I'm in Canada. They're in the United States. They don't have PayPal. Bitcoin is actually one of the few options available. Sending just $40 of funds internationally, when either or both parties don't have a US dollar account, or even a bank account, and definitely no PayPal account, is potentially quite difficult. Money transfer? Except Western Union is also difficult to work with sometimes. Last time I called for identity verification, they seemed not to comprehend I was not in the United States, and I couldn't get it sent. Fees are brutal, too, at easily 20% for a small amount. So, potentially difficult enough, that even the headache of cryptocurrency starts to look attractive.
He doesn't have a bank account as he's on the blacklist. Not sure why. But in the United States, if you write too many bad cheques, commit cheque fraud, or just default on your overdraft, basically anything where the bank closes your account with cause, you may find getting a bank account again, from any other bank, very difficult. (They have a reporting service they almost all report to and verify with.)
About 10 million Americans are blacklisted like this, from what I understand. And then you have people who lack ID, or who can't get an account for another reason. The unbanked add up to a fairly significant market - something like 5 - 8% of American adults.
> I've been hearing the Western Union usurper argument since 2010. I doubt any of the people making those arguments actually use those services.
I know you weren’t talking about me but I’ve actually used western Union, and while it wasn’t bad, it wasn’t a particularly pleasant nor pain free experience either. Wise is EXCELLENT though.
More importantly, money exchangers and check caching places extract a TREMENDOUS toll on people who are forced to use them, and the prospect that could change is actually pretty good.
Up until now the main issue was the wastefulness and lack of scale/purpose fit of blockchain. It seems like ETH is poised to solve those things where BTC was stuck due to the interests of miners.
There are problems, but it really does feel like blockchain might have just finished it’s infancy (the scam era, let’s say).
Maybe I should publish something longer form on this. I had something written then chose to self censor
I too have worked in the money services business, so I know the good and bad about these companies. They are by no means angels, but they work within the regulatory systems of the countries in which they operate and that creates costs and bureaucracy. But it also prevents problems that most of the crypto sector likely doesn't see, due to lack of real world logistical experience.
Will do! I am confident I have the same misgivings but the base assumption here is that cross border fund transfers are hard, but crypto gives the system a chance to be rebuilt (with technology that's much more traceable, as well) -- without governments funding development and doing the political wrangling and horse trading to get on one system.
I'll try to lay this simpler thought out even simpler (for my own sake) -- If nation X and nation Y trust Coinbase, and have negotiated how to off ramp, and Coinbase satisfies KYC with both countries/participating institutions, we can theoretically do away with SWIFT + TARGET2 or VISA at the end of the day. What Coinbase as done is also not so unassailable (where as VISA very much is), so there will be many Coinbases, and this will drive prices down.
> There is often an enormous difference in the tech-savviness of people that send the money, relative to those who collect that money. Crypto assumes similar levels of knowledge between both parties, which is how you end up with people sending ETH to a BTC address, causing it to fall out of the money circulation entirely.
I agree -- I think this assumption of Crypto is optimistic and wrong. But, I also see this as opportunity -- this is a problem to be solved. Crypto needs people willing to do the hard work of building reliable, trustable, and reversible transactions, and essentially re-imagining what transactions, contract enforcement, and escrow look like without the threat of violence from one government in particular.
Maybe people shouldn't manage their own crypto wallets at all -- maybe they should be managed custodially -- that's an industry that needs to spring up. I know this is peak crypto-bull-speak but I assure you I am not a crypto bull (I literally do not hold any) -- but I can really imagine the recreation of the modern bank. An entity you trust to manage your crypto and help you make purchases/safeguard your money that takes drastically less fees than the modern bank. I could Trust and reputation becoming paramount, moreso because there is less recourse.
I am interested to read your article as I am open to changing my mind, but I know for a fact that this quoted bit will not happen to any meaningful degree.
In the scenario you posit, the market has to have consolidated around a few key players. Coinbase wins over Visa for instance. What incentive does CB then have to charge lower prices to merchants? Why shouldn't they help themselves to the same margins that Visa were enjoying?
Well I am also open to changing my mind -- would you mind explaining how you know this? Is the implication here that the regulation and operational heft of banks will be sure to apply to any new challengers?
> In the scenario you posit, the market has to have consolidated around a few key players. Coinbase wins over Visa for instance. What incentive does CB then have to charge lower prices to merchants? Why shouldn't they help themselves to the same margins that Visa were enjoying?
I think that it's natural for markets to consolidate around a few key players, almost inevitable in the capitalistic system.
I'm positing that it is much easier to challenge Coinbase than it is to challenge any existing banking infrastructure in the US, so you get a much better chance of actual competition and prices being pushed down.
The pool of people who can start a crypto exchange and the group of people who can open up a bank in the US are of wildly different size.
I don't buy it? Structurally, nothing has really stopped the social engineering and manipulation of cryptocurrency. The same principles that made cryptocurrency attractive for scamming still hold true, and the audience of potential legitimate users shrinks with each passing day.
I hate echoing the comment above, but I've been hearing this argument since 2012. Cryptocurrency will not graduate from it's scam phase unless it has a centralized judicial body to punish and correct wrongdoings. If that ever happens, cryptocurrency will have no tangible benefits when compared to centralized alternatives.
Two things (excuse my curtness I think they are good points that can stand alone):
- social engineering and manipulation is present in all forms of money, investments, etc -- it's human nature. Crypto essentially democratized it much like MLMs do. So I wouldn't call this a failing of crypto necessarily, but crypto did amplify the effect greatly.
- I think "the audience of potential legitimate users shrinking every day passing day" will choke out scamming narrative along with the legitimate use narrative. Once this post-fire brush is cleared, new things (useful things with actual utility) may have a chance to grow.
> I hate echoing the comment above, but I've been hearing this argument since 2012. Cryptocurrency will not graduate from it's scam phase unless it has a centralized judicial body to punish and correct wrongdoings. If that ever happens, cryptocurrency will have no tangible benefits when compared to centralized alternatives.
It's a good argument (and it's not wrong either).
As far as the judicial bodies, I do think that they can be distributed/federated though, and that small networks can grow with trust as currency, anew. Right now the established systems have found one way to encode trust via contracts and implied/actual force, etc. I think that crypto might be able to offer a new way to enforce trust for less serious/lighter use cases.
I think of it this way -- do I need the full faith and credit of the united states government to buy a coffee? Maybe not. Also in making that statement I am fully aware that being money is one of the biggest failings of crypto so far, but I think PoS ETH2 + L2 + Sharding/rollups (future) will actually make it possible (in theory at least) to surpass VISA's transaction volume as a network.
Also, I think there's a huge way crypto might be better than the traditional alternatives -- it represents a chance to redraw the boundaries.
The current system is ossified -- even if crypto is simply a re-creation of the existing system with worse efficiency maybe it's similar to trying to change the engine in a moving plane/train/automobile. You build a second, possibly shittier engine which can be less tied to the mistakes of the first, switch to that, then maybe switch BACK to the original engine after upgrading/changing it.
Optimistic, but I think the current success of PoS ETH2 (and the fact literally anyone else can take it and run their own) warrants some optimism.
Either way, the table-stakes for digital and financial literacy in the modern world are rapidly changing, and we should be prepared for some increased level of baseline complexity in the coming decades.
Imagine how complicated computers, AI etc are -- is it that we just haven't gotten the same UI/UX visionaries to apply themselves to crypto yet?
There's an ease of use aspect to it that crypto boosters simply cannot understand, because they are used to dealing with a dizzying array of exchanges, cold wallets and nonsensical alphanumeric strings, and think that this is the UX that regular people will accept.