If most (in my personal observation, 100%) use cases of such sector seems fraudulent, I do believe it is justified to generalize to the entire sector.
What's fraudulent about that? Cryptocurrencies do in fact provide all of that (not all of them provide all of these guarantees, but some do).
Simply put: People use cryptocurrencies as speculative asset while they claim they are using them for decentralization and other properties.
This is akin to saying that seat belts are fraudulent because they aren't saving your life every single day. You might not need the properties of censorship resistance, privacy and so on right now, until one day you do.
I would much rather live in a world where such currencies are available in case I need to rely on them.
It's still early days for blockchain/crypto world. Alarmist comments don't really add anything to the discussion.
Why should cryptocurrency be singled out? Just because some people dislike it? We haven't done much about climate change and the big pollutants in decades, but as soon as cryptocurrencies come up, it's suddenly treated as an existential threat to human kind - I don't buy it.
If we are talking about climate change, time is quickly running out. So talking about wishful thinking while reality is actually other way around does not seems to be helpful.
And solution for the Bitcoin is what?
For example?
This is all fine and good for me, as I live in a developed country, so I "could" just use SWIFT ,but what about remittance payments? For people who have a mobile phone, but no bank (a large number of people in the developing world), a relative in the US used to send money via Western Union, the receiver would travel to the nearest Western Union branch, of course WU would take a chunk of that money, and then you're walking around with your cash. With crypto, it gets sent to a wallet, and they can use that. This isn't some pie in the sky idea, it's happening today, but will increase as crypto gains mass adoption.
Sending remittance payments in cryptocurrency does not make sense for people who are sending their hard earned dollars back to their home country to support their impoverished families. The risk exposure to exchange rate fluctuations, and risk of loss of funds in transit (due to fraud, hacking, losing a crypto wallet, sending money to the wrong wallet, etc), the fees associated with cryptocurrency transfers, and the extremely slow transfer times, all makes cryptocurrency a totally inappropriate product for the demographic that you are suggesting be targeted. You are basically suggesting that crypto bros should get rich off of selling a product to poor people that will only make them poorer. It's disturbing. This is exactly the kind of thing that makes me agree with title of this post.
Fortunately, most people have other options available for international remittance payments. For example, you can now transfer money to people using Visa in over 80 countries, all you need is their Visa card number, and the transfer time is 30 minutes or less for Visa debit. All the major retail banks have similar services, and there are plenty of money transfer apps (including a Western Union app), none of which depend on "blockchain technology."
This is true to a degree, but intra-day fluctuation are typically not going to be severe enough to pose a significant risk. The "risk" of the value going up is pretty much the same as the value going down on such short time scales, so any fluctuations should realistically even out after some time.
> and risk of loss of funds in transit (due to fraud, hacking, losing a crypto wallet, sending money to the wrong wallet, etc),
The risk of that happening is minimal to none depending on how well you prepare. Loss of funds is not something that typically "happens" to you, it's something you do. And it's usually pretty hard to do that.
If you're sending funds to someone repeatedly, you only need to get their address once. Send a small, let's say $1 transaction to see if you have the correct address.
Hardware wallets eliminate the risk of hacking, but you can avoid it through other means as well.
> the fees associated with cryptocurrency transfers,
Outside of Bitcoin and Ethereum, fees for cryptocurrency transfers are practically zero. Prime examples of this are Monero and Litecoin where transfers might cost $0.01, but you might get away without paying a fee at all.
> and the extremely slow transfer times,
Both Monero and Litecoin have a block time of around 2 minutes and transactions are usually completed within 5 minutes. Deposits to exchanges might take up to 30 minutes due to stricter requirements.
Traditional banking system usually takes at least 1 working day or more.
> all makes cryptocurrency a totally inappropriate product for the demographic that you are suggesting be targeted.
I'm not going to support or refute that, but I did want to point out that all of your claims above are wrong and don't support the argument you're trying to make.
In no way am I suggesting "crypto bros should get rich off selling product to poor people". The only point where any interaction with a crypto-bro may be necessary is in transferring fiat to crypto.
And your "fraud" comment makes me think you don't understand crypto. "Sending money to the wrong wallet" is a lame reason, it's the equivalent of giving money to the wrong person. Though there is likely to come a better/safer method, how many people have sent money to the wrong wallet by mistake?
The exposure of exchange fluctuations is real, but won't continue for ever as greater adoption leads to greater stability. You are also sometimes dealing in countries where the local currency is also susceptible to similar fluctuations.
I agree with your assessment. It's an overcollateralized repo agreement. In the the "centralized finance" world, the purpose of the repo market is to provide investors with leverage at low cost. It's similar getting a mortgage from your bank to invest in a real estate property - you give the bank a down payment (let's say 20% down), and the bank lends you the remaining 80% to buy the property. In this way, your initial investment (20% down payment) is leveraged 4 times. Despite your leverage, the mortgage on the interest rate stays low because the bank has a lien on the real estate property so they can recover their loan value by selling the property if you don't pay back the loan.
> I am not even sure what use such 'loans' have when you need to have $2 to take a loan of $1. They certainly solve some issues that Cryptocurrencies introduce for themselves but outside of that world they are useless
But what issues in cryptocurrencies does it even solve? What is the business model of these DeFi businesses? They advertise to crypto investors that they can earn impossibly high rates of "interest and rewards," and there are plenty of crypto HODLs who would be happy to lock up their crypto in a DeFi to earn interest, but where is the demand side? Who needs to borrow $1 worth of crypto while posting $2 of crypto as collateral and paying impossibly high interest? Who needs to borrow cryptocurrency at all? The only purpose I can see of borrowing crypto would be to short sell it, but how many people are crazy enough to do that? I can't help but feel like DeFi is some kind of scam and a reincarnation of the ICO bubble.
I agree that we should inform people about the risks and scams that are currently common in the crypto space, but you're advocating for a lot more than that.
You can speak for yourself, but you shouldn't pretend that your opinion is shared by, or that you speak for, the majority of people working in IT.