It also enables people to finance themselves despite tyrannical restrictions imposed by bad governments. Using bitcoin I can send money to someone in Chi no a who's social rating was degraded by the CCP and who is forbidden from using banks.
This alone trumps any arguments against bitcoin. Crime will exist forever and criminals will find ways to finance themselves anyway, so the use of cryptocurrencies for their operations is not really a factor.
> Using bitcoin I can send money to someone in Chi no a who's social rating was degraded by the CCP and who is forbidden from using banks
How will they convert it into something they can use to pay rent and buy groceries?
> Crime will exist forever and criminals will find ways to finance themselves anyway, so the use of cryptocurrencies for their operations is not really a factor.
Does this make it easier for the wealthy to evade taxes? I find just signing transactions using something like gpg a much easier to reason about.
My biggest concern about cryptocurrency is fees. There is no reason why fees should be based on payload as far as I understand. Whether I’m sending one satoshi (or any other unit of money) or a trillion, the cost should be the same and ideally as close to zero as possible if not zero. This was the original reason I was drawn to bitcoin but it was obvious it would never be the case.
> How will they convert it into something they can use to pay rent and buy groceries?
Exactly my question. Exchanges where you can sell the crypto for real money are still regulated and require KYC.
> My biggest concern about cryptocurrency is fees.
High fees are required to pay for the insane electricity bills and specialized hardware. PoW cryptos are expensive and inefficient by design so there will always be more transactions waiting in the queue to get on the chain than the processing power required to mine the next block.
You don't even need black market. On one the largest crypto exchanges in India (WazirX), P2P is the only viable option left to get money into exchange because most banks have stopped dealing with them.
Fees are based on resource usage. In Bitcoin this is usually the total data size of inputs and outputs that are used to make the sum. This is where the issue of dust arises, when an address holds a mass quantity of low value inputs, but combing them yields a very large and therefore costly transaction.
In some other chains, like Ethereum, the accounting is ledger based. With these systems theres is no variety in input count, but it similarly scales by transaction computation so more complex contracts are more expensive.
Both networks have a fluctuating transaction cost due to congestion competition, but the “base cost” in either is totally unaffected by the value/total amount of currency.
> Using bitcoin I can send money to someone in Chi no a who's social rating was degraded by the CCP and who is forbidden from using banks.
Okay, let’s think about this even a little bit: receiving that Bitcoin requires them to have software and access websites which the Chinese government has restricted. Assuming they successfully get a wallet app which isn’t compromised, they then need to connect to a well-known, trivially blocked high-volume network service without the Great Firewall triggering. Having done that, they then need to pay a substantial processing fee for any transaction. Since their landlord, grocer, etc. need to be paid in real money this person will also need to find someone to convert it, again requiring a substantial payment because accepting something banned from a pariah is high-risk.
All of this is not only expensive but incredibly risky since you’re leaving a lot of electronic records of illegal activity and you’re forced to trust various third-parties who can be compromised without your ability to easily tell. Bitcoin is perfect for state authorities, too, since it leaves a signed record of intent to break the law for each transaction — if they bust a business which does a lot of cash sales, it’s a lot harder to prove where each bill came from and there’s no way to do so if they only start monitoring after the fact like there is with Bitcoin.
> It also enables people to finance themselves despite tyrannical restrictions imposed by bad governments. Using bitcoin I can send money to someone in Chi no a who's social rating was degraded by the CCP and who is forbidden from using banks.
In no way does bitcoin being blockchain based enable you to do this better or more effectively. It's just because it's a less regulated currency.
Alright, how does a potential recipient use those funds?
Pay rent? No, because the government would notice the missing income on the landlords tax return.
Pay for food and other goods? No, because the government would not allow companies to take funds from permissionless blockchains.
Buy real estate or a car? No because those needs to be registered with the government as well and payments are regularly checked for fraud and money laundering.
A black market for all of the above? Sure but any government to weak too prevent a black market of this scale would also be unable to restrict transactions (no matter the method) in the first place.
Conversion of bitcoin to whatever currency is hard to block. USSR had death penalty (!) for buying or selling things using foreigh currency. Yet, the black was persistent.
Also, we are talking about the unbanked: people who otherwise have no other state-sanctioned way to use financial services. Bitcoin first and foremost helps such people.
> Also, we are talking about the unbanked: people who otherwise have no other state-sanctioned way to use financial services. Bitcoin first and foremost helps such people.
No. No it doesn't.
The main reason for a large portion of the unbanked population is that they are so poor that they can't even afford to open and maintain a bank account. But sure, "we require a person to have a smartphone with always-on internet connection to do anything useful and have egregious transaction fees in most popular chains" surely does help the unbanked.
I got into bitcoin when i could receive payment from a client that normally was declined to process by banks in our respective countries, and options like Paypal were too expensive.
In the result buying buying bitcoin for a client for his currency, sending it to me and selling for my currency was cheaper than simply converting USD to my local currency. That's where I understood that bitcoin is a great thing and is here to stay. It is enough to shut your argument. I wasn't poor, but absurd restrictions by banks stood in my way just the same. Bitcoin liberates money.
So if your personal anecdote "shuts down" my argument, then my personal anecdote of never having these problems sure as hell shuts yours.
What crypto peddlers don't understand is that:
- money transfer doesn't need blockchain in any shape or form
- restrictions and regulations exist for a reason, and these reasons are being rapidly discovered by all the people who are being scammed in the web3 space
- the moment money transfer over presents even a fraction of what banks routinely do, they will introduce same money transfers at a fraction of the cost (and they already have, in many parts of the world, but not because of blockchain)
What YOU don't understand that bitcoin has 2 key properties: permissionless and artificial scarcity. I haven't heard of any successful implementation of both without the use of Blockchain. Have you? Whatever else you'd offer would have a CA at the core which can censor and block people under duress or at will.
Restrictions and regulations exist for a reason, here I agree with you. What I don't agree with it that this regulation is good. I think most of it is veryverybad for people, designed to keep them under control. In my country, this control takes very draconian forms against anyone who is in opposition to the (criminal) government.
> 2 key properties: permissionless and artificial scarcity. I haven't heard of any successful implementation of both without the use of Blockchain. Have you?
Perhaps Because they are not that interesting or useful? So far you've given me two "solutions" in search of a problem.
> What I don't agree with it that this regulation is good. I think most of it is very very bad for people, designed to keep them under control.
Go and read something on food and drug safety (like Horse Named Jim, https://en.wikipedia.org/wiki/Jim_(horse)), an automotive safety, on emission safety, on workplace safety, on...
There's high probability that you're alive and healthy today precisely because of regulations.
> In my country, this control takes very draconian forms against anyone who is in opposition to the (criminal) government.
Ah yes. And crypto will surely help with that because that criminal government will never ever find a way to bust you for trying to convert that "censorship resistant crypto" into, you know, actual money you have to pay for food, rent, electricity etc.
I think it's important to note that what you're talking about is bitcoin, not the blockchain or even cryptocurrency. No aspect of cryptocurrency or blockchain plays any part at all in your story.
The reason why you could do what you did is because you participated in a young, unregulated market. Blockchain added nothing.
Bitcoin is not possible without blockchain or 'cryptocurrency'. Thanks to these properties, it can't be truly regulated, which is a good thing in my book.
Of course, this breaktrhough opens a way to zillions of shitcoins, but they should simply be ignored.
Of course it can be regulated. Countries are working towards that already. It's already a taxable asset. Nothing about the blockchain makes bitcoin harder to regulate.
Permissionless has nothing to do with blockchain. As an example if you want to exchange currency without blockchain you can do that by buying gift cards and exchanging them for cash on any number of online markets.
Blockchain provides integrity guarantees given a number of malicious participants. That's all it provides over any other ACID database.
This alone trumps any arguments against bitcoin. Crime will exist forever and criminals will find ways to finance themselves anyway, so the use of cryptocurrencies for their operations is not really a factor.