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Except they are frequently _not_. I dislike crypto on principle, but you can't look at the exorbitant transfer fees and latency that a lot of banks charge for common transactions (Visa/MasterCard are especially bad) and say that crypto has no potential.
Yes, it would be easier if we could just trust our banks to offer instant settlement and very low fees, but they don't.
The problem with banks pointing to banking regulation is that they helped shape the regulation - and they did so to protect their business, not to help consumers.
We know that central banks are great at monetary policy. We know that decentralized protocols remove a lot of the more parasitic traits of banks. Why not have a central bank currency that can be traded on the blockchain, especially since converting it to real money will still entail KYC?
Because literally the only point is to avoid the existing banking system and you can do that with a postures database with much less cpu involved.
Ethereum is actually very low resource intensive nowadays.
You can run a validator node on a RPI, a full sync node on a Intel N100 minipc with a big fast SSD and the "light clients" can probably run on something very small.
I have seen banks having to bring semi-trailers full of diesel generators to plug them to their mainframe because the current requirements were too high for the grid during big batch jobs.
1. Running a validator is inexpensive in terms of compute, but there are 1,000,000 validators or something, which adds up to a lot of CPU usage. Of course, I think it's insanely awesome that you can run some code on Ethereum and it'll be replicated on 1,000,000 independently-operated machines, but it's not a very CPU-efficient strategy. 2. Banks doing those batch jobs probably had much higher TPS than ethereum.
The blockchain structure, the validation mechanism etc are still a very inefficient way to do general compute or database type functions.
Postgres running on a single Raspberry Pi is something like 200 TPC-B read/write transactions per second.
Saying Ethereum “is not using very much CPU” is baffling to me. It is the state-of-the-art in this regard, and it uses something like six orders of magnitude more CPU than a normal database running a ledger workload?
Blockchain solves that. Newer blockchain protocols especially an L1 is much faster, easier on the environment, and provides all the immutability, transparency, and traceability benefits.
Also, you always have to trust someone, in this case Stripe.
Regarding L1 blockchains, how exactly do they solve the speed problem for a distributed global database that needs to be replicated everywhere for the security guarantees to actually work?
What do they forgo out of https://en.m.wikipedia.org/wiki/CAP_theorem ?
Societies cannot function without trusted intermediaries, in finance and many other things.
If we are in a democracy then the government regulates such organisations and should punish those who do not comply.
Blockchain doesn’t scale as a replacement so the point is moot.
All transactions must be derisked (there is a fallback if the transaction fails). This usually means backed with reserves, which also means they cannot be instant.
Now if you don't care for the risk management of a bank, sure, go ahead and do what you would like.
The real and continuing reason for the delay is to give time for repudiation and assessment of fraud, money laundering, and other financial crimes risk. The risk of instant transfer is instant theft or otherwise absconding with money that shouldn’t be yours. In fact settlement delay makes reserve problems worse because you effectively “hold” money that could potentially not be properly secured during the hold and cause a default on a transaction that was otherwise taken out of balance and pending transfer. Instant clearing and settlement makes this unambiguous. But it also makes transactions as risky as a cash transaction - instant and irrevocable.
For some customers this is legitimately ok. But by and large most customers benefit from the delays more than they’re hurt by virtue of having a window to repudiate a transaction that is illegitimate. It’s just they don’t recognize that value until they need it. We all benefit from a system that disincentivizes criminality overall. It’s hard to recognize it because we exist day to day with that benefit and it’s hard to prove the negative, but there were times without the protections against financial crimes and financial oversight and they were NOT better times. They were objectively worse, so our ancestors built a set of guard rails to prevent the endemic badness around us.
It appears though as they die off, and as we become less attuned to history, we are very busy ripping apart the guard rails our ancestors very carefully and thoughtfully built into our societies like some junior engineer who assumes every line of code written before them was written by an idiot. Take the American CDC as a case in point - the modern public health system was a very hard won victory against endemic diseases by generations - and as the generation who established it expires, we rip their legacy to tatters.
I think everywhere but America has already figured this out.
Instant bank payments are pretty standard everywhere else, even third world countries.
How long is settlement for you and what are the fees. Are you talking about banks for credit card payment processors A business needs a processor which will take fee and add some delay
