> Crypto currencies (or atleast DeFI) is trying to solve a pretty pragmatic problem: There is 1.7B unbanked people in the world and banking services are outdated and unavailable for large portion of humankind.
This take is quite plainly absurd. If anyone has enough access to a working internet connection to make crypto transactions possible, they already meet all the requirements to perform transactions through any other service such as PayPal or even any bank at all.
> Crypto currencies (or atleast DeFI) is trying to solve a pretty pragmatic problem: There is 1.7B unbanked people in the world and banking services are outdated and unavailable for large portion of humankind.
Huh? Is that the story now? I thought cryptocurrencies were about 1) implementing some kind of cyberpunk-libertarian vision of a world free from the control of central bankers, 2) getting rich quick off of speculation, or 3) rushing to apply a faddish technology to be hip and cool.
I would be very surprised if DeFI's relationship to the unbanked was anything besides "uh, so now that we've made this thing, what use cases could we use to sell it?" (e.g. exactly opposite to what you've described).
> Meanwhile 1.7 billion people around the world do not have a bank account.
Do you know why the majority of those people don't have bank accounts? Because they have no fucking use for it! They either have no money (how does crypto help those people?) or they use banking services through their family/friends.
Do you know what 3.7 billion people don't have? Access to internet.
> I'm not 100% steeped in cryptocurrency theory, and so I don't understand why this is presented as if it's agreed on by everyone. What problems does the world have that would be solved by an online, independent [of any nation, presumably?] currency?
Visa and Mastercard are taking a 3-4% cut of every single consumer payment made in much of the world. That ends up being a very, very big number.
There are many people all over the world without access to banking - they can't store money, they can't transfer money, and they can't invest money. That may be someone who has poor credit in the US, or someone who's living in rural India or Africa. Without access to banking, you are essentially cut off from globalization.
If you live in a country that has extremely tight currency and economic controls but with a corrupt government, and are experiencing hyperinflation (Zimbabwe, Venezuela, others https://tradingeconomics.com/country-list/inflation-rate), access to alternative currencies can literally be the difference between life and death for individuals, where the money you make on your salary will be worthless by the time you get your check.
Plenty of other examples. Whether this is a good solution I don't know, they just announced it.
> It's inherently speculative and has no real use besides investing and unregulated money exchange.
How about sending cash? You can do that with a bank account. But what if you can't? 1.7 billion people are unbanked and some of them do have access to computers.
There are situations where cryptocurrencies are currently the only solution. Sure, not for you, or for me. But definitely for a large group in the world that we don't know much about, because we don't live their lives.
Edit: the more I reread my reply the more it fits "unregulated money exchange". But I'd like to argue that such a thing is a real use case. And by trivializing it you're not allowing yourself to understand it with minimal bias.
> poor uneducated unemployed people in developing countries
I don't think poor uneducated unmployed people in developing countries have money to worry about.
> are the ones profiting from Crypto?
Profit is the wrong word.
In my country people are not looking for profit when they buy dollars. When even the official inflation numbers are above 120%, they are escaping state sponsored pillage.
Naturally it's illegal to buy dollars here, so the only way to do this is cash. Everyone who can save a penny will try to buy dollars, so by the strict definition, the country is pretty much filled with criminals.
Since having basic banking is something everyone wants, crypto becomes an attractive alternative for those who can sort out the technical barriers of entry.
> “Unless you’re trying to create a cryptocurrency, buy drugs or blackmail a company using ransomware there aren’t really any use cases for a blockchain”
It's time for the OP and people agreeing with the article look deeper into DeFI. https://compound.finance/ & https://pooltogether.com/ are two great examples. Borrow or lend (and earn interest (on dollars if you wish so by using stablecoins like USDC or DAI) much higher than in banks), or participate in no-loss lotteries. All you need is an internet connection and you can use it without any arbitrary rules imposed by governments or companies.
If you are into technology and finance, you should be in awe with this stuff in my opinion.
> Cryptocurrencies were supposed to replace banks but they ended up reinventing the whole thing badly.
The only way that statement could be true is if anyone every assumed it's feasible or desirable for everyone to have physical wallets and self-host everything
> Web3 is inclusive in the fullest sense of the term.
Only to those that hold the tokens. Web1 and Web2 seem to be more inclusive.
> Nothing. Anyone and everyone on planet Earth can use it. This is not true of traditional banking and other web2 services.
How is web2 more inaccessible than web3? Also banking is accessible to more people than the internet. The vast majority of unbanked aren't unbanked because they don't have access to banks but because they are so poor that they have no need for banks. How will crypto/web3 help those people?
> The crypto bros totally miss the point in understanding this too.
I don't know which "crypto bros" you've been talking to, but as someone who is building a self-hosted payment gateway for crypto [0], the benefits from using crypto are two-fold: it eliminates the chance of fraud and it moves the cost of customer support to the merchant.
Also, once again I will have to repeat that no one sane will try to completely replace the existing payment systems with crypto. Crypto is meant to be an alternative for the cases where the cost of existing processors make the transaction not viable.
> - Someone lives somewhere that the U.S refuses to bank with
Cryptocurrencies won't solve this problem. If that happens, there are much bigger issues.
> - Someone who lives somewhere that simply has no financial infrastructure readily accessible and relies on prepaid cards for things like water and electricity (Rural Africa?)
Let's be honest. The whole blockhain / cryptocurrency was never about that ever.
> - Some industries are forbidden to use the majority of credit card processing facilities without excess fee's (Adult content for example)
I think there are more than plenty online sites where people can pay for that kind of content without any problems.
> None of their claims have materially panned out.
Well, I can send arbitrarily large amounts of money across the planet, to any country with internet access, for tiny sums, safely, irreversibly, to anyone.
Many people have sent many millions to Ukraine, for example. Transnational, permissionless internet money is quite handy.
That wasn't possible before, and that's pretty useful, so I think the basic claim (that cryptocurrency is useful) is holding up fine.
> DeFi isn't a single market, it's millions of micro markets that are accessible through what amounts to a single API.
Millions of micro markets that produce what, exactly? Last time I checked there has to be at least something on the other side of the calculation what a coin is worth.
You think crypto coins magically make people work harder, better, faster, stronger?
That's not how the constraints of the physical world work.
> outside of our comfy western countries most people have this problem.
Can you cite some evidence that there are people keeping long-term savings* in cash and has adequate internet access and computing resources to participate in cryptocurrencies? I'm still not buying this.
* (I believe people do hold short-term savings in cash, but those are not the type of savings that money-printing erodes significantly.)
> Given that transferring crypto is hard, slower, more expensive, riskier, public, and more wasteful than real banking, I don’t see why these would be related.
This is partially true, but I think a bad blanket statement.
Bitcoin has outperformed all other asset classes over the last decade.
You can get crypto credit cards that remove all complexity you aren't forced to deal with anyway. And even if that wasn't the case. Banking is hard, too, so that's a moot argument.
Ethereum and others are moving away from proof-of-work.
Upgrades like taproot and zkrollups improve privacy and can be used today.
Something that has sporadic price fluctuations, is used as a gambling token for speculation, and cannot send value instantly to another person (crypto waiting times are over 9 hours) is not a currency.
Very often on HN, we see new stories about how Payment Provider X stole $$$ from some individual/group/business, ruining their lives. Or we see governments blocking bank accounts from doubleplusungood protesters.
I cannot understand how people see this kind of thing happen all of the time and then rationalize that there's no conceivable use cases for crypto.
This take is quite plainly absurd. If anyone has enough access to a working internet connection to make crypto transactions possible, they already meet all the requirements to perform transactions through any other service such as PayPal or even any bank at all.
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