My keynote for Ethereum Devcon: without the rule of law, crypto fails

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One minor problem with the cryptocurrency “utopia” in that sense: For real world transactions, all volatile cryptocurrencies are inferior since they require two expensive currency conversion steps (steps made more expensive by the irreversible design of the cryptocurrencies themselves).

The only way cryptocurrencies beat Apple Pay, PayPal, Venmo, Visa, SWIFT, etc is that the cryptocurrencies are censorship resistant, there is no authority that can say “thou shouldn’t”. Unless you need this, cryptocurrencies don’t work.

And if you do need it, congratulations, you need money laundering as a feature of your currency. Because censorship resistance is all about evading the controls designed to stop money laundering and other criminal activities.

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I really liked the talk!

I think you are missing the “shipping money across borders as remittance or payment for digital services” use case.

Try making a payment as a citizen in Europe or the USA to your family back in Africa or India and see how expensive the crypto conversions are compared to Western Union.

Try making a payment as a citizen of a country that isn’t hooked up to the Swift banking system, without a credit card, for a domain name, VPN or other digital subscription in a western country. The banking fees you have to pay regularly get to be about as high as the payment itself.

Besides that, the conversions costs become nearly irrelevant if acceptance becomes higher, as soon as you pay and get payed for things in cryptocoins you don’t need to convert (as much) anymore.

The argument you make against crypto can be made for cash too, why would you need cash? Can’t you pay by card? If you need the untraceability of cash you must need money laundering.

I don’t think crypto currencies are a solution to many things, and they create problems in many cases, I just don’t think it’s fair to write it off as always evil.


The problem is that when you need to buy something in that third world country you need to convert your cryptobucks into something the food bazaar vendors can accept, and this is almost certainly going to have high fees for the same reason Swift bank transfers have high fees: low volume and high levels of fraud.

Converting the country’s currency to run on Crytpobucks is likely a pipe dream. Most don’t scale to anywhere near the level they would need to support day to day transactions. Or if they do, it’s only because you leave the money sitting on an exchange instead of on the blockchain directly, and it’s back to being just a bank and having to deal with all of the headaches from that. This situation happens a lot in the Bitcoin world, where people set up exchanges, and then people put their money on the exchanges where it’s easy and cheap to use, and then it’s stolen and they realize that they weren’t really using the blockchain at all and had none of the benefits. Time and time again.

I liked the approach Cory used of illustrating the different elements (technical and legal) which came into play during the fight around strong cryptography, and relating that to the present day struggles which cryptocurrency is facing, it definitely got me thinking about a lot of things. It’s super important to be able to think about the multifaceted nature of power, and understand how different types of power are influencing outcomes.

At times though, the internet analogies for legal advocacy felt a bit patronizing. Yes, cryptoanarchist hackers already get that the legal system is a system like any other (it can be hacked). The reason they write code instead of writing their congressperson isn’t that they don’t understand how the political system works, it’s that they do. The impulse to forgo appeals to the halls of power in favor of building things that just work because they draw their power from other places…that’s a valuable and often strategic impulse that doesn’t need to be moderated with reminders that “no man is an island”. Yes, it takes all kinds, legal advocacy is a valuable strategic element and it’s good someone is doing it. But I don’t think it’s right to characterize hackers as bunker-occupying hyper-individualists just because they don’t fuck with politicians.

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