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Explained in words: he can only spend 92% and he wants to spend 100,000 baht. So 100,000 baht is 92%, meaning 1% is 100,000/92. From 1% we can get 100% by multiplying by 100, making it 100,000/92*100. Dividing by 92 and then multiplying by 100 is the same as just dividing by 0.92, so it can be rewritten as 100,000/0.92.

We have SEPA in Europe for instant (and often free) payments, hooked up to about 8,000 banks, so this is from bank account to bank account (not transfer between some third party digital wallet). Going outside Europe, you can use PayPal for instant and free transfers, as PayPal is connected to most local banks, so getting money in and out of your PayPal wallet is easy, or you can get a debit card for your PayPal account, like you have done with crypto.com. You definitely have some good benefits there, but, how is this enabled by DeFi? If I am reading it correctly, you have bought $40,000 worth of the CRO token (based on the benefits you list), which you have staked for 180 days, and in return, they have given you a prepaid Visa card (that you can top up), which admittedly, have some nice benefits, but you have risked $40,000 for this, which value is linked to the CRO token, which I assume is issued by crypto.com, so effectively you have paid crypto.com $40,000 for this card, but to get back your $40,000 you have to sell your CRO tokens to someone else, as crypto.com probably won’t buy them back from you. So this is very clever business scheme by crypto.com, and well, I guess you can argue that DeFi / blockchain makes this possible, because I somewhat doubt the regulatory authorities would allow someone to sell non-redeemable tokens like that.

Actually, my bank already offers me the true exchange rate for all transactions done in foreign currency (and no ATM fees when abroad). But this is only for premium customers. Wise has a free MasterCard where their fee is 0.20-0.45%, depending on the currency pairs. The impressive thing with Wise is that it is built *on top* of the existing system, and they can still offer extremely low fees. So this is not a technology problem, it is a “banks charge high exchange fees because they can”, but we are slowly seeing disruption from the likes of Wise, and my bank has seen the writing on the wall, and already removed all their fees (for premium customers and up).

For every single fad, you can find people with fancy titles or in high positions, that will endorse it. But look at all these endorsing statements, they are hollow. It’s all about how things could maybe in the future be better… but bitcoin is more than 10 years old, and pretty much no-one uses it as an actual currency, it has just become a speculative asset or a casino chip. Find someone who can explain *why* blockchain or DeFi can improve existing systems, what kind of inefficiency in the existing system does it remove? How does the tokens themselves create value? I have heard zero explanations of these things. Just explain to me, how crypto coins are not just zero sum games, and I will be impressed (they are actually negative sum, because of the new tokens issued to miners,).

What my experience shows is that there are no technical reasons for settlement not to be instant, and there has not been for more than a decade. Your problems may be very real, but I don’t think they are technical in nature, e.g. you mention a clerk on a powertrip holding on to your funds, so you couldn’t do payroll. Presumably though, this clerk wanted proof of origin or some other document, to release the funds, i.e. regulatory overhead, but this is not solved with a trustless blockchain, unless the goal is to avoid regulation, and while we can probably all agree that a lot of regulation suck, we still would like to run our businesses legally, and thus have to comply. But even if we assume we want to run an illegal business, and avoid all KYC/AML regulation, I am still not sure blockchain is the best answer, because it is a giant public ledger, so when the authorities crack down on you, they can basically see your entire financial history. Not to mention the practical problems of on and off ramping (when you run an illegal business), and actual interaction with the blockchain for a business would be a high risk, because there is no recourse for mistakes. Just this week we heard about DeversiFi which accidentally spent $23 million in an erroneously calculated transfer fee, and Compound who paid out $90 million due to a bug in their code. These are just human errors, there are also the hacks, exploits, and frauds, which are more dangerous with DeFi because if you someone steel your money (which has happened countless of times) no-one can help you, they are lost for good.

This I just don’t understand: I have been accepting payment cards online since 2004, and settlement has always been instant. And as a customer, I pay with ApplePay, and occasionally I’ve had my bank’s app open, and it live updates within a second to show the amount debited from my account. Likewise when I use my Wise card abroad (for the lower exchange rate), I get an instant notification each time I use this card, where I can see the exchange rate. So the existing payment systems are, for all intents and purposes, instant. Where there are delays are cross border transfers between banks (ignoring SEPA, i.e. instant transfers within EU). G20 has created a task force to fix this, but it’s a mess and they have identified many issues, so it will take a long time for all financial institutions in the world to implement all the proposals (and law makers to harmonize regulation). But blockchain won’t change/disrupt any of that: Blockchain is just adding a parallel system, but we already have a handful of parallel systems that works fine, e.g. using VISA/MasterCard abroad does provide instant settlement, so does transferring money from one PayPal user to another, regardless of where they are. The problem is on and off ramps to the custom system. PayPal is probably the provider that provides the most ramps. I know nothing about South Korea, but if they do not have an instant payment system for domestic transfers, I would be very surprised.

Oh the irony… so you also think it actually sounds rather dumb, and I must be explaining it wrong? Yes, there must be some “magic” ingredient in the blockchain I have missed, that can explain why “number go up”…

I have non-technical friends who are into crypto. When I explain to them *exactly* how a blockchain operaters, and all the problems, like transaction limit, the monotonically increasing database, that must be stored on your smartphone to be trustless, the many actual instances of majority attacks that have resulted in double spending, and why a transaction (for bitcoin) on average will take 15 minutes, but you should wait longer, to decrease the chance of it ending up in the shortest chain (and thus effectively reversed), that you must actually not only trust the people who wrote your wallet app 100% (to not steal your money, as there is no recourse), you must also trust that they are good enough programmers that there is no chance of anyone ever finding an exploit, etc. etc. At first, they think I am explaining it wrong, because all this just sounds dumb ???? What they do not realize is, that they *think* they are part of the crypto system, but in practice, they are just trading on Binance or another exchange, which has a central database, and all the trades are not actually settled on the blockchain. And then we get to Binance, all the various schemes done there to manipulate the price, not to mention Tether, the currency used instead of dollars, which is just printed without any proof of backing, so actually much worse and less transparent than the central banks that these people love to fault for all our societies problems.

Do you have some good up-to-date information about how the system runs? If user connect their bank account (as they mention), and merchant has a standard payment terminal, I have a hard time seeing how involving a blockchain makes things easier, cheaper, or faster. I assume you are familiar with Ripple, they also mentioned blockchain heavily in their press releases, and did have their XRP token for international settlement, but the network they were actually trying to sell banks had nothing to do with blockchain, because of course, when you have trust, as you generally have between banks, you can just use a regular database. Fair enough, I mentioned this in relation to DeFi, the topic is, if DeFi will kill banks, and CHAI is a company which provide a centralized solution where merchants trust CHAI (based on what I have been able to read about it so far). But if they actually benefit from using trustless blockchain technology, then I am very interested to learn more about this. And I mean benefit, as in, can do something more efficient than the existing system, not just benefit from the PR / hype, and more efficient would of course not just be about regulatory arbitrage, because I fully admit that trustless blockchain does have an advantage here.

@Neeranam you started this thread with a question, and now you are name calling people who have a different view than yours, without having contributed anything of value yourself. Disappointing! As for yield farming: Charles Ponzi also had an excellent explanation about how he was making his return (he was buying discounted postal reply coupons in other countries and redeeming them at face value in the U.S. as a form of arbitrage, and thus just needed a lot of liquidity to increase his profit). Stefan Qin, who was the scammer I mentioned above, who was sentenced a week ago for running a crypto investment fraud for 3 years, also had an explanation, BitConnect had an explanation, they all have somewhat plausible explanations. But try to dig a little deeper, do a spreadsheet to see how this adds up, because most of the time, it does not. E.g. why would CoinBase go to some yield farmer to borrow coins at a double-digit percentage rate? Makes zero sense. Also, for your high volume, keep in mind that blockchains have extremely low throughput, e.g. bitcoin can only do 7 transactions per second. As for banks: You can’t just take the worst credit card rate and assume every single dollar deposited into a bank, will give this yield. There are non-performing loans (which is a loss to the bank), majority of loans are secured, e.g. a house mortgage or a car loan, where the interest is much lower. Then you have reserve requirements, although currently suspended, but banks still need to have some cash for their ATMs or the interest free credit that most cards offer for the first month, that adds up to a lot of money lent out at 0%. In today’s economic environment, it is near impossible to give a *secure* return of even just 4%. I highly recommend this podcast: https://podcasts.apple.com/us/podcast/when-the-music-stops/id1568272504 Aviv Milner interviews a bunch of different people, including former and current crypto fans, and tries to answer “where is the value coming from” and “what can blockchain actually be used for”. There is one episode where he interviews a guy that comes on to warn about a ponzi he joined, and at the end of the interview, we learn that to try to compensate his friends, who lost money investing in this thing he recommended, he has found a new scheme to invest in, where they most likely will get their money back, because this time it will be different… hilarious! There is also more than an hour long interview with a “blockchain expert” who has worked with blockchains for 5+ years, but struggle to answer even the simplest question about “why is this better than a standard database”. Aviv Milner did an abridged 9 minute version of this episode where you just get all the non-answers, again, hilarious!

OK guys, we are nearing 3 pages, and no-one have explained what DeFi can do *better* than traditional finance, so I’m calling it quits… Enjoy the rest of the weekend!

This was in response to company promising 17.78% in interest rate, just transfer all your crypto to them, and no, they are not scammers, because the founder talks on YouTube…

The brick and morter banking system do a lot more than 7 transactions per second globally, so that is a bad excuse for bitcoin’s immense waste of resources. As for “old farts”, if it is not clear from my comments, I have been watching this space for many years, I was interested in, and understood, the concept long before there was any mainstream hype. But after a decade, and there is still no proper use case for this, other than regulatory arbitrage, but this can be done more efficient, for example we had Liberty Reserve from 2006-2013 (before 13 different countries co-operated to shut it down, which they probably can also do with many of the blockchains, by going after the on/off ramps).

Many scammers have had very public personas, take e.g. the Canadian exchange Quadriga CX, the founder (Gerald Cotten) was very active in the Canadian bitcoin community, sponsored a conference, etc. In the end, the exchange collapsed and more than $100 million in funds were missing. And this is not an isolated instance. Edit: Wasn’t there a BitConnect conference in Pattaya? That also turned out to be a ponzi, despite heavily promoted by some public people.

I think it is the opposite. People tend to think that Tether, Binance, etc. are operating ethically, even though there is a lot of smoke (indicating price manipulation, that USDT is unbacked, etc.), and a long trail of exchanges, investment funds, and other former big players, that were caught basically running frauds.

“Transfer your crypto to Celsius and you could be earning up to 17.78% APY in minutes” Right, so I am to believe, that if I transfer my money to them, they can lend them out to someone else, who will pay more than 17.78% (and not default on their loan)? This is double ridiculous because if I want to borrow from Celsius, I only need to pay 1% in interests… although I have to provide 4 times the amount in security, but it still does not explain how they can lend out money for 1% and pay depositors 17.78%.

Majority of these are probably *not* going over crypto rails: “CHAI serves e-commerce companies with an API called I’mport, that allows them to accept payments from over 20 options, including debit and credit cards through local payment gateways, digital wallets, wire transfers, carrier billings and PayPal.” I.e. this is not that different from the many other digital wallets that tend to piggyback on existing payment infrastructure, unless you do wallet-to-wallet. Also, it does not take days or weeks to settle payments: Domestic payments have had instant settlement in most countries for more than a decade. And CHAI is a startup with $75 million in venture funding offering an API, so this doesn’t seem to be decentralized / peer-to-peer. When something has to be decentralized and trustless, there is an enormous overhead, therefore it is by definition always more effective to centralize. I.e. worst case, the overhead for running a trustless network would be zero, but then the central organization could just run the exact same network (it would not add any overhead). Adding to that, in developed countries we generally trust our central institutions like banks, payment processors, and our government. Therefore it really doesn’t make a lot of sense to pay this enormous overhead, to get rid of the centralized institutions we trust, especially because if we remove these centralized institutions, we also remove a lot of security. I.e. in the current system, there is bank deposit insurance, there is a chargeback system, there is a bank you can call if you have any problems, and they can help you, e.g. if you have been the victim of scam. I just don’t see a world where normal people would prefer the wild west of finance over the established system, especially because, as we have seen, a trustless system attracts all the people that you can’t trust, so you have removed the guard rails, and also released the wolves…

Sounds like a fantastic return. I am curious: How is it possible to get such a good return? I.e. how is the value being generated. What kind of security do you have? I.e. is there any risk of losing all your invested funds. Have you heard of Stefan Qin? I.e. the latest kid to be busted for running a crypto investment scheme that turned out to be a ponzi (he ran it for 3 years before being caught). And btw, if you transfer your bitcoins to me, I will give you 9-10% interests, I have this great arbitrage system, but I need more liquidity to increase the returns. The 9-10% are guaranteed for at least the first 3 years! ????

If you google his name you will find quotes from him saying “we just don’t have enough investor protection in crypto finance” and “Frankly, at this time, it’s more like the Wild West or the old world of ‘buyer beware’ that existed before the securities laws were enacted.”. So I am not really sure how this guy’s statements or lectures are going to convince me that I should ditch traditional finance and jump on the crypto bandwagon. Basically he is just echoing what I have already argued above. What I was asking for, was an actual use case that would appeal to the common consumer, and a use-case that is actually possible today, not in 18 months when Etherium have implemented proof of stake (as they have been promising us for four years), or the Lightning network developers have solved the Canadian traveller problem (a computer science problem which solution would revolutionize the field), or secured the protocol against the obvious denial of service attacks (that currently have the few proof of concept networks be centralized because they cannot handle malicious actors, making the entire thing pointless).

Those are just hypotheticals. Asking 8,000 people if they would use crypto if it was widely accepted, and 18% says yes. But do these people know about the price volatility? The variable fees? The 7 transactions pr. second limitation of bitcoin? The frequent chain splits that necessitates waiting at least an hour before a transaction is considered reasonably secure (i.e. permanent)? The inability to do chargebacks or even get back your money, if you send them to the wrong address? That if you lose your key, you lose your money, no customer service, no recourse? That the wallet on your phone has access to all your money, and if it gets hacked, or you install a wrong wallet, it can transfer all your money to another address, and again, no way to get these funds back, etc. Crypto has so many problems, it is an extremely inefficient solution to a problem that majority of people just don’t have, and it introduces so many new problems, that traditional payment systems and banking doesn’t have. But please give me the short pitch: Why should I switch from paying with my iPhone (Apple Pay) and instead use crypto?

I am glad you added the “in theory”. A lot of crypto proponents will point out some problem/nuisance with regular finance, and then say “see, that is why we need crypto” without actually explaining how crypto solves the problem. And as for finance without a middleman, that means without regulation and laws? So back to wildcat banking (like Tether), bucket shops (like Binance), no consumer protection/insurance (like when Mark Cuban got “rug pulled” and lost all that he had put into TITAN after hyping it via his twitter feed) etc.? The reason we have so much regulation around finance is because if there is a way to scam other people, someone will do it, and there are unfortunately no lack of potential victims. Also, unregulated markets tend to favor the incumbents. Imagine owner’s of the New York Stock Exchange were allowed to use customer trading data for their own trades, front run their customers, do wash trades, etc.? Or that companies could trade their own stock without the current SEC oversight controls, etc.

My understanding is that anyone who wants to join the committee will be accepted *unless* there are more than 9 candidates, in that case, a vote will have to be held, to find out which 9 of the candidates will be elected. That said, I have heard (second hand) about a condominium which changed their bylaws to allow a smaller amount in the committee, which initially did give them a few problems with the Land Office, but was eventually accepted.

This is appeal to authority, but none of these people are really authorities about this, and if you dig into these people, for some you will find skeletons in the closet, some already got scammed in the crypto space and are now calling for regulation, some are just riding the hype, etc. Twenty years ago, when people were skeptical about Madoff, you could also argue with A-list celebrities who had fallen for his con, that doesn’t change the fundamentals. What benefit is DeFi / crypto providing?

Because it is a negative sum game. I am familiar with both MicroStrategy, El Salvador (and the dumpster fire from their bitcoin law), and most other things happening in this space. I have been following it since the beginning. Initially based on interest in the concepts, but these days all the fraud is far more interesting, all the problems that happen in an unregulated space, all the mistakes made costing double digit millions in accidentally entered gas fees, or bugs in smart contracts paying out millions, hacks, all the libertarians that haven’t gotten a clue about how the real monetary system works, Tether printing $70 billion worth of stable coins, and repeatedly caught lying about how this is backed, refusing to do any audits, yet the peg continues to hold, Etherium keep saying they will retire proof of work in 18 months, the lightning network which require solving the Canadian traveller problem to work, etc. The only actual use of this “technology” seems to be avoiding regulation on money transfers (in a highly inefficient way) and various forms of frauds (ponzi/pyramid schemes, pump & dumps, etc.). And the energy waste is very real!

It is quite common in Thailand to put the fee on the customer, as mentioned in my previous comment, I have often had merchants tell me there is a 3% credit card fee, and if you buy air tickets via e.g. AirAsia, you get several payment options, and the fee for each various, e.g. doing netbank payment is often the cheapest. You might be outraged by the visibility of merchant fees, but I actually wish the cost of using payment cards were transparent to the consumer, because different cards have different rates: 1.3%-3.5% for credit cards + a flat fee, and many debit cards have zero fees (but maybe a small flat fee, or monthly fee). Often the issuing bank will get a cut of the fee, so your bank (if you are American) may try to lure you to get and use an American Express card (highest fees) by giving you a 1% cash back, or other rewards, so that means the merchant gets 3.5% less when you use this card, instead of your debit card, but you will be incentivized to use it, because for you, it is an advantage. Notice how Apple introduced their own credit card and they give you 3% cash back when using that card to buy from Apple. You can basically see this as instead of adding 3% to the price of everyone who pays with a credit card, they give a 3% discount to people who use the Apple Card (where Apple presumably do not have to pay the credit card fee). Other big merchants also have their own cards with benefits, which I assume is also to avoid the merchant fees. Because the fee is not paid by the consumer, there is no natural competition occurring, bringing down the fees. I.e. if I had to pay 0% when using my debit card, but 2.5% when using my VISA card, you could be sure as hell, I would always use my debit card, even though VIISA may give me miles. But because it is instead the vendor who pays the 2.5%, I opt for the VISA card, where I get miles (hypothetically).