Perhaps. But we're, what? 10 years in and so far crypto has enabled 'I encrypted your data!' scams, caused political instability, been a vehicle for highly volatile investment (but the world wasn't hurting for such opportunities...), and served as a fine buzzword for dev teams around the world to get a sack of cash to update some systems.
That's a pretty poor result for 10 years of this much investment and focus. The internet was waaaaaaaaaaaaay more useful 10 years in.
I don't think crypto gets to claim the benefits of the oft touted protection against centralized bullies or scams. Quite the opposite: You need to go pretty deep into political dictatorships before crypto on net balance seems favourable. So far crypto coins are far more likely to be fleeced, and the vast majority of crypto holding folks are working with mostly centralized entities (such as Tether), which rate, as far as trustability and good shepherdship goes, not in a good place. Better than Pol Pot and Mugabe. Maybe.
Oof.
So if it's decades from its final form, when is it going to deliver on its first actually useful to humanity milestone? I'm still waiting.
> I don't think crypto gets to claim the benefits of the oft touted protection against centralized bullies or scams.
The big problem here is that the core benefit of cryptocurrency is in removing the bank as a middle man. But the bank is the chokepoint where governments impose constraints.
When you're up against an authoritarian government imposing unreasonable constraints, that's what you need. But it works the same against any constraints. So if you want constraints on "money laundering" or processing transactions related to criminal activity, those constraints are gone too.
The constraints are already gone for anyone willing to break the law. You can't un-invent Bitcoin, so from here on drug dealers will be able to use it or something like it to transfer their drug money etc. That's happened, it's in the past, no regulations you put on law-abiding people will undo it because the people doing it are already the people breaking the law.
We still have all the regulations. They just don't work anymore. We're still paying the cost and the benefit has evaporated. But for all the honest people who are following the law, the regulations still apply. The overhead is still there. All the paperwork and the false positives.
So you can use Bitcoin to buy drugs but you can't use it to buy a sandwich, because to accept Bitcoin the sandwich shop would have to deal with filing fees and lawyers that the drug dealer is just ignoring. Regular people don't get the benefit until we have a regulatory system that makes it as easy to accept cryptocurrency as it is to accept cash.
You can't uninvent Bitcoin but you can certainly make it illegal, making it all but useless for drug trade or money laundering. Nobody needs a currency that you can't exchange for, you know, real currency that you can buy real things with. So although the government doesn't have the power to eliminate Bitcoin, they do have the power to make it useless. I don't think they will though, because guess who is using it for bribes and money laundering?
Making it illegal doesn't affect its utility for illegal activity. Criminals already break the law. It would cause a one-time decline in value but that only matters to speculators. The value would still be non-zero because it's global and there exist places where it isn't illegal.
Even if it was somehow illegal everywhere, the value still wouldn't be zero because of black markets. The drug user uses it to buy drugs, the drug dealer uses it to buy guns, the gun runner uses it to buy stolen art, the fence uses it to buy stolen goods from petty thieves who use it to buy drugs.
Black markets would also exist to exchange it for cash or ordinary commodities so that someone else could get it to buy drugs/guns/art/whatever.
And it has utility over using physical cash or gemstones or bullion in that you can transfer it over the internet.
Making it illegal makes it vastly less useful for illegal purposes. Legitimate transactions provide cover, it’s like the difference between a sniper in a forest or an empty parking lot. If your factory selling a truck full of AK-47’s you want to actually be able to buy steel to make more AK-47’s. If bitcoin’s illegal you now need to find a buyer for the guns and another buyer for the bitcoins.
The steel mill was probably going to want dollars instead of Bitcoin regardless, so the only difference is that they do the trade for dollars on a black market exchange. This is likely to get folded into the money laundering process anyway -- the Bitcoin goes to unspecified offshore location to get turned into dollars that come back as a clean payment for "consulting services" or what have you.
There is no need for additional "cover" at that point because the illicit transaction is already illicit. If someone just took that Bitcoin and bought a house, the IRS would have questions. It would have to be laundered first. The output of the money laundering process is clean dollars regardless of whether the input is illegal because of the illegal source or illegal because of the illegal source and currency.
Do you expect the guy laundering money to accept bitcoins without charging extra? Because if the guy selling bitcoins takes ~10% from the AK-47 buyer and the guy laundering money also takes his ~10% cut for using bitcoins on top of his X% cut for laundering money, suddenly it’s starting to look really unappealing.
The real appeal of bitcoin for illegal purposes is it’s effectively a poor but really cheap way to launder money. Try and deposit even 1 million in cold hard cash and the banking system throws up red flags, liquidate 1 million in bitcoin and that looks significantly more legit at least on the surface. It doesn’t help if you’re under investigation, but then again it’s cheap.
> Do you expect the guy laundering money to accept bitcoins without charging extra?
That's the entire purpose of using them.
Someone who has a million dollars in physical cash either needs to get someone local to launder it, which might be hard to find or require paying them a thick margin, or they have to find a way to ship a huge amount of physical cash to the place it's being laundered and risk it being seized at border crossings etc.
Someone who has a million dollars in Bitcoin can buy money laundering as a service over the internet from the lowest bidder who has a good reputation. The Bitcoin gets transferred to some place with favorable banking rules, gets liquidated there where it's either not illegal or the local authorities are corrupt, and it comes back as dollars. Since it's possible to do it over the internet, you have competition from all over the world including some favorable jurisdictions, so the margins get smaller than they would be if you had to find someone locally.
Money laundering can’t just be done in an arbitrary location. You need to transfer money back into your country’s banking system while looking legitimate to safely spend it.
Put another way, banks are already operating on digital money that’s the problem.
> when is it going to deliver on its first actually useful to humanity milestone
Technologically speaking, most cryptocurrencies are utterly useless. Bitcoin included. There are some good projects though.
Monero, for example. It allows people to transact without anybody knowing anything about the details of the transaction. Where the money came from, where it's going, how much money was moved. Everything is obfuscated. Block chain analysis is at the very least hard and inconclusive, if not impossible. So it essentially works like digital cash.
This is an invaluable achievement that allows people to reclaim their financial privacy in a world where governments think it's acceptable to surveil everyone.
> so far crypto has enabled 'I encrypted your data!' scams
These scams existed long before crypto. But, crypto currencies are a better solution to international money transfers so of course they became the preferred currencies for these scams.
If cryptocurrencies were a better solution, they would have been widely adopted. Instead, they have been adopted by people who can't use real money for one reason or another, e.g. criminals. Which tells us they are a poor substitute for real money.
In several African countries people use their phone credit as a currency to barter and there are trials to use crypto instead with on/off cash ramps in the same way as the phone credit works but with the additional benefit of things like financial records to start building credit scores
Can you provide a link? None of this makes any sense. Why would anybody buy phone credit and then use that to barter instead of just buying whatever they need directly? How do you build a credit score from a record of transactions? Why do Africans that don't have access to banking are so worried about building a credit score? So many questions...
If that's the trend, by the time it reaches it's final form we'll all be smoking husks left over from the great AI uprising wars, but don't judge those AIs too harshly, that new testnet that paid out for verified kills was just too good to pass up.
That's a pretty poor result for 10 years of this much investment and focus. The internet was waaaaaaaaaaaaay more useful 10 years in.
I don't think crypto gets to claim the benefits of the oft touted protection against centralized bullies or scams. Quite the opposite: You need to go pretty deep into political dictatorships before crypto on net balance seems favourable. So far crypto coins are far more likely to be fleeced, and the vast majority of crypto holding folks are working with mostly centralized entities (such as Tether), which rate, as far as trustability and good shepherdship goes, not in a good place. Better than Pol Pot and Mugabe. Maybe.
Oof.
So if it's decades from its final form, when is it going to deliver on its first actually useful to humanity milestone? I'm still waiting.