> The intersection of organizations who can run a bank but don't already have entrenched software to do so, and want to build all the other software themselves seems vanishingly small.
Most FinTech is like this though. User Facing front end custom services built on top of bank infra. The bank infra is typically a bank partner and rarely is something like Stripe depending on the exact use case. This basically provides an intermediate alternative between Stripe and bespoke banking relationship.
Most people on HN here don't have a clue of what they are talking about, whether it is financial market regulation or cryptocurrency or blockchain technology.
What makes this topic difficult to approach is the degree of complex issues which surrounds it. We are looking at the intersection of technology innovation, the long-standing failure of institutional and market mechanisms, and combined with a bleak macroeconomic context.
Most people here should take a good reminder that they actually aren't experts in everything.
I checked the history of the user who left that comment; it shows recent posts about crypto, too. That's thirteen years of following the subject.
The claim in the parent post, roughly, is that the HN community is clueless about crypto and economics. In reality, HN had a large hand in popularizing crypto, and criticism here often is based on experience rather than ignorance.
What are you talking about? Read some history prior to the 4 years of the SEC.
Look at the suggested reforms the SEC was supposed to undertake AS IDENTIFIED BY CONGRESS. Then look at what actual reforms where implemented.
I'll help you out - almost none. The SEC has had a monopoly on financial market regulation since the 1930s and is just now becoming a victim to the cultural side affects of this monopoly. Shit, I actually think the SEC has done a phenomenal job regarding this and all other aspects of their job.
> The SEC has had a monopoly on financial market regulation since the 1930s
The Commodity Futures Trading Commission, Financial Industry Regulatory Authority, National Futures Association, Consumer Financial Protection Bureau, and many others would like a word.
I appreciate your sentiment, but I want to point out that your belief that "Traditional brokerage houses have regulations forcing them to play fair" and believing that there are adequate "reporting structures to enforce it" is a great example of the moral hazard that exists in the market today.
I agree that law and regulation plays an important role in the market, but as the market has advanced and become increasingly more complex than previous models, I do not believe Law and regulation has kept up.
The GME fiasco and the resulting litigation is a good example of these problems. And before anyone says this is proof the rules in place work - I'd like to point out that our online brokerage infrastructure and market structure has been around since the early 2000's. It's quite difficult to say what has not been surfaced and recognized. And no, despite the nature of the trade itself, no one should discredit the lawsuit as illegitimate. https://www.thinkadvisor.com/2021/01/29/gamestop-lawsuits-hi...
The absurdity and extreme nature of the GME case shows tells me that there are outstanding issues throughout this value chain. And the belief that our system of rules adequately handles this just because the rules exist is a strong indicator of the moral hazard that prevades our market culture.
Everything is relative. You cite GME, fair point. I'll cite Quadriga CX, where the founder died in India and took the passwords to the grave with him. Pretty much everyone had their coins frozen forever. That would never happen to people's stock portfolio's at a major brokerage firm.
The SEC is far from perfect, but what they do adds value to the individual investor in general.
Equating public financial statements with "transparency" is a fallacy. It creates moral hazard and over-emphasizes private audit facilities.
Is it objectively better than non-public financial statements? Maybe. Is it worth saying this alone should draw the line on what is considered a "safe" investment? No.
Again, the OP is asking about access, not what you believe about "transparent investments"
A lot of the database solutions don't seem to account for full security or full verification of the transaction context. You can certainly create an audit trail for all database activity, but auditing other aspects of the product requires some additional work.
The App Trail comment provides a good example of the necessary user context you may want. Additionally, you may also need to require verification that activity was logged, for example for a transaction to complete you want redundancies to ensure the logging occurred correctly.
Essentially it boils down to recreating user authentication and authorisation type functionality, but for all of your middleware pieces and components. You can capture the logs into a single database, do some hashing, and maybe include signatures from devices and users and you should have pretty coverage.
Cryptocurrency as a means of payment is used in Africa. And the usage of Bitcoin as an inflation hedge has certainly been proven by the fact that Bitcoin returned superior returns over the inflation rise recently than any other asset an average African could have held.
Maybe we shouldn't ignore that mobile banking in Africa still doesn't allow easy access to US dollars? Maybe we shouldn't ignore that a transfer from the currency in Ethipoia to the currency in Nigeria requires routing through the European banking system?
Don't act as if the traditional financial system has greatly supported the emerging market world. Let's not lie to ourselves.
What actual digital currency markets have existed in Argentina or any other weak state prior to Bitcoin?
All of these dark markets where cash only markets before, precisely because prior to Bitcoin you always needed a reliable state sponsored intermediary for online transactions.
Crypto doesn’t offer anything new over the blue dollar market besides digitizing it at a huge energy markup.
If you're converting your crypto back to fiat you're still needing a reliable state sponsored intermediary at some point in the pipeline. Most people don't really trade flash drives with coins anymore, they use Coinbase or something that has their government ID on file. And it's not like the conversion rate from Argentine pesos to Ethereum or whatever is very favorable — it's the same as the conversion to dollars. You can argue it's more stable than Argentine pesos but that's a really low bar to clear with 50% yearly inflation. Dollars also are more stable and don't require any technology or technical knowledge.
What it has mainly enabled is for people in these "weaker states" to take advantage of public goods like electricity subsidies to "mine" (read: verifiably waste energy) whatever FotM crypto and dump it for the next cycle. I'm not sure why it's controversial to dislike rewarding people for wasting a very disproportionate amount of energy in a public way.
Most FinTech is like this though. User Facing front end custom services built on top of bank infra. The bank infra is typically a bank partner and rarely is something like Stripe depending on the exact use case. This basically provides an intermediate alternative between Stripe and bespoke banking relationship.