The Lightning network addresses all of his privacy concerns with payment channels, onion routing, and multi-path payments.

Snowden seems to have similar criticisms. Neither of them seem to be up on the latest technology.

The Lightning Network is in many ways worse, rather than better, for privacy than on-chain Bitcoin transactions, simply because node holders have to at least know all of the route forward, and because of the forced address reuse.

Can you elaborate on why you think this is worse than having the whole network have a permanent history of a direct transaction between addresses?

"The Lightning Network" had been the BTC advocate's fallback excuse for years now. So far it appear to be an overcomplicated, untrustworthy affair that's failed to deliver. I'm not surprised it gets ignored.

I am surprised at how few people see that using such a complicated set of hacks to attempt to fix BTC shows just how flawed BTC is...

we're still asking a question we've had since times immemorial: where to draw the line between protection and privacy? it is, in my opinion, an inevitable tradeoff and you cannot have either in absolute without the other disintegrating. the stakes seem higher now because of the scale of the systems in question, but the philosophical arguments are probably the same. i should read more.

we're still asking a question we've had since times immemorial: where to draw the line between protection and privacy?

i've got a cookie which says you can't find anyone writing seriously about that question before the advent of photography.

"It was a strange incident, but apparently not a new experience for Stallman, whose emails urge any NSA or FBI agents reading to “follow Snowden’s example” and blow the whistle."

I find it extremely hard to believe that the US intelligence agencies haven't mastered the art of tapping phones without alerting targets over the decades.

"Asked what he thought about so-called privacy coins, Stallman said he’d gotten an expert to assess their potential, and “for each one he would point out some serious problems, perhaps in its security or its scalability.”

It would've been nice for the interviewer to ask followup questions in response to this.

"Taler never rejects a legitimate customer due to a fraud-detection false positive."

This would be nice. PayPal has caused no shortage of headaches for both me and people who wish to send me money. I wouldn't mind something better catching on.

I find it extremely hard to believe that the US intelligence agencies haven't mastered the art of tapping phones without alerting targets over the decades.

Unless they want him to know. Maybe they’re playing mind games.

Zcash’s privacy is cryptographic whereas Monero seems more like a chain with a builtin mixer. Monero has a history of fixing privacy issues as they are published (for example the paper by the National University of Singapore). Fixing issues is good, having so many is less good. Zcash has scalability limitations because it’s hard to add an L2 solution like Lightning because that would pretty much wreck privacy. But zcash is running at nowhere near capacity so that’s hypothetical.

They’re both great experiments and Stallman would be more impressive proposing better solutions than just sniping at the projects.

There's a pretty detailed proposal of a privacy-preserving L2 solution for Zcash, called BOLT (https://z.cash/blog/bolt-private-payment-channels/). The original paper is at https://eprint.iacr.org/2016/701 , and there's a prototype implementation by J. Ayo Akinyele at https://github.com/ZcashFoundation/libbolt . Further development of that implementation is being funded by the Zcash Foundation (https://github.com/ZcashFoundation/GrantProposals-2018Q2/iss...). The Blossom upgrade scheduled for October 2019 is intended to include consensus changes needed for BOLT (https://forum.zcashcommunity.com/t/announcing-zcash-blossom-... and https://github.com/zcash/zcash/issues/3676).

There are also realistic longer-term possibilities for L1 scaling of Zcash, including the possibility of doing a Coda-like succinct blockchain (https://codaprotocol.com/). I've been working on optimizing recursive validation (https://github.com/zcash/zcash/issues/3425) and researching how to find more efficient pairing-friendly curves in order to make this practical. Networking optimizations and other consensus layer upgrades along the lines of SPECTRE/PHANTOM (https://medium.com/@drstone/an-overview-of-spectre-a-blockda... and https://medium.com/@drstone/an-overview-of-phantom-a-blockda...), etc. are also quite feasible.

It's correct that we're not running anywhere near capacity at the moment, and that gives us time to develop these solutions.

-- Daira Hopwood (Zcash developer)

We can do better than money.

such as..?

Richard Stallman, the fervently committed founder of the free software movement, is discussing the term “libertarian,” when he stops talking abruptly and says, “Hello?”

I tell him I’m still listening, but he explains that the confused greeting wasn’t intended for me. Instead, he says a man’s voice – neither mine nor an echo of his – had just cut in with one word: “liberty.”

“Does that sort of thing happen a lot?” I ask. I hadn’t heard anything.

“Yes,” he says. “It wasn’t a voice I recognize.” He added, “It could be … ”

Then a quick burst of static made his next words inaudible.

It was a strange incident, but apparently not a new experience for Stallman, whose emails urge any NSA or FBI agents reading to “follow Snowden’s example” and blow the whistle.

Uh... What happened here?

I've had cross-talk happen while on a cellphone. It cut over to another voice saying "... three months!..."- it sounded like an ad. But it wasn't audible on the other end and the conversation wasn't interrupted.

Never did work out what happened there.

What are the odds of a random crosstalk saying 'liberty' ?

The question you should be asking is: What are the odds that some random vocal sound might be interpreted as "liberty" by a human brain that is primed by talking about that subject?

Odds seem pretty good to me.

Where? In the US?

I telconf weekly with a client in Singapore. The topic is litigation that's critically important to an industry none of you thinks about more than every year or so, if that.

Every call (2 years now) has been subject to intrusion by snippets of voice unrelated to our call.

I don't have this issue with telconfs (on the same topic) within continental USA. Have not done research on the matter.

I get that given a choice between causation arising from malevolence or stupidity, I should choose the latter. But sometimes I wonder.

Eavesdropper that is so incompetent that they don't mute themselves?

Free software messiah? OP is laying it on a bit thick with that one.

If it was "free software prophet" I would be fully on board: I think RMS was way ahead of the curve in foreseeing many of our future dilemmas around privacy, software patents, DRM, the open source movement, and many others.

Or maybe "saint".

We can do better than calling Stallman "messiah". Let's stop it with the hagiography.

Sure, there are better systems in privacy terms. However, the bigger story is that the world is changing fast: a huge percentage of the world's population - in China - now lives a reality of instant mobile payment. If you accept that the general population will always gravitate toward functional, reliable, cheap, centralized payment systems unless they have specific needs such as anonymity/illegality, and that those systems are improving rapidly in features and distribution, then the real challenge to future decentralized currency is getting anyone to give a damn.

I still don't understand what problem decentralised currency is supposed to solve.

As you say, I want cheap, convenient transaction at low cost, and specifically concerning privacy I want to know who I send my money, and I want legal recourse should anything fishy happen.

The privacy proposal of crypto in my opinion is bizarre. I am supposed to lay out my entire financial history in a public wallet (which I don't want), but trade with people who I don't know (which I don't want), and have all of it supervised by 'smart contracts', which are anything but smart and make it necessary to essentially put myself under surveillance?

It's trying to solve the problem of having to involve a 3rd party in on-line transactions. Chargebacks are expensive to deal with. Jurisdictions are expensive to deal with. Standing up a multinational e-commerce site requires a lot of lawyers and accountants.

Will the risk presented by crypto always be greater than the risk of involving trusted third parties? Maybe. Maybe not.

Counterpoint: There's a lot of people who will stop buying stuff online with such a system, once they have been bitten by a system that has truly irrevocable payments. Part of the reason why I trust buying random $25 used video games from eBay (using Paypal) is that I know I'm about 99% certain to get my money back if it never arrives, or arrives in poor condition. I can buy a used Cisco 48-port 1000BaseT/PoE switch on eBay and know that I have some degree of buyer protection. Or I can go to Newegg and buy a new $700 monitor and trust that if something goes terribly wrong with the transaction, Visa's buyer protection/chargeback system can be engaged.

Moving to irrevocable online payments is basically the equivalent of handing a wad of cash to some stranger in a parking lot selling "new, sealed!" ipads out of the trunk of a car.

I totally agree with you in practical terms, but what you're really saying is that you prefer the governance offered by Paypal and the credit card networks to the governance provided by the government: IOW, it wouldn't even occur to you (or most sane people) to file a claim in court over a $25 Atari cart you tried to buy online. In the society these courts are designed to serve (peasant agricultural economies), the courts were where these issues were hashed out, and a fair bit of the "state-iness" of the state derived from its ability to solve these kinds of problems for people. Increasingly, this kind of justice is inaccessible to ordinary people except through "customer support" mechanisms at institutions like Amazon or Paypal or by tweeting at their CEOs.

One of the very real problems that cryptocurrency enthusiasts are concerned about (but IMO totally failing to actually solve) is that it seems like a really bad idea to leave such basic functions of state in the hands of difficult-or-impossible-to-regulate transnational enterprises. When will these players realize that they've got more "state-iness" than most actual states, and how will they use it?

You won't need a claim either. Chargeback is easy. So in CryptoWorld, people should go to court and try get their money back from anonymous seller? That'd be a field day for scammers.

If you need the extra safety you pay for the service of an intermediary, like PayPal or eBay or (in cryptoland) Purse.io.

If you don't need the extra safety, you don't.

When will these players realize that they've got more "state-iness" than most actual states, and how will they use it?

In the brave new decentralized "free market" crypto world you are even more fucked if you have a problem. Who do you appeal to? Who decides if your edge case is worthy of rolling back the all mighty blockchain. The DAO folk got the "hack" stuff rolled back so the "thief" no longer had their money. But what about you and your Atari that never arrived? You think the top of the crypto pyramid is gonna roll back the blockchain for you? It can literally become mob rule!

And sure, you can say "build a better smart contract", but I would say that is impossible because then you have to encode every edge case you can imagine and all the ones you can't imagine. And worse, you still need that smart contract to interface with things outside the "trusted" sandbox the smart contract lives in (i.e. meatspace)--which means you need to trust not only whatever is providing that interface but everything beyond it.

Governments exist for a reason. One of those reasons is to be where the buck stops. A society that scales to billions of people needs somebody to say "this is right / this is wrong". It needs a final authority on conflict resolution.

Smart contracts are seriously one of the stupidest things to come out of the crypto space. It really highlights how some engineers think "I am good with computer stuff, so therefore I am also good at economics, government, politics, finance, monetary policy, contract law, etc". The whole idea is really arrogant.

I can buy a used Cisco 48-port 1000BaseT/PoE switch on eBay and know that I have some degree of buyer protection.

This is a basic insurance market. You can still buy the insurance separately if you want it -- sites like eBay would undoubtedly offer it with nothing more than a checkbox for about the same fee as the credit card companies currently charge for implicitly the same thing.

The problem with the existing system is that it requires you to buy that insurance, even when it isn't necessary. If you order something from Newegg, they're ultimately going to send it or give you a refund, because they're a stable business and it's cheaper for them to make good to begin with than have a small claims court order them to. So you lose 3% in processing fees for nothing -- Newegg is no more likely to not make good than the payment processor is to not reverse the transaction.

The existing system also basically makes micropayments impossible because the transaction costs are too high, but it's not actually all that serious of a problem if you get ripped off to the tune of $0.10 from time to time. The amount is small enough that it doesn't need to be insured, and that allows you to get a good feel for what kind of purchases are scams without actually losing any significant amount of money. It also creates an opportunity for curation services to vouch for verified sellers at a lower cost than insurance would have to be to cover the losses from less savvy individual buyers not knowing who to trust (or not caring when the insurance is mandatory).

This is a basic insurance market. You can still buy the insurance separately if you want it -- sites like eBay would undoubtedly offer it with nothing more than a checkbox for about the same fee as the credit card companies currently charge for implicitly the same thing.

It's not the same thing. With chargebacks, in the case of fraud the payment processor almost always extracts the money from the seller, acting both as a deterrent and reducing the cost of the protection. If it was just insurance, it would be more expensive (because there would be less deterrent to (seller-side) fraud and it would cost more to recoup the costs).

Counter to your counterpoint: the people selling you those games on eBay also know that you might be able to revoke your payment either fraudulently or because of events outside the seller’s control, thus the selling price is almost certainly higher than it would otherwise be. In other words, both buyer and seller are incurring a cost due to the existence of chargebacks. Whether that cost is worth it depends on the actual probability of fraud or problems occurring, and at the very least, it seems reasonable to have an option for both buyer and seller to agree to not support chargebacks.

In other words, both buyer and seller are incurring a cost due to the existence of chargebacks

The cost isn't due to chargebacks. It is due to the risk of fraud. Criminal behaviour like fraud extracts a toll on society at large and we all get to pay. The overhead added from chargebacks make both the buyer and seller internalize the potential risk of fraud. Without chargebacks, yeah prices might be slightly lower but society at large would get to foot the bill for fraud.

It could still be optional for parties who trust each other. Chargebacks is not the only way to establish trust in a transaction.

Loyalty programs fill that role.

It works the other way as well, there are some products businesses can't sell and communities they can't service because the risk of fraudulent chargebacks is so high.

Chargebacks from the business side. Rip-off protection from the consumer side. I personally will not be quick to give up the ability to dispute charges. That is a feature that just isn't possible in bitcoin without involving a third party.

Both of those are what escrow is for. A trusted and publicly audited thing where a payment is held until the services are rendered.

Escrow is far more expensive than chargebacks. And if we're involving a third party either way, I'd rather have the regulated, battle-tested, already existing banking system.

Chargebacks essentially are escrow. The merchant can't stop them from happening because the money is taken from the merchant account reserve, i.e. a minimum balance that the merchant can't withdraw. Sounds similar to money held by an escrow agent doesn't it?

And credit card transactions are also expensive, between 1.5% and 3% and even higher[1]. It's just that the cost is hidden from the consumer by accounting for it in a higher product price. (Some merchants like gas stations may offer a cash discount, which can be used as a rough estimate of that hidden cost.)

On top of this, merchants get charged a hefty fee (on the order of $50) for each chargeback that they receive.

[1] https://www.creditdonkey.com/credit-card-processing-fees.htm...

The EU proposed limiting transaction fees to 0.2%. I don't know whether that is law already or not.

There's the possibility to have escrow without a third party using smart-contracts.

The problem is that there is no way for a smart contract to actually know if goods have been received or not, so it is still subject to abuse.

Smart contracts are a bet on our ability to write code that is free from flaws. History suggests that the odds of that are not good. I'd rather trust a bank and the legal system.

There is no way of having charges "deducted from your account" with Bitcoin so there's no need for dispute or chargebacks.

The way cyrptocurrencies work, in order for there to be an interface that allows third parties from charging your account, you would need a smart-contract for counterfactual transactions instatiation.

Right now, I can't think of a "problem" that would require chargeback or dispute resolution and couldn't be solved this way.

You buy a good online from a seller, seller doesn't ship the item and refuses to pay back. What then? With credit cards you can go to the bank and demand chargeback or whatever.

Do you buy the good directly from the seller?

If so, and if you believe the seller isn't trustworthy, I'd recommend the use of a smart-contract that only releases the coins if both parties sign a message.

But how would you protect the seller from the "evil buyer"? The one who receives the goods, but never releases the lock? Sure, he is not getting his money back, but the seller is not getting that money also.

Banks are not really necessary. Even by basic game theory, scamming your customers has long term negative value. Reputation is worth much more than money.

We just have to design systems around it.

But someone has to take the gamble. Or everybody uses only established reputable sellers. And newcomers can't break into the market.

Customer protection is great to give small businesses a chance.

Yes and there is a converse problem, the seller ships the item but the customer having received the item fraudulently requests chargeback - this is common, sadly.

I lose the item, the money and a fee - bitcoin, like cash solves the fraudulent chargeback problem - but the buyer is unprotected.

Trusted Escrow solves both problems.

The chargeback system isn't good for small retailers. The banks have no incentive to check the system or secure the card as the onus is on the merchant.

How many times in your life have you had to use a charge back? I never have.

Just because you've never had to use it doesn't mean it's useless.

If you've ever had your credit card number stolen and used by a criminal for fraudulent purchases which you later disputed, you've used chargebacks.

Right, you need a remedy for the inherent insecurity of credit cards. Is it always a charge back though? In other words, are merchants eating all the costs of fraudulent credit card transactions? I guess either way the cost really gets passed on to us consumers in the end.

Chargebacks are also insanely useful. If my card is stolen I can get my money back, if my merchant tries to defraud me I have a recourse. I will never use bitcoin for consumer transactions for this exact reason.

Those aren't free, they drive up prices by a few percent and frankly fraud only matters for large transactions and/or untrusted merchants. Bitcoin is cash, not credit, and avoiding 2-3% of fees tacked on by credit card companies is more than enough reason to want internet cash for purchases where you're not concerned with fraud.

I know they’re not free, and I’m happy to pay for the service. I can name a large number of smallish purchases I would not have done online if I didn’t know that Visa would make it right should the unknown vendor stiff me.

Bitcoin is piss poor cash, given the wild exchange rate swings and the ability for it to be stolen online. It literally has no property that I desire.

frankly fraud only matters for large transactions

Largeness is relative. The counter to your argument is that widespread use of existing payment methods means the market prefers them.

The counter to your argument is that widespread use of existing payment methods means the market prefers them.

That's not a valid argument. The market always prefers what "is" until a critical mass understands benefits of a new technology. The existing credit system was not designed for today's world, is pull based, and is rife with fraud on both the merchant and the consumer side. Merchants absolutely despise credit cards, we can't wait for something better to be invented.

The market preferred horses when cars were first invented; it takes time for new technology to penetrate. Internet cash will be a thing, Bitcoin might not be the successful implementation of that thing, but that thing's time will come.

Credit card companies are despised by merchants.

Market dominance is absolutely a fair argument for something being preferred by consumers, unless if you’re going to allege fraud or assert that everyone is dumb.

It of course doesn’t mean that things will remain this way forever. Credit cards have risen to prominence within living memory, there’s no reason why this has to remain. But it also means that if you expect something to replace credit cards, it must overcome both consumer preference and comfort, as well as all the advantages that the incumbents have.

As an aside, we have internet money. They’re called credit cards and debit cards, and we all use them daily to purchase ludicrous amounts of goods and services online and offline. What I have yet to see is an actual explanation for how any proposed “internet money” is superior to my Visa without relying on any ideological claims.

The baseline price for payment processing is well below 2-3%. In the EU, credit card processing fees are capped at 0.3%, and these companies are still able to make a decent profit despite.

What those high fees really come from is the need to cover the cost of all those rewards programs that are so ubiquitous in some countries such as the USA. Those would probably disappear pretty quickly in the presence of a law allowing merchants to add any processing fees (perhaps above some nominal baseline cost) on to the bill. 1% cash back doesn't seem like nearly so great a deal when you have to reckon with the fact that what's really going on is that you pay 2% more, and then the issuing bank gives half of it back to you, along with a generous dose of smoke up the ass, and then pockets the other half.

a law allowing merchants to add any processing fees (perhaps above some nominal baseline cost) on to the bill

This!! So much. The status quo amounts to price manipulation that harms the market and is utter B.S.

Item 8 from http://donellameadows.org/archives/leverage-points-places-to...

Actually most states do permit credit card surcharges by the merchant. California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas are the ones that ban it. Some of those states have pending litigation against those laws. Some of them also allow discounts for paying cash (as if it's any different than a surcharge for processing)

There was a time from 2013 to 2017 that merchants were permitted by processing agreement to do it, but Visa and Mastercard convinced an appeals court to throw it out. A few places in my state still do surcharges, but it's pretty rare.

What those high fees really come from is the need to cover the cost of all those rewards programs

You've swapped cause and effect here. It's the other way around.

High fees lead to rewards programs.

No, it is the way GP described it. Both transaction fees and reward programs are governed by the same entity: payment processing company. Reward programs were a trick to make people accept high transaction fees, because people fall for the illusion of "getting something in return". In practice, transaction fee is paid by everyone, but many people do not bother to claim their rewards, so it is a net win for payment processors. Also, even people who do claim their rewards usually do not do excesive calculaitons and do not realize that for 3% payment fee they get 0.5-1.5% worth of reward.

In practice, I don’t know of anyone offering 0.3% card processing fees. Most POS systems and online payment processors are more like ~2% e.g. Stripe is 1.4% + ~€0.30 to take online payments from within the EU. And chargebacks are passed on to the merchant with an additional fee tacked on.

Can you point me to any cheaper solutions?

I like the idea of having the processing fees displayed prominently on the receipt though (like VAT). If people had to actually pay more to use Amex (rather than the merchant absorbing the blow, or distributing the costs across their other customers), then they might quickly go out of business (and rightly so).

On the other hand they are mostly related to the limitation of cards: you give the merchant a number with which he can draw an arbitrary amount, any time, and pass it on (or leak) to someone else. An authorization token for a single transaction to a specific party for a specific amount could probably work without chargebacks.

An authorization token for a single transaction to a specific party for a specific amount could probably work without chargebacks.

1) This is precisely what you get from EMV transactions. A cryptogram covering these details, signed by your hardware token (card). Online transactions don't do this, it's true, but that's why we have the verified-by-visa type stuff. It's imperfect, I agree.

2) Chargebacks are still necessary, because it's not just about merchant overcharging or unauthorised transactions, it's about what happens when someone fails to ship, or sends you broken goods etc

on 2), the token must be for a specific amount, a merchant shouldn't be allowed to double dip or charge more unless he specifically asks authorization to do so.

On the merchant not delivering, I think this is really wrong. If you have a conflict with a merchant, I appreciate that reversing the payment is a convenient way to apply pressure but I think is not the fair way to do it. It should be legal process really (if it ever gets that far).

Your card being stolen has nothing to do with chargebacks.

Your mobile could be stolen with your cryptowallet inside and you could do a remote wipe of the device. You can also use multi-signature protections for large transactions, etc.

Your mobile could be stolen with your cryptowallet inside and you could do a remote wipe of the device

So long as the cryptocurrency hasn't gone already. If it has.. well whoops, bye bye money.

Of course.

Likewise, if you hold some bank notes in your wallet next to your credit card, an attack will deprive you or your money. The bank might cover any charges made on the card pending some admin and police work. For that service you pay a fee to the bank.

Except we weren't talking about cash, we were talking about cards.

Nice diversionary tactic there.

Would you if you got a big discount? There's a games site that offers 30% off when you use BTC, and I frequently take them up on it.

Miners are your 3rd party.

A lot of people are interested in it because they have a particular view of economics. In particular, they like that Bitcoin (1) has a fixed monetary supply, and (2) is difficult to regulate and tax.

Oh no, bitcoin is insanely easy to tax and regulate, they’ve just not bothered yet. A permanent ledger of all transactions is the tax man’s Dream.

I think the difficulty largely comes from not being able to associate a public key with an individual.

I can't say I agree. A gov can't pry the secret key to my coins from my brain (yet). You can much more easily freeze a bank account and garnish whatever you wish.

Additionally, Satoshi himself advised to never re-use a bitcoin address. It's foolish and makes it easy to link your transactions to a single entity (you). If you use a HD wallet, which almost every bitcoin wallet software supports, and is the default in the majority of them, you will not reuse an address. This is because it becomes impossible to tell if you sent money to yourself or another person.

Correct me if I’m wrong, but I believe the following two things are true about bitcoin addresses:

1. Once I know your public key, it’s trivial to prove that an address belongs to you, since an address is nothing more than the hash of a public key. 2. If I don’t know your public key when you receive funds, figuring it out is impossible. But once you spend that money, I now know the public key that received those funds, since only the private key associated with the original address could sign a new transactions.

Those two alone should make recreating the tree of transactions a purely mechanical process, with a much lower cost than what it took to create the original chain. At this point it’s a bit like any other de-anonymizes toon attack, with the benefit of some entities being known and coercable, and some users helpfully posting addresses on their social media accounts.

On the garnishment front: this kind of depends on scope. But the one thing we’ve seen is that all monetary security goes out the window when the attacker can take possession of you. This is why using technical solutions to such scenarios have always struck me as a bit silly.

The inventor said it well:

"The root problem with conventional currency is all the trust that's required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust. Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve. We have to trust them with our privacy, trust them not to let identity thieves drain our accounts. Their massive overhead costs make micropayments impossible."

Most agree that Bitcoin privacy is currently unsatisfactory. If it is not improved it should not be adopted generally. Legal recourse and low-cost transactions are layered onto the base protocol.

The inventor was trivially wrong, though. This was all born out of looking at a complex system, failing to understand it, declaring you've got a better idea, then learning over the course of a decade why the current system exists and that in fact you did not have a better idea.

(1) Trust is not a problem, it's a huge optimization. The sheer power consumption of cryptocurrencies is hard, demonstrable proof that trust is an efficiency.

(2) Debasing money (aka inflation) is a feature. It's a regular haircut for unproductive capital, and is, as designed, completely irrelevant to people who invest their capital. Even in most people's biggest investment, their own homes.

(3) Banks are trusted and regulated. Exchanges are totally unrelated fly-by-night banks set up because being your own bank sucks. This is not an improvement.

(4) Fractional reserve lending is fine because the FDIC guarantees the funds in the event of a run. This is a further efficiency, allowing the economy to move faster with freer access to capital.

(5) Identity thieves draining your account at a traditional bank has recourse. As we've seen in crypto, that's where this is a real risk - you've got nobody to hold accountable.

(6) Micropayments aren't something people want as it turns out.

Good points, but I would argue that micropayments would be great if they required micro effort and no overhead. They would transform the ability of non profits to fundraise.

Not that bitcoin offers that iirc, just saying.

It's a tempting premise, though my counterargument is decision paralysis. Making any decision has some amount of fixed overhead in the human mind and eventually you just don't want to deal with making a decision - period - no matter how small. This is why Netflix/Spotify/Apple Music is so popular; you may well save money buying/renting via iTunes but you just don't want to deal with it.

Micropayments can exist, as simple ledger entries. You pre-load a, for instance, PayPal account then PayPal can allocate pennies or fractions of pennies on your behalf. There's no technical mystery. It feels like this hasn't been done due to lack of desire for it rather than any inability to execute.

If you look at a country like Sweden, which is pretty much cashless, we can see that electronic micropayments are indeed transforming a society, but it can also be shown that this is actually not an ideal situation. There was an article on this very site a few days ago discussing this.

(1) Trust is not a problem, it's a huge optimization.

This feels like a response to a straw man, or at the very least an uncharitable interpretation of pro-cryptocurrency views. The problem cryptocurrencies intend to solve isn’t that trust is bad, but rather that in the real world you are effectively forced to trust a single entity or a small group of entities. I don’t think any cryptocurrency advocate claims that cryptocurrency is great because there’s no need to trust the parties on the other end of your transactions.

"Forcing" a trusted party into the exchange is the optimization, and it only works because everyone does it. This is like pre-existing conditions. You only get coverage for them if everyone agrees to be covered all the time in the first place. As soon as one entity opts out and you have to build a system to accommodate it, the efficiency is rendered void/unworkable.

Your optional-trust model is effectively what we have now, with bitcoin + exchanges. You can opt to trust an exchange, and yes, that does reduce load on the network, however the network is still wildly inefficient because it needs to also support the use case of zero-trust transactions. Traditional banking is an exchanges-mandatory system, which is why it's so much more efficient.

NOTE: This is not an equivocation of the wild-west unregulated crazy-town exchanges of the crypto space and real banks, just the roles they play in their respective systems.

I don’t see how it is comparable to preexisting conditions. Two people using one payment system does not prevent two other people from using some other payment system.

We already have limited options with different features regarding fraud/chargebacks, like paying for something with cash versus with a credit card. Clearly both cash and credit cards can exist together.

Youve missed the most important usecase. Censorship resistant financial transactions.

If you don't find that useful, then you should consider yourself fortunate and privileged. There are literally billions of people in the world living under authoritarian regimes right now.

Bitcoin doesn't solve that problem; you still have to obtain these tokens by exchanging your authoritarian currency for bitcoin, which can be made illegal very easily.

which can be made illegal very easily.

And yet here we are, living in a world where this isn't happening.

People are using cryptocurrencies, today, in regimes such as Venezuela, and yet your prediction of it being successfully banned, has yet to come to pass.

Really, nobody's using it anywhere, which is why governments haven't tried to stop it. The Venezuela case is the only currency less stable than BTC, but that aside, as a thought experiment consider: where did the BTC in question come from?

(1) If you can't move currency out of the country the whole thing is zero-sum. You're just buying bolivars from one guy and taking his BTC. You're leaving others within the country holding more bags of bolivars. The problem hasn't been solved at all just redistributed.

(2) If you can move money out of the country, you'd have done much better just buying USD and holding onto it, or using it there.

(1) Trust is not a problem, it's a huge optimization. The sheer power consumption of cryptocurrencies is hard, demonstrable proof that trust is an efficiency.

This is a conflation. Trust can certainly be a problem, and the demonstrable proof is the 2008 bubble and any other historical bubble with similar features.

(3) Banks are trusted and regulated.

Again, until they're not or they collude. This isn't slippery slope stuff, this has actually happened in the recent past.

(4) Fractional reserve lending is fine because the FDIC guarantees the funds in the event of a run.

It's difficult to judge whether this is true because as far as I know it's never been put to the test. Historically, banks aren't great at guaranteeing funds during a run no matter what they say (Great Depression).

The majority of your arguments centre around efficiency over trust (i.e. you trust in the system enough that efficiency has become your only concern when it comes to transacting with value). For most day-to-day operations you're probably in the right here. The problem is when you're wrong (and there are always these events in economic history where the "system" fails) then you're really wrong.

The problem is when you're wrong (and there are always these events in economic history where the "system" fails) then you're really wrong.

And that is not a problem cryptocurrencies solve. These systems can also fail.

I'm a pretty huge bitcoin critic because I view it from the problems that I want to solve. I want fast, low fee micro transactions and it doesn't serve that need. If you look at another perspective though, of people whose economies are collapsing, or people living under authoritarian regimes, it serves a need.

have you seen Lightning network? it is a second layer on top of Bitcoin that allows near instantaneous transactions for basically zero fee. people are using it today to buy stuff although it is still in beta testing.

It's a huge failure.

It's difficult to use, it requires always-on nodes, there appear to be multiple failure modes where funds can be lost to the counterparty with no recourse, and it requires the commitment of large amounts of currency to fund its channels and make the system work.

It's basically a joke at this point.

I'm not sure why it wasn't the first thing that was said, but let me say it.

It's to give freedom. Freedom to make and distribute your own currency without borders, rules or monopoly.

An outcome of this would be elimination of an artificial recession. There's a reason why Bitcoin paper was published in 2008.

Another outcome would be reduction in the authority of banks and governments. There's a reason why all the banking institutions and governments are quick to call it evil. Reason is that control of money grants banks and governments great control over citizenry.

There's no denying that it's far from perfect and has to be updated to solve all the bugs, many resembling to fiats.

About those "artificial recessions":

The historical experience with a gold standard without central banking is the closest we have to what an economy built on only Bitcoin would look like. If you look at the 19th century, it had far worse cycles of strong recessions than we've ever seen in the 20th or 21st century since central banking was established, and then later we got rid of the gold standard.

So... were those frequent 19th century recessions somehow preferable because they were "natural"?

Bitcoin doesn't solve anything. Its mission has been completely subverted by external financial interests, and its leadership relies on censorship and FUD to survive.

Cryptocurrency in general, however, solves the problem of payment processors strangling businesses and individuals at the whim of CorpGov.

It allows entities who are operating within what they believe to be moral and ethical bounds to do commerce without needing the blessing of a totalitarian state like China or the US.

What leadership? BTC has no leadership. If you mean developers, you really overestimate their influence.

I still don't understand what problem decentralised currency is supposed to solve.

I agree with all your other points, but e.g. in China people may soon wish they still had a decentralized payment system. Especially if you have a low social credit score, and the government starts to decide in detail what you can and cannot buy.

No one except power companies and current holders of large amounts of cryptocurrency benefits by the staggering amount of energy being poured into this completely asinine model.

If cryptocurrency is supposed to bring the benefits of decentralization to the masses and usher in an era where the "little guy" is more free, it needs to solve that equation somehow.

e.g. in China people may soon wish they still had a decentralized payment system.

As there will be no way back from a bad social score, this is coming.

The key problem to solve is how to create an exchange that the authorities can't shut down.

Some people want to use digital cash and that's what crypto coins are. As far as I'm concerned they should be stable(pegged to a known currency) and fast to transact to solve this problem. Bitcoin just doesn't make sense for paymenys due its volatility.

This sounds great until an irresponsible government prints money.

what problem decentralised currency is supposed to solve.

for example the central european bank deciding to devalue the euro, making us all 20% poorer in a few short months of 2016

not that bitcoin solves the fluctuation issue, but it's one of the issues that having a central bank gives us the people in our microeconomics when the politicians go all in on macroeconomics

So the question was: "What problem does X solve?"

And your answer is: "Well, problem Y. Except it doesn't solve it."

Or am I missing something?

I still don't understand what problem decentralised currency is supposed to solve.

The problem(s) that proponents hope decentralized cryptocurrency will solve have grown and evolved. So far, Bitcoin doesn't seem to fully solve them but these are some of the bullet points the idealists want:

(1) real (not nominal) "buying power" wealth protection : A currency that government couldn't inflate seemed to be the original and biggest motivation from the perspective of Satoshi Nakamoto. The genesis block[0] of Bitcoin has an embedded comment about government bailout (debasement) because of the 2008 financial crash.

(2) transactions of buying and selling without intermediaries: The charitable version of this scenario would be sellers accepting payments without paying fees and rent to bank-owned networks like VISA/Mastercard. Or transfer funds between accounts without bank wire fees. Sellers can also sell controversial items without being "approved" by companies like PayPal or Stripe. (What some call "censorship" or "deplatforming" by denying access to the payments infrastructure.) The uncharitable version of this scenario is buying & selling illegal things like drugs on Silk Road.

(3) privacy of transactions: This is somewhat related to (2) because of no intermediaries. If a shopper uses Google Checkout, Amazon Payments, Apple Pay, or VISA/Mastercard to make a payment, that information can be used against them. This doesn't necessarily have to be illegal drugs. Some people are worried that buying a legitimate item such as a certain book can be unfairly used against them. The age of pervasive data collection and machine learning means buying "50 Shades of Gray" could result in insurance companies charging you higher rates or employment background checking firms lowering your "hiring" score. The Chinese "social credit" system using pervasive data about its citizens might be an example.

(4) bypass government currency controls: citizens of restrictive countries like Venezuela want to protect their savings from corruption by converting it into a cryptocurrency. This is related to (1).

(5) universal basic income : I just threw this last one in here because HN front page sometimes has a proposal to use decentralized cryptocurrency as a way to implement UBI.

I'm skeptical of cryptocurrencies promises but I wanted to try to fairly lay out its aspirations. Are there any more I missed?

In any case, different participants of cryptocurrency have different priorities as to the benefits of decentralized trustless currency. Some prioritize wealth protection more than censorship-free payments. Or vice versa.

[0] https://en.bitcoin.it/wiki/Genesis_block#Raw_block_data

There are many problems cryptocurrencies solve. You can make a list just by noting where actual turnover in the real-world crypto economies goes in practice:

* How do I receive payment for illegal goods I am selling without going through traditional regulated entities that want to attach my real-world identity to the payment in their records?

* How do I provide gambling services to customers in jurisdictions that prohibit this?

* How do I profit from people willing to put their money into transparent pyramid schemes or straight-up scams, without risk of recourse from traditional police / legal systems?

* How do I launder money?

* How do I skim from the shadow economy i.e. in entities engaged in all of the above activities, without committing an obvious crime myself?

Legal oversight can be an unwanted transaction overhead that introduces risk, and laws restrict freedom.

Ask instead what problems decentralised currency is supposed to solve that are legal and moral to solve and cannot be solved more cheaply through traditional systems involving a regulated third party subject to the rule of law.

You didnt mention that governments print money. Lots of money.

Thats my number 1.

Why's that a bad thing?

Because a dollar is not always worth a dollar. A bitcoin is always worth a bitcoin.

The dollar doesn't have a "reference rate," as it is subject to arbitrary inflation. The dollar has had several reference rates in the past, based on weight in silver, and later, gold. The purchasing power of a dollar has declined rapidly since these reference rates were abandoned.

A bitcoin has a reference rate which is eventually 1 in 21M. There is an initial inflationary period until it reaches that, but we're already 1 in ~18M, so most of the inflation has already occurred. We will be very close to the 21M in another 13 years, and after that we will only be adding small fractions.

If you had a dollar in 1918, it would be worth only a small fraction of a dollar today. 1/16 or 1/40, depending on what estimations you use.

If past performance is anything to go off, then a dollar in 2118 will be worth 1/16th of a dollar today. If you hold onto 16 dollars today, they will have the purchasing power of 1 dollar in 2118.

On the other hand, if you hold 16 bitcoin today, you have 16 of 18M of the bitcoin supply. In 2118, you will have 16 of the ~21M total supply.

In the same 100 years, bitcoin will inflate by most 16%. The dollar will inflate by 160% in the same period, if the past century is anything to go off (it isn't, this century will be much much worse).

Or put it in to shorter timeframe. If inflation is approximately linear over the 100 years, then every 6 1/4 years, your bitcoin will lose 1% of its purchasing power. In the same timescale, your dollar will lose 10%.

Which of these are you going to save money with?

The above is based on the assumption that demand for bitcoin will not increase in relation to demand for the dollar. Given Gresham's Law, this is highly unlikely.

That only pins the value of a bitcoin in relation to other bitcoins - it does nothing to pin the value of a bitcoin to real-world goods. And the only practical value of a bitcoin, in the long run, is its value in relation to real-world goods.

It's also worth remembering that once the inflation of bitcoin stops at the 21m mark, it can only ever deflate from there as wallets (and their associated coins) are lost. As bad as inflation is, a deflating currency is not any better.

Of course, the proposed solution to bitcoin deflation was (at least at one point) just to inflate the bitcoin currency by effectively moving the decimal point to the right (one bitcoin becomes 10, etc).

That only pins the value of a bitcoin in relation to other bitcoins - it does nothing to pin the value of a bitcoin to real-world goods.

This is true, but it's also true for dollars. No goods are inherently pinned to a dollar value. Goods are priced in dollars with the expectation that the seller will earn a profit if sold at a given rate.

But if that dollar loses its purchasing power, mostly due to it being inflated by central banks, then the price of goods in dollars will have to increase for the seller to earn the same profit. It is not sufficient for the seller to just increase their goods at the rate of inflation either, because the cost of all their expenditures increases too. To earn the same profit after inflation, they need to increase their revenue more than the rate of inflation. This has a ripple effect over all industries.

On the other hand, if the non-inflationary currency is not losing its purchasing power over the same periods, then merchants will prefer to obtain the non-inflationary currency over the inflationary one. If they obtain both, they will use the inflationary currency first to purchase new materials, and only dig in to the non-inflationary currency as and when they run out of the inflationary currency.

If eventually, businesses decide to price their goods in bitcoin, rather than the dollar amount of bitcoin at the current market exchange rate, then they might be able to expect that they will not need to keep raising prices annually for inflation, but might instead be able to lower them, or keep them at the same rate and increase their profits for as long as a cheaper competitor does not appear. However, if these goods are priced both in bitcoin and USD, then while the bitcoin value remains the same, the dollar value must continue to increase for inflation.

Since bitcoin also enables a certain level of transactional privacy too, it will also be used for grey and black market transactions, which make up 10-20% of economies. Most people interact either directly or indirectly with these markets for saving money or generating additional profit. Cash has traditionally been used in these cases, but as the effort of states to make money digital, under mass warrantless surveillance increases, the practicality of using cash decreases. Bitcoin is well suited to fill the gap being created.

As bad as inflation is, a deflating currency is not any better.

I often hear strawmen arguments against deflation, but never any real sources or evidence of how terrible it supposedly is. I'm led to believe that people won't spend money in a deflationary economy, but peoples need to eat and drink suggests otherwise.

An example of deflation in action is in Moore's Law. If I buy a computer now, it will be half as powerful in 1.5 years. Why would I not just wait 2 years and buy a computer then? People continue to buy new machines all the time, and they don't wait 2 years for the next iteration, because they know that in another 2 years, that one is out of date. People will spend for as long as they perceive the transaction is worthwhile now for the labour effort they put in to acquire that amount in currency. In a deflationary economy, people simply make better decisions, because they're not simply comparing the amount to what they earned recently, but in any significant transaction they need to weigh the importance of the transaction against their future self.

I think the real complaints about deflation are from socialist types who worry that the rich will get richer. Too bad for them, they can't prevent this any longer. The state no longer has the capacity to steal people's bitcoin if they take the right measures to secure their keys. The rich might get richer, but anyone can get better off if they shift to a low time-preference mindset, instead of being stuck in the debt spirals that are encouraged by high time-preference economies.

Of course, the proposed solution to bitcoin deflation was (at least at one point) just to inflate the bitcoin currency by effectively moving the decimal point to the right (one bitcoin becomes 10, etc).

The "bitcoin" denomination is really just cosmetic anyway. All of the values in the bitcoin protocol are measured in satoshis, as a 64-bit integer. It is not trivial to change this denomination as it would affect the entire UTXO set of transactions. On the other hand, moving the decimal place for the cosmetic appearance of satoshis could be trivial, but it doesn't change much.

You’ve explained why dollars are inflationary, which I already knew. You haven’t, however, explained why an inflationary currency is bad.

Which of these are you going to save money with?

Neither. Most of my savings is in productive assets (i.e. stocks). Some is in gold.

The inflationary money is bad in comparison to the non-inflationary money, because the inflationary money sees people's purchasing power lose value from the labour they underwent to acquire the currency, over short terms (a few years). The non-inflationary money however, sees people's purchasing power remain the same as their productive effort to acquire it, if not, increased from when they obtained it due to deflation.

When two forms of money exist and one is better than the other, people will save the better money and spend the worse money.

People do save with currency, usually in limited amounts or limited times, in large part due to its inflationary nature. Inflation forces a high time-preference on labour because the non-spender loses value over time. Putting money into stocks is not the same as saving, but it is investment, with varying degrees of risk. None are guaranteed to even preserve value, let alone profit. At present, Bitcoin behaves like a stock because its value wrt USD is so volatile.

Gold is only valuable because of it's perceived scarcity and historical use as a store of value. It is not priced so highly due to its intrinsic properties as a metal (it is neither that useful nor that scarce), unlike some other commodity metals.

Bitcoin is the digital equivalent of gold. Its value is based on scarcity and perception of value due to the ability to find someone who will trade it at an expected market rate for other currencies or for goods.

Precious metals already solved this problem, and already have widespread acceptance.

Good luck sending gold through copper wires. Good luck transporting it without getting mugged. Good luck hiding it when the socialist state comes knocking for it.

Inflationary economies can survive in the long term, whereas the survivability of deflationary economies is not so clear.

I'm still waiting for the hyperinflation Ron Paul and his adherents have been promising for....decades now.

If the best they can do is point to Zimbabwe or one or two other developing nations, then I think the concerns about governments printing money are either overblown or entirely off the mark.

Look up Weimar Republic

Nice example of the grasping at straws. Can you actually answer parent's question with an example that is not almost 100years old?

Are you taking the position that hyperinflation hasn’t happened in the last century, or simply that it only happens in banana republics?

You do realise that Bitcoin is experiencing much more inflation in its supply than the USD or the EUR, don't you?

BTC supply is capped at 21,000,000

The US government has 20,000,000,000,000 in debt. Today USD might be better, at some point debt will need to be paid back.

that's not how debt works on a national level.... it's not like personal debt at all

I know this is true when the debt is issued by the currency issuer & denominated in that same currency, such as in the case of the United States.

Is that also true in the case of say, Italy's debt denominated in Euros or Illinois state debt denominated in USD? I have been meaning to read Steve Keen's work on this

the 20T will have to be paid back. Unlike personal debt the fed can just print the money. There is currently around 6T in existing money supply (though I havent checked recently).

The question is how will the debt translate to increased money supply over time (inflation).

You do realise that Bitcoin is experiencing much more inflation in its supply than the USD or the EUR, don't you?

So, I argue that it seems likely this would happen; someone will figure out how to fractional reserve the stuff, the gain is too great. But do you have evidence that it did happen? what was the mechanism?

someone will figure out how to fractional reserve the stuff, the gain is too great. But do you have evidence that it did happen? what was the mechanism?

If the transaction is not on the blockchain or is not directly tied to a blockchain transaction (like with LN/payment channels), you MUST assume there's a fractional reserve going on, as you have no way of confirming otherwise.

If it is tied to the blockchain, it can't be a fractional reserve.

That's a solved problem. Precious metals are what you are looking for.

While there is some truth in your argument, you are very clearly only focusing on one-side.

The problems that crypto-currencies attempt to solve are more to do with monetary policy. E.g. - you can't have things like quantitative easing / manufactured inflation if your money supply is dictated by a tightly controlled algorithm.

Whether or not that is a desirable overall policy is a wholly separate argument.

I keep saying this but personally I see bitcoin as a good way to transfer value, nothing else. As soon as you consider it that way, it does solve every issue you got with it.

You buy bitcoin > You send bitcoin > He get bitcoin > He sell bitcoin, all that hopefully happens in less than a few hours, to avoid market fluctuation the most.

The only wallet is at the exchange, hopefully for them, it's moving quickly too.

I am supposed to lay out my entire financial history in a public wallet

Don't hold bitcoin, you make a wallet, you buy, you send, you scrap the wallet.

trade with people who I don't know

Cryptocurrencies doesn't solve that, HTTPS solve that, you solve that by trust. Sure the old ways to transfer money require less trust from you because you can always revert it by calling your bank, but then it's the other side that need to trust you (and he has much less to works with).

If you are going to go through an exchange anyway, how is BTC helping you? Both parties still need to trust coinbase or whatever and ultimately the transaction is identical to using venmo.

I can't use Venmo, thus I can't exchange anything between you and me.

Cryptocurrencies is this neutral third party that won't care about borders. Venmo could be your exchange, while mine would be something else. That's the beauty of it.

We are lucky, we have ways to handle money transfer relatively easily between US and Canada (my country) so that's not so much an issue, but that issue exist.

China / US / Europe are not good proving grounds for Bitcoin. Those are large single markets served by a single currency. Southeast Asia on the other hand, is fragmented across 10 financial systems.

What Bitcoin offers, that centralized payment systems cannot in Southeast Asia; is the prospect of having an overlay on top of the local financial systems that is open and interoperable by any startup looking to provide local solutions to the payment puzzle. A wallet app developed in Vietnam for example, can easily receive Bitcoins but cannot easily receive Rupiah.

The only requirement is to have proliferation of Bitcoin-fiat exchanges across the region so people can jump in and out of the Bitcoin ecosystem when the need arises. This part of Bitcoin development is not rocket science, just requires time and hard work.

The only requirement is to have proliferation of Bitcoin-fiat exchanges across the region

No, that's not the only requirement. Other requirements include teaching large numbers of nontechnical people what the heck a cryptocurrency is, how to get and secure a wallet, how to get an account on an exchange, how to convert Bitcoin to and from their local currency, why they can't carry Bitcoin around in their pocket like cash, and who they should talk to if their Bitcoins get stolen or their exchange gets hacked.

Or, they could just get a WeChat or Alipay account, which are going to be available in southeast Asia pretty soon. Boom, done.

WeChat and Alipay are here already, but the market is already fragmented when they arrive.

They also pose the risk of vendor-lock, which is worrisome to local businesses and regulators due to their links to China. It's one thing to have a locally-approved payments monopoly, it's another thing if that monopoly is foreign-owned.

If Southeast Asia wants to produce a region-wide equivalent to WeChat / Alipay, then an open, neutral & interoperable platform is the best way to do it, politically speaking.

Payment puzzle? I can easily send money with:

- Venmo

- PayPal

- Apple Pay

- bank transfer online

- direct deposit

- wire transfer

etc Etc ...

How much experience do you have with wire transfers? I have very little experience, but it always proved far from easy.

There was a long post-9/11 stretch during which many US banks made this somewhat annoying. Much less so now, you can do it entirely online, both domestically (although why would you) and internationally. It's just (comparatively) expensive.

Is anyone doing this kind of thing already there? If not, why not? Are the exchanges regulated out of existence or just not enough entrepreneurs with the right skills to bring them to fruition?

Any sites you recommended that are discussing this topic deeper? It's a great comment you made.

Why would you convert money from one currency into bitcoin before converting it into another instead of just converting it directly from one currency into the other?

- It doesn't reduce cost or forex exposure

- It adds to the infrastructure required in both countries

- It adds to the complexity to complying with regulations like KYC

A wallet app developed in Vietnam for example, can easily receive Bitcoins but cannot easily receive Rupiah.

Yes but the sender cannot easily send bitcoins - because nobody uses them! And if the sender is using an Indonesian mobile wallet, and bitcoin is purely the intermediary network - then why wouldn't this wallet provider not just send the cash in Dong using a bank/remittance provider?

The sender can easily buy bitcoins, the receiver can easily sell them. Neither has to know or care what local currency the other uses.

Sending bitcoin is easy in a connected app and requires no permission or blessing from the world's financial and governmental overlords. It's essentially a native "value transfer protocol" of the internet. Wheras managing hundreds of pairs of currencies using some choice of third party intermediary companies brings in third parties, contracts, counterparty risks, regulatory issues, legal issues, risk of government seizure, censorship & interference, etc.

Still doesn't make any sense.

- You need a third party intermediary if you want to use bitcoin as an intermediary unless you want to build an exchange yourself. It's just as easy if not more so to use a remittance company.

- Why would a sender buy bitcoins to send it to her friend when she can just click "send X rupiah to Nam" and receive a message like "Nam will get Y Dong". Or even "Send Y Dong to Nam" and receive the cost in rupiah.

This scenario only works if both the sender and receiver are comfortable in using bitcoin instead of their local currency as their unit of stored value. Which we know nobody is.

> The sender can easily buy bitcoins, the receiver can easily sell them. Neither has to know or care what local currency the other uses.

People generally tend to care how much money they will be receiving!

Wheras managing hundreds of pairs of currencies using some choice of third party intermediary companies for remittancing brings in third parties, contracts, counterparty risks, regulatory issues, legal issues, risk of government seizure, censorship & interference, etc.

Yes if your a remittance company. Which I assume this application developer isn't.

[edited for clarity and as I missed the last part of the comment]

I get what you are saying.

Bsaically you are saying that bitcoin is useless because nobody uses bitcoin.

Unfortiunately it's true that it is yet to see big adoption outside of techies, and citizens of basket case economies such as venezuela etc.

It's like if you invented email but nobody was using it yet. People would say email is useless, because nobody uses email.

But the concept of bitcoin is not useless, just as the concept of email is not useless. Day to day usefulness requires adoption it's true.

But even now it is useful as an intermediary currency that can "tunnel through" any kind of regulatory barrier as long as an internet connection exists.

It solves the problem of not having to rely on a central bank to maintain the value of currency. It may seem unnecessary in the US, but pretty damn useful in countries like Zimbabwe where the privilege to print money has been abused. The opposite problem of deflation (a la Japan) seems more likely to hit the US. As population declines (and with it the demand for housing), it'll become necessary to destroy money with negative interest rates to reach the target inflation, boost investment, and check unemployment. But that's damn difficult with currency notes. And there'll be political opposition to any effort to target higher inflation or fiscal policy that has the government borrowing and spending more. The behaviour of UK and EZ governments and their austerity policies (especially towards Greece) do not inspire much confidence. An alternative currency might start looking attractive when that happens. Bitcoin is even more deflationary and won't help. But some other cryptocurrency could.

It's also a matter of principle. There are some who don't like the idea of central bank monopoly. A competing currency could be beneficial even if the only thing it accomplishes is keeping central bankers more vigilant and honest.

...is hypothesized to solve. Do we know of any actual economist who endorses cryptocurrency as a soln to central banks?

I listen to macro voices. They pointed out that wealth is so sharply concentrated in bitcoin that if all the cash in the world was replaced by crypto equivalent, it would instantly mint an oligarchy of cryptokings with nationstate levels of resources and it would cause a world war. Obviously the current world order would resist that.

Nope! Most cryptocurrencies are even more deflationary and are designed to benefit the protocol designers and early investors. That doesn't mean we should stop trying! I haven't seen any good arguments for why a cryptocurrency cannot possibly work. Once the dot-com phase of crypto ends, there may be more serious efforts to make a currency that's actually useful. I'd argue that people in Greece could use one right now if there was a sane way to bootstrap the process.

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Interesting footnote.

Oh the irony of trying to implement some facebook tracking crap on an article about RMS.

Well, it was a snarky and belittling article at least.

Sidenote: does anyone know why all these cancer scripts use this approach of using an initial Javascript payload to create a `script` tag, instead of just being a `script` tag directly?

A injected script element was last I checked the only way to send a piece of data to a remote server on a third party domain without a preflight OPTIONS request.

Less round trips. Less bandwidth.

For more reading look here:http://dev.housetrip.com/2014/04/17/unleash-your-ajax-reques...

But in general here's what is wanted.

- No OPTIONS request

- Third party domain.

- withCredentials - pass cookies in the request.

The best option in this case is actually a injected async script element.

Source: worked in ad tech a few years ago. Looked into all the possible options, this came up least bad, and explained why it was so popular.

Taler is designed as government spyware. Why it is part of the GNU project is a mystery.

“I wouldn’t want perfect privacy because that would mean it would be impossible to investigate crimes at all. And that’s one of the jobs we need the state to do.”

Anyway, I wonder if there is any protection built-in that prevents the exchange from looking you up on linked-in and associating your salary information with your job, then selling the data. It could make salary negotiations a little more unfair.

Actually wondering, does anybody know details? This seems it would need some law passed to protect your privacy in this case, and that hasn't been the trend lately (except in the EU).

Absolutely no aspect of Taler could be reasonably described as "government spyware".

First of all, only receivers of Taler tokens are auditable (and the reason for this is so that businesses can show they've paid their taxes correctly -- unless you are a "taxation is theft" type of person I'm sure you'll agree that if you want to have large-scale systems of doing transactions this is a requirement unless you want government intervention). Consumers are not auditable, nor is it possible for any third-party to correlate their purchases.

Comparing this to BitCoin, you would have to also argue that BitCoin is "government spyware" because it provides a public transaction record -- which is far more information about consumers' transactions than is available through Taler.

By the same token, VISA or your bank is government spyware. That's just a ludicrous argument.

By the same token, VISA or your bank is government spyware. That's just a ludicrous argument.

No it isn't! The fact that visa and banks are government spyware is basically why bitcoin was invented in the first place.

Bitcoin has a public record of every transaction by every user, with every users' current balance made public (the former might be possible to reduce with Lightning, but the latter is not since you have to settle everyone's balance on-chain at the end of the day). Can you please clarify by which token VISA and banks (and GNU Taler) are "government spyware" and Bitcoin is not?

I happen to think that none of these systems are "government spyware" but if you want to argue otherwise, it would be nice to have substantiated statements.

The part where Visa and banks know your name and address and the blockchain doesn't.

Every single exchange I've used requires providing multiple forms of government ID. Practically speaking, most Bitcoin users identify themselves in this manner. Yeah, there's localbitcoins.com but just because it's technically possible to do doesn't mean that it is a practical difference if very few people do it.

Don't get me wrong, I agree that it's generally a problem that all of these institutions know your name and address. But to be honest, I trust my bank to better protect my personal information than some random Bitcoin exchange.

But with Bitcoin you don't have to use any exchange. You can get paid directly in Bitcoin for goods and services.

With fiat, there is no way to do digital transactions without attaching your name and address.

You're making an ideological argument for taxation of income and for having government spyware embedded in our financial tools, not a technical argument that GNU Taler is not government spyware.

"Spyware" doesn't mean "spying software that I don't like". You liking it and thinking it necessary makes it no less spyware.

Can you explain, in technical terms, how GNU Taler is literally government spyware? It was not developed by a government, it does precisely what it advertises, does not steal information from users' computers, and is GPLv3+ licensed. It therefore does not fulfill any criteria that a reasonable person would use to define "spyware", let alone "government spyware".

If the concern is the government knowing about your transactions (which Taler doesn't allow -- but whatever), then that is an ideological concern not a technical one.

I don't know why you think that my liking GNU Taler's principles somehow invalidates that it does not fulfill the definition of "government spyware". I assumed that the objection was ideological, not technical -- because as I've outlined above there is no technical basis on which to base this view (I don't think it's good to strawman people -- I assumed that GP was making the stronger ideological argument rather than the [in my opinion] incorrect technical argument).

I guess it's not spyware, or a backdoor, because it's not secret. It's an overt listening device for the government.

The lack of privacy to government surveillance is the important feature that people are trying to convey when they use the term "spyware" to describe it. But we can use a more precise term if you're concerned about the term's connotations with secretive spying.

The only world where people would use financial software like this that puts them in such a subordinate position vis-a-vis the government, is one where real financial privacy technology is illegal.

Stallman should be upfront about whether such laws are what he would like to see implemented.

It's an overt listening device for the government.

What do you mean by this? Are we still having a technical discussion? Can you point to the code in GNU Taler which turns on the users' microphone? Obviously I'm being sarcastic here, but you were just complaining about me not discussing the technical argument and now (in the next breath) you're talking about ideological views on government.

But in all seriousness, I imagine you're talking about the auditability aspect of GNU Taler. GNU Taler only allows auditing of people receiving money (which is going to be businesses that currently, according to the laws of basically every country on the planet throughout history, have to pay taxes) and not those sending it (which would be you and me).

Bitcoin (which I assume you are a proponent of) has a more public transaction history and thus in theory a government could construct more worrying audit systems than they can with GNU Taler. You can use GNU Taler with Bitcoin if you like, it works as an eCash system on top of any underlying payment system (like VISA or Bitcoin). Now, Lightning does help with this problem for most transactions but the general problem of money auditing still exists -- but I am not the one arguing that Bitcoin is an "overt listening device for the government".

Uh, yeah, it's called Monero. It's been out since 2014, guys, and it's FOSS.

Stallman doesn't want to take government out of money, so the sorts of privacy guarantee that are provided by things like monero are not what he wants.

Government, to him and many of the rest of us, is a useful joint endeavour that allows us to have many if the nice things we have in our societies.

Cash and gold have been around forever, and are similarly untraceable. Government has inserted itself into money. It hasn't existed in the position that taking its oversight out of money has to be justified. The contrary...

Gold is not often transacted in, directly, so it's somewhat spurious to the discussion at hand.

The vast, vast majority of transactions take place electronically and with government oversight, so yes, cryptocurrency enthusiasts really are talking about removing such oversight when they propose wholesale moves to cryptocurrency.

All of which is orthogonal to the point at hand - whether such things should enable such oversight. Stallman clearly feels they should.

Transactions are only now taking place increasingly electronically. That's why only now are banks being moved into the position of police investigator and enforcer.

Whether gold is transacted in for daily items is a non sequitur. It is used. It's simply expensive to transport.

You've also ignored cash entirely.

To be honest I remain unconvinced at the weight of your counterargument.

Electronic transactions, and even widespread use of cheques, are very new on the historical timescale. The current level of financial surveillance by the central government, that has been enabled by this technological shift, is unprecendented.

A permissionless and decentralized financial ledger holds the possibility of reversing this trend and restoring the more decentralized distribution of power that traditionally existed.

I wouldn’t want [X] because [Y]. And that’s one of the jobs we need the state to do.

jobs we need the state to do

we need the state

What about libertarianism were you guys talking about? Because the motivation around this coin is simply NOT libertarian..

"What about libertarianism were you guys talking about? Because the motivation around this coin is simply NOT libertarian.."

According to the wikipedia article on Libertarianism[0] there are actually two almost completely opposing definitions of "libertarianism", one they call "right libertarianism" (which sounds like it aligns with what the original article calls "anti-socialist"), and the other "left libertarianism". From what I've seen, when European literature uses the word "libertarian" it usually means "left libertarian" and when US literature uses the word it is more likely to mean "right libertarian". Given the same word has almost opposing definitions, it is usually safest to either define it very carefully when using it or avoid using the word at all.

BTW, in the context of Bitcoin and cryptocurrencies, from what I can tell, it was originally more on the "left libertarian" side with talk of benefits like "democratising money", but now is more on the "right libertarian" side. From the original article: "Taler’s design explicitly tries to block opportunities for tax evasion ... We need a state to do many vital jobs, including fund research, fund education, provide people with medical care ... provide justice, including to those who are not rich and powerful, and so the state’s got to bring in a lot of money."

[0] https://en.wikipedia.org/wiki/Libertarianism

You can build one thousand money transfer networks better than the banking system - it's irelevant, the incumbents will never let them exist at scale. Financial intermediation is a trillion dollars industry, do you think the industry will just let some small startups and OSS developers steal their lunch? No, they will lobby to hell, they will pressure all regulatory agencies, they will scream "money laundry, corruption and pedophiles!". In the end all you will get are paypals and stripes, thin tech veneers over thick banking gravy.

Cryptocurrecies succeeded to some degree precisely because they were not merely transfer networks - indeed, despite the dubious usability as such. They succeeded because they created their own units of value along with the transfer system, speculative virtual assets that allowed then to bootstrap without being grandfathered by the banking industry.

A social token that would strive for a balance between privacy and against criminal behaviour could be imagined. But it would need to follow a similar path, neither banks nor governments desire to relinquish any control over their currencies.

Original article: https://www.coindesk.com/free-software-messiah-richard-stall....

'Stallman continued:

“I wouldn’t want perfect privacy because that would mean it would be impossible to investigate crimes at all. And that’s one of the jobs we need the state to do.”'

What? That doesn't really sounds liks RMS, right? I thought he wanted perfect privacy for all the things?

I mean I know he is certainly not against law enforcement doing proper investigation but I thought he was of the "There is either perfect encryption (and thus privacy) or there is no encryption" -persuasion.

I think there is a hypothetical system of using tools like TPM 2.0, Secure Boot and Intel SGX.

Proof of Elapsed Time (Hyperledger Sawtooth) is exactly that