Comment by __MatrixMan__
7 days ago
I disagree. There's a tremendous amount of waste in the economy related to reconciling different companies' records of who owes what to whom and then getting that info to the bank and then hearing back from the bank about whether the debt was fully or partially paid and then relating that to whether the service continues to be rendered.
Moving from an accounts-receivable/accounts-payable model to a insert-coin-receive-service model would be a huge advantage.
It just hasn't happened because the vibes are wrong and it appears that they'll stay wrong for a while.
>Moving from an accounts-receivable/accounts-payable model to a insert-coin-receive-service model would be a huge advantage.
Why would the method of payment affect how you track accounts payable/receivable in your books?
Maybe there were better words I could have used there, sorry.
You can of course track it however you want, but the complexity of what you end up tracking explodes if you're operating on something like a monthly billing cycle. Especially if you have more than one financial institution with an opinion about whether money should/did get moved.
I've been involved with the maintenance of several billing pipelines and having to handle events like maybe the bank was only able to collect half of this person's bill but it took them a few days to let us know that, but we've already sent that money over here so now we' have this deficit and do we shut off their service over a deficit of just $5...
It's a nightmare that's totally orthogonal to the business that's being run. Nobody wants to be on the billing team, but it's viewed as a necessary evil. But I'm saying that it's an unnecessary evil. If you can very quickly settle up for practically nothing, then you can just build the app to withhold service for a few milliseconds until payment clears and then there's no debts to keep track of and resolve later. And having it on a public blockchain means that if you're collaborating with other companies over how the pie gets sliced, there's a single source of truth for how big the pie actually is.
> There's a tremendous amount of waste in the economy related to reconciling different companies' records of who owes what to whom and then getting that info to the bank and then hearing back from the bank about whether the debt was fully or partially paid and then relating that to whether the service continues to be rendered.
Is all that really a tremendous waste, in the days of databases and instant communication? How much waste are we talking about here? I'd wager a lot of money it's at least one order of magnitude less than the literal heat waste produced by validating bitcoin transactions. Crypto is much more wasteful.
> Moving from an accounts-receivable/accounts-payable model to a insert-coin-receive-service model
The monetary system isn't what's preventing this. You can't provide a service and also charge for it in the exact same instant. If I hire a contractor to renovate my bathroom, there's a ton of negotiation, possible disagreements about whether the work is "done" or not, payment deadlines, etc., and crypto vs. fiat currency changes none of that.
> You can't provide a service and also charge for it in the exact same instant.
Sometimes you can, and it's those cases that I'm thinking of.
But even when you can't, why not create the transaction up front and include the conditions under which it should or should not proceed at a later date? If you want a third party as a mediator, just in case, why not make that part of the transaction too? Why not ensure now, that the money you'll be paid later, actually exists and can't be spent on something else in the meantime?
So much becomes possible if both parties are on the same page yet neither had to build that page from scratch.
> How much waste are we talking about here?
Well there's all the business that doesn't happen because while I'm a bit curious about your service, I'm not curious enough to give you my credit card and trust your pinky-promise that you'll charge me like you said you would.
And then there's the business that doesn't happen because micropayments are required for the business model (many tiny credit card transactions being prohibitively expensive).
And then there's all the money that gets wasted when resolving disputes in court when mediators could've been bound to the transaction up front--mediators who are more familiar with the parties and the situations and who have access to a single source of truth about the nature of the disagreement rather than having to reconcile both versions of some "handshake agreement".
And then there's maintenance for all that billing pipeline code which is implemented over and over again--slightly differently by each company but rarely meaningfully so--which has to account for two worlds: one which creates debts, another which eliminates them, just to align the conjunction of those worlds to an arbitrary cadence (typically monthly) which has no correspondence with the product's usage. If you offload the accounting to public infra immediately, then you don't have to build and maintain infra which keeps both worlds in sync.
All told, I think it's quite a lot. As for the waste heat from bitcoin--yes, bitcoin is stone-age crypto. What we need for this probably doesn't exist yet.
I just don't see most of what you're talking about as either actual problems, or as caused by fiat currency / solved by crypto.
> why not create the transaction up front and include the conditions under which it should or should not proceed at a later date
Forcing people to commit money to some Etherium contract before work can begin is not going to grease the wheels of commerce. You hire an engineering firm to design a new regional airport for tens of millions of dollars over three years, and you're supposed to stick all that money in some crypto account where nobody can touch it until an oracle says the work is complete? Where any bugs or security flaws or front-runners might just steal or lock away all the money with no recourse? In the real world, no party ever holds the entire pot of money all at once -- that's a cashflow nightmare! You seem to be lamenting the cashflow problems caused by our current system (which companies would indeed pay a lot to improve), and your solution is to lock up the entire contract value ahead of time?
The current way that people are paying each other is not a problem that needs to be fixed.
> the business that doesn't happen because micropayments are required for the business model
The world is lousy with microtransactions. I heard about this being a problem a decade ago, but not anymore. Besides, what are the current gas fees on major crypto platforms? Isn't crypto terrible for microtransactions?
> money that gets wasted when resolving disputes in court
If people are still signing contracts with each other, this is still happening. Crypto does not solve this. This will still happen, plus all the money that gets wasted when their bitcoin wallet is stolen or their contract is front-run or there's a bug in the exchange.
> maintenance for all that billing pipeline code which is implemented over and over again--slightly differently by each company but rarely meaningfully so--which has to account for two worlds: one which creates debts, another which eliminates them
There are somewhere around 20,000 cryptocurrencies in existence. Twenty thousand. You're lamenting the fact that different companies have to handle dual-entry accounting, a relatively simple practice that has remained basically the same for hundreds of years, to the complexity of implementing cryptocurrency exchanges and blockchains correctly? Why can't companies just rely on third parties for fiat transactions? You're comparing crypto and fiat on completely different playing fields here. A bug in your fiat accounting code requires a manual correction, maybe an audit, and possibly a court case. A bug in your crypto code can permanently cost you all your money with no possible recourse.
> What we need for this probably doesn't exist yet.
So you're comparing the problems with our current fiat system with some hypothetical perfect future crypto system and saying the crypto system is better. Yes, I could compare anything that is happening now with a hypothetical future perfect alternative that might not be possible, and the latter will always look better. That is utterly meaningless. When you compare our current fiat system with any crypto systems that currently exist, the crypto systems are significantly worse in almost every way, except for buying drugs and scamming people. If you have a thousand "innovation points" that you can spend making a cryptocurrency system that doesn't have these problems (doubtful), why not spend that innovation on specific improvements to specific problems with the fiat system instead?
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i agree smart contracts are the way forward, but you don’t need crypto or blockchain to implement them. You do need a trusted third party, to adjudicate when things go wrong.
We already have that. It's called courts.
Some people just ignore the courts, or delay them more or less indefinitely. This whole figure-it-out-after-the-fact-if-something-goes-wrong thing we're doing has a lot of opportunity for improvement.
I'm not saying smart contractors are more effective but they might be more accessible to the plebs than hiring a lawyer to prosecute your case.
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> It just hasn't happened because the vibes are wrong and it appears that they'll stay wrong for a while.
No. A civil society needs to be able to issue judgments that override transactions / seize assets. And therefore they cannot have automatons determining where the assets belong.
When criminals are caught with their hand in the cookie jar, we can't just shrug and say "gee I wish we had a way to get that money back."
I'm a big fan of bitcoin and to some extent cryptocurrency. I think it has real value. But I'm not deluded enough to think it can somehow replace all ledgers everywhere.
I'm not proposing that this all happen on an L1, of course you need some time for various parties to decide whether settlement should proceed. Nor am I saying that all ledgers everywhere would benefit from this change.
I'm just saying that many businesses would benefit (or become feasible in the first place) if the time between service-rendered and payment-pending were sub-second and built into the product and instead of relying on month-long-billing cycles. It would also be beneficial if the infrastructure for handling that process were common to both parties rather than having each of them track it separately hoping they agree on what is owed after the fact.