Comment by __MatrixMan__
14 days ago
> 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?
> 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
Well yes, I was attempting to refute:
> This is the only promise that cryptocurrency held
My claim is that there are other promises. I hear you say
> The current way that people are paying each other is not a problem that needs to be fixed.
...and I couldn't disagree more. Have you ever worked at a payment provider? Your code ends up with other payment providers in all directions and the user is nowhere to be found. It's just a big pile of parasites fighting over the money pipe. Outside of work I'd strike up a conversation with a merchant about how I'm familiar with their POS equipment, and there I'd learn that it's practically a hostage situation.
The liquor store near my house has two entirely separate POS systems pointing at two separate bank accounts and they just direct customers to whichever one happens to be enlisted in the least-objectionable shenanigans at the moment.
The needs of the people are not being served, especially if they're people who can't afford a lawyer.
I'm not proposing that anybody should have to use crypto. I'm saying that when crypto is ready, those who do use it will have a competitive advantage because they won't have to deal with the drag exerted by the existing system. The multiplicity of platforms won't be an issue because those two people--whoever they are--will agree on whichever one fits their use case (though I expect they will be fewer by then).
> why not spend that innovation on specific improvements to specific problems with the fiat system instead?
Because the fiat system was not designed to solve any of the problems we're talking about. It was designed to feed the Roman war machine, and since then its primary purpose has been to ensure that power structures established by varying forms of violence remain in effect without the need to trot out that violence again.
It's not the kind of thing you can incrementally improve on. It has the problems it does because the people who maintain it want it to have those problems.
Take credit card companies for example. There's a lot they could do to prevent fraud--there are many ways to build a system where payments happen without leaving secrets like credit card numbers out in the open. But they don't want to solve that problem because it's a problem that puts them in a privileged position--they get to be the money-censors, which is a powerful position that they frequently abuse.
Or consider health insurance claims. They could absolutely provide a price to the patient within a minute or two--fast enough for the patient to factor it into whether or not they get the procedure. But having the bill come six months later and full of surprises is a feature for them, not a bug.
We have a lot of harmful middlemen. Improving the fiat system would just to improve their capacity to do harm.
It may be in a pretty embarrassing state right now, which I hope it snaps out of, but crypto is at least compatible with the idea that we could put control over the system in the hands of its users. Fiat is not.
I know this is hard for techies to hear, but the way you fight existing power structures is by organizing, petitioning, protesting, voting. Political, in other words. No technology is going to come and save us from powerful people exploiting the poor if we keep voting for the biggest assholes on the planet. Ironically, most of the people advocating for crypto to save us from powerful people are exactly the same people voting for the absolute worst people whose campaign promises are to fuck over the poor and exact revenge on their political enemies. So it's hard to take the argument "I'm pro-crypto because it rages against the machine" in good faith when 99.8% of people making that argument are fighting tool and nail to make it illegal to oppose the machine. But I'll assume you're in the 0.2% for sake of argument. The point stands: these are political problems, not technological ones.
> Because the fiat system was not designed to solve any of the problems we're talking about. It was designed to feed the Roman war machine
This is exactly why I'm saying you're comparing fiat vs. crypto completely unequally. If fiat was designed to feed the Roman war machine, then crypto was designed to buy drugs online. You're being reductionist and pessimistic when describing fiat and blindly optimistic when describing crypto.
> its primary purpose has been to ensure that power structures established by varying forms of violence remain in effect without the need to trot out that violence again.
The primary purpose of the fiat system is to allow more control and regulation over the system, mostly to avoid huge boom-bust cycles in the economy and more Great Depressions. That's genuinely it. Yes, much of the purpose of government is to enable the transfer of power without violence. If we're redesigning government, can we please keep that part? Right now, if I break into your home and hit you with a wrench until you tell me the private keys of your bitcoin wallet, I can steal all your money assuming I get away. If I break into your home at hit you with a wrench until you give me your credit card, there's very little I can actually do with that. The violence you're talking about is the violence of anarchy -- the exact same anarchy that you're touting as a benefit of crypto.
> Take credit card companies for example. There's a lot they could do to prevent fraud
Credit card companies do an enormous amount to prevent fraud, and they're incredibly good at it. And are you seriously claiming that crypto will have less fraud? Most of the ways that credit card companies deal with fraud is by immediately detecting and canceling fraudulent transactions -- something that is inherently impossible with crypto.
> --there are many ways to build a system where payments happen without leaving secrets like credit card numbers out in the open
Yes, including in a fiat system! Here you are again comparing the current, flawed fiat system with some imagined future crypto system, but you can also imagine a better fiat system! And people are working on it, e.g. with chipped cards (yes it's annoying it's only for in-person purchases).
> Or consider health insurance claims. They could absolutely provide a price to the patient within a minute or two ... [previously] I'm not proposing that anybody should have to use crypto.
But if health insurance companies don't have to use crypto, and they benefit from the current system, then they just won't use crypto. So your problem is not solved. It's a political one, not a technological one.
Look, humanity has been getting incrementally better at this "government" thing over thousands of years. Yes, it's slow, and we backslide a lot. I'm pissed at entrenched power structures too. But these are political problems, and crypto just is not inherently a fix for these problems. The people "in power" could be megacorporations and aging narcissistic asshole rapist felons, or they could be scientists, human rights lawyers, passionate nerds, doctors, and even everyday people. It's largely up to us whether it's the former or the latter, and most crypto advocates today fight tooth and nail in favor of keeping power in the hands of narcissistic assholes.
If we're imagining a better world, why are we imagining one where existing shitty power structures just get torn down, and nobody has the power to stop scams, money laundering, illegal activity (we're not talking about buying fun drugs here either, we're talking about the bad shit), billions of dollars being funneled to North Korea (thanks, crypto!), small bugs in contract logic causing billions of dollars in losses, etc.? A world where a multi-billion-dollar project to build a new children's hospital requires some party to ever actually hold multiple billions of dollars in one pot, lock it up in some crypto contract for 5 years where it can't benefit the economy, and then have absolutely no possible recourse when it gets stolen and funneled to North Korea? Why is that the world we're imagining, and not one where power is just distributed better? Fuck crypto, vote better.
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