Why reach for crypto? My strategy would be to have a small emergency fund with a different bank. The risk of being debanked by two independent banks _at the same time_ seems lower than crypto.
> The risk of being debanked by two independent banks _at the same time_ seems lower than crypto.
I use 3 separate banks for this reason. But honestly, the 'reason' for dropping me might be a 3rd party risk assessment that flags something and services all three banks... Or some sort of story or hysteria that could trigger three similar systems.
Using a decent crypto currency with good practice, the biggest threat is me messing something up. And i can put systems in place to minimize this. The only issue is that most things i spend moneys on don't accept crypto and so still need banking services to use crypto. I hope this changes.
I use 5 different banks and have cash. The problem is that with the lame (primarily US driven) overreaching AML nonsense, banks will not take any risks and close whatever they don't make a lot of money on at the first sign of issues. Why would they not. What do you do if multiple/all banks closed your accounts for no reason at all outside that you are too small a fish to put an actual human on to verify the validity of the closure? Is there anything outside crypto and stuffing money and gold in your mattress?
...until they implement a system to automatically corroborate your accounts and close them all at once, which will happen, "because crime". security theater only gets worse over time. but right now you "hackers" can stop this since 99% of transactions can still be done in cash. but you won't because you're all fake.
Lots of discussion in the comments here about how ingrained banks are into our current system. I do honestly see Bitcoin as a way out of that, but at this early stage of it, you'd probably have to get help from someone who is not debanked in order to interact with our heavily banked system. If you are honestly interested in this, take a close look at Strike.
Could you clarify what you find interesting about it?
I skimmed their website and looks like just a lightning wallet. Am I missing some key feature that helps one interact with fiat systems?
I mostly agree with krupan's answer below, but it depends on use-case.
BTC for investment or long-term store of value. BCH, or various other alternatives (Litecoin, XRP, Stellar, cough Nano cough), for making payments. But if you can use the Lightning network, then BTC works for payments as well (arguably - in this space anything and everything is highly arguable).
If you're seriously looking down the track at using cryptocurrency, spend some time playing with small amounts of it to see how it all works. Different coins have different use-cases, and it's very confusing to come from zero knowledge. Also transferring and converting between different coin types can kill you in fees, so keep an eye on that as well.
And in doing your research don't believe what anyone says about anything, especially youtube folks. Find the most likely narratives amongst the jungle of snakes and traps, based on your own experience at detecting bullshit and applying logic.
I'm sorry, but playing with anything other than BTC Bitcoin and lightning is just going to waste your time and resources. I'm sorry, but the last 15 years has taught us that again and again. Definitely do your own research, start with small amounts, but be very, very careful especially with anything not BTC.
Comment feels like a great example of a bitcoin-maxi. An important data point, worth paying strong heed to, but also worth understanding the reasons behind bitcoin-maxi perspectives in order to see where you fit along the scale.
Bitcoin itself has the longest, most proven history. It's the safest house in the least safe neighbourhood. It's also the best performing asset of it's lifetime so far (something like that anyway).
It's use-case has changed since it was created, and there are additional use-cases to which other cryptocurrencies cater, smart contracts being the primary example (which then facilitate a whole other ecosystem of products, of arguable value and utility to humanity).
I'm around 50% bitcoin-maxi, to expose my illogical stance :)
I also have barely a little toe dipped into that particular asset pool, so my opinion isn't necessarily fully formed or well founded.
I was answering the question about how to interact with non-bitcoin users today. That requires trusting some third party. Strike is a good one for making Venmo like payments. The best exchange right now that I have found is Swan.
> How can I pay my bills with bitcoin while being debanked?
Acting as an alternative to krupan's Bitcoin-centric answer:
- There are other crypto rails other than Bitcoin that could be used in its place. USDC & stablecoins in general is going to be the medium-term winners in this space, as more services are set up to help people pay their bills with stablecoins. Here are 2 services that I've found within a few minutes of searching "USDC pay bill":
> > Optimism is an EVM-equivalent Optimistic Rollup chain.
> I’ll be right back, I need to explain this one to grandma.
Term by term:
- EVM-equivalent: The Ethereum Virtual Machine (EVM) is the part that allows smart contract code can be run on the network. EVM-equivalency means that you can just drop in your smart contract code, and it has to run as it would on Ethereum itself.
- Optimistic Rollup: A Rollup is the current consensus for scaling up the network, by outsourcing compute to other networks, and pushing the important end state back into Ethereum. Optimistic rollups do this by assuming that there'll be at least 1 person to challenge a proposed block whenever that block's invalid. This setup however has the shortcoming of needing there to be a challenge window for other participants in the network to have time to respond.
Just as an FYI, USDC & stablecoins (and CBDC's) are centralised and the same abuse of power is possible here too. Obviously being debanked in fiat and crypto at the same time is extremely unlikely...but possible if someone is REALLY out to get you.
> Just as an FYI, USDC & stablecoins (and CBDC's) are centralised and the same abuse of power is possible here too.
It's the unfortunate consequence of one gigantic unaddressable problem:
USD can only be minted efficiently by the Fed.
- Collateralized stablecoins exist, but they're inefficient in that they must be overcollateralized to cushion against falling asset values.
- USDC & their kind are efficient, but at the cost of being centralization vectors as a result of current US legislation
- An efficient synthetic stablecoin can exist, but it requires deep liquidity in the marketplace to keep the peg stable. (Probably > $100B at the ready to absorb panic sells) Synthetic stocks are the closest analogy available for this, but applied upon a currency. The chicken-and-egg means that bootstrapping something like this is not feasible at small scales: It needs to be big from the get go.
You can't. Every US Dollar touch point is heavily regulated. Back in the day Local Bitcoins was the way to convert crypto to cash but now its highly regulated and they implemented enhanced anti money laundering controls.
Ethereum trumps bitcoin in pretty much every metric except for market cap, which is lagging because bitcoin has the name brand, simpler for people to understand, and misinformation spread by bitcoin maxis and competing chains
How about metrics like answering the question of, "how much of the coin exists?" Or metrics like, "how understandable and simple is the overall protocol and mining scheme?" Or "has this chain ever broken it's own rules and rolled back transactions at the behest of its benevolent dictator?"
Spoiler: Bitcoin wins on all of those. The market cap is better for a reason.
>"has this chain ever broken it's own rules and rolled back transactions at the behest of its benevolent dictator?"
Bitcoin has also done this.
You're referring to the $50m DAO smart contract bug (or "hack") early in 2016, when Ethereum had been running for about a year. The Ethereum blockchain was swiftly rolled back. This was achieved by the majority of Ethereum developers agreeing to create an update to Ethereum software that reversed the hackers transactions specifically, and the great majority of users and miners agreeing to use that updated software. The people behind the DAO were closely connected to the Ethereum developers. Some of them were Ethereum developers. Some of the people who lost money in the DAO were Ethereum developers.
What you're unaware of apparently, is that when Bitcoin had been running for about a year, in 2010, a bug allowed someone to create 184 billion Bitcoins. This effectively made everybody's Bitcoins worthless (or even more worthless!). This event was ALSO swiftly rolled back, just like the Ethereum DAO event, by the same consensus process that I described above.
"Core developers Gavin Andresen and Satoshi Nakamoto were on the case, and the 184 billion BTC transaction was purged from block 74638."
Since then, there have been various incidents involving Ethereum and Bitcoin and hacks or smart contract bugs that caused losses of millions or billions. But neither currency has ever done a roll back of this nature again.
For instance. A year or so after Ethereum's DAO debacle, there was another similar event, the Parity bug, which accidentally locked $230m in a smart contract, permanently. The people operating Parity were closely connected to the Ethereum developers, some of them were Ethereum developers. But this time, although the victims pleaded for a roll back, it was never seriously considered.
> But neither currency has ever done a roll back of this nature again.
Maybe not a rollback, but Ethereum has proven it is malleable time and time again. As one example, compare the issuance of ether to Bitcoin. Eth's issuance is a dog's breakfast, indicative of changing opinions by those who call the shots... just like a central bank.
Bitcoin's issuance? Predictable and steady as a rock for 15 years.
Another example is replacing Proof-of-Work with Proof-of-Stake. A core part of how it works, important for censorship resistance and accessibility, and they removed it for something permissioned that makes censorship far easier.
Bitcoin? Still on PoW and never going to change. If you think it will change, you still don't understand Bitcoin. But never fear, there's already a PoS Bitcoin out there (that no one uses).
I don't know why you're replying to my comment, because I wasn't talking about any of those other issues you've said here. I did not confirm or deny them.
I quoted the single issue that I was disputing. I wrote as clearly as possible to only refute one point, about the implication that Bitcoin had never done a roll back.
If you want to talk about all those other things, then make a separate thread or post,. Please don't use my comment as a vehicle for your arguments, because it's confusing and few people will understand what you're talking about.
Thanks for pointing that out, I didn't know that bit of Bitcoin history. I see a big fundamental difference between that chain fork and the ethereum DAO fork. The bitcoin fork was to fix a bug in the bitcoin source code. Without doing that fork, bitcoin would have died. All bitcoin users would have suffered if the fork had not been done. No bitcoin users complained about it.
The ethereum fork was to fix a bug in a smart contract running on top of ethereum. That bug only affected those who were participating in that smart contract (which was code for an investment scheme that a private organization had dreamed up). Lots of ethereum users complained about it.
Yes, I do see some differences. It's true that the situations were not identical. Thanks for your interesting reply.
One important difference is that the amount of money lost in the DAO was MUCH larger than the amount lost by the Bitcoin bug (the Bitcoin bug simply lost the total value of all valid Bitcoins, which I guess was only about $1m at that time in 2010, with few individuals holding substantial amounts). This meant that not much money was at stake and fewer people were affected, so the roll back was less contentious.
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But there's a VERY important similarity between the two events: They were both existential threats to the respective currency.
That existential threat to Bitcoin was obvious. As you have just said, Bitcoin would have died if they did not quickly invalidate the 'faked' Bitcoins, because the quantity completely dwarfed the true Bitcoin money supply. So it was clearly the right thing to do.
The existential threat of the DAO bug to Ethereum was less clear. There was also more time to decide what to do, because the stolen funds had not yet been released from the smart contract, (and I recall the money could be stalled in the contract almost indefinitely by white hat hackers iteratively exploiting the same bug that had created the problem.)
But the consensus at the time, very early in Ethereum's life, was that Ethereum might die if 15% of the entire currency was in a state of limbo, or in the hands of a malicious hacker. This was compounded by the reputational damage and loss of confidence caused by such a huge disaster that directly impacted thousands of the most active Ethereum users, not just a few Ethereum developers.
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I pointed out that some Ethereum developers lost substantial amounts in the DAO, so I can accept that personal financial loss probably also biased the decisions of some of them to approve a roll back.
But I personally don't believe that personal loss suffered by some Ethereum developers was a very significant factor in the decision to do a roll back of the DAO event. To explain my reasoning: That is why I mentioned the Parity bug.
The Parity bug was an even larger loss in financial terms, but it only affected a very small number of people, who mostly were Ethereum developers. The lost money was destroyed, not stolen. It did not affect the wider community, so it was not seen as an existential threat to Ethereum. So there was no question of a roll back.
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Possibly the quite acrimonious argument over the DAO fix, which was bad enough to cause a semi-viable hard fork (creating the ETC currency), was an additional factor discouraging the developers and community from accepting a roll back to fix the Parity bug and later incidents.
Edit: Like you've mentioned, another difference is that the Bitcoin issue was a bug in Bitcoin itself. The Ethereum issues were coding bugs in smart contracts. I'm just making an observation about that, not claiming that one currency is better than the other.
The bitcoin fork was to fix a broken promise. The bug meant that Bitcoin didn't work as promised, the code fix and fork fixed that.
One of Ethereum's promises around smart contracts was, "code is law." The fork broke that promise by circumventing the smart contract code.
It is good that they have never done that again, but they have been making other big changes to the original Ethereum code not to fix bugs and broken promises, but to change the way it works. That, to me, is a concern.
"Since then, there have been various incidents involving Ethereum and Bitcoin and hacks or smart contract bugs that caused losses of millions or billions"
Sneaky of you to add "Bitcoin" to that sentence, implying that smart contract bugs on Bitcoin, or Bitcoin hacks have cost people millions or billions. That is completely false, but nice try.
Honestly, I'm not trying to be "sneaky". I didn't mean to imply that Bitcoin has suffered from disastrous smart contract bugs like Ethereum has, or that the core Bitcoin or core Ethereum systems had ever been hacked since that time.
The hacks I was talking about were just all the numerous attacks on exchanges and users that have involved BTC or ETH getting stolen.
It's sort of tedious discussing this kind of thing on HN because there will always be some guy who jumps in and says 'Well, ACTUALLY, what about SBF and FTX!!" even though I'm not talking about that. So, I just wanted to admit there had been many other financial losses, to try to avoid all those clever people replying and telling me about MtGox or Tether or something like that, as if I didn't already know about it. Kind of like that other guy who replied to my comment with something mostly irrelevant that he wanted to spout.
I didn't have time to write that all out in such pedantically specific detail - almost nobody is reading this. So, I'm sorry for the misunderstanding that I created. I was not being sneaky. You know: Sometimes, people just don't have time to explain everything in detail.
You seem like someone who is able to see this side of the argument, so thank you again for your comments.
Actually... the account model is much easier to use to get an accurate view of all balances than the UTXO model. As for rollbacks, Bitcoin had one in 2010 (https://en.bitcoin.it/wiki/Value_overflow_incident) and a chain fork in 2013 (https://bitcoin.org/en/alert/2013-03-11-chain-fork) both decided by those who could make the decision... and accepted by a majority of nodes, same as with the ETH hard fork
I'm not so sure about understandability at protocol level, I do believe Ethereum to be straightforward but then again I've followed its progress over the years
Finally looked at both of those bitcoin events that you are attempting to equate to the DAO fork. I commented about the first one elsewhere here. The second one was indeed a chain fork, which is actually a normal and expected event in Bitcoin when miners disagree (for whatever reason) about which blocks are valid or not.
In this case the disagreement happened because of a backwards incompatible change that was accidentally made to the mining software. Nodes running the old software rejected blocks generated by the new software. The bug was fixed and miners happily stopped using the buggy version of code and the chain fork was resolved, just as designed by the Bitcoin protocol. Nodes that never ran the buggy version didn't have to do a thing.
Like my discussion of the other bitcoin fork, this to me looks like an entirely different category of event than the DAO. Bitcoin fixed a broken promise in both cases. Ethereum broke a promise in the DAO fork.
Bitcoin is ever innovating in ways that are safe and transparent, see Taproot that was added fairly recently. Other crypto has proven to be at best run by incompetent folks, at worst straight up scams. Either way you lose with them. Sorry, but that's what the years have taught us.
Well, I would totally disagree. I love safe and transparent but it is just not what gets the job done. I've had to transfer money to people around the world and people have asked to send them dollar-pegged tokens on networks like Tron and Polygon. These are not ideologically sexy networks at all but they have clearly found product-market fit. Metamask (convenience) + low fees + fiat peg (less volatility and easier to understand) and people are all about it. And, whether we like it or not, it works.
Meanwhile I've had the majority of my net worth on Ethereum for over 5 years now and am not really worried about it. And I get user experience that I can never get with bitcoin, like social recovery smart contract wallets.
Safe? Tacking on higher energy-costs through more complexity and increasing pollution across the planet as a result of the increased energy expenditure is safe innovation?
Distributed permissionless databases of any sort are a bust and a scam, period. This was tested and found true in the 70s.
* Efficiency - allowing small scale players to participate in verification and block production.
* Inter-chain communication - some networks are explicitly designed as connected swarms of chains (Cosmos and polkadot for example) and some evolving into that direction outside of the protocol level (Ethereum). How do execute transactions that span the networks is an ongoing research topic.
* Privacy - how to execute transactions in private. How to attest that something is true, say that you have a certain credential, without exposing your account information. Blockchain has been why zero knowledge (and now homo-morphic encryption it seems) cryptography are becoming an active field of research.
* Identity, authentication, account recovery. - these tie into cryptography but generally research on applied cryptography with good UX. For example the first time I've seen social-recovery accounts with any amount of usage (now a feature in Apple accounts) was in a blockchain application.
* Monetary research - far from everybody involved in crypto believes that a fixed-supply rare item makes for good money. "Fiat" money is basically a "token" with governance attached to it. This has lead to a wave of experimentation with other forms of tokens - ones that are algorithmically tied to other assets, ones that are backed by an organization, local currencies, etc.
* Organizational research - since smart contracts can effectively be transparent community banks there's has been a plethora of experiments with building organizations that manage their own treasuries. Horizontalism, organizational transparency and cooperation is something that's been at the core of many crypto projects, the idea being that something cannot be both a reliable public good and controlled by a single party. It's not an easy task, but some cool organizations have come out of this. For an example look at pocket: https://messari.io/report/governor-note-proof-of-participati...
Without a general purpose (i.e. Turing complete) and sufficiently expressive programming language (i.e. providing an idiomatic and expressive manner to build general-purpose logic) associated to the ledger you cannot build scaling technology that inherits the self-custodial, permissionless, and censorship resistance qualities of the underlying ledger. Nor a financial system that inherits those same properties.
If you think about it you are very limited in what you can do. You have an asset that you can self-custody, exchange permissionlessly and without censorship which is good to fight what the original article is about. But you cannot build any financial product on top of it that would have those same properties. Nor be able to scale the transactions per second that the base layer does while keeping those same properties. And I find it very unlikely you can serve the entire world with 7 transactions per second. So yes, there is plenty to innovate on its core function.
> you cannot build scaling technology that inherits the self-custodial, permissionless, and censorship resistance qualities of the underlying ledger
Correct, and yet you seem to still miss the point. There are tradeoffs. You can't scale AND maintain those properties. This is why Bitcoin scales with layer 2 solutions like Lightning (and more ideas like Enigma, Ark, Cashu etc.), or things like RGB or Taro for expressiveness. Separation of concerns.
The best attempts to have their cake and eat it too have failed in crypto.
There is very little innovation to be had in the core function of what a blockchain was designed to achieve. There's plenty of innovation ahead of us for the layers that are built on top of it.
zk-proofs allow you to do so. It's seeing very active development, and yes it involves an L2. The issue you seemed to have ignored is that to be able for the L2s to inherit those properties from the L1, the L1 needs to have sufficient expressiveness to be able to build the proof verifiers. I would love to see how anyone builds such a thing on bitcoin.
