The first problem that cryptocurrency solves is, how can to securely make transactions without giving away our secrets such as critical account numbers. It accomplishes this using cryptographic signatures.
Other systems that do not use cryptography and instead often rely on trust in exchanging critical secrets, such as how the banking system generally works, are outdated.
Venmo, cashapp, and PayPal all have geographic restrictions (only one of those works where I live), and also pretty shit reputations - PayPal routinely just dicks its users and freezes their funds indefinitely.
Crypto doesn't give a shit about borders, there's no intermediary who can freeze your assets (unless you decide to leave them on am exchange), etc.
Crypto right now is just to new to have been properly regulated yet.
And while you are true that you can run your own wallet, you are depending on the decentralized network, you do need a certain amount of stabity and you need to make sure you can recover and keep your wallet.
Enough people demonstrated at least with the last point and millions lost in locked away wallets that there are still fundamental problems.
You cannot easily make payments to or from certain places, or based on certain activities, with the dominant payment technologies.
Yes, this is due to regulations, but it's also due to the centralized nature of the technology which requires permission to use.
Even when more regulation is forced onto cryptocurrencies, the architecture will always be permissionless, as it's a decentralized network. That is a fundamental difference.
I'm a fan of cryptocurrency but I don't think this is a great description of it. Its primary goal is finding a way to make transactions work, given that you don't want to involve a central authority. Cryptocurrency works the way it works specifically because of that desire to work without a central authority. It's perfectly possible to create payment systems involving cryptographic signatures involving a central authority (with the downsides a central authority involves).
> Cryptocurrency works the way it works specifically because of that desire to work without a central authority.
The word works is doing a lot of work there. Every compromise, hack, scam, theft, and weird "oops I sent the crypto to an address that doesn't exist and now it's gone forever" incident screams for central authority. Even what we call Ethereum is a rage-quit to pretend the DAO thing didn't happen.
How can you do any transactions at all without trusted intermediaries? You have to trust government, banks, paypal... something.
Or you can start trusting the individuals at the other side of the transaction. Perhaps these folks who do not have experience can also benefit from your exp... Oh wait, you've become an intermediary?
Cryptocurrency is just an asset that you can sell nearly everywhere in the world. But it depends on electricity, is volatile in value, and has long transaction times. It's just an inferior cash, except the fact that it's not physical so border control can't take it away from you. If you are optimizing for that... Maybe there can be a simpler solution? Buy art shares? I don't know.
> You have to trust government, banks, paypal... something.
In the case of crypto you're trusting that an adversary won't be able to control 50% of the computation power on the network for a substantial amount of time (and cryptographic theories, but you're trusting those whenever you use the internet anyway). Generally you're not even trusting the other party.
Except you don't even need to completely trust them like you are probably thinking of.
Depending on the level of trust you are willing to give the other party, you could use one of many automated eskrow services (that kick back to a human when one or both parties dispute the transaction), or on the other end of the spectrum, you can have a mostly automated smart contract with built in refund mechanisms where all of the rules of the transaction are declared upfront.
At the end of the day, reducing the number of parties you need to trust for a transaction to succeed is a strictly better outcome than the status quo (or expanding the number of parties that need to be trusted).
> you could use one of many automated eskrow services (that kick back to a human when one or both parties dispute the transaction)
How do you think that would be better than paypal, ebay, or anything else? Do you think people who use cryptocurrency escrow services have less problems than people who use anything else?
Paypal arbitrarily suspends accounts and steals funds, so yes... practically anything is better than that. They don't discriminate by size, as even I have been digitally mugged by that mob. Most recently they have given Flipper Zero the same run-about. [1]
Ebay isn't a payment provider, as far as I'm aware, so I'm not sure why they are relevant. They have certainly focused on the digital to physical mapping, but are overall rife with buyer and seller scams and they aren't really offering a solution beyond their easily gamed reputation system.
>Do you think people who use cryptocurrency escrow services have less problems than people who use anything else?
Typically, yes, the people using escrow have less problem by virtue of there being far less reports within the crypto community of actual escrow services being bad actors.
You brought up a random company from 2015 that happened to have eskrom in its name. That was not an eskrow service in the crypto sense of the word. If you are sending your crypto to a stranger and hoping they do the right thing, it's no eskrow. The typical eskrow setup will be some kind of multi-sig wallet (e.g. 2 of 3 signature) where the buyer, seller and eskrow service provider have a signature each, and two are required to release the funds.
Note: Eskrow systems are the very lowest tier of "zero-trust" when dealing with services or physical goods. It's a sliding scale of effort versus security, where a smart contract would be the "gold standard", and the eskrow is "better than nothing".
PayPal probably has many orders of magnitude more customers than any escrow service could imaginably have.
Also, you are still trusting humans, or a company as a trusted intermediary (and in the case of escrow services, most likely with no course of legal action if things go wrong). My argument still stands.
Why are you fixated on the lowest tier of "zero-trust", that is eskrow? And why does the number of people using a service or technology have to match what Paypal clears to be an improvement on the status quo? At the end of the day, we were talking about the concept of trust, and it seems pretty straight forward to me that lowering the number of parties involved in a transaction reduces the number of parties that need to be trusted.
Paypal doesn't even appear on the radar (even if you overlook their outright predatory and scummy behaviour) when there is the option to outright remove the payment provider from the equation and reduce the number of involved parties by one, while still allowing for a third-party (a human for eskrow, or an oracle with human fallback for a smart contract) to arbitrate if necessary if one or both parties are malicious.
Also who says there is no legal action if it goes wrong? It's better to set things up such that things can't go wrong, but if they do, the rule of law doesn't cease to exist just because it happened online.
I haven't seen a coherent argument yet, but maybe I'm missing something...
> it seems pretty straight forward to me that lowering the number of parties involved in a transaction reduces the number of parties that need to be trusted
It increases how much you have to trust them. You can also build the same escrow system with anything. You don't need cryptocurrency for that.
> the rule of law doesn't cease to exist just because it happened online
Is there any legible escrow businesses for cryptocurrencies? If yes, how are they "less amount of parties involved" in comparison to Paypal?
> I haven't seen a coherent argument yet, but maybe I'm missing something...
I didn't initiate or authorize the transaction though, how am I to decide what the rules of transaction are when somebody else set up the transaction and authorized it?
The trust is that the bank recognizes when a transaction looks off, and holds it/notifies me, without my involvement
> to securely make transactions without giving away our secrets such as critical account numbers
This describes any "push" payment system where you instruct your bank, service provider, wallet, device etc. to transfer funds, rather than providing the payee with your information, as well as any pull-based system with additional verification (such as 3DS and PIN-based payment cards), and isn't unique to crypto at all.
Other systems that do not use cryptography and instead often rely on trust in exchanging critical secrets, such as how the banking system generally works, are outdated.