The Trade-offs You're Not Aware Of
An interesting tidbit on trade-offs from Astral Codex Ten's recent article on cryptocurrency.
Yes, The Crypto Financial System Is Just Reinventing The Regular Financial System Except Worse In Every Way, And That’s Fine
The space program has existed for more than fifty years, and mostly succeeded at reinventing things we already have on Earth, only worse. Remember the story of that special astronaut pen that cost $1 million? We already have pens on earth, for like $0.10, and they work better! The lunar rover is just a car, only worse. That robocopter that flew around Mars is just a drone, only worse. We spent $100 billion building the International Space Station, which is basically just a big house in space. But we already have houses on Earth which are cheaper and more comfortable in every way!
The only excuse for any of this is: yes, but it’s in space.
In the same way, everything about the crypto economy is worse than the regular economy. The only excuse is that it’s decentralized. This means you can use it for all of those cool things - sending remittances, circumventing corrupt banking systems, resisting authoritarian governments - that are hard to do with regular money. Of course subjecting yourself to a difficult constraint is going to be harder than not doing that! You don’t hate the International Space Station for being worse than houses on Earth. You marvel at the fact that anyone can live in space at all!
If nothing’s wrong with your country’s financial or political system, then you don’t need crypto. If you use crypto anyway, it will be worse than your regular financial system, because it’s trading off many things you need (efficiency, speed, safety, the good kinds of regulation) for something you don’t need (avoiding the bad kinds of regulation).
Just because crypto is worse than fiat in so many ways, doesn't mean you should dismiss crypto or treat it as useless. It's also similar to Chesterton's fence where things are what they are for a reason.
In the matter of reforming things, as distinct from deforming them, there is one plain and simple principle; a principle which will probably be called a paradox. There exists in such a case a certain institution or law; let us say, for the sake of simplicity, a fence or gate erected across a road. The more modern type of reformer goes gaily up to it and says, 'I don't see the use of this; let us clear it away.' To which the more intelligent type of reformer will do well to answer: 'If you don't see the use of it, I certainly won't let you clear it away. Go away and think. Then, when you can come back and tell me that you do see the use of it, I may allow you to destroy it.'
Just because something is there and you don't understand why, doesn't mean you should dismiss it as useless. A gentle reminder to keep an open mind to the many wonders of our world.