>> One of the biggest drawbacks for blockchain is that transactions can't be revoked after the fact (with the only exception being costly forks of the entire ledger), and there's no additional human oversight (like I'd get when sending a large amount of money through a bank) to protect me.

>> With crypto, a software flaw used to steal crypto can kill an entire company. They're largely powerless to stop it once the transaction has gone through.

>> With crypto, a xss attack or a misplaced password can cost me all of my coins.

>> With crypto, I have to triple check the address I'm sending coins to because I can't undo it.

>> With crypto, I have to spend what's sometimes a significant amount of money just to complete a transaction, and transactions can take minutes or hours to complete.

> You can transfer money to an escrow smart contract that reverts the transaction if a third party confirms malicious activity.

In practice, who would you trust with such significant transactions as a company though? If you want to get anywhere close to the level of protection that you'd get in the "old" system, you'd need to thoroughly vet both the smart contract and the third party to be sure that there are no additional bugs in the contract (after all, it's just software like anything else, so there can be exploitable bugs) and that the third party won't screw you over. Some sort of neutral third party that both the buyer and seller can trust due to being known for such trusted transactions...like a bank. How is this any different than what we have, just with extra steps?

> How is this any different than what we have, just with extra steps?

It's declarative. There's no vagueness about the state of the transaction, and settlement can be cryptographically proven. This creates transparency and accountability. It's also sovereign. Not every transaction NEEDS this level of customer protection. Paying in person at a restaurant or supermarket can be done with a simple transaction.

Also, some transactions like subscriptions (which are very common) need a cancel functionality that follows strict rules: perfect for a smart contract.

And finally, even your bank won't be able to protect you in many cases.

What is the vagueness present in a basic credit card transaction? (Not saying there isn't any, just curious what you mean)

Not every transaction needs that level of customer protection, but it's very nice to have. Currently, banks that provide consumer protections are motivated to hunt down fraud, which helps everyone, not just credit card users. It keeps the level of fraud overall low.

And while I do agree some transparency would be gained through smart escrow contracts as opposed to credit card transactions, I disagree it's any more "sovereign". For the system you're describing to function, you need established third parties that both you and sellers trust. These third parties may choose to revoke your access, restrict your purchases, etc in the same way banks do now. In short, crypto still has not solved the trust problem.

(Also, while smart contracts do work for cancelable contracts, being able to "issue" a new credit card for each company as a consumer and then cancel it whenever solves it better and without any blockchain this or that)

> It's declarative. There's no vagueness about the state of the transaction, and settlement can be cryptographically proven. This creates transparency and accountability. It's also sovereign.

What's to stop network effects from this just ending up with a bunch of centralized verifiers that in practice make it impossible not to use them for most daily things?

Even if that would happen, it's very different from today. Because these centralized verifiers now have an incentive to perform well.

1. I can ALWAYS choose to transact on L1 with others. This option is non-existant in our current system.

2. Because payment provision and customer protection are now split, it means that there can be more competition. You don't need to be a payment provider at the same time.

And most importantly: have you ever had to deal with scams and chargebacks? These "verifiers" (paypal, visa) are often utterly useless, with lots of unclear rules.

It turns out that many people don't actually WANT this "protection". What people want is an efficient, global payment system with strong authentication methods. And maybe a way to lock their account (which is much easier to realize with DLTs)

i think the other problem with crypto, is that all of those things sound like great solutions that either involve significantly more hoops for a user to jump through or are problems the modern banking system have already solved for most people. the point was to have a bankless future, which turned out to be something absolutely no one wanted, so now it's just banks but the money has no consumer safeguards whatsoever. I don't see how this becomes a product someone like my parents would use with any regularity, even if indirectly

I think what a lot of people miss is that cryptocurrencies are different than blockchains. But also that cryptocurrencies can both work exactly like modern money (opposed to cash) but that this system is still new (e.g. DeFi: Decentralized Finance). Not only can you do smart contract escrows, but there's nothing stopping anyone from doing DeFi and having the exact same functionality as a credit card. You can also take out loans. You can invest. You can have clawbacks and credit lines. All that already exists in DeFi. Though there are also other people that think crypto/bc can work without a judicial system in place. Maybe, but probably not. Tech doesn't solve everything nor can it. People are also "solving" problems that aren't problems with tech (or creating new ones). But that's an age old story and not limited to cryptocurrencies.

There's also other things that even make it attractive for governments and financial institutions. E.g. you can use transaction fees as a form of consumption tax (especially valuable if you're the world's reserve currency or that of a major area). Through a country cryptocurrency you could set a federal consumption tax (providing a new and difficult to avoid revenue stream), give everyone free access to banking (wallets), make buying treasury bonds trivial, and other modern things that most of us take for granted but not everyone has access to (5.4% of Americans are unbanked). This would have the potential to simplify taxes but could equally complicate them. Hell, the Fed Reserve could pre-mine coins (for fast transactions and low environmental impact) and even offer interest on wallets through POS. These things could be beneficial.

Also one thing that makes it attractive to governments is that you have the ability to track every transaction, making it a data rich environment. This is an extreme authoritarian route although could make for simple return free filing and "stop terrorists and criminals" (I'm not bullish on that). Though personally I hope it doesn't go this route and we have ZKP transactions (i.e. anonymous like cash). Personally I don't think the gov should see that grandma gave me lunch money. Most cryptocurrencies aren't anonymous/private (not what the crypto stands for), despite what is common belief. I, unfortunately, think that this is a big reason large financial institutions and governments are interested.

But definitely agree on this being full of speculation and uncertainty. There are also plenty of people creating scams and abusing the systems. But just because a big part of the ecosystem is corrupt doesn't mean the underlying technology is useless. To determine that we'll have to wait and see, but there has been shown at least the potential for utility. I'm not trying to say that cryptocurrencies are going to be the future. I'm just also saying that there's reasons that smart people are attracted to the idea other than scams. But that also doesn't mean the ideas will work out.

> 5.4% of Americans are unbanked

Did you even look at why they are unbanked?

--- start quote [1] [2] ---

According to the Federal Reserve data, 14% of households making less than $40,000 are unbanked, compared to only 3% of households making more than that amount.

...

“Don’t have enough money to meet minimum balance requirements” was cited by 29.0 percent of unbanked households as the main reason for not having an account—the most cited main reason

--- end quote ---

But sure. Do tell me how magical crypto that expects you to pay wildly fluctuating fees for every single transaction is going to save the unbanked.

Cue in "not all cryptocurrencies in 3... 2... 1..."

[1] https://www.forbes.com/advisor/banking/costs-of-being-unbank...

Yup, hit the nail on the head.

A related thing that's bonkers to me is how much progress there has been in ZK cryptography.

But people just dismiss the field, saying "ZK existed since the 80s it's a fad", and post yet another Bruce Schneier article.

ZKPs are actually one of the "spin-offs" I've been really excited about. The hype in CC/BC has caused more funding and research into that area. It really has been a recent golden era for cryptography. We have services like Signal and Matrix becoming popular (making cryptographic communication simple) and privacy is being taken seriously. Makes sense that people want to do the same with money/transactions.

But also, to be clear, it is hard to separate the signal from the noise. Especially with hyped subjects like CC/BC.