> This is a genuine question - should anyone take cryptocurrency seriously? To me, the only purpose of it is to make money. It's the stock market, but with less rules, and it's 24/7.

I would say no. It's a technology that serves no practical purpose, since the problems it addresses are ones purely created by certain peculiar ideologies. If you're not indulging in one of those ideologies, there's no point. And, like you mentioned, it doesn't even succeed at addressing those problems. A virtual technology can't free you from real-world power, because it's dependent on the real world and can be attacked there, where it's weak.

From outside those peculiar ideologies, something like Bitcoin is like an application written so badly that it's like 486 PC that requires as much energy as Argentina to run. Why should anyone want something like that?

No practical purpose EXCEPT for the ability to easily take assets across borders to leave authoritarian regimes, bringing a form of storing assets to the 2 billion or so unbanked individuals of the world, and comparatively cheap remittances for people sending money back to their families in another country. These are just a few of the incredibly practical use cases that quite literally change people's lives.

> easily take assets across borders to leave authoritarian regimes

How do you get your assets converted to crypto in the first place, if an authoritarian regime prevent you from having something akin to a bank account?

> comparatively cheap remittances for people sending money back to their families in another country

According to cryptofees.net, BTC transaction fees average 4% and ETH 1.6%. Even the median fees are pretty high when compared for example to Wise.com and there you only have fees when converting currencies.

> bringing a form of storing assets to the 2 billion or so unbanked individuals of the world

This is a fair point, but I would argue that people who are unbanked are not the kind of people who will find it easy to securely manage crypto keys and wallets.

> According to cryptofees.net, BTC transaction fees average 4%

That site hasn't been updated in almost a year. (Check the prices and recent transactions it links to.)

Here's a more accurate way to estimate bitcoin's fees. Go to mempool.space and look at the current estimated Low/Medium/High priority fees. That is based on current pending transactions and most of the time, unless you are in a hurry, "Low" is enough to get a transaction confirmed in the next hour.

At current writing, and for most of the past year, those fees are a few cents.

And this is the expensive way to transact bitcoin -- on-chain! Nowadays most commerce is moving to the layer-2 Lightning Network, where transactions are instant and typically nearly free via payment channels that are settled on-chain in the future.

Thanks for correcting this. Can you explain the layer-2 network? Is this a separated kind of chain?

Lightning Network is a "layer 2" on top of "layer 1" bitcoin. The short summary is that it allows two parties to conduct lots of transactions and, when one of them decides they are done, the final balance is committed to the bitcoin blockchain rather than every single one of the transactions. These channels can also be used to forward payments to others, which means that depending on your Lightning node's connections you are able to transact in this way with many thousands of parties beyond just the ones you are directly connected to.

Each channel sets their own rates so the cost of transacting this way varies but it usually comes out to a very tiny amount, much less than 0.1%.

This is a pretty good overview with more detail: https://cointelegraph.com/bitcoin-for-beginners/what-is-the-...

The network has grown a ton in the past year and apps like CashApp and Strike now support it.

All of those things that make it easy to move money out of authoritarian regimes also make it easy to move money into them - see the recent North Korea hack.

Turns out that when you purposefully build a system without any guardrails or oversight, then bad actors will find exploits and there will be no way to stop them. Regulation and oversight might be good things, actually.

Most of our lived-in systems have very little in the way of guardrails or oversight. We maintain our safety and happiness through a social contract, not absolute enforceability of law.

The "exploits" you're describing were possible 20 years ago through various other methods (unregulated banking, cash in briefcases, etc). The new thing is government and police having a much greater degree of control over monetary systems.

I think crypto is failing at most of its promises and it's still unclear whether it will ever live up to any of them. But rah-rah celebration of government being able to monitor and halt anything it wants to is not the way to go, either; it's actually a literal doomsday scenario (Vernor Vinge has written about this, among others).

How would Bitcoin work for a sanctioned authoritarian regime like north Korea? Who would they trade it with for useful currency or goods? It's not like they can just create a Coinbase account and cash in the Bitcoin for USD.

Perhaps not, but they can sell their crypto reserves to other actors who are in a position to exchange them, for stuff that's actually useful to them.

> Except for the ability to easily take assets across borders to leave authoritarian regimes, bringing a form of storing assets to the 2 billion or so unbanned individuals of the world, and cheap remittances for people sending money back to their families in another country. These are just a few worth mentioning because they quite literally change people's lives.

I'm not disputing you can still do work on a 486 PC that requires as much power as Argentina; the question is why would you want to when a regular PC works just as well or even better?

Also, most of those use-cases break down in practice at the intersection with the real world. Sure if you've got some Bitcoin and an internet connection (and a big HD to store the blockchain), you can transfer it around to your heart's content. But how (for instance) are you supposed to get Bitcoin for your authoritarian-regime fiat? Wire it to Binance? That defeats the point. Why would you use Bitcoin as a store of value, when there are better, less volatile alternatives like the dollar, the euro, or even gold? When you work through the particulars, there's not that many cases where Bitcoin actually makes sense to use, from a practical perspective.

And providing significant funding of the North Korean regime to keep crushing people under their boots.

This isn’t happening and it’s not the purpose.

“Unbanked” is an imaginary word. If a person is “unbanked”, it’s likely that they are also “uninternetted” and/or “uncomputered.”

And even more, "unmonied".

That's really not true. You'll find a lot more people with no bank account than you will with no internet access at all. Many of the poorest in the world still have at least a cheap cell phone with some internet access.

There are actually "unbanked" Africans, according to this article they just use their mobile provider's feature of credit transfer to bank that way: https://archive.ph/imZOj - it allows them to buy and sell things and settle debts by transferring digital money between phone numbers.

But probably not good enough for the crypto-bros, it's a centralized system!!1!!

> These are just a few of the incredibly practical use cases that quite literally change people's lives.

I've heard this for a decade now but no one ever gives any evidence. Where are all these people with changed lives who aren't affluent white guys?

X: there are no use cases

Y: here are the use cases

X&Z: let's downvote and be negative anyway.

Welcome the usual crypto discussions on HN. Why do people still bother?

> X: there are no use cases

> Y: here are the use cases

You misunderstand. My gist was there were no practical use cases, and the response was to enumerate some impractical ones. I think the thing that confuses some people is that (like cryptography) some of the biggest problems are on the onramps and offramps, not in the core technology itself.

> X&Z: let's downvote and be negative anyway.

It's right an proper to be negative about something that doesn't really work (when compared against alternatives), especially when that thing is as overhyped as cryptocurrency is.

If it actually worked, the value would be obvious, and wouldn't need to be constantly justified by the kind of contrived use cases that are usually offered.

Like I said, if someone comes with an obvious use case, and you claim it's not a use case, or however you want to twist your words ( impractical use case or whatever), well, then the discussion ends right there. What else do you want to discuss then?

> Like I said, if someone comes with an obvious use case, and you claim it's not a use case, or however you want to twist your words ( impractical use case or whatever), well, then the discussion ends right there. What else do you want to discuss then?

Did you not read the comment where outlined some of the holes in those use cases?

Here's a gist of how these coversations usually go:

>>>> We should use literal bricks as currency.

>>> That sounds dumb and pointless.

>> No it isn't. Here's an obvious use case: if you want to buy something from me, you can push over a wheelbarrow of bricks to make the exchange. This is superior to fiat because it's hard currency, and far more difficult to steal than banknotes or even precious metal coins. No way the government can confiscate it, it's too heavy. IT'S THE FUTURE OF MONEY!!1!

> That doesn't make any sense. It's a PITA to cart around bricks, banknotes and coins are way more convenient. Also the government has trucks.

If it has a $2T market cap and people are actually using it for that usecase, what the fuck are you arguing then?

But like I said before, these kinds of discussions are totally useless.

You don't get the usecase, fine, no problem, move on already, there is no point of discussing this any longer.

> If it has a $2T market cap and people are actually using it for that usecase, what the fuck are you arguing then?

Market cap doesn't mean squat here. The one use case that cryptocurrency has satisfied is being a speculative investment.

If some true-believer dude claims he's actually carting around brick-bux in a wheelbarrow and that it's great for buying things (and maybe occasionally actually making a transaction), that doesn't actually mean it's a good choice for that use case. It just means that guy isn't making very good decisions (or is dishonest).

> But like I said before, these kinds of discussions are totally useless.

No. There's quite a lot of utility in disputing BS, because that has a chance of eventually making it go away.

> You don't get the usecase, fine, no problem, move on already, there is no point of discussing this any longer.

I do understand the use case, I just think the application of cryptocurrency to it is BS. If you think there's no point discussing it, you're welcome to stop.

> You don't get the usecase

Another possibility is that they get the use-case and consider it worthless. As we have seen repeatedly in this space, popularity seems to have no correlation with technical viability, so this "$2 trillion can't be wrong" argument lacks solidity.

If some people are actually using it as a means to store value outside governments reach, then you might dislike the usecase as much as you like. People are using it that way, so it's a valid usecase. Like I said, there is not much to discuss here anyway.

Edit: if you are not willing to admit that crypto allows you to store or move value outside of governments reach, then there is 0 reason to discuss further. And it doesn't even matter at that point who is wrong or not.

Easily: just need the energy consumption of a medium sized country

> But we have seen time and time again that that isn't true, and if a government wants to freeze your crypto assets, they can do so easily.

We have seen no such thing. The claim is not that the government can't put your wallet on a blacklist in an attempt to ban local companies from serving you. Nor is the claim that the government can't come to your home and arrest you, nor that they can't have your server taken down where you store your private keys.

These things happen, but it is unreasonable to ask cryptocurrencies to protect you from real world violence, anymore than encryption is useless because someone can use a hammer.

> should anyone take cryptocurrency seriously? To me, the only purpose of it is to make money. It's the stock market, but with less rules, and it's 24/7.

It's not the stock market at all. Not even close.

The stock market is a system that enables the buying and selling of shares in productive business - businesses that provide goods and services, that generate revenue and (ideally) profit. As a shareholder you own a fraction of that production, the assets, the profit. That's ultimately what determines the value of a stock over the long-term, its ability to generate sales and profit (and of course the bounds on valuations can swing widely over that time, multiples can contract and expand).

You maybe see crypto markets and think: gambling; and so that's where you're making an incorrect connection to stock markets. The stock market, if you're doing it right, is absolutely not gambling. Stocks are supported by the productive capacity of the business in question, ultimately; crypto doesn't work that way (at least not at present, maybe one will in the future). This is why Bitcoin has dramatically more in common with gold than eg stocks (gold isn't a producing asset, it's not going to spit off a dividend from profit every year).

The reason an entity like Berkshire Hathaway or Microsoft can so astoundingly trounce gold in generating returns over the long-term, is precisely because they're generative entities and gold is not. There's no compounding action to gold from the consequence of production growth (a lot more production is generally bad for the holders of eg gold or Bitcoin, as their value is based in part on scarcity), it's a hedging device primarily. Whereas if it's 1981 and Microsoft generates $3m in profit, they can plausibly reinvest profit and maybe get $5m the next year by hiring more engineers, launching new products, more advertising, etc. Rolling that expansion process forward is how you end up with $50m in profit instead of $3m. Gold, as with Bitcoin, does not work like that at all, there's no compounding mechanism. It's why gold sucks as an investment compared to eg the S&P index over time; although it's perfectly reasonable as an inflation hedge for a fraction of your assets, if one so desires to diversify.

> The stock market is a system that enables the buying and selling of shares in productive business

Ostensibly, yes. But in practice stocks are often pretty disconnected from business realities by algorithmic trading and high-frequency trading. Even manual trades made on a snap basis like a mass sales on a company posting a slightly less than stellar quarter on the back of a proven long-term, solid, growing business: is that company really "worth" 10% less today? Especially since that "value" is then often recouped even before the next quarterly report.

Most companies can't even explain many of their own stock price moves.

> in practice stocks are often pretty disconnected from business realities by algorithmic trading and high-frequency trading

If you are an HFT and you are noticeably impacting the price of a stock, you are losing a ton of money very quickly

> mass sales on a company posting a slightly less than stellar quarter on the back of a proven long-term, solid, growing business: is that company really "worth" 10% less today?

This is a very easy theory to test. If you think it’s true, just buy every stock that’s down 10% on earnings (it’s obviously not true as such a strategy would have been exploited by hedge funds decades ago)

> Ostensibly, yes. But in practice stocks are often pretty disconnected from business realities by algorithmic trading and high-frequency trading.

No they're not. Only short-term to a limited extent and only to an extreme in very rare cases.

High frequency trading is a laughable triviality to a long-term investor, entirely meaningless. It only matters if you're trading a lot of volume and they're swiping some of your profit by moving faster. I don't care if they take 0.1% of the present value of my trade if I'm buying a stock to hold for years (or if I'm buying at a steep discount to what I value the company at).

I buy Teladoc at $61.22 and I plan to hold for years - do I care if HFT swipes $0.02 of that trade? No. I don't care if it swipes $0.20 of that trade in fact. If you're doing it right, if you're calculating the margin for error in the purchase correctly in terms of the value you're buying, you can very easily disregard the margin that that $0.20 represents. That is to say, if a stock isn't a good buy at $61.22, it's not a good buy at $61 either. There's no scenario where I'm going to care about HFT.

I also don't base my purchases on what the market (other investors, whether algorithmic or not) thinks a stock is worth. I make my own determination of the worth of the business, its potential, and from there I decide if the current price matches up with the value I think the business represents. As such algorithmic manipulation largely doesn't matter to me, I don't care if they run a stock up or down 5% tomorrow or next week, it doesn't alter my evaluation of what the business is worth; although if they want to crash a good stock by 70% in a few weeks because some people panic and hit the sell button, prompting a cascade of selling, due to something like Covid, then I'm a buyer, I'll happily take advantage of their mistake.

> Most companies can't even explain many of their own stock price moves.

Again, you're talking about shorter-term volatility, spikes, blips, temporary emotional swings up or down.

As a long-term value investor, I don't care much about short-term volatility and will never have to (other than if it happens to provide a rare, freakishly outsized, emotion-based buying or selling opportunity to take advantage of; as with the Covid crash). As an owner, shorter-term concerns, swings, are largely meaningless to me. As they should be to most investors.

Why do I care if a company can explain stray volatile stock price movements? That's not the business I want them to be specializing in. I have no need of their explanations unless it's a critical legal matter. Read their quarterly reports, figure out their business and its long-term trajectory - that's what you're properly buying, not the explanation by public relations on the daily movement of the stock.

Bitcoin is attempting to BE value better than fiat.

There is a possibility that we eventually achieve a bitcoin circular economy. In such a scenario, Bitcoin does not go up or down against fiat because there will be no demand for fiat.

There's no potential scenario where that happens (only scenarios with no potential to occur in reality).

Governments are not going to give up the critical aspects of economic control and self-determination that come from national currencies, generally. They could already do that with gold, and they overwhelmingly have had absolutely no desire to do it (for obvious reasons). If Bitcoin gets a lot larger and a lot more stable you may see an occasional small nation, in the midst of economic crisis, peg itself to Bitcoin; whenever the confidence crisis wanes, they'll promptly unpeg to regain flexibility and control.

The extreme majority of nations will strongly prefer to control their own destiny in terms of currency and retain the vast flexibility and power that comes with that control.

One might as well expect nations to give up militaries in the name of peace. That's a similar fantasy outcome that no doubt many millions of people believe could possibly happen (it can't).

> There's no potential scenario where that happens

Maybe not in your lifetime. But you’re not practicing long-term thinking here. Global, trustless, decentralized networks allow humanity to fundamentally reorganize. Physical, nation-state borders are ignored by such networks. Cooperation for physical resources still does matter but that may also be lessened by technological leaps in sectors like energy and food production. Humanity, if lucky enough to not be oppressed by ultra powerful governments, will likely render federal/central governments much less important and thus much less powerful. Simply put, the value proposition of central governments is now on the decline.

There is no potential scenario where that happens even long term. People have to physically live somewhere. Nation states continue to hold a pretty effective monopoly on violence. They can prevent you from entering, or put you in prison, or seize your assets by force. Global, trustless, decentralized networks can't control government security forces with guns. The value proposition of central governments will continue to grow, not in the sense of people actually liking them but simply because there is no alternative. That is reality and no amount of techo-utopian fantasizing will change it.

And even if it did, it wouldn't be bitcoin. As bitcoin is capped at a maximum number of units, with some being burned by losing access to them, it is per definition is deflationary currency. That would prevent a normal economy from working.

> Stocks are supported by the productive capacity of the business in question, ultimately; crypto doesn't work that way (at least not at present, maybe one will in the future).

Ethereum's revenue is the transaction fees it collects for people to use the network. Its expenses are the rewards it pays out to miners and stakers. Its profit is the difference between the collected fees and rewarded fees.

This difference between collected fees and rewarded fees is "burned", or ceases to exist. The process shares some similarities with stock buybacks.

But is there also a regulated annual report? Filled with regulated numbers and audited by independent companies?

> if a government wants to freeze your crypto assets, they can do so easily

They can, but only if they get physical hold of you and like, threaten you with a $5 wrench. This is not limited to governments, if whoever gets hold of you and threatens you, they will mostly be able to get your assets, and there's nothing anyone can do about that.

> So in all seriousness, what is the point of crypto, other than a "new stock market"?

The second time you mention the stock market. From my pov, (most?) crypto is very dissimilar to stock market. Stock market includes mostly somewhat productive assets. Crypto usually isn't productive, it's just predictably scarce. Esp Bitcoin and similar are much closer to digital gold than to stocks. See eg https://www.lynalden.com/what-is-money/

If you want to speculate on a digital asset with limited regulation around the market, sure, it is fine for that. For any other purpose, no.

Except for the ability to easily take assets across borders to leave authoritarian regimes, bringing a form of storing assets to the 2 billion or so unbanked individuals of the world, and comparatively cheap remittances for people sending money back to their families in another country. These are just a few worth mentioning that quite literally change people's lives.

> So in all seriousness, what is the point of crypto, other than a "new stock market"?

The society needs to start hanging banksters. This is a way there.

It is a market where the scum fat cats who entrenched themselves in political class by buying politicians do not have a monopoly on swindling gullible public.

cryptocurrency democratized behavior of scum. It is a good thing. When JPM Chase f!cks grandma out of her house there's some hand waving goes on as Chase does good hence maybe it was grandma fault and the CEO of JPM does not go to prison where he belongs. When grandma gets screwed by Jose the Neighborhood slickster, society will get the incentives to throw everyone who behaves like Jose the Nieghborhood slickster into prison, ensuring that the CEO of JPM and wall st bros go there as well.

And that's a good thing.

For most of the people cryptos are a way to make money or a way to use money for illegal purposes. Outside of that, you'll only find preachers of this tech.

Cryptos now have a lot more control in China, and the European Union is going to force the identification of those who interchange Euros or other currency to/from cryptos, so I don't know how much is going to last the bubble of earning money with that.

It's not even the stock market - buying stocks is an investment into a company, meaning the company has access to more funds which can be used to grow the business and generate more revenue, cryptocurrency trading is just shifting bits around, it doesn't create any new value.

These are amateurs, you supposed to buy your own NFT for fks sake...

"Analyzing the Very Bizarre Sale of Melania Trump’s $170,000 NFT"

"The crypto used to purchase the former first lady’s NFT came from the NFT creator themselves, blockchain records reveal."

https://www.vice.com/en/article/m7vpx8/analyzing-the-very-bi...

>you supposed to buy your own NFT for fks sake

You joke, but that is exactly correct. The only real use case for NFTs is money laundering. Create silly NFT, purchase it from yourself with millions of dollars from some other illegal activity (using shell entities to hide your identity), money is now "laundered" having been legitimately earned by selling an NFT.

> if a government wants to freeze your crypto assets, they can do so easily.

Lol source?

I'm not the OP, but this from the Matt Levine newsletter last week, which I think is what he is getting at:

> 1. If you hold your coins at a regulated exchange, sure yeah the authorities can probably get a warrant and seize your Bitcoins.

> 2. If you hold your coins in your own wallet but you write down your private key in, like, your phone’s notes app, and it backs up to the cloud, then the authorities can probably get your cloud provider to give them access to your notes and read the key and use that to seize all your Bitcoins. (This happened to the alleged Bitfinex hack launderers.)

> 3. If you write your private key on a scrap of paper, the authorities can search your house until they find it and seize all your Bitcoins.

> 4. If you memorize your private key, or just write it down somewhere really safe, then they can arrest you and throw you in jail until you tell them what it is, and then seize all your Bitcoins.

This is ignoring that 3 and 4 are still improvements.

This argument is similar to me saying there is no point to encrypted communications because the government can hack it, plant back doors, throw you in jail, etc. That is all true, but making the government’s job harder, even if not theoretically impossible for a nation state, is still something that is worthwhile.

Ah gotcha. Agree that no one man is going to stop a nation state from using Physical violence to achieve their goal.

>"To me, the only purpose of it is to make money."

Understandable, but a wide variety of things exist for the sole purpose of making money. That fact doesn't invalidate cryptocurrency. Without launching into the tried and true "what is money" pontification that crypto advocates usually bring up, it does have use cases for many people and even if those use cases are only valid when they interact with other crypto true-believers, it still has utility for those folks nonetheless.