Source: /cirosantilli/are-cryptocurrencies-useful

= Are cryptocurrencies useful?

The key difficulties of cryptocurrencies are:
* how do transaction fees/guarantees/times compare to centralized systems such as credit cards:
  * "The Blockchain Scalability Problem & the Race for Visa-Like Transaction Speed" (2019)

    \Q[The battle for a scalable solution is the blockchain's moon race. Bitcoin processes 4.6 transactions per second. Visa does around 1,700 transactions per second on average (based on a calculation derived from the official claim of over 150 million transactions per day).]
  Obviously, decentralized currencies cannot be cheaper to maintain than centralized ones, since with decentralization you still have to send network messages at all times, and instead of one party carrying out computations, multiple parties have to carry out computations.

  Crypto could however be close enough in price to centralized systems that it becomes viable, this can be considered.
* how can <governments> <tax> cryptocurrency. Notably, because:
  * taxation has to be <progressive tax>[progressive], e.g. <wealth tax>[we have to tax the rich more than the poor], and <anonymity> in transactions would weaken that
  * it would be even easier to move money into <fiscal paradises>, and then just say, oops, lost my passwords, those coins are actually gone
  See also <globalization reduces the power of governments>.

Until those problems are solved, the only real applications of cryptocurrency will by <illegal> activities, notably buying <drugs>, paying for <ransomware>. But also paying for anti-<censorship> services from inside <dictatorships>. Illegal activity can be good when governments are bad, and arguably selling drugs should be legal.

For this reason <Ciro Santilli> believes that <privacy coins> like <Monero> are currently the most useful cryptocurrencies. Also, people concerned with their privacy are likely to more naturally make fewer larger payments to reduce exposure rather than a bunch of small separate ones, and therefore transaction fees matter less, and can be seen as a reasonable privacy <tax>. Also drugs are expensive, just have a look at any <uncensored Onion service search engine>, so individual transactions tend to be large.

Hedgint against <inflation> due to <money creation> in <fiat currencies> is a another valid argument for cryptocurrencies. <Money creation vs tax>[Money printing is a bad form of tax]. But why not just instead invest in bonds or <stocks>, which actually have a specific intrinsic value and should therefore increase your capital and beat inflation? Even if crypto did take over, its value would eventually become constant, and just holding it would lose out to stocks and bonds. And pre-crypto, salaries should adjust relatively quickly to new inflation levels as they come, though there is always some delay. Also, without anonymity, governments will sooner or later find a way to regulate and pervert it. If you want to do things without anonymity, then what you really have to fight for is to change government itself, perhaps with a #DAO-like approach, or pushing for a more <direct democracy>.

If crypto really takes off, 99.99% of people will only ever use it through some <cryptocurrency exchange> (unless scalability problems are solved, and they replace <fiat currencies> entirely), so the experience will be very similar to <PayPal>, and without "true" decentralization.

For those reasons, <Ciro Santilli> instead believes that governments should issue <electronic money>, and maintain an open <API> that all can access instead. The centralized service will always be cheaper for <society> to maintain than any distributed service, and it will still allow for proper taxation.

Ciro believes that it is easy for people to be seduced by the <idealistic> promise that "cryptocurrency will make the world more fair and equal by giving everyone equal opportunities, away from the corruption of Governments". Such optimism that new <technologies> will solve certain key <social> problems without the need for constant <government> intervention and management is not new, as shown e.g. at <HyperNormalisation by Adam Curtis (2016)> when he talks about the cyberspace (when the <Internet> was just beginning):[]. Technologies can make our lives better. But in general, some of them also have to be managed.

In any case, cryptocurrencies are <bullshit>, the true currency of the future is going to be <Magic: The Gathering> cards. And <Cirocoin>.

One closely related thing that Ciro Santilli does think could be interesting exploring right now however, notably when having <Monero>-like anonymity in mind, would be anonymous <electronic voting>, which is a pre-requisite to make <direct democracy> convenient so people can vote more often.

TODO evaluate the possible application of cryptocurrency for international transfers:
Of course, the ideal solution would be for governments to just allow for people from other countries to create accounts in their country, and use the centralized API just like citizens. Having an account of some sort is of course fundamental to avoid money laundering/tax evasion, be it on the API, or when you are going to cash out the crypto into <fiat currency>[fiat]. So then the question becomes: suppose that governments are shit and never make such APIs, are international transfers just because traditional banks are inefficient/greedy? Or is it because of the inevitable cost of auditing transfers? E.g. how does <TransferWise> compare to Bitcoin these days? And if cryptocurrency is more desirable, why wouldn't <TransferWise> just use it as their backend, and reach very similar fees?