alt Hacker NewsMy question is, which real-world problem is actually solved by crypto? All I know is transferring money over the border gets much easier than pre-bitcoin era.
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There is a lot of money "wasted" on intermediaries due to the closed nature of the global financial system e.g. 3-5% fees for updating a row in a database. Besides those it allows other novel products that traditionally required trusted entities: - p2p lending - reputation systems - p2p insurance Also we have things like Open Banking i.e. sending money instantly for free which banks started implementing in 2015, one year after Ethereum mainnet went live which suddenly allowed people to send fiat money instantly and (almost) free. Banks and fintech companies having competition is a good thing for consumers.
In practice is sorta allows reasonably quick bank transfers.
Something that outside of the US is solved by SWIFT, or the state equivalent of instant bank transfer. Most of the rest of the world has instant, or near instant bank transfers. The US doesn't, it has venmo or similar.
That's the main legal use-case afaik. If you like travelling to a country that has no banking connection to your country, it might be more convenient to open a bank account or make friends in the target country and move money there via Bitcoin marketplaces. I've seen that plenty of times.
Allows scammers to avoid money being returned by having no centralized platform.
The problem of not being able to conduct transactions (globally or not) due to state-level censorship. Also called "censorship resistance".
I only refer to bitcoin (and lightning as Layer2), not crypto. Real-world problems will become more relevant if you live in a 2nd or 3rd world country:
- private (as in privacy) store of value without necesity to build a vault (or trust a 3rd party for storing)
- Transfer of money by immigrants "back home". Good luck sending money to Cuba or Venezuela right now
- Micropayments / Webpayments via Lightning (TradFi failed on this) - you can literally send 10cent right now to someone at the other end of the world - or pay for a news article.
- Decentralized / Ad-free social media like Nostr. Pay with micropayments for everything (hosting, forwarding, micro-donation for content). If you look at how damaging the ad-based social media economy is fighting for engagement and attention, it is obvious society is better of without Instagram/Facebook/Youtube/Tiktok trying to get you to watch more, to get more ad revenue
- Insurance against dictatorships taking over free democracies. If monetary policy is not done my the government, they can't use it to control the people. In Bitcoin, the people are deciding and voting on monetary policy independent of the government (miners, node runners/validators, acceptance of transfers etc.)
- Insurance about fiat devaluation (governments printing money)
Purchasing drugs
Regulatory overreach, for one.
Does it really?
The only real world problem is probably solved by low chain fees where I can hold usdc or gold coins and then pay or recieve payments without too much hassle
But that again, is such a low niche and something that includes exchanges fees too
Recently I wanted to get a domain name on black friday so I went to namecheap and paid them 10 $ in crypto, I had to pay 80 cents to an exchange to convert my usdc polygon to btc to then + some btc fees because namecheap just accepted that
I am a teenager so technically buying this domain pseudo-anonymously (yes I know I can do things with monero too so thus anonymously too) is the only real use case
I think stablecoins have potential to atleast remove this stripe/paypal/visa/mastercard etc.'s monopoly and allow cheap payments
Honestly I wish UPI from India or Pix from brazil were implemented at a global scale, they are so good.
My thoughts are nuanced but since I am a teen and yes I have a bank account but it cant be operated fully until I turn 18 by me, its all just complicated and crypto kinda solves some aspect of it
But this whole field is niche too and most people who build on these primitives basically build gambling as the author said
Here are my thoughts on crypto that one time I was on HackerNews on a similar thread and wanted to give a proper space to my thoguhts: https://justforhn.mataroa.blog/blog/most-crypto-is-doomed-to...