I'm originally from Bosnia / Ex-Yugoslavia.

Experienced hyperinflation, experienced civil war, experienced buying bread with 200,000 dinars one year and 2,000,000 next year etc. Experienced scary people with guns knocking at your door. My family and their ancestors all lost all their money and possessions numerous times over the last 100 years, including in the mid-90's.

And yet, I feel it's the people IN position of Western privilege, who have NOT experienced actual 'dystopian future', and what a hostile government actually CAN do, and what living under duress is ACTUALLY like, who think Crypto will somehow solve such problems based on their theoretical envisioning of only a specific part of dystopian future. I still believe Crypto, like anything else, survives at the mercy of your local government. It has a tremendous set of requirements, complexity, and telltale signs, to be helpful against hostile government which can and will knock at your door with a gun, or criminalize all crypto use/mining/exchange, etc.

I think you're exactly right. Cryptocurrency is built for a dystopian future where the people have access to stable, unmonitored internet (in other words, a contradictory situation that will almost certainly never exist). If the dystopian country retains the technical capacity for widespread internet, the dystopian government will have the ability to detect and crack down hard on cryptocurrency users (if they're worth the trouble). If the dystopian government lacks the ability to crack down like that, the dystopian country has almost certainly lost the technical capacity for widespread internet, making cryptocurrency moot. And in all cases, there are better alternatives to whatever problem cryptocurrency is meant to solve (e.g. gold bullion, US dollars), except in some very narrow cases.

I haven't lived in such a place but this is always how I think of it.

The tech is the easy part. If you're conducting illicit transactions in some kind of attempt to dodge regulations - however your (potentially) corrupt regime defines "illicit" and whether the "regulations" are just - then obfuscation isn't going to help you for very long.

The ability to use the internet at all is a function of the willingness of the people in charge of a government to 1) allow usage of the Internet by anybody and 2) the willingness of the people in charge to allow you in particular to use the Internet.

Your story is an anecdote, and an interesting one, but not sure if your conclusions are valid. Crypto is used in China for subverting government oversight, and they are far more advanced than Bosnia at digital control.

Absolutely and fair point: My story is indeed an anecdote; but it was not strictly meant to address the question of whether Crypto is useful or not in escaping government oversight, but the specific hypothesis in the post I replied to:

  "Those who haven't personally experienced #1 (such as world superpowers, the wealthy/"elite") seem not to be able to grasp the benefits. "

As such, I wanted to provide a counter-point/perspective, anecdotal as it may be.

Not always oversight, but for subverting government controls — note that these are very different.

What's the difference?

And what do you think, they are successful because the crypto schemes are so powerful, or because the CCP is letting them go with it?

Every time I am running a mental simulation about using a different currency as medium of exchange I come to the conclusion that the moment the government bans the currency, your network of people who will openly admit to accepting the currency will shrink to nothing. Yes you can't enforce the law on the Blockchain but you can still enforce the law in the physical store.

> And yet, I feel it's the people IN position of Western privilege, who have NOT experienced actual 'dystopian future', and what a hostile government actually CAN do, and what living under duress is ACTUALLY like

A lot of the arguments in this thread could apply to free speech as well. Pretty scary how many HNers feel that way.

I would place "trust in government" with "lives in a hegemonic superpower". You can fully understand the use cases while also believing that they aren't that compelling unless you live in global south.

The fact is there is no reason to believe holding crypto would retain value if the united states went through an country-ending economic crisis; it more likely that your crypto would also just become equally worthless and also crash in value. Treating the United States as a "future Argentina" makes no sense, especially when it's the US-based VC investors who are indirectly backing the value of Argentinian purchased bitcoin. If you end up in a situation where the USD worthless, then there is no wealthy counter party to prop up the value of your cryptocoin.

It makes no sense to look at third world countries with relatively tiny economies and believe that crypto will retain its value if the US went through a similar situation.

Also, you can fully understand the hypothetical use cases in the global south whilst being aware that crypto competes with hegemonic superpowers as a way to store wealth there too (and other stable currencies, and lots of other things that hold value and are easy to barter with) in those markets, and generally has fewer or worse on/off ramps for the average person there. People aren't sending money to Coinbase Global Inc because they haven't had access to international money transfers or the ability to store their wealth in anything other than rapidly-depreciating pesos before.

I mean, I'll happily concede that cryptocurrency was something that was actually stable in value, was widely accepted and understood in local markets in the global south so you could buy food, save for your kids education and bribe the border guard with it, then it would be even better than gold earrings, black market banknote swaps, hawala or trusting you would be able to access your offshore account in future. But it isn't, the fact that some people would dearly like it to be that way doesn't make it that way (especially not the "stable in value" part), and there isn't an obvious route for it to be that way.

There are a lot of people who don't understand these problems at all, and therefore distrust crypto. There are also a lot of people who understand these problems very well, and therefore distrust crypto.

In developed nations, populations who are unbanked/underbanked typically have much bigger fish to fry. In developing nations, they typically already have a solution to the banking problem... and also bigger fish to fry.

You'll notice that every article hyping up cryptocurrency as a solution for these things refers to "early adopters". The adopters are no longer early; they're now a perpetually fringe sub-population. (They're also presently experiencing inflation in crypto for the first time.)

Pretty good answer, but I’ll caveat with wealthy/elite provably bought into this a while ago. A subset of them run OpEds in NYT criticizing the space as bunk. Another large subset have been in it for years.

Some data points to support this:

- most major algorithmic hedge funds, market makers, etc are significantly involved. Not the janky crypto native one, the lethal ones from NY.

- Microstrategy had to convince a whole slew of board members and legal to convert their treasury to btc (“wealthy/elite”). Saylor is on record as saying that all but 1 of them where already on the space and fine with it, or something to that effect.

- this is old days btc lore, but there is a famous known event of Wences Cesares and I want to say Reid Hoffman having a SV get together with a few other who’s-who and sending a couple mil in btc around their phones while sitting in a living room. This And related Got most of the early day big tech people who are in it now to invest. This was years ago. Peter Thiel is the most public of this group today.

- CIA had the btc core lead Dev visit to explain the tech in 2011 (Gavin Andresen/spelling).

- Go to a digital assets event in DC that gets actual DC people to attend, and you’ll have notable elected officials discussing its use as a covert tool

- US has paid foreign fighters in it

- Bank of International Settlements is allowing member banks to hold a % of btc in reserves

- Fidelity has mined btc since early 2010s and is notably involved today.

There are a lot of examples like this out there. It’s a large wealth transfer currently benefiting really top crust people/orgs and the tinfoil hat crowd. Everyone else is reading Paul Krugman opeds and calling it a day, or missing the key so-what of the tech that’s worth committing to.

You still have no answer for the crypto on/off ramp issue.

I think the idea would be that in a scenario where crypto becomes a currency, there wouldn't need to be an off-ramp (at least immediately, think war/revolution). You would trade the crypto like "real" money.

This requires price stability, which is at odds with the use of crypto as a speculative investment vehicle. People use fiat to transact because it is stable. It’s stable because a central bank is using tools available to bring about stability.

It's a hedge. Like anything other hedge it's not bulletproof. I'm blessed to live in a country that has sound monetary policy (you do too probably). But there are millions (if not billions) of people who don't. Crypto offers a way to avoid capital controls when governments fail. It's not the crypto itself, its just the most convenient way. See: https://restofworld.org/2021/the-cryptocurrency-dons-of-beir...

Sort of agree. Find ways to issue them digital wallets with fiat currency support. Venezuelans using Zelle to transact in dollars comes to mind. It’s a financial inclusion and digital identity story, high level. But if you’re violating nation state laws (AML/KYC/money laundering/capital controls), you’re not likely to avoid repercussions for that, state monopoly on force and all that jazz.

https://www.coindesk.com/markets/2020/06/16/venezuela-is-a-t...

There are decentralized stable coins such as Dai that survived massive crashes/volatility in the past and still remained on peg. Crypto ≠ Bitcoin.

Unless you have a nation state backing the currency, its speculative assets all the way down.

You still need an on-ramp inside of the authoritarian country you want to depart

There's another likely scenario (at least in my mind) where Bitcoin is a global reserve "currency" like gold used to be. In this instance, the on/off ramps that exist already would still likely be the ones around. That is to say, completely centralized instiutions that interface with completely centralized fiat currencies. Bitcoin isn't going to replace countries, countries will likely have fiat stablecoins which is exactly where our increasingly cashless societies are headed towards.

tldr; either the crypto itself is traded like real money, or a l2 or even centralized unconnected layer is - either way on/off ramps that currently exist (p2p and centralized) continue to exist and thrive.

If someone is trying to escape their local currency, they won't want an on/off ramp. In foreign nations with a large underground USD economy, people skip the local currency and trade/spend USD directly. The same could happen with BTC. In fact in the most extreme cases this transformation is already happening: https://www.reuters.com/technology/venezuelas-economy-regres...

> But a major part of Venezuela's crypto operations involves businesses swapping out of bolivars to beat inflation, said economist and finance expert Aaron Olmos.

> "Nobody is going to tell you 'every night when we do the books, we convert bolivars into bitcoin,' but yes, this is happening."

I've used crypto for regular monetary transactions (selling art) and it's a huge pain in the ass compared to using actual currency. The idea that people are going to do day-to-day purchases with bitcoin is pure fantasy, it would be a huge step back from what most people are used to.

You pay fees for every single transaction: chain storage, gas, if you want to deposit or withdraw or exchange to another currency, etc; it's slow to go through and at peak times you get gassed out and it doesn't go through at all.

The value fluctuates wildly at all times of day, so your transaction might lose a significant percent of value before you've had a chance to even access it let alone trade it for a more stable currency or asset. Oh, and you have zero safety net for if something is entered wrong, a key is lost, if you end up not receiving the item you purchased, you're outta luck and there's no bank or credit card agency you can petition for a chargeback. Plus you lose ALL your money with no recourse if you can't keep track of a non human memorizable secret key, or if it gets in any way intercepted or stolen from your computer, or if you accept the wrong transaction...

How can everyone convert bolivars into bitcoin? That would imply that equal amounts of bitcoin are being sold by someone in exchange for bolivar. Who is that and why do they think it's a good deal?

People who spend it before it gets inflated but yes you are right, if everyone is posting sell orders and nobody is picking those up then the Bolivar will plummet vs Bitcoin.

We do. It's called people accepting cryptocurrencies in exchange for goods and services. Here is the roadmap: https://intercoin.org/communities.pdf

Ok then you tie an identity to a Bitcoin address and you have the same exact problem

Who’s talking about Bitcoin ? ;-)

This is the only right answer. Pack it up.

For real, every time I try to answer my I do crypto, often people just don't understand. They just don't. They just don't understand why I don't trust entities.

If you don't understand this, then you don't understand crypto. Period. There is no other debate necessary. Period. Full stop. We go on our own way.

Full stop.

The problem is that crypto doesn't really solve those problems either. As the article says far more eloquently.

I understand that you are saying you were burned by a central authority. But the truth is that the only way to get everything to work is with a central authority. The article gives examples of crypto being fully reliant on central authorities, for instance.

Everything being done by crypto today could be done better by trusted companies putting together a semi-open peering arrangement that both doesn't waste pointless electricity and that doesn't allow just any potentially hostile actor join the group of authorized peers.

The question to me really is which central authorities you trust less...

And for me it is at the moment the crypto side. I don't trust exchanges and I can't be bothered to do local transactions. So central government "approved" system is easier for my life.

And this is the case for basically everyone.

In fact, given that ownership is fundamentally a mutually agreed upon social norm, and not any sort of real truth - Even if you trust the central authority of your locality less, they are likely a much better resource regardless.

I really think crypto advocates just don't actually understand how power works. Power is not the number in the ledger, it's the number of people who will step up to enforce it for you.

It turns out that number is very, very tiny for crypto. Much, much larger for your local currency - even if it's not as large as you'd like it to be, or "fair" as you think it should be.

His example and your support is mixing up central authorities that matter for crypto.

Crypto companies with legal exposure? Yes can be censored.

Open source crypto protocols? As long as raspberry pi’s and digital comms exist, it’s akin to saying the govt can shut down Linux. This is the censorship resistance that matters. It’s not perfect (some ungodly amount of nodes are in AWS and the Trail of Bits report did a good write up as well).

The central authority here is open source software. The author spent a lot of words demonstrating they didn’t know this at all.

Open source crypto protocols are completely irrelevant without connections to crypto companies.

There's this fantasy that crypto can replace money, and that you would therefore never need to trade it for real dollars. That's not going to happen, for reasons outlined in the article and because no medium of exchange that's deflationary can ever be a currency.

If it goes up in value over time, it's an investment and people won't spend it.

Will the open source be free forever? Sure. Whatever. Can people run nodes that burn electricity? Yup. Does that matter? In no way that's relevant to the general public.

Worse, even the crypto networks themselves are subject to issues with their authority: Enough bad actors who join can steal the value of a large percentage of the network.

When we're looking at potential theft of billions of dollars, you better bet that someone will invest the hundreds of millions required to rewrite the chain and take control of a large number of coins.

Then what? Then everyone will need to get together and act like a central authority to either rewrite the chain back to its state before the attack, in which case you do need to rely on a central authority, or you need to admit that _allowing untrusted nodes into a financial network is a Bad Idea._

"Censorship resistance" is irrelevant too, by the way.

> Open source crypto protocols are completely irrelevant without connections to crypto companies

Bitcoin, an open source crypto protocol, launched without the existence of crypto companies.

Mt Gox, instead of helping btc, almost set it back years due to the hack.

Bitcoin grew adoption and scale on tor/DNMs and localbitcoins, both of which had organic, non-exchange economic activity which kept accounting in pure crypto vs returning to fiat/needing an exchange.

The attack you’re describing is a 51% attack, and it had yet to happen due to protocol design on the main chains. If it does, I suppose you’d be right.

But I generally think you don’t understand how the tech works and what proof of concepts exist to disprove your opinions, or at least strongly counter your opinions. and without addressing why they’re wrong you have a weak argument.

What good is Bitcoin without the ability to trade it then?

Your assertions are the ones that are extraordinary, so yours is the side that requires proof. You're effectively claiming that a distributed peer database with a somewhat secure history has some kind of intrinsic value. I'm calling that BS.

Where is the money? Where is the _value_?

The fact that a few people were trading Bitcoins doesn't mean it can ever go mainstream. Something that's a niche hobby isn't going to change the world. If you want to use Bitcoin as a hobby barter medium, then have fun, but that doesn't imply value outside of a tiny community.

Prove me wrong. A "proof of concept" is in the technology domain. For crypto to work outside of a community of crypto-libertarians, it needs to be usable by regular people. Libertarians are famous for not actually being able to design social systems that work in the real world; last time they tried they were chased away by bears. [1]

And as the article pointed out (did you read it?), most apps that support crypto rely on a centralized server since the chain can't be downloaded to mobile devices. How useful is a medium of exchange that requires you to bring a laptop with you everywhere?

[1] https://www.vox.com/policy-and-politics/21534416/free-state-...

> Your assertions are the ones that are extraordinary, so yours is the side that requires proof.

Ah, or your assertions are akin in a technical sense to saying “the internet is a complex series of tubes, prove me otherwise!” Your criticism is based on a pretty clearly patchy technical understanding.

Banning Linux would result in stagnating development because most Linux developers do not want criminal prosecution. Only the most diehard contributers would remain. No more drivers upstreamed from vendors.

Hey - I get it, I used crypto precisely because I wanted to avoid government regulation when buying black market goods back when the silk road was still a thing.

But I think you're absolutely bonkers if you think that any crypto today is actually a real solution to your lack of trust.

Here's my take:

You think that by using crypto, you're avoiding trust in governmental and financial institutions - and in some (incredibly limited - aka drug/gun) markets you are, but the exchange that you are making (intentionally or not) is not trivial, and not acceptable for most people most of the time.

What you are giving up is the power of the governmental institutions to enforce any sort of agreement or contract you make using crypto. Not their currency, not their problem. It's now your problem to resolve scams and fraud, and you have to do it using your limited powers.

And to be clear - you have really, REALLY fucking limited powers here. Unless you are so wealthy that those "entities" that you so dislike are mere nuisances dealt with by the law firm you have on retainer, or you can fund your own black-ops team, you're living in lala land if you think you can personally enforce the contracts you make. You can't. You don't have the oomph. Full Fucking Stop.

---

So I understand your lack of trust, but hate to break it to ya, bud - crypto is not solving your problem.

Simple example: You hire a contractor to remodel your bathroom, and you pay him in crypto (and we'll ignore for a moment just how laughably absurd the chances of this actually happening are...). You agree to pay 20K for the remodel, with 10K up front. He runs off with your 10k. Now fucking what?

in crypto land, you would never do that! You'd set up a smart contract to automatically move money from your wallet to his as milestones are hit in the project! It's beautiful! Maybe they could run off with your $1k upfront, but maybe your smart contract can even get that back if a milestone isn't hit in time.

Now all you need is connected oracle that can judge completion percentage of a bathroom and communicate with the blockchain! /s

Now flip the story and you are the contractor and hit the first milestone. The customer however refuses to acknowledge that milestone and holds on to the funds demanding some extra work not in the original contract.

You are out the labor and materials with no payment and no recourse. It's not beautiful for the contractor why would he agree to this with no arbiter between the two of you. And as soon as you introduce an arbiter you are back to someone else enforcing the agreement not the blockchain. The blockchain adds nothing here that a standard court of arbitration doesn't.

I fail to see how a currency that a) requires internet access, and b) can fluctuate so massively over the course of a few months, is any kind of solution to instability in developing countries. crypto is also arguably as or even more at the whim of national governments. look at what happened when China banned it. they're not gonna be banning dollars or gold anytime soon.

also, perhaps the cause of people not understanding you is not some kind of lack of mental faculties on their part, but your - what I would describe as - extremely obnoxious style of communication

Can you trust your local supermarket to accept Bitcoin if it is banned? The point of a currency is primarily to facilitate trade, everything on top of that is just there to make the process more efficient and lower transaction costs.

I personally think Bitcoin is a terrible currency for non speculative trading due to scaling problems and it's volatility.

Your own way is a deadend. There is nothing there. A currency is about relationships and trust. You can't own those things, you can at best only enforce them against people's will if they don't maintain them voluntarily.

Yet Monero isn't winning. It is very clear that this is not the dominant use case for cryptocurrencies and blockchains since we've got a system that is maximally resistant to interference and it is dwindling away.

This captures some of the reasons why crypto is very big in Nigeria.

With Naira the currency being as stable as a pendulum gets on a windy day, many middle class fellows seek to store their money in some form of stable assets. Crypto seems to be the easiest to acquire for the common folks while the politicians prefer and have access to US Dollars.