argue that they are a scam based on the fact that they don't solve any of the problems that a cryptocurrency is meant to solve (this critique pretty much applies to all top cryptocurrencies BTW; they don't solve any significant economic problem aside from upholding the status quo; the opposite of what they claim to do).

>> So it's a scam because it doesn't exist yet and it's planned on the roadmap?

It's scammy because they sell it as if it already exists, but it doesn't.

https://www.sec.gov/news/press-release/2020-338

Ripple likening themselves to other cryptocurrencies when they are centralized is scammy in my book. There is a reason that video game currencies or Magic Cards aren't listed on exchanges.

tokens and shitcoins as get rich quick schemes are detracting from the true innovation imo

What are the true innovations in blockchain technology?

it's actually private, has fast and cheap transactions and is pretty stable. only problem imo is that it's POW (and mined on the cpu which means it makes crypto mining malware more common)