
Switzerland embraces digital currencies and crypto-entrepreneurs - edward
https://www.economist.com/news/finance-and-economics/21737255-switzerland-embraces-digital-currencies-and-crypto-entrepreneurs-banking-centre
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malthaus
Switzerland does not 'embrace' digital currencies per se. We (or rather: our
politicians and ecosystem shovel-sellers) are looking desperately for a new
focus area after having lost most of the historical wealth management appeal
and since some of the early crypto companies settled here they kind of ran
with it.

The robust political system and wealthy quite egalitarian society is a nice
environment to run your company in but is also the reason that the next step
of the cryptocurrency revolution will not happen here.

Cryptocurrencies are still 100% hype & speculation; a solution in search of a
problem. Unless it delivers some real-world applicability i'm not very happy
about the reputational risk we expose our country too as i'm strictly in the
camp of that it will all come crashing down in a big bang soon.

~~~
scalesolved
Whilst there is a lot of hype and speculation I think you are mistaken about
there being no real-world applicability. My bank has so many fees and
loopholes for sending money even within the EU and they can take days.

I owed a friend some money and I sent him BTC which arrived in a couple of
hours with fees that were about 10% of what I pay using the banking system.
Real-world applicability and a satisfied user.

~~~
Toine
1) I don't what bank you're using but it's really bad

2) It's been a LONG time since we can transfer money really fast at a really
low cost

~~~
0xFFFF0000
>>2) It's been a LONG time since we can transfer money really fast at a really
low cost

Transferring money from many places in the world is not cheap or easy (think
of third world countries) - but even in more developed countries it can take
quite long and have heavy fees. Crypto enables people to be their own bank.

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thisisit
A cynical way to look at this will be that Switzerland had enabled people -
corrupt politicians, dictators etc, especially from third world countries,
hide money. They refused to divulge bank details citing privacy concerns. But
in recent years details have come to light - either through leaked data or
country actions. This has led to weakening of their infamous privacy rules.

With cryptocurrency's rise, it offers Switzerland a new way to continue their
privacy bs. So, obviously they are going to embrace and enable.

~~~
m_mueller
> privacy bs

Privacy is always BS until the lack of it bites you personally. Privacy (i.e.
4th amendment) is to Swiss what 2nd and 4th amendment is to conservative
Americans: Our insurance against government overreach.

The problem is of course that not every place is as democratic (i.e. ruled by
the people as a whole) and low in crime, therefore privacy creates unwanted
side effects in form of illegitimate uses. What exactly is illegitimate is up
for discussion though - e.g. I consider tax hiding as simply a symptom of
governments failing to create stringent market places where taxes flow
automatically and fairly. As long as you don't have a world- (solar system?)
wide government with total control, you'll never eliminate the availability of
tax havens, they just get shifted around - currently the easiest place to hide
is probably Delaware.

I see cryptocurrency as a nice opportunity to introduce a much more stringent
monetary system where it's trivial to trace back the origin of money and track
whether it has been earned in a legitimate way, including the deduction of
taxes. People will still have the same options in general:

(a) store it in a personal offline wallet - somewhat dangerous due to
potential loss and/or forgetting access codes

(b) give access codes to a trusted bank who will have an interest in tracing
whether everything is in order (due to regulations)

(c) store it somewhere off-shore, risking fraud

What crypto enables is basically a clean separation of (b) and (c), which
would make life easier for Swiss banks in the current landscape, i.e. allow
them to once again deal freely with foreign nationals, especially Americans.

~~~
HIPisTheAnswer
Your only defense against government overreach (ie violent aggression) is
self-defense (ie genuine, well-trained militia of free people).

Reference to: The constitution of no authority by Lysander Spooner, and, The
law by F.Bastiat

~~~
EarthIsHome
What is an example of a genuine, well-trained militia, and how does it fare
against a government's military?

~~~
hueving
This question falsely presumes that the government's military is not also
fractured by whatever is causing the militia to revolt. The military is made
up of citizens.

~~~
pg314
But then why do you need the militia?

~~~
hueving
To protect yourself from and fight against weakened fractions of the
government.

The military cannot occupy the entire space of the US so maintaining order of
a tyrannical government would require a low ratio of military guards to
citizens. With even 50% of the citizens potentially armed and willing to fight
back, it's an untenable position for the government.

A militia could fight just as effectively as the Taliban against the
government and be several orders of magnitude larger. The US military is good
at eliminating identified enemies, but it's pretty terrible at nation building
and that's even in its strongest state.

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alehul
I recently was lucky enough to have a conversation with a co-founder of a
large cryptocurrency (identifying details redacted for his privacy), and among
many other interesting ideas, he talked about the inflection point for a
potential crypto-filled future.

He doesn't see people being willing, en masse, to convert the currency they
receive (in a paycheck, for example) into another currency unless absolutely
necessary. This is a chicken-egg problem if you want crypto widely adopted,
where you need the vendors to adopt crypto but it'll likely have to be the
government or company first that distributes it to citizens/employees.

He specifically mentioned Switzerland as a great country to explore a system
like this (think Anti-Venezuela lol); if they were to found/back a
decentralized currency, it could quickly reach mass adoption and we could
actually function in society on crypto. I'm interested to see whether
Switzerland could go that far with their approach.

The incentives that could be provided to make it worthy for a country like
Switzerland to found/back a currency which they don't ultimately control are
unclear, but nonetheless an idealistic concept.

~~~
Hermel
From an economic perspective, you always have to ask: what are the incentives
for someone to switch currencies. At first sight, it does not seem to matter
much which unit of account you are using. However, there is in fact a strong
financial incentive for the young, working generation to switch to a new
currency, thereby devaluing all the nominal savings of the old, retired
generation. So even in a country like Switzerland, Bitcoin or another
cryptocurrency could be used by the young to brake free from paying an
unfairly large share of their income to the old.

~~~
nosuchthing

      a strong financial incentive for the young, working 
      generation to switch to a new currency, thereby devaluing 
      all the nominal savings of the old, retired generation.
    

That's not how economics works.

First, who is producing the new supply? _How_ is the new supply being
produced? Hopefully by them, and not a 3rd party that exploits the production
and sale of this new medium...

The reason proof of work coins have no inherent value, is because there's zero
economic demand except from speculators. Coins are generated though software
which has a measurable cost, and why would a vendor or nation state expose
their real world assets to be traded for a database token produced though this
software method?

You can't just tell all the kids to start using seashells or cryptocoins for
their money because it would have to equate or surpass the abilities of normal
cash.. for both client and vendor.

If anything, one can imagine a nation state issuing a protocol tied to their
centralized treasury but that's not too different than using a debit card.

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ymse
This is somewhat off-topic, but I think the cryptocurrency craze came at the
worst possible time. Here we are, amidst an ecological crisis, the poles are
melting, and people are using insane amounts of energy on...mining digital
"currencies".

Yes, blockchains are useful, cryptocurrency has its place, but if the current
(ecological) trend continues, even fiat money will be worthless in many parts
of the world in 20 years.

Please consider the environment before buying a $3000 mining rig with expected
profits of $100/month.

~~~
tlrobinson
I’m not saying we shouldn’t look for better solutions, but just to put things
in perspective, Bitcoin uses approximately 30 TWh/year, while global energy
consumption is more than 100,000 TWh/year (so 0.03%).

People have also hypothesized that energy used in mining cryptocurrency will
tend to be cleaner since mining operations can be located close to
cheap/renewable electricity.

~~~
ufo
The problem is that bitcoin is used by less than 0.03% of the people in the
world. Bitcoin energy spenditure is proportional to demand for bitcoin and we
should expect mining costs to go up drastically if Bitcoin becomes more
popular. (Mining costs are proportional to mining rewards, which in turn is
proportional to prices, which are a function of demand).

~~~
tlrobinson
True, but mining rewards also halve every 4 years.

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blunte
It's nice that they take a positive approach to management and regulation, but
it's too bad they're so strict about who they let in. I believe if you're an
EU citizen you have a path to get in and start a business, but if you're
American it seems you're not welcome (unless you start with a lot of funding
and basically buy your way in).

The Netherlands will let an American come start a business with only (about)
5,000 € and a bit of paperwork, plus another 1,400 in fees. NL isn't making a
great effort to attract blockchain businesses, but they do benefit from the
generally calm EU regulatory approach to the new technologies.

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tomascot
Switzerland wants people to spend the money from cryptocurrencies there.
There's a lot of money to attract.

~~~
tehlike
not as big as you think it is. current market is mostly manipulated, and
liquidity is not as much.

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hjkm
I've heard that, in Switzerland, you can buy Bitcoin at train station ticket
machines.

~~~
buckthundaz
I'm not sure you can buy Bitcoin, but you can buy public transit tickets with
Bitcoin (from kiosks) in Zurich and likely elsewhere in Switzerland.

