[didroe]

Decentralised systems are always more inefficient. If certain kinds of transactions are currently cheaper, it's due to lack of regulation (lack of competition in many cases is sadly a symptom of regulation). When the inevitable economic crises present themselves (assuming it ever gets used for anything serious), regulators won't stand by and do nothing.

> Coins going up in value just because they are scarce or first movers, is just like Pets.com being valuable because they have a good domain name.

Isn't scarcity baked in to Bitcoin? Any investments made using it will have to return more than the deflation / speculative-hoarding rate, which means useful things won't get funded.

[BLKNSLVR]

> If certain kinds of transactions are currently cheaper, it's due to lack of regulation

I just can't see any truth in that statement, but admittedly I'm probably looking at it from a different angle to you.

Cryptocurrency cuts out the middleman in a transaction, or at least minimises the cost and 'touch' of a middleman, and that's where the cheaper-ness comes from - no vampiric-squid-encircling-the-globe sized multi-national taking its monopolistic percentage. That's my angle. The behaviour of said percentage-takers over the last century haven't exactly made regulation the saviour of the common citizenry either.

[didroe]

You have to ask yourself, why are those middlemen there at the moment? We have digital trading platforms / banking systems, the technological side of it is not the issue.

It's because regulation says only certain institutions are allowed to perform certain transactions, and have to perform certain checks, etc. I'm not saying there aren't inefficiencies that aren't directly related to regulation, eg. monopolistic behaviours. But that's the side-effect/price you pay for some kind of oversight. There is of course lots of room for improvement in the systems/regulation we have.

When you look at the history of where the regulations came from, it's usually in response to a major crisis. Humans tend to be reactionary, especially the ones in positions of power when they're enacting laws that limit their paymasters.

> The behaviour of said percentage-takers over the last century haven't exactly made regulation the saviour of the common citizenry either.

Look at the most recent major economic crisis of 2008. The main reason it was so devastating was due to rolling back regulation from previous crises, along with "innovative" financial products that regulators had turned a blind eye to. What do you think would have happened to business lending (ie. jobs) and the stock market (ie. people's pensions) if there had been zero regulation and no ability to inject liquidity into the system?

[dragontamer]

> no vampiric-squid-encircling-the-globe sized multi-national taking its monopolistic percentage

What do you think about the Gigawatts of energy + transaction fees that are going to miners? Because your hyperbolic statement is what I think of the miners in the cryptocurrency world.

They do nothing but buy up critical parts (GPUs, ASICs, etc. etc.), use up rare resources (energy / coal / etc. etc.) and then are paid to do so (mining rewards, transaction fees), without offering much innovation on their own.

Doubling the number of miners in the world for the BTC network won't improve the speed of the network, nor would it improve the rewards. All it would do, is double the energy usage.

[lxgr]

In a functioning market, any middleman has competitors and its "vampiric profits" should quickly converge towards marginal costs.

Regulation, compliance and customer support actually cost money, and by cutting most or all of it out, crypto based services are obviously cheaper.

A better criticism of regulation would be that, depending on how it's enforced, it can serve to create regulatory motes for incumbents and hinder mentioned competition.

Crypto doesn't solve this – it just sidesteps the problem, and that isn't feasible in the long term.

[uuidgen]

> Cryptocurrency cuts out the middleman in a transaction

How are you going to do ANY crypto transaction without a middleman? Will you wait months and burn insane amount of electricity to finally mine the block yourself? Of will you submit your transaction somewhere and pay the fee?

I have free next-day transfers, pay $1,2 for instant transfer up to $1200 - and those are bank transfers, with all the security of it, not some shady apps. This is in highly regulated market. What are commissions on bitcoin transfers again?

[zrm]

> Decentralised systems are always more inefficient.

Decentralized systems are always more efficient.

Suppose you have something a hundred million people want. It's on one server. The server is in Virginia. If a million of the people who want it are in Japan, it has to traverse the ocean a million times. If a million more are in the UK, etc.

Compare this with something like BitTorrent. The million people are in the UK, the first one gets it over the ocean. From then on, people in the UK can get it from other people in the UK. Either because the client chooses peers with lower latency, or because closer networks are just faster and so when you're receiving from 100 peers at once, the closer ones will send faster and the download will finish from them before you've sucked too much data through the thinner pipe across the pond.

Even centralized companies build decentralized systems internally. Because it's the only way to build a reliable system and it's the only thing that scales.

The hardest part about decentralized systems is paying for the initial implementation. Somebody has to write the code. But in a true decentralized system, they can't sit in the center and suck out a percentage, because there is no center.

So that's how the evolution of systems goes. The first system is centralized, because when it's small the disadvantages of centralization are small, and as it grows the creators retain control of it for a while.

Then the disadvantages of large centralized systems start to manifest. Single point of failure, monopoly power, censorship etc. So people start building a decentralized alternative. At first it's terrible, because it's people working on it in their spare time. Eventually it gets better and takes over. And then nobody ever worries about it anymore, because it's there, and it's reliable and efficient and it works, and it just fades into the background because nobody pays attention to things that are working. Like TCP/IP, or Wi-Fi, or the global market for wheat.

[fomine3]

For centralized vs decentralized, comparison should be CDN vs P2P. CDN is centralized but distributed. P2P isn't efficient as like CDN because it uses uplink from user, and possibly need transit from other ISP user. Top CDN's edge is located on ISP. But P2P is still useful tech.

[billytetrud]

Lack of regulation is not an accurate way to describe what goes on in one of the most highly regulated industries. Rather what I think you mean is the lack of a specific regulation that limits the price of various services. In actuality, it's regulatory capture that keeps competition at bay and keeps prices high. We actually need to remove specific malicious regulations in order to solve the problem of competition in the banking and money transfer industry.

[thebean11]

> Decentralised systems are always more inefficient.

A centralized system like Western Union is very efficient, unfortunately the owner of that system keeps the excess efficiency (fees) for themselves..from the perspective of the user it's not efficient.

[andreilys]

Decentralised systems are always more inefficient.

Quite the statement, anything to back it up with?

Is it more efficient that your centralized system can at any moment be seized by the state, and turned over to a bureaucrat to run in the name of nationalization?

[a_conservative]

What about distinguishing between long term efficiency and short term efficiency?

Decentralized systems tend to be more efficient in the long term. Centralized systems tend to be more efficient in the short term.

I think this may be true-ish??