What does "handful of people acquired a speculative digital asset" have to do with the market need of "send and receive money digitally"?
There reason people want to send and receive money digitally has many sources. The cashless society change that Swedish governments and bank started a while back created a need for digital alternatives for activities that previously used physical cash. Transactions between individuals, flea markets, collections at church services, fees for clubs, sale of drinks/food at events. Credit cards are costly, includes minimum fees and use systems that tend to be slow and hard to use. A church collection does not work if a 1$ donation cost 1$ in credit card fees. Even donation services today like patreon currently looks down at such low donations as all the money get eaten by the credit card fees.
The benefits that people who advocated for Bitcoin in the early days talked about was mostly those. Ease of use. Cheap. Physical cash alternative. It was a time where paypall was the only alternative to credit cards and for many places the only way to pay unless you used direct bank transfer that take a minimum of 1 weekday transaction time.
Smartphone penetration is a relevant factor, but it was not the only one. The new bank service fulfilled a need which credit cards and paypall both did a poor job with. The question is if banks/government are willing to continue support what the market needs, or if systems like bitcoin will utilize the hole that remains when physical money is phased out.
Chaum's systems also failed because of a lack of demand. In the early-to-mid-90s it seemed sensible that nobody would spend money online without at least some of the security guarantees of digital cash. In retrospect, however, there are these issues:
1. Banks have centuries of experience in combating fraud. It is not clear that digital cash actually improves the situation for banks, given the higher infrastructure costs. If you cannot show banks that they will lose less to fraud with digital cash than the new infrastructure would cost, the banks will not care -- it is easier to analyze spending patterns and identify likely fraud.
2. Most users have a very poor understanding of the security implications of spending money online. On some of that, the fraud that users have to deal with is only partially defended against by digital cash; scams involving people taking money and not delivering the goods are even older than the banking system and are not addressed by digital cash. While the theft of credit card data causes headaches for users, banks are sufficiently good at stopping it that few people are clamoring for a better system.
3. It is unclear that merchants would have benefited from digital cash. While certain kinds of fraud affecting merchants might have been mitigated (e.g. no charge backs), the real issue is whether or not merchants would make more money with such systems. That is unclear, as the banks can and mostly certainly would still charge fees for the service and would likely charge at least as much as they charge for credit cards. Offline systems would mitigate the issue of service fees, but would also increase the risk of fraud and would leave merchants with the short end of the stick.
If anything, Bitcoin reinforces the point that security is not the deciding factor here. Bitcoin does not even have a clear security definition, yet for reasons that we could argue about for hours on end it has become more popular than systems with provable security.
Can't say I'm an expert in the Swedish situation specifically, but I'd think the fact that every other European banking system was already working on free instant bank transfers in the 2000s and smartphone penetration probably had more impact on instant krona transactions via smartphones than cryptonerds hyping their low-penetration speculative asset that doesn't actually do fee-free instant transactions as the future of money. It's not as if the average church is or was better set up to take collections in Bitcoin than credit cards anyway...
I think part of it is a bootstrapping problem. Bitcoin solved an interesting technical problem, so people started using it. Once people started getting interested, companies popped up to sell it, but notably there was a base of users prior to that.
By contrast, the barrier to entry for a new system denominated in USD is much higher. People can't really start using it until there's a company around to support it, and starting a company to run a payments platform isn't for the faint of heart.
Still, I've been keeping an eye on GNU Taler[0], which seems to be tackling the technical side of that problem. I'm unclear on some of the technical details, but it's the closest thing I've found so far to digital cash.
Really? You can't imagine a large populist movement rejecting a newly developed technology based on suspicions about some kind of sinister agenda?
It doesn't matter if lots of people, even most, pay with digital transactions. As long as a substantial minority is using cash, the option will be available for those who need it.
Personally, I wouldn't. Most people don't want digital cash for the same reasons they don't use real cash: your risk of theft is higher, it's not as convenient to use, transactions can't be reversed, and you lose a lot of buyer protections.
I use technology to solve problems for people. The few niches Bitcoin has found (e.g., speculation, money laundering, ransoms, light drug crime) are not really what I would call solving problems for people.
None "rely" on a speculative cryptocurrency. Mobile phone cards are relied up as currency moreso than bitcoin. It surely doesn't lend itself to easy transfer.
Plenty of people grasp digital cash but (1) they don't want cash and (2) current cryptocurrencies aren't good digital cash. And most people don't want (digital) gold either.
The difference is that the existing financial system is used by about 3/4 of the world population (closer to 94% in developed nations) for the exchange of actual goods and services.
Bitcoin has significantly fewer users, but more importantly it is almost never used for the actual exchange of goods or services.
With my bank (and the accompanying infrastructure that goes along with it), my employer can deposit directly into my account, which I can then use to pay rent online (as opposed to physically traveling to their office), buy groceries at the store, and purchase nearly every legal good or service that is for sale, all while reducing the odds of me being robbed or losing money (e.g. losing my wallet.) If someone or some business scams me, I'm given methods of retrieving my money without confronting them in person. It also allows me to autopay all my bills so I'm never charged for forgetting to pay (and frankly I have very little desire to write and mail several checks each month or travel to various places to pay in cash.)
Credit cards, debit cards, direct deposit and money transfers are far more convenient than using cash, and aside from convenience, I imagine they decrease a nation's carbon footprint over using exclusively cash (due to less need to mint, print and transport physical currency, as well as travel in person to pay or receive payment.)
They do come at a cost of privacy, but if I wanted privacy for a specific purchase, I can still use cash for those specific transactions. While it may have a higher carbon footprint than digital payments, overall ink and paper tend to have low carbon footprints (though it's probably a bit higher for currency than it is for standard A4 paper.) Still, it's near certainly less carbon intensive than Bitcoin (per purchase, maybe not in total since billions of people actually use paper currency to buy things at least sometimes.)
Cryptocurrencies and their accompanying anonymity can bring about good things, so I'm open to at least considering their value — there are countries with authoritarian and oppressive governments, and there have been several democracies that have fallen to dictatorship before and that very well could happen again in the future. As such, being able to anonymously transfer money does have its value, especially in a world with CCTVs and facial recognition.
Cryptocurrencies, of course, also can be used for illegal services that are near universally considered immoral and evil. Currently, in most countries (even ones that aren't exactly liberal democracies), this is likely a much larger harm.
Balancing freedom from and freedom to is always tricky: neither authoritarianism nor anarchy are appealing — allowing personal freedom while preventing people from encroaching on other people's personal freedoms is difficult to achieve.
However, even if I were fully convinced that cryptocurrencies currencies were a net positive on society (open to considering the idea but definitely not convinced yet), I struggle to see how one with such a large carbon footprint is what should be used.
^^^ for your user class, probably true. But for others, it is deeply needed. The two mainstream use cases I see are transferring money where a fiat bank was too problematic (fees, limits, audits, etc) and purchasing items with the perception of anonymity (e.g. an incognito subscription with a coingate payment option alongside Visa). It is nice to know there is a way to digitally pay for things without major payment processors running analytics on my spending.
And in providing foreign aid, crypto has helped us reliably transfer funds without corrupt intervention. Culture ebs and flows, but in this case core user needs are being met by the tech.
But BTC cannot simply wipe out the need. Transactions per second is absurdly low currently (7) and confirmations take more than an instant to complete. I just don't see how it can replace the well structured payment networks that exist.
Might depend on your social circle, some groups might use it more then others. I have seen them being used much more frequently (and way beyond ransomware scenarios). For instance Bitcoin debit cards (e.g Ten X) are quite common and for those that got in the market early, it's a cheap way of buying anything. In some countries it's not even a taxable event to spend it. Still not perfect in the sense of having to use Visa, and down the road transactions will be much more direct when more merchants will start directly accepting crypto currencies.
1. I think that there are anti-money-laundering regulations that don't require $20m in bonds, like the know-your-customer laws that many exchanges are complying with.
2. Many people want consumer protections, but they'd probably, if asked, 'want' it for cash as well. And in fact, they do have them -- customer service, anti-fraud laws and criminal prosecution, small claims court and lawsuits. Those protections are necessary to, essentially, protect the consumer from the money transmitter. But in this case, the Bitcoin network exists, and provides a novel invention of something that can, through the use of keys and such, be transferred every bit as irrevocably as handing cash from one person to another -- and provide an excellent, public 'paper trail', which can act as proof of purchase/payment, as well.
So my point is, the world has changed, and it's very, very good that the old-world regulations aren't yet completely crushing that change.
Cash++ springs into being, and companies are being formed to add a user-friendly skin on top of this amazing Cash++ network, but endangered existing players want to make the barrier to entry for any company that taps into Cash++ be the onerous, $20mm bonds required of traditional money transmitters.
For most of those thousands of years, money was a precious metal (although not always the same one).
We moved away from it because of all the things that go wrong with that, and then the internet happened and we want digital money.
"Digital money" in the broadest sense is how it all works today, even with the coins and notes that are common here in Berlin. "Trust-less" money — without anyone who can undo transactions — is an illusion, as it necessitates the users trust their counterparty as court-ordered refunds can't be guaranteed. But too many entities who can undo transactions has a similar effect, and there's a benefit to scale, so you naturally end up with a small number of Visa/MasterCard/PayPal types who have motive, means, and opportunity to bribe/regulatory-capture governments.
One of the reasons I was originally curious about BTC, before it gave me "scam!" vibes, was the possible it might be a new path that might avoid some of this; but I no longer have that impression.
I don't know this woman's situation but the general assertion is people need their money to pay for basic goods/services
> leaving much of the population unable to pay for basic needs
I think the argument for crypto would make sense if everywhere accepted it, but I don't think it would be that useful if you need to exchange to fiat currency at volatile exchange rates to feed your family...
Sure, and that's one of the reasons cash is going to disappear in the coming decades and yet another flaw in the design of bitcoin (which was modelled on physical currency or some sort of electronic gold just as that loses favour). It's not competing with cash, it's competing with free instant transfers between bank accounts and free payments (for the customer), which many people enjoy right now.
Physical currency was always an instrument of states, and now they have better ones, which retailers, consumers, and states prefer (digital currencies, not cryptocurrencies). In many countries cash usage is down to 20%, it's expensive to produce and manage and not required any more.
Interesting read indeed! We need more innovation in this space. I am in the camp of cash users for several reasons. Increasingly, electronic forms of currency and credit are used as a means to exert control over vast majority of the population. The data can be misused by government and private entities to profile and target certain minorities. Crypto was supposed to solve this but that hasn't really panned out as governments do not want competition to their fiat currency.
Why should they use crypto? Dont they have credit cards. The Value of the currency didnt drop and the Banks will hopefully be backed by the EU or somesorts. Their money is still good.
Why does crypto have to be more beneficial than credit cards to count as a real world use case?
Because if you want people to switch from credit/debit/paypal to crypto, the idea is that it needs to offer some tangible benefit.
There are people in the US who cannot get a credit card easily.
Yes. Debit or Paypal can be used then. The only clear benefit I see from crypto are people who are completely unable to get ANY bank account. But still with crypto, you need a way to purchase it. Not easy without a bank account, but possible if you can find a way to buy it with cash.
There reason people want to send and receive money digitally has many sources. The cashless society change that Swedish governments and bank started a while back created a need for digital alternatives for activities that previously used physical cash. Transactions between individuals, flea markets, collections at church services, fees for clubs, sale of drinks/food at events. Credit cards are costly, includes minimum fees and use systems that tend to be slow and hard to use. A church collection does not work if a 1$ donation cost 1$ in credit card fees. Even donation services today like patreon currently looks down at such low donations as all the money get eaten by the credit card fees.
The benefits that people who advocated for Bitcoin in the early days talked about was mostly those. Ease of use. Cheap. Physical cash alternative. It was a time where paypall was the only alternative to credit cards and for many places the only way to pay unless you used direct bank transfer that take a minimum of 1 weekday transaction time.
Smartphone penetration is a relevant factor, but it was not the only one. The new bank service fulfilled a need which credit cards and paypall both did a poor job with. The question is if banks/government are willing to continue support what the market needs, or if systems like bitcoin will utilize the hole that remains when physical money is phased out.
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