Comment by latchkey
3 years ago
> that's the thing that causes the most cognitive dissonance.
The road is literally being paved and is being done so iteratively. I'm ok with that as that is a standard way to develop things over time.
> why not trust entities that have had hundreds of years to work out the kinks?
Simple. Because they are not acting in your best interest. We've been sold on the idea that money is scary and we shouldn't touch it ourselves. We should put it into 401k's and forget about it until we retire. We should 'trust' people who know these complicated finance things better than us. It is a self fulfilling prophecy.
> We've been sold on the idea that money is scary and we shouldn't touch it ourselves. We should put it into 401k's and forget about it until we retire. We should 'trust' people who know these complicated finance things better than us.
For 95% of the population (including me) crypto is the same trust system. I can't audit a smart contract and the underlying virtual machine it runs on. I would have no clue whether my transactions can be front-ended by bots that take all of the gains I expected, and then some.
I do have a general idea what happens when I use a credit card to make a purchase, and what to expect. I also have a general idea that if I put money into an investment account what fees will be deducted, and what stocks and bonds are being bought and sold.
And if I make the horrible mistake of sending money or NFTs to the wrong account, I know it can at least theoretically be reversed in non-crypto systems (and that often the reversal costs will be eaten by the bank, not paid by me). Whereas with crypto I have no expectation that the validators care about me to do a MakerDAO reversal on my behalf.
Your comment sounds like this:
https://www.smithsonianmag.com/smart-news/people-had-to-be-c...
You obviously have some understanding of the system if you can speak about bots and front running. Fact is that front running exists in all markets, not just crypto.
As for reversible transactions, that's something done with smart contracts and escrow services. We are not there yet in terms of development, but it will happen eventually. Today, people actually appreciate the immutability of transactions. It enables the effective store of infinite wealth as a basis.
Credit card companies are providing the reversal business, which is paid for by the people who are borrowing money at insane interest rates... no reason why it can't be replicated once there is enough demand for it, but honestly, I'd rather move to reverse the model.... over collateralized loans. This is what is done in countries without the whole bogus credit rating systems.
We did not have an alternative to electricity for all of the things electricity could power. For some of the things alternatives to electricity continue to be used (e.g. oil, gas, or wood heated homes; windows for light; combustion engines and fuel cells for automotive power).
> You obviously have some understanding of the system if you can speak about bots and front running.
What I've read on crypto skeptic blogs. So basically my understanding is equivalent to the understanding that anyone gets from reading news articles written by content-expert journalists. From what I understand the front-running in crypto can have pretty egregious effects, and can occur with simple monetary transactions, not just the crypto equivalent of stock market transactions. (Yeah, sure, front running can occur in currency exchanges in non-crypto, too, but as an individual, when you go to a currency exchange, or make a purchase overseas, you know the exchange rate before you trigger the exchange.)
> Today, people actually appreciate the immutability of transactions.
I don't. And I don't see how this follows: "It enables the effective store of infinite wealth as a basis." Infinite wealth cannot exist. And how does immutability facilitate this? And how is a blockchain that can technically be rewritten at non-infinite cost immutable (i.e. the MakerDAO rewrite, or any Sybil/51% attack)?
> Credit card companies are providing the reversal business, which is paid for by the people who are borrowing money at insane interest rates... no reason why it can't be replicated once there is enough demand for it, but honestly, I'd rather move to reverse the model.... over collateralized loans.
From what I understand, the interest rates go to the issuing banks, and the credit card companies take their profit from fees. Credit cards (and payday loans) exist for people who lack the collateral for a non-signature loan (without having to collateralize their freedom, aka debtor's prisons or endenturing). The only way to do this in crypto is to trust a third party lender such as Voyager or Celsius.
1 reply →
> We've been sold on the idea that money is scary and we shouldn't touch it ourselves.
We have? I guess I was passed over when that sales job happened.
> > We should 'trust' people who know these complicated finance things better than us.
That's not how I look at it. How I see it is that when I'm operating in the established monetary system, I have some amount of protection and recourse available to me if/when things go wrong. With cryptocurrency, I have none.
To me, that's a really significant difference, and is in the top 3 reasons why I avoid cryptocurrency.
It has nothing to do with "trusting" financial institutions, or feeling like money is too complicated to understand.
> I have some amount of protection and recourse available to me if/when things go wrong.
We just literally witnessed several banks fail in the last few weeks, along with a litany of startups freaking out about how they were going to pay their staff. The government had to step in to prevent things from going totally ape shit and we are still on the edge of things getting worse by the day. All because people had some sort of belief like you do.
> With cryptocurrency, I have none.
This is simply not true.
> We just literally witnessed several banks fail in the last few weeks, along with a litany of startups freaking out about how they were going to pay their staff
We did, and those startups got into the state they were in because they chose to avoid getting insurance on their deposits that exceeded the FDIC limits. That's not the fault of of the financial system. And the financial system protected them well over and above what it had committed to do.
> All because people had some sort of belief like you do.
Not at all. If I had a large deposit like them, I would have actually used the services that would have protected my deposits.
> This is simply not true.
It isn't? What protection is there?
6 replies →