[HN Gopher] CEO of a top Bitcoin exchange warns: crackdown on cr...
___________________________________________________________________
CEO of a top Bitcoin exchange warns: crackdown on cryptocurrencies
may be coming
Author : alexrustic
Score : 169 points
Date : 2021-04-12 16:51 UTC (6 hours ago)
(HTM) web link (www.cnbc.com)
(TXT) w3m dump (www.cnbc.com)
| CynicusRex wrote:
| >I am more confident that nations which turn their back on it, or
| shut it out completely, will see a loss of otherwise valuable
| businesses and mindshare.
|
| Mindshare like cancerous greed? Nations turning their backs on
| crypto"currencies" turn their backs on multi-level marketing
| pyramid schemes. Good riddance.
|
| "Strong currencies are not the solution to poor governance. Good
| governance and democracy makes a country and its currency strong.
| Not vice versa." --halukakin, HackerNews, 2021
| --https://news.ycombinator.com/item?id=26105680,
| https://www.cynicusrex.com/file/cryptocultscience.html.
| pjc50 wrote:
| People have been saying this for a decade, and several failed
| exchanges later plus a few attempts at banning US persons from
| using crypto, the crackdown has yet to really arrive.
| Alupis wrote:
| Well, what has changed is we now have CEO's of publically
| traded companies openly and brazenly participating in crypto-
| currency pump-n-dump schemes[1] because they are currently
| unregulated markets.
|
| Now, with major publically traded companies buying up other
| crypto-currencies, seemingly speculating on their rise in
| value, we may have a problem that compels some government
| agency to step in and ensure these organizations are truly
| acting in shareholder's best interests.
|
| It's not a far stretch to see these events ushering in new
| crypto regulations.
|
| [1] https://tradetheday.com/crypto-analysis/dogecoin-elon-
| musk-p...
| loceng wrote:
| Elon doesn't have to do anything for a pump and dump to occur
| - unless Tesla buying somehow becomes considered a pump
| action; if more gullible people or "amateur investors" buy
| into Bitcoin driving up the price because of whatever
| reasons, it's not Elon's responsibility to protect them -
| that is government and the SEC's role.
|
| Elon's said "Bitcoin is almost as much bs as fiat money" - so
| he likely doesn't see that as end up. Because of this I could
| see Tesla selling $1 billion worth of EVs via Bitcoin,
| waiting for that to reach $10-$20 billion+ in value - and
| then slowly selling off say $4 billion worth to prevent a
| price crash - and then dumping $10B+ all at once as an
| experiment.
| Alupis wrote:
| Perhaps you're right about Bitcoin, but Elon's messaging on
| Doge Coin was indisputably a Pump-n-Dump scheme. He even
| egged the SEC to investigate him[1].
|
| Which reinforces my point - actions like this, by today's
| Tycoons and ultra-wealthy, will usher in a new age of
| crypto regulations since it is indeed the little guy being
| hurt by all this.
|
| [1]
| https://markets.businessinsider.com/currencies/news/elon-
| mus...
| ballenf wrote:
| Torrents or file sharing in general is maybe a good parallel.
| My impression of torrenting is that crackdowns have made file
| sharing a niche instead of mainstream activity. Of course it
| can't be 100% wiped out, but the general public is now wary of
| file sharing because the message is out there that it's risky.
| larviz wrote:
| I think online poker is a good example too.
|
| Online poker never went away but it also didn't take that
| much to cripple the market to a point it couldn't come back
| from.
|
| It also somewhat caused all the scams and shady practices to
| see the light of day.
| Scoundreller wrote:
| I think Netflix/Spotify/YouTube and the like "hurt" piracy
| more than any legal manoeuvre.
|
| My own piracy would go down another 50% if I had access to
| free/paid services like in USA. Then there's the time I
| couldn't play a movie I rented on my TV through Apple because
| I guess it didn't like my old TV's HDMI interface...
| rawtxapp wrote:
| I think it has more to do with the fact that for 10-20$/month
| you can subscribe to Netflix/Spotify and not bother with
| torrent. That said, torrenting is still alive and well.
| asdff wrote:
| That's true for spotify but not for video streaming. The
| libraries are too siloed so you could end up shelling out
| quite a lot buying up accounts for these parallel services.
| lmkg wrote:
| This statement from the CEO of an exchange about the utility of
| cryptocurrency for crime reminds me of those old prohibition-
| era "warnings" on grape juice, that told you to avoid a very
| specific set of steps or else you would end up creating wine.
| winslett wrote:
| Instead of killing it by banning it, I suspect they could kill it
| by buying it.
|
| If the Fed wanted to "invest" in Bitcoin, it would kill it by
| soaking up liquidity and creating a liquidity-squeeze. Because
| the amount in circulation is fixed, it wouldn't have to buy all
| of the Bitcoin -- just enough to kill any utility. This is a
| downside of an asset with a fixed quantity.
|
| Once the community discovered the liquidity-squeeze spike, it
| would lead to a run-to-the-exit with a price crash. The short-
| squeeze spike and crash would spread across alt-coins as well due
| to rush-in-rush-out and leverage across alt-coins.
|
| Once liquidity is killed, liquidity-squeezed, and a crash
| happens, the FED / SEC could make it illegal citing volatility
| and losses of citizens.
|
| The Fed would need to do this discretely and never disclose their
| purchases. If it became public, the community would probably
| choose to fork.
| sleavey wrote:
| The FBI did once own a significant amount of Bitcoin after
| busting the Silk Road, but auctioned most of it off.
| liquidify wrote:
| This is nonsense. Bitcoin has not had much utility since 2015
| when the repo was taken over by people who refused to increase
| the block capacity.
|
| A purchase of bitcoin by the govt would massively increase the
| prices. Transaction of value by the big players would become
| even easier. The high degree of divisibility would ensure that
| small players could still play. There would be no more
| liquidity issue than there is currently.
| gruez wrote:
| Can you elaborate on why a "liquidity-squeeze" is bad for
| bitcoin? It's subdivisible to 8 decimal places, so it's not
| like reducing the supply would make it harder to transact or
| anything.
| lambda_obrien wrote:
| The USG could kill it by using a 51 percent attack; the NSA
| must have rows upon rows of servers that could be repurposed
| for a week or two to destroy the market. Split the blockchain
| every couple of hours into several different versions,
| eventually there would be little chance to reconcile things.
| arminiusreturns wrote:
| I theorized back in 2009 that this is exactly what would
| happen, but instead of having NSA use it's server farms, it
| would be the central banks using third party cutouts to buy
| up chunks get to a collective 51 percent. Why I didn't
| predict that the obvious result would be a runaway market I
| still kick myself for, because at the time I rejected bitcoin
| for it's lack of privacy and just moved on...
|
| My current guess is that they are going to pressure all the
| other coins, and come to some collective agreement after some
| farcicle fact finding mission ala 1907 to agree there should
| be some sort of central bank controlled digital coin... which
| of course they will control, but will lack anonymity. BTC
| will crash then. (but again, maybe I'm not the best person to
| listen to on this topic!)
| gruez wrote:
| >the NSA must have rows upon rows of servers that could be
| repurposed for a week or two to destroy the market
|
| Their general purpose servers are nearly useless for mining
| bitcoin because their hashrates are orders of magnitude lower
| than the ASICs that professional miners use. If you want to
| 51% attack bitcoin you either need an absurd number of
| general purpose computers (possibly more than all CPUs/GPUs
| that exist on earth) or pour billions into making hardware
| that can only be used to mine.
| SubjectToChange wrote:
| $1B would be more than enough to design and manufacture all
| the necessary ASICs to cripple the network. They wouldn't
| even need to do a 51% attack to do so, e.g. selling coins
| at a complete loss would bleed the other miners white.
| gruez wrote:
| >$1B would be more than enough to design and manufacture
| all the necessary ASICs to cripple the network
|
| Source? Some napkin math using the current bitcoin
| network hash rate[1] and the price/performance ratio of a
| yet-to-be-released bitcoin mining ASIC[2] suggests that
| you'd need $9.5B to take over the network.
|
| [1] https://www.blockchain.com/charts/hash-rate
|
| [1] https://shop.bitmain.com/product/detail?pid=000202102
| 2419553...
| maxerickson wrote:
| I think specialized chips work too well for repurposing other
| computing capacity to work.
|
| I expect the most effective attacks would go after control of
| mining capacity, either directly seizing it or taking it
| offline.
| Karunamon wrote:
| The NSA/CIA/etc. is precisely why this _won 't_ happen, for
| the same reason the same are launching no wide-scale attacks
| to take down Tor - the guys in suits doing questionable
| government things need anonymity too.
| fastball wrote:
| Hell, Satoshi Nakamoto probably _is_ the NSA.
| p1peridine wrote:
| I don't think NSA would include a video poker game in the
| source code
|
| https://github.com/trottier/original-
| bitcoin/blob/master/src...
| wil421 wrote:
| Bingo. I've always thought it was the NSA, CIA, or maybe
| UK or Israel but I doubt the latter two. Especially since
| Satoshi's wallet is so large and hasn't moved.
|
| Bitcoin has to make it much easier for 3 letter type
| agencies to follow money.
| RealityVoid wrote:
| Most darknet stuff uses monero and that is... tricky to
| follow.
| rodiger wrote:
| Unfortunately it's almost definitely a smart nerd (using
| this as a compliment here) who passed away.
| thebean11 wrote:
| You're claiming that an entity buying up a ton of Bitcoin would
| crash the price? Do you have any references? I'm not familiar
| with that economic phenomenon.
|
| Also like others have said, the price is divisible to many
| decimal places, and with consensus could be updated to be
| further subdivided.
| Y_Y wrote:
| But won't you also increase the mining activity if the price
| shoots up? I'd like to hear more detail on this "liquidity-
| squeeze" plan.
| gruez wrote:
| That wouldn't affect emission rates (at least in the long
| term), due to network difficulty adjustments.
| throwaway6734 wrote:
| Or make it illegal and have the NSA directly attack the compute
| used to secure it
| RealityVoid wrote:
| Hah! :)) So naive. No way this is possible. Attacking compute
| used to secure it means attacking a whole lot of machines.
| And the people near those machines will patch them. An you
| need to attack 51% of them at the same time. Even if you
| manage to do a 2x spend, they will live with it and patch the
| stuff and people will still use it. Because what is a couple
| of 2x somewhere along the way compared to the rest of the
| blocks it secured?
|
| Not to mention of the geopolitical consequence.
|
| No, this "have the NSA directly attack the compute " is not
| feasible and would only strengthen its position in the long
| term.
| ac29 wrote:
| If government agencies can hack into and disable secured
| nuclear facilities (this happened... yesterday), I dont see
| why it would be "impossible" to attack random Bitcoin
| mining facilities. When state level intelligence agencies
| are your adversary, I wouldn't assume you can "just patch
| it" either.
| RealityVoid wrote:
| Oh, it's possible. You hack into, what? One? A couple?
| But it does not scale up like that. Do you really
| honestly think you can reach 51% like that? Besides, yes,
| you can just patch the vulnerabilities. Contrary to
| popular belief, vulns are not plentiful and are not
| cheap. Using one kind of burns it. So it would be a
| _very_ stupid usage of vulns.
|
| Precisely the decentralized nature of BTC makes it
| impossible to shut it down exactly the same way you shut
| down a nuclear power plant.
|
| And ok, you 51% the network. Then what? You can't create
| BTC's or change the rules of the game dramatically,
| without a fork. so the people on the original network are
| kind of... meh, at your attack. You could double spend
| but you need to own the coins you spend, so you shaft a
| couple of people. What then? I do not think that would
| kill it, there are cryptos that were 51%'ed (looking at
| ETH classic) and are still alive and chugging along.
| throwaway6734 wrote:
| That's assuming that they couldn't attack cooling
| infrastructure to fry the chips or the fabs making the
| asics. Also, enough chaos would surely have an impact on
| the price.
| RealityVoid wrote:
| Only psychologically. The mining capacity is driven by
| the price not the other way around. The rest of the
| miners not hit would be ecstatic because now they get
| less competition. The difficulty would self-adjust
| eventually or new mining would get brought up.
|
| The mined supply is very small compared to the
| circulating one. Besides, if you were to slow minting, it
| should drive the price up, not down. :)
| cblconfederate wrote:
| > spike, it would lead to a run-to-the-exit with a price crash.
|
| why? It would become an even-more-stable store of wealth that
| way, since people literally cant sell it, but can exchange it
| for dollar at a very future date.
| cwkoss wrote:
| "Whatever you do," cried Brer Crypto, "Don't throw me into the
| briar short squeeze"
| rspeele wrote:
| Just as a fun hypothetical to think about... an effective way to
| crack down on cryptocurrencies would be to do it under the table.
| Don't make any official policy about crypto other than
| recommending that US citizens don't invest in it. Attack the
| crypto ecosystem the way they attacked Iranian centrifuges. The
| damage is done by the CIA and NSA, not the SEC and FBI.
|
| The goal is not to make it impossible to use crypto but to make
| it so untrustworthy that nobody wants to touch it. Host mirrors
| of popular software wallets with hidden malware. Add backdoors to
| some hardware wallets at the factory. Create trojans that sit
| quietly and harmlessly until you try to deposit your coins at an
| exchange, at which point, unbeknownst to you, your compromised
| browser is displaying the CIA's bitcoin address instead of the
| exchange's as the place to send your coins. Make smart contracts
| with increasingly clever obfuscated time bomb backdoors. And it
| all comes with easy plausible deniability, since any of these
| tricks could just as well be regular old crypto thieves, highly
| motivated by the massive "bug bounty" on any exploit, including
| social engineering, that lets them steal coins.
|
| Of course, the backlash if this was ever found out would be
| immense. It would basically be the US government operating a
| cybercrime organization. Many of the victims would likely be US
| citizens speculating in crypto. It wouldn't be worth it unless
| the powers that be decided crypto is THAT dangerous to the status
| quo.
| postalrat wrote:
| They could throw a ton of money into mining, raise the
| difficulty to some absurd number, then cut it. Rinse and
| repeat.
| ttul wrote:
| What's to say CIA and others aren't already operating all sorts
| of crypto infrastructure? I absolutely guarantee they are. The
| people who run the financial system are a different group and
| would not necessarily be aware of what the three-letter
| agencies are doing.
| seriousquestion wrote:
| Like the NSA and Snowden, there would be backlash, but with
| little to no actual effect. Business continues as usual.
| RealityVoid wrote:
| So just... like... what scammers are currently doing?
| hudon wrote:
| Indeed, and this may already be ongoing. Programmers find a
| handful of vulnerabilities in core Bitcoin software every year
| [0], and there is no way for us to know if those bugs were
| planted intentionally. Some of these bugs caused the supply
| inflation to be wildly different than what is claimed (so much
| for "there can only less than 21mm coins"). We also don't know
| what bugs currently exist in the software that are or will be
| exploited. We also don't know if any of the core contributors
| and influencers in the project actually work for the
| CIA/NSA/PRC/etc.
|
| [0]
| https://en.bitcoin.it/wiki/Common_Vulnerabilities_and_Exposu...
| scandox wrote:
| To me it's always seemed like money grows from the barrel of a
| gun. Detaching money from military power sounds wonderful but it
| makes no sense to me. It seems to defy the very basis of what
| money is. Tokens handed out by warlords. Only stretched out over
| such a long time that it isn't obvious any more.
|
| Obviously I am neither an economist nor a political theorist.
| generalizations wrote:
| I always figured that 'naturally arising' currencies, like gold
| and cigarettes, have two key properties: a) perceived inherent
| value (e.g., gold by long tradition and whose origins are lost
| to history, and cigarettes because people want their fix) and
| b) natural limitations on quantity (and counterfiting: gold has
| known density, and a fake cigarette is apparent as soon as you
| try and use it).
|
| The purpose of the gun, it has seemed to me, is to get around
| the fact that fiat currencies have neither of the above
| properties, but that both can be enforced to some degree.
| christiansakai wrote:
| Tangentially related. Cryptocurrency is just a side effect of
| blockchain. Once blockchain technology matures and if one day we
| see blockchain to store files and blockchain to run cloud
| services, then will the US government censor it as well? If they
| will, how? It is practically impossible. You can upload anything
| there, including child porn, instructions on making bombs, videos
| that contain brainwashing propaganda for terrorist groups. You
| can run your server there, including servers for recruiting
| terrorists, etc.
| coolspot wrote:
| When they realize, they will kill on/off-ramps into cash and
| make any transactions not legal.
|
| The software itself they can treat is as malware - blackhole
| IPs and shutdown any hosts involved.
| RealityVoid wrote:
| The value of crypto would decrease but never be completely
| gone. A whole pandora's box was opened and they can't put the
| genie back in the bottle no matter how hard they try.
|
| If they were to kill the offramps, the ecosystem would move
| on websites on Tor or I2P that would work P2P, they can use
| high privacy coins such as Monero or zcash. Or people will
| trade it in person using escrow systems. It's not like the
| first BTC trasactions had the privilege of nice exchanges.
| The possibilities are there. Just the incentives are not yet
| present.
| arcturus17 wrote:
| > if one day we see blockchain to store files and blockchain to
| run cloud services
|
| As a user of both types of services, I don't see what bringing
| them to the blockchain would do for me.
| christiansakai wrote:
| Like, uncensored AWS? You are free to run your own Parler
| without getting booted from AWS?
| RealityVoid wrote:
| My stance is: forget about this "blockchain" rhetoric thing.
| What was interesting for cryptocurrencies was the ability of
| producing scarce, unique, digital assets. That was
| groundbreaking. Then other cryptocurrencies expanded on that.
|
| Write only data structures themselves are not new and not that
| valuable on their own.
|
| But the interesting thing is the decentralized, trustless
| structures it enables. And just pinning that on blockchain
| sounds bad.
|
| This whole things is still early and it is the basis of _a lot_
| of speculation. But I see this whole ecosystem enabling a whole
| new class of self-governing communities, websites and
| structures, some good, some bad.
| loceng wrote:
| Give me a blockchain that isn't inherently structured like
| MLM-Ponzi schemes (and unbiased people who use it not
| claiming the contrary) and then we're talking.
|
| Likewise, I'd suggest that pinning the problems you suggest
| are solved with "decentralized, trustless structures" -
| ignores the fact of reality, the physical world and real
| trust networks, centralized organizations, that reflect the
| state of society; Bitcoin et al may be a bridge but
| attempting to circumvent and ignore the positives of
| institutions is a bad idea.
| RealityVoid wrote:
| > but attempting to circumvent and ignore the positives of
| institutions is a bad idea.
|
| I mean, maybe? I did try to qualify with "some good, some
| bad", and I am certain some are bad, I'm not some idealist
| trying to sell you something. It just _does_ enable the
| possibility of circumventing institutions, and it will keep
| doing so, no stopping it, IMO.
|
| > Give me a blockchain that isn't inherently structured
| like MLM-Ponzi schemes
|
| Depending on your definition of "MLM-Ponzi schemes", it
| could be that the whole of human society might fall under
| it. Besides, I did mention I am not too fond of the
| "blockchain" name and think cryptocurrency is much more
| apt.
| plank_time wrote:
| I think this is pretty obvious and even mentioned this is a
| previous comment a few weeks ago. The US government has been
| saying that crypto is funding terrorism and money laundering. If
| you can't read the writing on the wall then that's your fault.
| Animats wrote:
| What terrorism? Since 9/11, there have been only two major
| Islamic terrorism incidents on US soil. The Boston Marathon
| bombing was by two brothers, and the San Bernardino shooting
| was a husband and wife team. Both were low-budget operations.
|
| Even 9/11 is estimated to have cost the attackers only about
| $400K.
|
| What costs is setting up an full-sized army, like ISIS.
| plank_time wrote:
| People from the US and other countries are sending money
| abroad via crypto to fund terrorism outside the US
| yunesj wrote:
| People from the US are sending crypto abroad to feed their
| families.
| slenk wrote:
| People from the US and other countries are sending money
| abroad via cash to fund terrorism out the US
| jcranmer wrote:
| Wikipedia lists a couple more Islamic terrorism incidents:
|
| * Fort Hood shootings
|
| * 2009 SUV attack at UNC
|
| * 2015 Chattanooga shooting
|
| The DC sniper attacks might also qualify as Islamic
| terrorism. The perpetrators were Islamic, and their goal was
| terrorism, but it's not clear that the terrorism was actually
| perpetrated to further Islamism.
| Animats wrote:
| Those are two lone nuts, plus two juveniles on a crime
| spree. None required significant funding or organization.
|
| There will always be crazies. Although, crazies who can
| shop at a "Guns Galore" store cause more trouble than
| unarmed crazies.
| blondie9x wrote:
| Bitcoin will never be regulated.
| pcora wrote:
| Would you bet on it?
| RealityVoid wrote:
| Not OP, but I am. Tell me the bet conditions and the winning
| criteria. Would take that any day. I'm serious.
|
| I am certain they will at some point try, but fail miserably.
| noxer wrote:
| It already is. You cant buy one without KYC. Unless you go to
| "dark" places where you may or may not get scammed. Unless you
| already have cryoto then ofc you can exchange it but most
| people need a fiat on-ramp.
| RealityVoid wrote:
| Don't be silly, of course you can. It's inconvenient, but not
| impossible. ON/OFF ramps are the parts that they could
| regulate but the tighter they squeeze, the better the
| circumvention methods will be. I think HN really
| overestimates the ability of states to keep this under wraps
| and underestimate the ability of the ecosystem to adapt.
| noxer wrote:
| Name one place where you can buy BTC with fiat without KYC.
| danlugo92 wrote:
| 1) bisq 2) sign up to a kyc exchange. Exchange small
| amount. Contact someone who is willing to exchange
| outside of the platform, maybe someone with a high
| reputation.
| noxer wrote:
| 3) Lose all your money - deserved for being this stupid.
|
| The only reason someone sends you money back after you
| irreversible send money to them is if they are even more
| stupid than you.
| RealityVoid wrote:
| Huobi, last I checked. localbitcoins, I think ? ( huh,
| such a blast from the past - they now have some sort of
| KYC but I think it's soft)
| noxer wrote:
| Huobi needs KYC. Localbitcoins is more like localscamers.
| christiansakai wrote:
| Maybe don't bail out bad actors like in 2008 and we gonna behave,
| promise.
| drummer wrote:
| This is exactly why i love projects like MobileCoin and its
| integration in Signal. We are going to desperately need
| anonymous, secure and privacy focused payments very very soon.
| Signal needs to open up payments worldwide as soon as possible.
| The last problem to fix is making it all decentralized.
| noxer wrote:
| Everything crypto has KYC now days. I highly doubt you can get
| that mobilecoin in any relevant quantities without disclosing
| who you are.
| RealityVoid wrote:
| Buy monero on some KYC, move it non-kyc and buy whatever.
| noxer wrote:
| Whats the point? As soon as you buy anything in the real
| world its connected to you, unless you want your lambo be
| gifted to someone else with no traceable connection to you.
| Fine you an buy anonymous gifts with crypto - awesome.
| motohagiography wrote:
| Some discussion from knowledgeable people of what plausible
| "crackdown" rules would look like would be interesting. The
| article mentions an ID requirement for transactions above $3k.
|
| Personally, I think the idea of the physical nation state is
| converting to a global credit score, where instead of transacting
| across borders, you are transacting across classes of businesses
| and people, and tarriff and tax policy will be enforced on a risk
| basis instead of a national border one. Instead of black market
| electronic transactions, the transaction is just taxed at a
| higher rate because of the relative social credit score of your
| counterparty, so your transaction with a non-KYC enrolled wallet
| would incurr a 100%+ excise liability on your tax reporting. It's
| the sort of totalitarian idea that is appealing to the sort of
| people you really need a popular revolt against to unseat, but
| worth considering what they think about to remove their element
| of surprise.
| cinntaile wrote:
| This is an interesting point of view, do you have any sources
| where I can read more about this?
| walterbell wrote:
| See this comment from a larger thread on CBDCs:
| https://news.ycombinator.com/item?id=26205741
|
| May or may not be repurposed: https://www.goodhealthpass.org
| & https://www.lfph.io/ & https://trustoverip.org/
|
| There's been talk of a KYC requirement for all customers of
| US _web hosting_ because cyber.
| motohagiography wrote:
| Having worked with more than one of those member companies
| in that foundation, the one thing I've learned about
| conspiracy theorists is that what they really lack is
| imagination and vision.
| walterbell wrote:
| Identity is necessary but boring. US SSNs were used by
| third-parties far beyond the original purpose. Any
| identity system that achieves global scale can be used to
| anchor a risk score. Which systems do you consider good
| candidates for global digital identity and credit score?
| Cryptocurrency exchanges are using driver's license and
| utility company bills. The IaaS KYC EO basically says
| "record as much as possible", https://www.steptoeinternat
| ionalcomplianceblog.com/2021/02/u.... If we take
| inspiration from online advertisers, no formal "identity"
| is required, they can construct a profile from online
| signals, but there would zero legislative recourse for
| false positives.
| motohagiography wrote:
| Necessary for whom? Every single use case for assigned
| identity reduces to enforcement. It is not a consumer
| product people want, it's a tool to herd people. These
| companies and so-called foundations are just jockeying to
| become the next Hollerith.
|
| Identity schemes don't need features or complexity as
| once you're subject to it, it can be a crappy yellow card
| or even an arm band you carry with you and present it
| when it is demanded. The rest is theatre.
| walterbell wrote:
| I was going to say that identity is useful when replying
| to a comment on HN :) but you're right that the comment
| text could stand alone. The poster's identity is only
| needed for karma sorting and greylisting of comments.
| pmurt7 wrote:
| Don't shoot the messenger.
| justapassenger wrote:
| Crackdown on current state of crypto can only help it in the long
| run, if you actually really believe it.
|
| Right now it's market mostly dedicated to get rich quick schemes.
| While it works great if you're on top of the pyramid, it's only
| hurting crypto case for the future.
| puranjay wrote:
| DeFi has a legitimate use case and NFTs have an astonishing
| number of use cases. Smart Contracts are an incredible,
| incredible innovation.
|
| We are at the tip of the iceberg and nothing has been more
| disappointing than seeing the traditional tech world's
| dismissal of crypto as "get rich schemes". The tech world is
| surprisingly as complacent now as the legacy dinosaurs it first
| helped destroy in the 1990s and 2000s.
| rawtxapp wrote:
| I think it's somewhat similar to innovator's dilemma, a lot
| of current tech leaders were once the underdog and now are at
| the top, so they end up becoming complacent and non-
| innovators or slow innovators like the companies they
| replaced.
|
| An example of really cool smart contract usage is borrowing
| against your crypto, for example, this person/group was able
| to borrow roughly 340M$ [1], the best part, they didn't even
| had to provide their name or deal with any other human, all
| enabled by a smart contract that they can inspect and verify.
|
| 1: https://defiexplore.com/cdp/8463
| samvher wrote:
| To be honest this trend of borrowing against your crypto is
| specifically something that makes me very suspicious about
| the current state of the cryptocurrency world. If crypto
| crashes 30-50% again all these loans for which collateral
| is going to be sold would crash the whole market (or am I
| missing something?). Also it seems way too popular to
| borrow against crypto and then use that money to invest in
| crypto as well, creating significant leverage in the
| market, worsening the problem I mentioned before and
| inflating the price of crypto compared to its "true" value.
| rawtxapp wrote:
| These are all over-collaterized, so you're usually
| borrowing up to 30% of your collaterals value, it's
| nowhere near the 2-20x leverage that you might get in
| traditional markets or leverage based exchanges.
|
| I think it makes a lot of sense in the current bull
| market, it probably makes less sense in a bear market
| unless you're borrowing only up to like 5-10% of your
| collateral to actually spend on something you need.
| puranjay wrote:
| I find it incredible that someone can code up a strategy
| for deploying an investment vault, the community, which
| operates as a Decentralized Autonomous Organization (DAO),
| can decide to vote on it, and two days later, people can
| start investing money into it and earning interest - no
| middleman or manager involved. The investment vault will
| deploy the capital in different protocols based on the
| strategy outlined (and voted on by the DAO) automatically.
|
| The automation smart contracts can bring about is scary.
| justapassenger wrote:
| DeFi main value proposition isn't tech (that's cool) but
| avoiding regulations.
|
| Blockchain has lots of potentially interesting use cases like
| NFT, but crypto currency is still not one of them. And by not
| cracking down on scams in cryptocurrency will only make any
| future adoption harder.
| puranjay wrote:
| DeFi's main value proposition is the automation of money.
|
| NFTs main value proposition is fractional ownership and
| assertion of ownership rights in a transparent manner.
|
| Imagine owning 1% of a Drake song - and getting paid 1% of
| the royalties every time it plays on Spotify. Or creating a
| yield earning strategy that automatically moves money
| around based on fixed paramters without ever interacting
| with a banker or fund manager.
| thinkmassive wrote:
| Scott Galloway has an interesting take on this,
| predicting it's only a matter of time before some
| prestigious institutions and brands jump on the
| bandwagon:
|
| https://nymag.com/intelligencer/2021/04/unified-monetary-
| the...
| CharlesW wrote:
| > _DeFi 's main value proposition is the automation of
| money._
|
| That's a potential value proposition of any currency
| which can be manipulated digitally. Whether it's
| distributed or not is an implementation detail.
| tcgv wrote:
| Indeed, but the bar for "automating money" in traditional
| finance is extremely high due to not only legitimate
| regulatory reasons but also to large banks and
| institutions trying to preserve their power/dominance.
|
| In DeFi anyone can automate money. For instance, for the
| past few months I've been building an experimental
| options exchange [1] in my free time, which would be
| impractical on traditional finance.
|
| [1] https://docs.defioptions.org/
| jonfw wrote:
| The reason we don't have fractional ownership of pop
| songs is because that's a bad idea, not because we can't
| figure out how to organize it.
| ac29 wrote:
| David Bowie famously did securitize the rights to his
| songs for 10 years (1997-2007):
| https://www.investopedia.com/terms/b/bowie-bond.asp
| Barrin92 wrote:
| >NFTs have an astonishing number of use cases
|
| NFTs are the equivalent of trading cards or video game
| lootboxes. They enable a form of conspicuous consumption
| whereby you conjure up value by slapping a digital signature
| on something and creating artificial scarcity.
|
| From the perspective of the state none of these instruments
| improve supply chains, enhance military or state capacity,
| increase productivity or growth. NFTs basically enable the
| uber wealthy to sell original versions of their artworks or
| whatever, they have no impact on real world innovation or
| mass commodity production.
| arisAlexis wrote:
| Art is only one use case. NFTs can represent land
| ownership, driving licenses etc.
| Barrin92 wrote:
| sure but putting a license on the internet isn't that
| innovative. Our driers licenses are pretty good and
| pretty cheap, and we've proven land-ownership over
| generations pretty well. This is not world-changing
| stuff.
|
| If you want radical innovation build some robots that
| make house construction 90% cheaper, whether the license
| for my house is printed on paper or a blockchain doesn't
| matter to anyone.
|
| NFTs and virtually any crypto tool have no impact on the
| material world, and we very much still live in the world
| of atoms.
| AlexandrB wrote:
| Traditional tech innovation was predicated on doing things
| more efficiently (sometimes orders of magnitude more
| efficiently) using new technology, thus disrupting
| incumbents. Blockchain reverses this completely by doing
| simple things, like changing numbers in a database, for
| orders of magnitude more computational (energy) cost. Until
| someone squares this circle I will continue to be skeptical.
| puranjay wrote:
| Have you looked into newer consensus mechanisms that
| consume vastly less energy - like Proof of History - that
| blockchains like Solana use?
|
| The whitepaper should make for an interesting read:
| https://solana.com/solana-whitepaper.pdf
| puranjay wrote:
| HN is boomer central when it comes to crypto. Haven't had a
| single enlightening discussion about it here.
|
| I see a lot of misconceptions about scams and pump and dump
| schemes carried over from the 2017 run, and complete neglect of
| the innovations created since.
|
| If anyone wants a refresher, I'm always willing to chat. I will
| also write a primer to help get folks up to speed on what's the
| latest in crypto.
| arcturus17 wrote:
| Yea no I've seen plenty of you folks talking about recent
| innovations in crypto and I'm just not persuaded that any of it
| is remotely useful other than maybe store of value and
| certainly speculation.
|
| I'm not a boomer, and I even own a decent position in BTC /
| ETH.
| puranjay wrote:
| I'll give you an example.
|
| The most "mainstream" revolutionary idea in crypto right now
| is automated market makers (AMMs) like Uniswap. These
| essentially allow anyone to create a "pool" to trade between
| two assets and earn fees from it.
|
| You can tokenize any asset, pair it with a liquid token (such
| as ETH or USDT) and offer it to anyone to trade while you
| earn fees. Or you can join an existing, popular pool (such as
| between wBTC-ETH) and earn fees on any trades that happen on
| it.
|
| Essentially, anyone can:
|
| - Create a decentralized exchange economy
|
| - Participate in existing exchange economies with _any amount
| of capital_ and earn fees from it
|
| The latter part is important because that's been the purview
| of banks. Countless trades happen between currency pairs
| daily. Banks earn all the fees because they supply all the
| liquidity. You can't participate in that market even if you
| wanted to (or unless you had tens of billions in capital).
|
| AMMs turn that around. You could have $1 worth of liquidity
| but you can still earn fees on it.
|
| This is the first time in the history of finance that
| creating and participating in exchange economies has been so
| cheap and accessible. I think that alone is revolutionary. It
| makes previously inaccessible financial avenues available to
| the little guy
| RealityVoid wrote:
| Go ahead, post them. I think there are _some_ and I think
| crypto is really, bigger than most people give it credit. But
| there is a lot of crap and hype out there.
|
| But just posting them instead of threatening would lead to
| better discussion overall.
| exabrial wrote:
| > use of bitcoin for money laundering, terrorist financing and
| other illegal activities.
|
| Bullshit. It's being used to get around the fucking enormous 33%
| taxes levied on the middle class to support Democrat and
| Republican donor's lifestyles.
| acdha wrote:
| Are you saying that the U.S. middle class starts at $163/326k
| of taxable income?
| machinecontrol wrote:
| For anyone thinking to do this, it's a terrible idea. Bitcoin
| has a public ledger that is around forever. It is much easier
| to trace than cash or offshore bank accounts.
| GoodJokes wrote:
| Does this mean I buy or sell?
| vmception wrote:
| Capture US regulatory agencies while you can.
|
| This has already had varying levels of success with the Chief
| Legal Officer of Coinbase being the acting chair of the OCC and
| telling banks it was okay to custody crypto and settle
| transactions on cryptocurrency networks instead of just SWIFT,
| ACH, FedWire
|
| There are some at the SEC, and the new SEC chair was pro-crypto
| when he was previously the chair of CFTC
|
| Cabinet level positions and the Federal Reserve and Treasury
| would be ideal
|
| If this is important to you, you don't have to be just a passive
| holder or entrepreneur. Use your platform to assume power. Make
| the world as comfortable for your generation as older generations
| did for themselves.
| PaywallBuster wrote:
| Crypto exchange owner was 2nd biggest donor to Biden campaign
| https://nymag.com/intelligencer/2021/02/sam-bankman-fried-bi...
| vmception wrote:
| Great, yeah a lot of crypto builders thrive in power vacuums.
| So the Trump administration was convenient for the 2017
| bubble, as a debilitated SEC was necessary for the token
| launches that made issuers millions (and billions). And a
| paralyzed Congress was necessary to get non-establishment
| people confirmed who will last many administrations. All of
| that lost its utility by 2020 as the outcomes were mostly
| solidified and favorable.
|
| I would say it is slightly more than moderately successful.
|
| The SEC still hasn't approved a digital commodity trust yet
| ("bitcoin ETF") but enough wealthy people are involved now
| that have created surrogates that it isn't as important.
|
| Maybe some college kid in the late 2020s will make some
| Netflix conspiracy documentary about the "revolving door in
| crypto", I would call that success.
| medvezhenok wrote:
| There is also an interesting argument about crypto being a
| convenient drain for excess liquidity in the system
| (injected by the stimulus), which is why it's not being
| regulated too heavily.
|
| If stocks & crypto were less appealing, perhaps we would
| all experience higher velocity of money & inflation since
| demand would turn to "real assets".
| vmception wrote:
| > which is why
|
| Extrapolating any competence from policy makers on this
| is a bit too fantastic of a conclusion at this point in
| time. Cryptocurrency just does not have an adversarial
| relationship with the US government, and the musings of
| some policy makers that create existential threats just
| are not the opinion of an amorphous entity (which also
| doesn't exist). The longer the rest of us are familiar
| with the technology, the more likely the gradient shifts
| to a less and less probability of adversarial
| relationship with the US government.
| rawtxapp wrote:
| Square, Fidelity and Coinbase joined together to start lobbying
| group [1].
|
| 1: https://seekingalpha.com/news/3679495-square-fidelity-
| coinba...
| vmception wrote:
| The existing crypto lobbying groups were able to get bi-
| partisan support and co-sponsors for their bills but couldn't
| get Congress to focus enough to pass things. They got Wyoming
| and some western states to pass favorable state-level laws
| though.
|
| Let's see how this one does.
| joe_the_user wrote:
| _Capture US regulatory agencies while you can._
|
| I'd perhaps quibble a bit to say US financial regulatory
| agencies can't be captured in the fashion of traditional
| regulators (where the "revolving door" is awful). This is
| because they were "captured from the beginning", operated
| specifically for the benefit of large financial firm from the
| very start. The Federal Reserve isn't even a traditional agency
| but public, private partnership ("has a 'unique structure that
| is both public and private'). EPA theoretically protects "the
| environment" a thing outside markets. Financial regulators
| protect markets. Protecting markets is completely compatible
| with protecting the profits of the largest players in the
| markets. So it seems logical regulators will remain "objective"
| in their assessments.
|
| https://en.wikipedia.org/wiki/Federal_Reserve
| vmception wrote:
| I'd say they can.
|
| Enforcement divisions have sole heads who can make unilateral
| decisions that the commissioners never review.
|
| Commissioners and Chairs can make make rulings favorable or
| ignore making unfavorable rulings, they can do anything they
| want regardless of what happens during the comment periods.
|
| The CFTC, OCC, CFPB all have single head directors. The SEC
| has up to 5, and the FRB is the most decentralized but its
| Board of Governor's head is the primary sole signal to the
| international market on this entire planet regardless of how
| much they actually do behind the scenes. The Treasury doesn't
| have to be adversarial either, no matter how much it wants us
| to tie our national identity and ego to its currency, not all
| Treasuries or Central Banks have this concern.
|
| Right now, crypto related topics are either ignored or
| adversarial. Crypto related topics can be collaborative or
| simply favorable.
|
| Capture in this context (and all contexts of regulatory
| capture) just mean that someone joins for a certain purpose,
| does all of the other tasks correctly and with high
| competence, but also makes sure their single issue is
| protected.
| InsaneOstrich wrote:
| This all sounds incredibly nefarious
| vmception wrote:
| Every other industry in the country being an instruction
| manual.
|
| If you ever thought this was going to be about a multi-decade
| long organic merchant adoption story, you were gullible af.
| loceng wrote:
| "Make the world as comfortable for your generation as older
| generations did for themselves."
|
| Make the world as comfortable to the early adopters
| loceng wrote:
| "Make the world as comfortable for your generation as older
| generations did for themselves."
|
| Make the world as comfortable for the early adopters [weighted
| from latest to earliest, so long as you're not left holding the
| bag] as the older generation had [before regulatory capture via
| industrial complexes and automation pooled more and more money
| to fewer and fewer]; FTFY.
| vmception wrote:
| speculation drives innovation.
| kasperni wrote:
| With all of the effort spend worldwide on money laundering,
| terrorist financing, and transfer of funds regulations. I find it
| very hard to believe that someone won't come after
| cryptocurrencies at some point. None of these regulations make
| any sense if you can just wire the money through crypto instead.
| pmurt7 wrote:
| Do you really think that terror organizations like Isis use
| Bitcoin to buy weapons? No, they use goold old USD.
| [deleted]
| kasperni wrote:
| Not only do I think they do, I know they do [1].
|
| [1] https://www.justice.gov/opa/pr/global-disruption-three-
| terro...
| mam2 wrote:
| The market is too big now to come after it.
|
| Plus, if you use monero + vpn you are basically untraceable.
| system16 wrote:
| Is the timing of this statement a coincidence, or is it possibly
| a jab to take the wind out of the sails of another top exchange
| set to go public in two days?
| gruez wrote:
| Judging by the market's non-reaction to this, I'm going with
| the latter.
| ac29 wrote:
| Coinbase's IPO isn't until Wednesday.
| gruez wrote:
| I'm talking about bitcoin prices
| [deleted]
| cblconfederate wrote:
| This was expected, crypto is essentially a weapon against the
| dollar. However i m not sure if the world's economies will go
| along with it. Maybe europe (which usually drags itself behind
| the US) but i m not sure the rest of the world would want to
| begin the post-covid era with even more dependence on US.
|
| In any case, good news for binance, bad news for coinbase
| goonogle wrote:
| I really want someone to ask Janet "do you have plans to ban Cash
| transactions because they are used for illicit activity?"
|
| I would guess USD inflation is far worse than expected and they
| know Bitcoin's initial intended purpose (as an alternative to
| government money) has come to fruit.
|
| It just sounds better to use the illicit boogy man.
| toomuchtodo wrote:
| Do you need to ban cash if you simply phase it out of
| existence? Turn up instant payments, and any notes turned in at
| banks and to the government get shredded. Look to China and
| Sweden [2] for foreshadowing of digital currencies and the
| eventual deprecation of physical notes.
|
| [1] https://www.google.com/search?q=china+cashless
|
| [2] https://www.google.com/search?q=sweden+cashless
| riskneutral wrote:
| > I really want someone to ask Janet "do you have plans to ban
| Cash transactions because they are used for illicit activity?"
|
| There are already existing controls on cash transactions. If
| you deposit cash in a bank account, you need to prove your
| identity and you're subject to anti-money laundering
| surveillance. Securely transporting and storing large amounts
| of physical cash, outside of a bank, is very difficult. I
| imagine that making or receiving large payments with physical
| cash is often impossible or would attract a lot of attention
| from authorities and perhaps even criminals.
|
| > I would guess USD inflation is far worse than expected and
| they know Bitcoin's initial intended purpose (as an alternative
| to government money) has come to fruit.
|
| Gold can play the same role, and has been banned in the past,
| but is unlikely to be banned again. The more likely story is
| that there are serious money laundering and terrorist financing
| risks posed by Bitcoin's intended purposes, and governments are
| trying to figure out how to get a hold on the national security
| / law and order situation without being to heavy handed.
| gpapilion wrote:
| To flip this a bit, how much of bitcoin usage is non-
| speculative, and for legal purposes?
|
| I actually think the speculative issue is a bigger concern for
| the fed, then the legality. It's an commodity w/ very little
| utility, but a high degree of poorly regulated investing. In
| addition its used to funnel payments for illegal activity.
| knorker wrote:
| Let's hope.
| chadash wrote:
| You can argue that cash is also used for a lot of illegal
| activity and you would be correct, but that misses an important
| point, which is that cash has been with us since our country's
| founding and from a political point of view it would be nearly
| impossible to ban it, even if doing so would be a sensible
| policy. Cryptocurrency is still in the infant stages and banning
| it wouldn't entail nearly as much of a backlash.
| rawtxapp wrote:
| I think you're underestimating how many people own/are into
| crypto. A quick look into Coinbase's S1 alone shows that tens
| of millions of people in US have accounts with them and they
| are custody-ing billions of $ of institutional coins.
|
| And that's just Coinbase, ignoring Robinhood, Cashapp, Gemini,
| GBTC and lots of other exchanges and custody which have very
| significant volumes as well.
| NaturalPhallacy wrote:
| How?
|
| How do you 'crack down' on a currency that doesn't require any
| existing state or bank controlled apparatus to operate? Other
| than the exchange point, which private exchanges for cash can
| circumvent, how do you crack down on what is essentially math
| conducted via computers that everyone has access to?
|
| Neither the article, nor the linked one from December say.
| toomuchtodo wrote:
| You (government currency regulators) make it illegal to convert
| fiat to crypto, and then monitor crypto ledgers for that last
| bit of folks who still attempt to use crypto. When exchanges
| break the law, you ship the folks who own the exchange to jail
| [1]. Crypto folks think they're the former cartoon panel, when
| it's really the latter how nation state enforcement works [2].
| Governments crack down on money laundering with fiat all. the.
| time. Playing with fiat amounts more than $10k at a time?
| That's a currency transaction report (CTR) [3]. Try to avoid
| the CTR? That's structuring [4], also illegal, and a suspicious
| activity report (SAR) [5] is filed. So, when the question is
| asked, "how do you crack down on crypto?", the answer is "with
| the monopoly of force governments possess."
|
| [1] https://www.google.com/search?q=crypto+exchange+jail
|
| [2] https://xkcd.com/538/
|
| [3] https://en.wikipedia.org/wiki/Currency_transaction_report
|
| [4] https://en.wikipedia.org/wiki/Structuring
|
| [5] https://en.wikipedia.org/wiki/Suspicious_activity_report
| puranjay wrote:
| All this will do is compel companies to move to crypto
| friendly countries. China squeezed down on crypto. Chinese
| exchanges just moved their headquarters to Malta.
|
| When you start getting into DAOs and their legal status and
| everything starts becoming murky.
|
| Crypto has truly some of the most exciting developments
| taking place in the world today at the intersection of art,
| finance, law and economics. The quality of discussion on HN
| about crypto is woefully out of touch.
| 1996 wrote:
| > The quality of discussion on HN about crypto is woefully
| out of touch.
|
| Given most of the comments I read, I'd say HN is aging out
| - like facebook median age > snapchat > tiktok
|
| Now I wonder what the replacement is - it must already
| exist! We just don't know about it yet.
| bruiseralmighty wrote:
| I find the whole line of reasoning in the xkcd comic quite
| amusing when it comes from crypto 'shorters'. Admittedly, I
| am on the 'long' side when it comes to crypto and
| decentralization.
|
| Suppose your government actually had to act this way in order
| to crack down on cryptocurrencies. Every prison would have
| its own Guantanamo bay for torturing private keys out of
| cryptocurrency users. And this is is portrayed as some kind
| of win or gotcha in the comic. The non-violent offenders
| glutting the prison system would sky rocket as judges have to
| hold people in contempt indefinitely for not giving up
| private keys(this has already begun happening in the US).
|
| "Well you forgot to account for all the knees our liberal
| democracy would be willing to break!"
|
| If that's what it takes then you've already lost. This is the
| private fantasy of a lot of individuals long on crypto and
| the broader decentralized trust-less ecosystem. Because the
| _implied_ threat of force is often a much stronger form of
| social control than the _actual_ use of force itself; which
| is expensive, unpopular, and broadly illegal in developed
| countries.
|
| The ideology of this decentralized ecosystem mocks the myth
| of the benevolent nation-state prosecuting 'criminals' on
| behalf of its 'citizens'. A nation-state with the power and
| will to exist in such an ecosystem would be the most cruel
| and invasive authoritarian regime in human history. Any
| reasonable person can conclude that it _ought_ not to exist.
|
| So I say let the money laundering commence. Or people will
| leave. Or they wont be allowed to.
| tinus_hn wrote:
| If only there were an international, barely regulated network
| that allows people in one country to interact with people in
| another.
| kec wrote:
| you can't reliably opt-out of laws in the place where you
| physically reside, especially where money is involved.
| tinus_hn wrote:
| You can't reliably restrict what you can't see
| kec wrote:
| At some point you need to convert your crypto gains back
| to fiat to actually use it, especially in the
| hypothetical case where crypto trade is banned locally.
| The IRS/FBI/etc are not going to arbitrarily constrain
| themselves when trying to go after folks who do this.
| puranjay wrote:
| Nigeria banned banks from trading in crypto, killing off
| the fiat.
|
| Nigerians just started making telegram and whatsapp
| groups, made codenames for different coins and traded
| them for cash or bank transfers.
|
| Unless you decide to bank commerce and phones and the
| internet and talking to your neighbor and running a
| computer, you can't ban crypto.
| acdha wrote:
| This only protects you if the government is powerless or
| chooses not to target you. In the other cases, what
| happens is that banks and other businesses are required
| to report transactions and, since a blockchain helpfully
| gives the police a full signed transaction log, anyone
| who is arrested is going to in turn give the police leads
| on everyone they've ever exchanged money with.
|
| In that world, using cryptocurrencies has a high risk
| factor: do you trust the other party to go to jail rather
| than identify you, or that they have personal security
| good enough to even be able to prevent that? Simply using
| an unapproved payment mechanism, much less one of the
| ones which tries to provide some anonymity (fewer will
| deliver in practice), will likely be seen as proof of
| intention to commit financial crimes and ... I sincerely
| hope you can convince them that you aren't hiding
| something they haven't yet scared you into confessing.
|
| This is not a recipe for a functioning economy.
| Technology can't fix social problems like that and the
| vast majority of people making claims otherwise won't
| personally be affected but are recklessly endangering
| anyone who makes the mistake of trusting them.
| kec wrote:
| What you're describing is laundering, so now you're
| committing two crimes. I wouldn't bet against the
| government taking an interest once values being exchanged
| are large enough.
| puranjay wrote:
| What I'm describing is free trade.
| NaturalPhallacy wrote:
| >At some point you need to convert your crypto gains back
| to fiat to actually use it
|
| Except you don't. It's a currency. Just because it's hot
| right now and people are treating it like an investment
| doesn't change the fact that it's a currency itself. You
| don't need to convert it to anything. It was literally
| built to be a currency free from bank/government control.
| That was the whole point.
|
| _The sole criterion for the viability of a currency is
| acceptance in trade._ It doesn 't require government,
| bank, or sign off by any authority. If people accept it
| in trade, it's a currency and it's viable. Just because
| other, older fiats are more mainstream currently doesn't
| change that fact one iota.
| yladiz wrote:
| Okay, sure, let's consider it a currency for the sake of
| argument. I would posit that if I can't easily exchange
| my crypto into a form that I can use to pay taxes with,
| or buy groceries with, that it's a useless currency, and
| so people will be able to but won't want to accept it in
| a trade. Currencies aren't useful simply because they
| _can_ be traded, they're useful because they _can_ be
| trusted.
| NaturalPhallacy wrote:
| It is a currency. I've bought stuff with it. There's
| literally a BTC ATM in my local liquor store. There's a
| famous strip club(!) in Portland that accepts BTC. There
| many, many more examples: https://coinsutra.com/who-
| accepts-bitcoins/
|
| >Currencies aren't useful simply because they _can_ be
| traded, they're useful because they _can_ be trusted.
|
| If people trade them, it's because they _already_ trust
| them.
|
| That's why I said 'sole criterion'. Say you think fiat
| currencies, and the USD is a terrible and untrustworthy
| currency. The market doesn't care. It's viable because
| it's accepted. Acceptance in trade is all that matters.
|
| Another example: Baby food is as good as cash to drug
| dealers. The implications of that are disquieting, but
| don't change the fact that it's true one bit.
|
| When it comes to a currency, acceptance in trade trumps
| all. Nobody's feelings or long held beliefs matter in the
| slightest. The growing acceptance of crypto is _why_ it
| 's become seen as an investment, not the other way
| around.
| kec wrote:
| I'm speaking in the hypothetical where crypto is
| regulated or banned. If you can't legally use it to trade
| where you physically reside you either need to convert to
| fiat overseas or buy your physical goods or services
| overseas. In either case the government isn't going to
| turn a blind eye "just because".
| xxpor wrote:
| Currencies derive their value _from_ government control.
| That 's why BTC is an investment, not a currency.
|
| Until and unless the IRS accepts tax payments in a
| cryptocurrency, they won't be used in the mainstream
| economy.
| NaturalPhallacy wrote:
| >Currencies derive their value from government control.
|
| There are countless examples that prove this false. World
| of Warcraft gold, EVE Online ISK, BTC, Ethereum,
| Dogecoin, baby food, etc. There are literally jobs in
| developing countries where farming in game money is a job
| that pays their bills. Yet we both know that no
| government is in control of those currencies.
|
| >Until and unless the IRS accepts tax payments in a
| cryptocurrency, they won't be used in the mainstream
| economy.
|
| I'm surprised they don't already. They're already used in
| mainstream economy if you count buying things on amazon
| or Subway.
| notahacker wrote:
| > There are literally jobs in developing countries where
| farming in game money is a job that pays their bills
|
| Do they pay their bills in World of Warcraft Gold or
| local currency?
|
| (That actually illustrates the distinction between tokens
| that _might_ have value to speculators and currency quite
| nicely)
| NaturalPhallacy wrote:
| It's not speculation though. They literally sell one
| currency for another. That they have value is a given, or
| they wouldn't be able to exchange one the other. (notice
| how it doesn't matter which currency is which in that
| sentence?)
|
| Acceptance defines value. No other factor trumps it.
| xxpor wrote:
| That's exactly my point. They're mining a commodity, not
| a currency.
| [deleted]
| Consultant32452 wrote:
| Taxes. They make a sacrificial lamb out of a few high profile
| tax dodgers. All the power structure has to do is convince
| norms that crypto is scary/dangerous/tax risk and they will
| have done their work. I think someone else made the torrent
| analogy. The crackdowns on torrenting were quite successful.
| They scared the public with some messaging, made a big noise
| about canceling regular people's internet service, etc.
| Torrenting has ben kept as a niche instead of mainstream.
| That's all the power structure needs, it doesn't have to
| completely kill crypto.
| rawtxapp wrote:
| You block on/off ramps and lose a lot of important information
| on these transactions, the people involved and tax revenue,
| seems like a losing proposition, but definitely doable. You
| can't stop people from running a software on their computer
| short of shutting down the whole internet, even then, there are
| satellites with the blockchain data now, so it'd be really
| hard.
| iudqnolq wrote:
| Satellites are the easiest thing to ban. Sure, the govt has
| the tech to jam/shoot them down, but they're also almost
| certainly associated with a real person with a real bank
| account and a real door they can knock on/down depending on
| their cooperation.
| rawtxapp wrote:
| Sure, I guess my point is there will always be some kind of
| functional messaging in place.
|
| If people can communicate any message, they will be able to
| communicate the blockchain data. Satellites, p2p networks,
| ham radio, but again, I don't think we'll ever see a global
| internet shutdown _just_ to shutdown BTC.
| iudqnolq wrote:
| I disagree. Take the war on drugs. They can't get rid of
| them, but they can make everybody sad. And that's the
| real world, which is harder to intercept.
| nrmitchi wrote:
| > Other than the exchange point, which private exchanges for
| cash can circumvent
|
| "private exchanges for cash" (that really would have to happen
| in person) will never, ever, replace the scale at which an
| online exchange that can deposit money straight to a bank
| account will.
|
| The goal of a "crackdown" is never to eliminate something 100%
| (because as you noted, that is impossible).
| BitwiseFool wrote:
| Consider that the government doesn't need to attack
| cryptocurrencies at the source because they already have full
| control over their own citizenry. There are plenty of things
| the government could do to coerce citizen compliance. Yes,
| "illicit" activity will still happen but if the goal was to
| harshly crackdown on things like Bitcoin they will have
| succeeded.
| liquidise wrote:
| > U.S. Treasury Secretary Janet Yellen and other officials have
| warned about the use of cryptocurrencies for illicit
| transactions.
|
| Wait until you hear about cash.
|
| More seriously (and hopefully less reductionist) i feel nations
| who embrace cryptocurrencies early will see mixed results as the
| landscape matures. I am more confident that nations which turn
| their back on it, or shut it out completely, will see a loss of
| otherwise valuable businesses and mindshare.
|
| Whatever your stance on cryptocurrencies are, what is of little
| dispute is the business opportunities they have created. Binance
| and Coinbase are large, successful companies. Poloniex was sold
| for ~400M.
|
| Knowing the US has soured on cryptocurrencies doesn't make me any
| less interested in them, it just makes me less interested in
| holding them/working in the space on US soil. I'd be surprised if
| i were alone in this sentiment, and in spite of its negative
| reception on HN, the tech space around cryptocurrencies is quite
| literally growing as we speak.
| throwastrike wrote:
| I am sorry but that's a very weak argument about cash being
| involved in illicit transactions. As it stands right now cash
| is still TANGIBLE. If you want to launder cash you still need
| to be physically present. Crypto not so much.
|
| I will leave you with this: the reason why crypto will
| inevitably fail is because no one and no country will be
| willing to go to war to defend it. As for USD? There's the
| single greatest military power assembled by mankind backing all
| US interests.
| puranjay wrote:
| Let me introduce you to the wonderful world of Hawala:
| https://en.wikipedia.org/wiki/Hawala
|
| The idea that cash can't be laundered because it is tangible
| is laughable.
| throwastrike wrote:
| I am not contesting that cash isn't laundered. I am simply
| pointing out that whenever someone brings up crypto being
| utilized for money laundering the first argument is almost
| always "well cash is also used for money laundering" which
| is pretty weak. If you knew what people can do to launder
| money in shitcoins and bitcoins you would not make that
| argument. There's a reason why Macau is no longer needed to
| get money out of China. And there's a reason why gold is no
| longer used to move drug cartel money in the past two
| years.
| petertodd wrote:
| > Wait until you hear about cash.
|
| I'm always bothered by this arguement because most of the same
| people in government who want to see a crackdown on Bitcoin
| also seem to want cash to be eliminated.
|
| I've been asked to do consulting on one of these digital cash
| replacement projects. The requirements included all the stuff
| you'd expect, like strict ID requirements for every account,
| and the ability to freeze funds at will. But they also wanted
| things like the contents of _receipts_ getting uploaded to
| government servers, to allow real-time tracking of not only who
| was paying who, but what the funds were supposed to be for. My
| contact wouldn 't tell me what government it was supposed to be
| for. But they did admit it was a dictatorship. Obviously, this
| would have been a very effective tool for cracking down on
| dissent.
|
| Frankly, I kinda suspect what was _really_ going on was the
| company that reached out to me was pulling a scam on that
| dictatorship and had no real plan to actually deliver a working
| product. But it 's still a good example of the panopticon that
| authoritarians want to replace cash with.
| dgrin91 wrote:
| > most of the same people in government who want to see a
| crackdown on Bitcoin also seem to want cash to be eliminated
|
| Can you provide a source for that? First I've heard of such
| an argument from government officials
| jerf wrote:
| It hasn't necessarily been out front-and-center in the
| mainstream media, but it's definitely something getting
| talked about in mainstream financial circles routinely.
| Here's a bit of a partisan source from a quick google
| search, but it's got a lot of links and citations you can
| follow up on and I believe it is basically correct in its
| facts, even if you disagree with the conclusions drawn from
| them: https://www.newswars.com/cashless-society-democrats-
| propose-...
|
| It's up to the "trial balloon floated in Congress" point.
| The trial balloon has so far always been shot down, but
| it's really only a matter of time. If the government could
| just push a button and have access to literally every
| single transaction that occurs, they would certainly do it.
| They wouldn't even blink.
|
| Also, I want to say, I'm just linking one example. You can
| follow up with search terms similar to the ones used in
| that article, and probably find even more mainstream
| sources discussing it. It's a topic in the air in financial
| circles.
|
| Edit: Bit more searching, here you go with something much
| more mainstream, Forbes:
| https://www.forbes.com/sites/advisor/2020/10/22/the-
| pandemic...
|
| And again, my main point here is that it is a _topic of
| conversation_ , not making any particular claims about
| where we are currently.
| knorker wrote:
| It's a ridiculous comparison, though.
|
| E.g. try to regularly move billions in cash and see how long
| it'll take before you're busted for not reporting that you're
| doing that.
|
| A billion bucks weighs a fucktonne.
|
| I'm pro cash, anti cryptocurrency, because the comparison is
| absolutely ridiculous there's no contradiction.
| spurdoman77 wrote:
| Central bankers are often pro-cash but anti-bitcoin. They
| dont want competition.
| xxxxxxx12 wrote:
| > They dont want competition
|
| Which is another way of saying they want absolute control,
| which in this case is the absurd charade where "inflation"
| measures that they claim represent life on the ground
| exclude the essentials like education, healthcare, and
| housing.
| devmunchies wrote:
| I liked the take from the Mayor of Miami (from a podcast
| about cryptocurrency):
|
| "they [governments] will have to borrow money like
| everybody else borrows money, they can't just print their
| own money. They have to borrow money at an interest rate.
| And if governments don't behave fiscally then they are
| going to have to borrow at worse and worse rates. They
| can't just invent their own interest rates and currency,
| which manipulates how markets work...
|
| We in the city of miami, we're forced to balance our
| budget, we actually have a surplus, about $150 million in
| surplus and we have some of the lowest tax rates in the
| history of the city."
| xxxxxxx12 wrote:
| There is a (seemingly growing) number of people that
| openly say that the budget doesn't matter. You just print
| and spend.
|
| Fortunately this incentivizes finding ways to circumvent
| that regime and point out how absurd it is.
| devmunchies wrote:
| Yes, and that the only point of taxes is to reduce
| inflation, since the govt doesn't need taxes anyway since
| it can print money. Taxes don't even cover the cost of
| govt expenditures so it makes sense.
| maest wrote:
| The point of taxes is to create demand for the currency
| in the population. The government can then promise to pay
| people in its own currency so that it can provision
| itself with staff, goods and services.
| arcticbull wrote:
| Broadly speaking the tools of monetary policy available
| to reduce inflation are:
|
| (1) Increasing reserve rates for lending. This causes the
| circulating supply of currency to go down.
|
| (2) Increasing interest rates for lending. This reduces
| the demand for borrowing, which is largely fractional
| reserve. This also causes the circulating supply of
| currency to go down.
|
| (3) The Fed unwinding its balance sheet by selling bonds.
| They collect the cash and remove it from circulation.
| They can increase the circulating supply by buying bonds.
|
| Taxation doesn't change inflation, to the best of my
| knowledge, as before and after taxation the same amount
| of money exists in the circulating supply. Taxation is
| fiscal policy.
|
| The government doesn't print money per se, the government
| can borrow money by selling bonds. This just reallocates
| the existing money supply. The overwhelming majority of
| US government debt is held domestically by US persons.
| This doesn't change the money supply either, unless the
| Fed steps in.
| reducesuffering wrote:
| > "Taxation doesn't change inflation, to the best of my
| knowledge, as before and after taxation the same amount
| of money exists in the circulating supply. Taxation is
| fiscal policy."
|
| Fiscal policy affects inflation. You're thinking of
| inflation as "the money supply / total of all $", but
| that's only one definition or part of inflation.
| Generally, you would also describe inflation as the price
| of things you buy going up or down (CPI). Say you ratchet
| up the effective tax rate to 90%. Everyone's going to
| have a whole lot less money to buy extra things. Some
| things with fixed raw input cost still wouldn't budge
| much. However now that people's monthly incomes have gone
| from $5000 -> $1000, you're going to see houses,
| education, Pelotons, and other extra income sinks, have
| their prices fall precipitously.
| arcticbull wrote:
| It's only wrong if it doesn't work -- but it does.
| Economists aren't 100% sure why, but it does.
|
| The fact is while the debt has exploded, the total cost
| to service that debt has collapsed. The US is now paying
| less interest on its sovereign debt than before the COVID
| stimuli. Explain to me how it's stupid not to take
| advantage of this?
|
| The reality is when you take on debt, the only thing that
| matters is what you choose to do with it. If you use it
| to generate economic activity - and hence revenue -
| that's a good investment. If you don't, that's a bad
| investment.
|
| Now, you can "circumvent" this by investing your money
| like you're supposed to in _literally anything_.
| thoughtstheseus wrote:
| The cost of debt has dropped would be a more accurate
| description. Well... just because you can take out more
| loans does not mean you should. The issue is really how
| long you can refinance the debt for, or can you outgrow
| the debt, otherwise you'll be forced to inflate it away.
| The cost of financing will not be this low forever and
| it's still a few hundred billion of interest each year.
| Still, we should spend money on infrastructure and cool
| tech while we can.
| [deleted]
| maest wrote:
| Why would a government with a sovereign currency ever
| have to borrow any sort of money? They can issue as much
| of their own currency as they want.
| devmunchies wrote:
| that's the point. if money is backed by something with a
| max-supply (like gold or some cryptocurrency) or if there
| were a law limiting the max money supply then eventually
| they will have exhausted their reserves if they aren't
| careful, and will need to borrow. The american dollar is
| not backed by anything but the "full faith and credit of
| the american govt"
|
| Even cryptocurrency projects like Brave browser's BAT has
| a max supply, so Brave will have to buy BAT back from the
| market (at the market rate) if it wants more.
|
| His point is that a government is more fiscally
| responsible when it has maintain real reserves, where
| there is a risk of depletion. The federal reserve is a
| misnomer, since it doesn't have meaningful reserves (like
| gold). It just prints.
| paulgb wrote:
| > We in the city of miami, we're forced to balance our
| budget
|
| This is true, but not without some moral hazard. Miami
| can keep building on land that will be swamp within the
| lifetime of the building _because_ federal taxpayers and
| inflation are there to bail them out.
|
| https://e360.yale.edu/features/as-miami-keeps-building-
| risin...
| vkou wrote:
| > Wait until you hear about cash.
|
| Cash sucks for illicit transactions, because laundering it is a
| pain in the ass.
|
| A crypto ecosystem without strong KYC is much easier to use for
| illicit transactions. A crypto ecosystem with strong KYC...
| Probably isn't.
| gpapilion wrote:
| > Wait until you hear about cash.
|
| This is why Europe eliminated the 500 euro note, and the US
| doesn't produce bills larger than 100 dollars. The thought is
| these are largely used be criminals.
|
| Similarly Modi's demonetisation which the intent was to remove
| black money from the economy. All bills of 500 and 1000 rupee
| were to become worthless if not exchanged by a certain date.
|
| So they've heard about it.
| purple_ferret wrote:
| >Binance and Coinbase are large, successful companies
|
| I don't think you should group Binance with Coinbase. Binance
| is mostly unregulated, literally on the run, refusing to admit
| where it is headquartered[0], possibly because it avoiding
| paying taxes.
|
| It seems like more and more likely that Binance is just a
| mechanism for CZ to exit via a massive BNB pump and dump.
|
| [0]https://www.coindesk.com/binance-doesnt-have-a-
| headquarters-...
| knorker wrote:
| Beany babies spawned a lot of successful business, but you
| absolutely cannot from derive that they were fit for purpose,
| or in any way useful.
|
| You're cargo culting.
|
| They're still a solution in search of a problem, backed by tech
| people who think they understand what they are trying to
| replace.
|
| Once you understand the fence you can tear it down, but
| cryptonerds really really don't understand law (they think
| smart contracts solve a problem) or economics.
| arisAlexis wrote:
| Could you pay federal taxes in beanie babies? I think not
| jdgoesmarching wrote:
| There are few things more annoying than hearing a crypto
| cultist talk about economics. It's like a plumber lecturing
| me about database architecture based on their Excel
| experience.
|
| Ironically people who actually work as blockchain devs are
| very chill about it.
| captn3m0 wrote:
| You can't transfer a billion dollars worth of cash by sending
| an email with your private key.
| john_moscow wrote:
| If you have a billion dollars to hold, you don't want the
| volatility that could turn it into a hundred million, or ten
| billion in a few weeks, just because.
|
| Also, holding a billion dollars in a form protected by a
| single private key is effectively putting a billion-dollar
| bounty on your own head.
| noxer wrote:
| Stable coins exist.
| john_moscow wrote:
| Backed by the issuing companies' heartful statements of
| best intent.
| puranjay wrote:
| The second largest is issued by a soon-to-be-public $100B
| company. I'm sure the backing assets will have to be
| disclosed to the public.
| noxer wrote:
| There are stable coins backed by crypto.
| AlexandrB wrote:
| What does that mean? How does "crypto" guarantee that
| someone has the reserves necessary to back the stable
| coin in circulation? Whenever cryptocurrency interacts
| with the "real" world, you're trusting _someone_ to
| verify that the real world state corresponds to the state
| recorded in the blockchain. I have yet to see a
| satisfactory solution for this. You 're also trusting
| _someone_ to verify that all this software is free from
| backdoors and bugs that could be used to commit fraud.
| atat7024 wrote:
| Liquidity, in a word.
| noxer wrote:
| Backed by crypto means for every stablecoin worth 1 USD
| someone has locked away for example 1.5 USD in crypto.
|
| Whoever locked the crypto away and created the stable
| coin needs to buy it back to unlock the crypto again. If
| the price of the stabelcoin would drop below 1 USD
| everyone who created them and sold them would make a
| profit buying it back lower. This essentially makes the
| coin stable.
|
| I'm not going into further details as you can easily
| google how this technically works.
|
| Also no one said there is no risk you have all kinds of
| risks including meteorite impact event. Backed
| stabelcoins simply reduces/decentralizes and shift the
| risk to code/market dynamics and other stuff rather than
| a single issuer of a coin. Nothing ever is without a
| risk.
|
| BTW if finding a flaw in the code makes you rich that
| kinda a very good incentive for people to find flaws. We
| dont really have anything better than that in your "real
| world".
| john_moscow wrote:
| >Backed by crypto means for every stablecoin worth 1 USD
| someone has locked away for example 1.5 USD in crypto.
|
| In order to do that, someone would need to match every
| USD coming from you with 0.5 USD from their own pocket.
| noxer wrote:
| kind, they dont lose that it just locked away. But yes it
| must be more than the value to be backed else it could
| become partially backed if the crypto price goes down to
| fast. It can be more of less than 150% backed is up to
| whoever writes the code. But 150% seems reasonable for a
| volatile assets.
|
| You may think no one would do that but its actually a way
| to bet a price gains of your crypt. By locking away 150%
| you get 100% in stable coins to invest/spend without
| losing the volatility (possible gains) of your crypto. So
| if the price of you crypto goes up you get the whole
| profit on the locked 150% collateral even if you spend
| the stabel coin. ofc you need to buy back the stable
| coins to unlock you crypto but the buy back should always
| cost the same because its a stable coin.
|
| Example with numbers:
|
| You lock away 150 USD in ETH You get 100 USD in stable
| coin to spend Price of ETH goes up 100% (doubles) You can
| now buy 100 USD stabel coins and unlock 300 USD worth of
| ETH
|
| This is interesting because you have 100 USD that you can
| use while you wait for the price to go up. You could buy
| ETH with it which also doubles in price so you have 200
| USD worth of ETH You sell 100 USD worth of it to buy back
| the 100 USD stable coins
|
| You now turned 150 USD worth of ETH into 400 USD worth of
| ETH even trough the price of ETH only doubled.
|
| Ofc if the price drops your stable coin will be
| undercollateralized and someone else can "buy them" and
| re-collateralize which would make you lose the
| difference. In other words if you bet on rising prices
| and it goes down you have to top up to keep the 150%
| collateral if you cant top up someone else will and you
| get liquidated.
|
| In the end is a zero sum game. Some lose others win but
| its a net gain because stable coins can can exist that
| are backed by crypto.
| Forbo wrote:
| I _wish_ someone would try to cash out $1B Tether.
| noxer wrote:
| I never said all-in Tether. Also you cant "cash out" a
| billion dollar of anything. Its completely absurd, no one
| has a bank account with a billion dollar on it. It also
| make zero sense to ever do that. Its completely
| irrelevant if that is or isn't possible with coin XY if
| there is nothing you could move it into. The only reason
| someone would cash out a billion is if he wants to invest
| it into something. What could this possibly be that
| requires a instant investment of the whole billion? You
| guys need a reality check. No one ever buys something
| with 1 billion at once. There are multi-billion contracts
| but they aren't settled at once.
|
| You could probably sell one billion in Tether over the
| course of a few month just fine. Simply stop selling if
| the price goes below 1 USD and use all large exchanges
| parallel. It has several billion fake volume so even if
| real volume is 100 times lower it should suck up an
| additional billion. Assuming real volume is 100 times
| lower and you sell over the course of 100 days you would
| only cause less then 1% of the volume.
| stefan_ wrote:
| Eh, when the Archegos fund leveraged at $100B collapsed a
| few weeks ago, many banks cashed out many billions. It
| made the news because they gave lots of leverage to a big
| gambler, not because that event in any macroeconomic
| sense mattered at all.
| noxer wrote:
| >banks
|
| The entities where almost everyones non-physical assets
| is stored. Yes, they can indeed do things private person
| cant do.
| coolspot wrote:
| Surprisingly, no one yet abducted and tortured Vitalik
| Buterin or other people known to have insane amount of
| crypto.
| [deleted]
| rawtxapp wrote:
| If you have billions of dirty money to launder, you don't
| need to worry about cash, you just call your pals at HSBC
| [1][2].
|
| 1: https://www.icij.org/investigations/fincen-files/hsbc-
| moved-...
|
| 2: https://www.investopedia.com/stock-
| analysis/2013/investing-n...
| puranjay wrote:
| Crypto maximalists - and I know a LOT of them - are drawn to
| crypto because of ideology, not just the money. The idea that a
| person should own his/her own assets, be able to share and use
| them whenever they want, and be free from government censorship
| and foolhardy economic stewardship is incredibly powerful.
|
| When governments talk about banning crypto, what scares them
| isn't crypto; it's this ideology. And this ideology also makes
| crypto incredibly hard to ban. You can create all sorts of
| regulations but that will only harden the stance of crypto
| maxis because it will only prove them right.
| this_user wrote:
| > You can create all sorts of regulations but that will only
| harden the stance of crypto maxis because it will only prove
| them right.
|
| They can harden their stance all they want, but breaking the
| crypto ecosystem is incredibly easy if governments really
| wanted to. All you have to do is ban companies from
| interacting with crypto currencies in any form, be it
| accepting, exchanging, holding, or producing them. That would
| immediately shut off the gateways between the crypto
| ecosystem and the real economy, which reduces crypto to P2P
| transactions in parking lots.
| puranjay wrote:
| History has shown that when the potential rewards are large
| enough, the players will literally move jurisdictions to
| tap into the rewards. All that happens is forgone tax
| revenues for nations.
|
| Because unless you have a one world government (hopefully,
| no one is a proponent of this), there will be at least some
| countries that will welcome you. And since the rewards will
| be large enough, market participants will even do illegal
| things to access it.
|
| All it will eventually do is make your country less
| competitive until you have no recourse but to change the
| law. FOMO isn't just for people; it's for nations as well.
| Daishiman wrote:
| International sanctions are a thing, _especially_ in the
| world of banking.
|
| The rewards are minuscule. It's a niche industry with no
| potential of it ever not being niche unless is has mass
| adoption.
| cblconfederate wrote:
| I mean, companies are barely interacting with crypto right
| now, very few businesses use it for trade, but it keeps
| going up so i dont see how that works. US based onramps are
| useful only to americans, and i m sure people will seek
| ways to convert their dollars elsewhere, like they did for
| years before coinbase or other us based exchanges existed
| drog wrote:
| Why is this post so downvoted? It seems that antigovernment
| sentiment is not popular here
|
| It's not only that but also all that "crypto is not
| technologically interesting and it's just Ponzi scheme!".
|
| There are so many interesting and unique things there. You
| can mix cryptography, finance, etc. into endless amount of
| protocols.
|
| Here is some interesting ideas in crypto: decentralized
| stable coin (dai), automatic market makers (uniswap), zero
| knowledge rollups, dns that you actually own and not rent,
| p2p prediction markets, automatic borrowing, algorithmic
| stable coins without peg and so on and so forth.
|
| And there is always something new.
|
| I think blockchain is essential building block of the future
| free web.(at least stuff like dns)
| OGWhales wrote:
| > Why is this post so downvoted?
|
| Oddly, HN is over all rather closed minded about
| cryptocurrencies/blockchain. I can understand being jaded
| at all the bitcoin maximalist out there that are frankly
| ignorant or even just being generally weary about the idea
| of such currencies... but it seems like the general
| sentiment is very negative in almost every thread with very
| minimal understanding of cryptocurrencies or frankly
| currencies in general.
|
| Shame, tbh. I wish there was better discussion on the
| topic. Blockchain is very cool, even if you don't believe
| bitcoin is replacing your dollars ever.
| puranjay wrote:
| At this point, I don't even care about Bitcoin anymore.
| It serves no purpose. I don't even care about
| cryptocurrencies as such.
|
| But the ideas popping out from these fields are just so
| darn exciting. DeFi makes all these complex financial
| instruments that were previously the sole purview of big
| banks accessible to _anyone_.
|
| And we're barely scratching the surface with NFTs and
| DAOs.
| tom-_- wrote:
| What you described as the ideals of crypto maximalists
| largely applies to fiat currency. Individuals "own" their own
| USD, are able to share and use as they please within the
| bounds of legality.
|
| Not sure what it means to "censor" currency, but if they
| consider governments' economic stewardship to be foolhardy,
| why would they consider the wisdom of miners, programmers or
| the crypto's regulating body to be superior?
|
| What's left is the question of legality, anonymity lets users
| skirt the government's laws, which has value to basically
| criminals.
| r00fus wrote:
| USG knows how to deal with cash - you can't take any decent
| amount over the border or even on trains without being
| questioned.
|
| Bitcoin main use (regardless of what it was designed for) is
| for laundering money.
|
| Also it's not a currency, but an asset - as it is designed to
| appreciate due to how mining works.
| waterfowl wrote:
| even on trains? amtrak specifically questions people about
| cash?
|
| This seems weird -- compared to traveling by air amtrak has
| approx 0 security, no TSA equivalent, bag scan, etc(unless
| you check maybe).
| jandrese wrote:
| Large amounts of cash, and not even all that large ($10k)
| have been considered evidence of crime and confiscated by the
| cops in the US. The laws that enable this have been slowly
| dying off, but it still happens. No other evidence of a crime
| is necessary nor do the people need to be convicted of
| anything, the cops just take the money because it might be
| used to commit a crime.
|
| http://gm1-miwebvarnish.newscyclecloud.com/opinion/20201218/.
| ..
| mrtksn wrote:
| The cash argument is not a good take at all. When you travel
| with large amounts of cash people ask questions, you are
| obligated to declare it when crossing borders if it's over
| certain amount(over 0,25BTC as USD will make you fill out
| declarations and it may be confiscated until you can prove that
| it is legitimately yours) depositing it to your bank account
| rings all kind of bells, the banks can refuse to work with you
| and can trigger law enforcement interest.
|
| We can be cynical about it but actually number of banks paid
| fines in the billions of dollars and they take it seriously
| now. Some hard hit banks like BNP that got fined for $9B would
| even refuse to work with cash intensive businesses.
|
| The criminals need to go through trouble of creating shell
| companies to launder or transfer money, cash is no good
| anymore.
| insert_coin wrote:
| > cash is no good anymore.
|
| Crime is gone now? What else are they going to use?
|
| Crypto is used by less than 1% of the world. All crime uses
| "cash" relatively speaking.
|
| *a lot of it is "digital" cash but still.
| NaturalPhallacy wrote:
| Only about 10% of USD physically exists:
| https://www.quora.com/How-much-US-currency-physically-
| exists...
|
| 'M0' is cash. 'M1' are bytes in bank computers.
|
| It's really not a big mental leap from USD that doesn't
| physically exist (which is 90% of USD) to crypto which
| doesn't physically exist.
| mrtksn wrote:
| That's not my argument. Crime is not gone, tools are
| changing and the enforcers are trying to catch up.
|
| Cash is now for petty criminals only. For anything beyond
| car level of money you need involvement of politicians or
| high end criminals.
|
| They tend to use gold and fake bank transactions BTW.
|
| Just today there is a trial of the Turkish bank Halk Bank
| that was allegedly caught laundering money for Iran. High
| ranking Turkish and Iranian politicians are involved, the
| funds in form of gold were transferred using private jets
| and laundered through Dubai. The defense of the person who
| run the gold operations includes Rudy Giuliani. The things
| are at that level now.
|
| Start digging from here if you want to know more:
| https://en.m.wikipedia.org/wiki/Reza_Zarrab
| throwaway6734 wrote:
| >Whatever your stance on cryptocurrencies are, what is of
| little dispute is the business opportunities they have created.
| Binance and Coinbase are large, successful companies.
|
| What business opportunities have been created outside of the
| crypto space?
|
| > i feel nations who embrace cryptocurrencies early will see
| mixed results as the landscape matures.
|
| They may also leave themselves open to these currencies being
| manipulated by foreign mal-actors
| jayd16 wrote:
| >What business opportunities have been created outside of the
| crypto space?
|
| They're probably just talking about all the pickaxe selling.
| NFTs are possibly an answer if you assume good faith and not
| just speculation.
| ac29 wrote:
| NFTs are not "outside of the crypto space".
| prox wrote:
| Indeed, not an expert... but what is a state actor stopping
| form putting extraordinary resources (say NSA for instance)
| in mining and minting to gain an advantage? And how bad is
| that?
| throwaway6734 wrote:
| It wouldn't even need to be just mining. I'm assuming there
| have to be at least a few zero days present on the asics at
| large miners. Just mucking up the network enough to scare
| enough people to panic sell could cause massive chaos.
| csomar wrote:
| > I am more confident that nations which turn their back on it,
| or shut it out completely, will see a loss of otherwise
| valuable businesses and mindshare.
|
| This is a very _under-appreciated_ point. US persons (citizens
| and companies) assume the US banking system for granted. Many
| countries (even some developed ones) do not have a developed
| banking sector and by consequence it is harder /expensive to
| make transactions, access to capital is limited and access to
| markets can be restricted which limits opportunity.
|
| Crypto-currencies requires significant expertise, much more
| than the current banking system. Countries who will attract
| these companies and knowledge will have lots of sway in the
| international economy in the future.
| arcticbull wrote:
| > Wait until you hear about cash.
|
| Oh we have don't worry. The proportion of cash used for illicit
| activities is much much lower than the proportion of crypto
| used for illicit activities. Especially once you remove
| speculation volume (which cash doesn't have). Then there's the
| whole new kind of crime it created - ransomware.
|
| Plenty of work was done to ensure tracability of cash. Take
| large amounts in or out of the country? Form. Withdraw or
| deposit large amounts? Form. Act suspicious? Form. Structuring?
| Prison.
|
| You can't really compare a system designed to circumvent
| regulations regarding transactibility to a system designed to
| provide as much oversight as is practical. They're not even in
| the same ballpark.
| AlexandrB wrote:
| > Whatever your stance on cryptocurrencies are, what is of
| little dispute is the business opportunities they have created.
| Binance and Coinbase are large, successful companies. Poloniex
| was sold for ~400M.
|
| This is the broken window fallacy writ large. The small value
| cryptocurrencies provide over other digital transaction methods
| is overshadowed by the huge inefficiencies of how transactions
| are processed via PoW. The fact that there are companies that
| have made a fortune dealing with all these "broken windows"
| doesn't change the basic fact that cryptocurrency is probably
| the least energy efficient way to move money digitally.
| zionic wrote:
| PoS is replacing PoW at scale. It's time for new arguments.
| AlexandrB wrote:
| _When_ is it replacing PoW? I 've heard this promise for
| years now. Time for new rebuttals.
| lucasverra wrote:
| Beacon chain is live with 100k validators. Merge is due
| late 2021 Sharding 12 months from now
| yunesj wrote:
| > The small value cryptocurrencies provide over other digital
| transaction methods
|
| I'm not aware of any other digital transaction methods that
| can send un-printable money besides cryptos.
|
| I think devaluing currency to inflate stocks and fund wars is
| harmful, and cryptos are a valuable solution. Although, I
| think there's better than PoW.
| AlexandrB wrote:
| These are political problems. If you think that an
| additional form of currency will solve them, I have a
| bridge to sell you. Even if you convince the US government
| to switch to BTC (this is probably a harder political
| project than defunding the defence department), I'm sure
| they'll think of _something_ if they need to fund a war or
| two. BTC would be a mere speed bump.
| yunesj wrote:
| Yes, the US can still raise funds other ways. It would
| still be preferable if they were more transparent about
| it.
|
| > Even if you convince the US government to switch to BTC
|
| There's no need for that. It would be enough for some
| people to switch to BTC. I.e., not store their money or
| denominate their salaries in USD.
|
| As things stand, most wealthy people already store their
| money in things other than USD that are somewhat less
| easy to manipulate, like stocks and commodities. It would
| be nice if this strategy were more accessible to people
| worldwide.
| arcticbull wrote:
| > I'm not aware of any other digital transaction methods
| that can send un-printable money besides cryptos.
|
| That's because it's not a useful feature heh. Money is
| meant to be a medium of exchange and temporary store of
| value. To the extent it holds its value for the duration of
| your ownership of it, it's met its goal.
| yunesj wrote:
| Sure, it's a fair argument that gold + paypal may be
| superior to bitcoin.
| arcticbull wrote:
| You can simplify this even more. Open an
| InteractiveBrokers margin account and request a debit
| card. Fund the account, purchase gold (futures, GLD,
| whatever) and spend on your IBKR debit card. This will
| pull from your margin. Your margin interest is ~1% and
| tax deductible. Settle up your account as you see fit.
| yunesj wrote:
| I use IBKR margin, but didn't realize it was tax
| deductible!? Thanks for the tip!
| arcticbull wrote:
| Yes, you can use it to offset capital gains. Also,
| depending on your largesse, consider tax-aware borrowing.
| [1]
|
| [1] https://csq.com/2018/04/geoffrey-berlin-private-
| wealth-tax-a...
| Salgat wrote:
| I don't ever see most nations willingly giving up monetary
| policy by ceding to cryptocurrencies. This is especially true
| for China and the US. They can however adopt their own version,
| where they remain the authority and would operate the nodes
| responsible for handling transactions. This would allow many of
| the advantages of cryptocurrencies while still allowing a
| country to control not only the money supply but also be able
| to audit money and (even in the cases of fraud and theft)
| return money to its rightful owners. You could even have a
| system where you can freely convert between the digital version
| and the physical cash version.
| choward wrote:
| This isn't different from what we have now with central
| banking except you threw blockchain in for some reason. What
| value does that add?
| powerapple wrote:
| I believe that is exact where the value of bitcoin is:
| because any nations will not giving up their own currency.
| Bitcoin is anti-establishment. Of course, the real test will
| only happen when some country start banning bitcoin. No one
| knows what's going to happen.
| puranjay wrote:
| It will only prove Bitoin holders right.
| arcticbull wrote:
| lol, it will prove them broke. The overwhelming majority
| of people own bitcoin because number go up. Banning it
| will make number not go up. This will cause them to
| divest. Substantially nobody is in it for the ancap
| utopia espoused by $20 transaction fees and 30 minute
| long confirmation times.
| CJefferson wrote:
| My main problem with crypto is I like the rule of law. If
| someone steals my bitcoin it's gone. Normal bank transactions
| have (imperfect) protections. There is a reason the world
| switched from storing cash, or gold, under a mattress.
|
| If a country was running on a crypto coin which had a major
| hack, it could collapse the whole countries economy.
| golergka wrote:
| > Wait until you hear about cash.
|
| I've seen the estimation that 40% of all bitcoin transactions
| are related to drugs. Hydra (russian dark web drug store) is
| still the biggest receiver of bitcoin transactions. I don't
| think that cash is anywhere close.
| notyourday wrote:
| > Wait until you hear about cash.
|
| Cash is extremely difficult to use in criminal enterprises,
| especially with the USD. Large amounts of cash are bulky due to
| $100 being the largest note. Massive amounts of cash is
| difficult to convert to/from other forms of assets due to CTR,
| SARs and fed surveillance.
|
| Cash as a vehicle for facilitating criminal activity by now is
| largely fiction. Even diamonds are easier than cash.
| spurdoman77 wrote:
| Cash is perfect for small criminals. Practically useless for
| bigger criminals.
| kelnos wrote:
| > _Whatever your stance on cryptocurrencies are, what is of
| little dispute is the business opportunities they have created.
| Binance and Coinbase are large, successful companies. Poloniex
| was sold for ~400M._
|
| I find this argument a little weird, because I think we can all
| agree that bubbles and fad tech isn't really great for society
| as a whole. If you believe cryptocurrencies aren't a fad and
| actually provide useful benefits to real people (which does
| _not_ include "we built a company that does crypto stuff and
| made a bunch of money"), then ok, fair opinion, but I don't
| share that view. To me it just looks like a big house of cards
| built on something that is fundamentally not that useful or
| valuable, but is propped up mainly by speculation. Building a
| company on top of it that is sold for $400M is great for the
| founders and investors in that company, but doesn't mean that
| crypto itself is useful for society.
|
| I apply this to other things, too... there are ton of
| lucrative, successful businesses built on top of and around
| internet advertising, but I think that entire ecosystem is a
| huge net negative for society.
| thebean11 wrote:
| Calling it a bubble is essentially an unfalsifiable
| statement, there's no way to really disprove it. Many would
| very much disagree that it is non useful, especially on a
| forward looking basis (the same way a money losing unicorn is
| still worth a billion dollars). At what point is it no longer
| a bubble?
| craig131 wrote:
| I admire that controversial opinion, but would you really be
| comfortable with a federal authority telling you which
| software on your computer is "great for society as a whole"
| and which is a fad?
| bko wrote:
| Crypto is a better version of gold and a store of wealth that
| whose supply isn't at the whims of central banks.
|
| Gold has a purpose. Central banks may pretend that gold
| serves no purpose in a modern economy, but they still hold on
| to trillions in gold. I hope eventually they'll get around to
| holding a crypto currency like Bitcoin. They're just upset
| they don't have a head start in accumulating a reserve.
| fock wrote:
| yay, now it's at the whims of connectivity to a global
| computer network and cheap energy (not only in the past,
| but also in the future).
| arcticbull wrote:
| Gold is shiny pebbles people are willing to pay money for.
| Crypto is spreadsheet cells people are willing to pay money
| for. Well, some amount of money -- mostly Tether though,
| which is likely in turn backed by the same crypto lol. It's
| really an open question just how much new real money is
| flowing into crypto.
|
| It's all pretty clear in the settlement Tether signed [1].
| Particular note are #17, #20, #36, #43-46
|
| [1] https://ag.ny.gov/sites/default/files/2021.02.17_-_sett
| lemen...
| bko wrote:
| I don't know what the point of your comment is.
|
| There is a need to have a medium of exchange for trade.
| Barter has its limitations. For all of history, people
| have created new forms of money for exchange. The primary
| characteristics you would need is scarcity, clear
| ownership, transferability and fungibility. Gold serves
| this purpose, and Bitcoin even more so.
|
| The fact that gold is a shiny pebble is not adding
| anything meaningful to the conversation.
| mbesto wrote:
| > The fact that gold is a shiny pebble is not adding
| anything meaningful to the conversation.
|
| Not the parent's argument, but _TECHNICALLY_ speaking
| Gold as a shiny pebble can be used for jewelry, wiring,
| etc. It TECHNICALLY has utility.
|
| Bitcoin has no inherent utility. ETH (and derivatives) on
| the other hand can power a smart contract which actual
| real business value, but the fact that it has a currency
| associated to it is generally meaningless.
| peytn wrote:
| If you owned all the gold, people would still want to buy
| gold. If you owned all the Bitcoin, nobody would want to
| buy Bitcoin. The only value stored is the network of
| people pumping it, and the only question is how long
| it'll take them to move on to the next thing.
| arcticbull wrote:
| Neither gold nor bitcoin are particularly good for the
| purpose you are suggesting -- that's why gold was
| replaced with fiat currency. Because fiat currency was
| better. Bitcoin chasing after gold's position is
| unfortunate because of course, fiat is better than gold.
|
| The characteristics you need for a medium of exchange
| are:
|
| - fungibility.
|
| - the ability to hold its value for exactly as long as
| you need to hold onto it. Any longer than that is a non-
| goal.
|
| - stability/predictibility.
|
| - the ability to adjust to shocks, and a changing
| population.
|
| - low cost of transactibility.
|
| Scarcity is a non-goal. Clear ownership is a non-goal
| except in as much as possession is 9/10th of the law.
|
| Basically none of these apply to gold, and basically none
| of these apply to bitcoin. That's why nobody uses it as
| such.
| bko wrote:
| The first use of gold as an exchange was 550 BC.
|
| Our fiat money has been around since the 1970s with
| staggering blowups
|
| Come back to me on 2500 years and we'll see who has the
| better track record.
| arcticbull wrote:
| Generally speaking we don't need to wait as long as the
| previous iteration existed to prove the new generation is
| successful.
|
| For instance, I think it's fair to say e-mail is a
| success, even though the first postal system was
| established under Cryus the Great in 550 BCE in Persia.
| The first e-mail was sent in 1971. Are you saying we
| won't be able to declare victory on e-mail until the year
| 4492?
| Closi wrote:
| You are right! So I should invest in emails right? I'm
| sure emails will get more valuable as time goes on.
| arcticbull wrote:
| Well I hear "bitcoin is TCP/IP" and for some reason
| people are trying to buy that lol, so can't lose.
| bko wrote:
| Sure. I think people will be sending physical mail to
| each other longer than using pop3 smtp and imap
| cslarson wrote:
| How can you not see what the importance of this new
| infrastructure? I come here and read these comments and am
| just at a loss for words at this point. Forget Bitcoin and
| look at Ethereum. This tech is so powerful I am in some ways
| scared of it and you call it a fad. The gulf between our
| interpretations drops my jaw to the floor :)
| TomSwirly wrote:
| Maybe that might make you question your assumptions?
|
| I mean, we've had a decades of cryptocurrency and just one
| actual application has arisen - crime. Money laundering,
| tax evasion, purchasing illegal items, and that sort of
| thing.
|
| When it comes down to it, cryptocurrencies say that people
| trust some obscure algorithm that almost none of them could
| evaluate over society and governments.
|
| It's a bad sign.
| graeme wrote:
| Can you name some use cases that aren't trading crypto
| derivatives or crypto debt?
|
| Ethereum is certainly more interesting than Bitcoin but the
| use cases so far seem to be more speculation.
| c01n wrote:
| Short list:
|
| - Pseudonymous Transactions - Multiple Accounts -
| International Transfers - Customization (smart contracts)
| - Micro Payments / Internet money - Privacy - Low entry
| (Phone, internet) - Peer 2 Peer and decentralized - Free
| Software - Programmable
| c01n wrote:
| - Pseudonymous Transactions / Privacy
|
| - Multiple Accounts
|
| - International Transfers
|
| - Customization (smart contracts)
|
| - Micro Payments / Internet money
|
| - Low entry (Phone, internet)
|
| - Peer 2 Peer and decentralized
|
| - Free Software
| Daishiman wrote:
| > Pseudonymous Transactions / Privacy
|
| Not really tech problems; you're bound to the limits of
| the law
|
| > International Transfers
|
| Not a tech problem; international trx are dropping in
| price as competition increases; tech doesn't change
| anything here.
|
| > Micro Payments / Internet money
|
| There is no way to scale the tech to the volume where it
| makes sense for microtransactions.
|
| I'm not really seeing these as problems fundamentally
| limited by technology.
| beambot wrote:
| Censorship-free distributed storage (using Ethereum &
| Filecoin)
| cslarson wrote:
| Sovereign identity, DAOs, NFTs (not just the art stuff
| which atm is a little cringe but game items, land
| registries, deeds), stablecoins (usdc, dai, yes there is
| also wilder experimentation here).
|
| I think people can quickly get dissuaded by some
| negatives like lack of scaling or environmental issues.
| These are real but are being solved. We really need
| communities like HN to engage because if proponents are
| right then the change will be vast and we are unprepared.
|
| My personal favorite outcome is playing out right now.
| When a tech company is successful they capture near 100%
| of the value, despite leeching content off users.
| Ethereum based projects generally share rewards with the
| community of users that make the protocol/network
| successful. Applications are forkable, not just the code
| but the community, too. The community is in control.
| viraptor wrote:
| > land registries, deeds
|
| I hope that will never happen. We really don't need
| anyone to end up in a situation where a key is lost and
| they can neither prove they own something nor sell it
| legally. Also, "transfer your home by mistake" scams. And
| have fun trying to figure out how to deal with dead
| owners.
| graeme wrote:
| And what are some example use cases you can do with those
| things, or that people are using them for? Genuinely
| asking. I see people very excited about things like DAOs,
| but most descriptions seem to be about inter crypto use
| cases.
|
| With the early internet it was easy enough to see there
| were use cases like "instantly send a letter to someone
| across the world" or "order a book not stocked at your
| local store" or "go directly to Nintendo's website and
| read their info". I remember doing this last one as a kid
| in the library and was instantly taken with the internet.
|
| What are some similar ELI5 use cases of the Ethereum
| chain and those names you mention? Other than intra
| crypto loans, derivatives etc
| Daishiman wrote:
| > Sovereign identity
|
| Not a real problem. Any civilized country has solved
| identity already.
|
| > DAOs
|
| A solution in search of a problem
|
| > NFTs
|
| Speculative. Game items, land registries and deeds are a
| solved problem. If your jurisdiction/company hasn't
| solved them already with Postgres and hardcopy it's
| because it's not interested in solving it or it's not a
| real problem, just a minor annoyance.
| ipaddr wrote:
| One use case:
|
| Buying something without a credit card online.
| graeme wrote:
| With Ethereum? That seems like one of the least
| interesting possible use cases.
|
| * For one, Bitcoin can do this too (though not in many
| places)
|
| * For two, you can't do it in many places
|
| * For three, you already can buy online with paypal,
| prepaid debit/credit, and other checkout solutions, for
| less fees. You can buy a prepaid credit card useable
| online in any convenience store for a low fee....
|
| I don't think this is what OP meant.
| BEEdwards wrote:
| And you bought the crypto itself with magic?
| dogecoinbase wrote:
| Finally, I can purchase something without recourse in the
| event that I'm defrauded.
| rudderz wrote:
| Take crypto out of the equation, what are the implications of
| the fed issuing a programmable currency? Many financial
| services would become obsolete. What do I need a stock broker
| for? What do I need a bank for? You have Wall St and other
| sophisticated investors profiteering and competing against
| the general public, devaluing our purchasing power, making
| leveraged trades because they know the public will hold the
| bag. It's a system that exists to favor the few and it's time
| to disrupt the orgy.
| wayoutthere wrote:
| If the fed did a cryptocurrency, it would be backed by the
| full might of the US Government -- and all the things that
| the government can do if it decides to print more money.
| This also includes military and police powers.
|
| Which brings me to the other point: currencies are governed
| at both ends; at issuance and at use. If you use a crypto
| that's not approved, the government can simply arrest you
| for using one of its competitors. The treasury could likely
| do this without even needing to issue new laws, just new
| guidance. Governance is the reason for the existence of the
| US Treasury and Federal Reserve. It's a core feature of any
| currency and the government isn't going to abandon that
| lever of hard power. They're only going to do a
| cryptocurrency that gives them _more_ power, not less.
|
| All of the stakeholders you list have a vested interest in
| not being disintermediated. They're also deeply embedded in
| policy creation. I can't help but notice the way crypto
| evangelists speak of crypto is the way leftists speak of
| Marx: in very vague terms outlining a utopian vision of a
| new economic paradigm that is frustrated by the sticky
| realities of the momentum of money and power. The reality
| of Marxism is different from the utopia, as would be the
| realities of central bank crypto (hint: it's gonna be
| authoritarian af).
| loceng wrote:
| I can see value in democratic nations agreeing to use a
| single global blockchain they've created, without an MLM-
| Ponzi structure redistributing wealth simply because of
| adoption/use (consensus by agreement, not through
| greed/financial gain).
| wayoutthere wrote:
| Totally would never happen; it would require too many
| people to give up too much power. See also Brexit (the UK
| never fully integrated into the EU over this exact
| currency control issue).
| vinay427 wrote:
| I almost think the several countries that remain in the
| EU which choose to avoid or delay joining the Eurozone
| are better examples. While the UK evidently had other
| concerns with EU membership besides the Euro, even pro-EU
| governments seem to encounter opposition when it comes to
| the currency union.
|
| https://en.wikipedia.org/wiki/Eurozone
| stretchwithme wrote:
| I agree. That's why China is doing it.
| mbesto wrote:
| > It's a system that exists to favor the few and it's time
| to disrupt the orgy.
|
| I've got news for you:
|
| _BTC: 2% of the anonymous ownership accounts that can be
| tracked on the cryptocurrency 's blockchain control 95%[0]_
|
| _Just 376 People Found to Own a Third of All Ether
| Cryptocurrency_
|
| [0] - https://www.bloomberg.com/news/articles/2020-11-18/bi
| tcoin-w...
|
| [1] - https://www.bloomberg.com/news/articles/2019-05-15/ju
| st-376-...
| KptMarchewa wrote:
| Why are you asking this question here? While I agree with
| this idea, it has nothing to do with crypto.
| heMan09 wrote:
| Humanity already solved this problem:
| https://en.m.wikipedia.org/wiki/Tax
|
| Most white collar crime is obvious and where the bodies are
| buried is largely known.
|
| There's simply no political will to do anything about it.
|
| Crypto becoming mainstream isn't going to change
| indifferent minds.
|
| Physical reality is a thing. Burying our heads in ephemeral
| concepts is distraction, not change.
| stretchwithme wrote:
| We need to fix how we select our representation.
|
| Winner-take-all elections lead to weak control over who
| represents your interests. It's like being party to a
| lawsuit where one attorney represents all parties.
|
| And you can't fire your attorney for four years.
|
| In the single attorney situation, SELECTING the attorney
| would be the major struggle. And then that attorney has
| all the power. The parties would then have to lobby the
| attorney to win the case.
|
| And that's why our elections have become such a struggle
| and why lobbyists can buy votes.
|
| And that's why Wall street firms can call up their
| friends and get a multi-billion dollar bailout.
| hatsunearu wrote:
| The majority of economic activity is not "programmable"--if
| I order a ship load of steel from some country, how is that
| contract going to be enforceable/verifiable with
| cryptoeconomic techniques?
| pcthrowaway wrote:
| That's not programmable today, but may be in the future.
|
| Presumably the shipment has a series of checkpoints,
| which add some amount of traceability. There's also the
| potential for insurance for blockchain contracts.
|
| I only recently learned about oracles, but I suspect
| we're only getting started on unlocking the potential of
| blockchain.
|
| If there are oracles making the progress at each
| checkpoint along the way available from the blockchain,
| and insurance contracts for potential disruptions at each
| stage, your contract can ensure payment on delivery, and
| the supplier can be insured against any disruptions.
| demosito666 wrote:
| Economic != financial, which was the point of the parent
| I believe.
| LB232323 wrote:
| Finance is one of the largest sectors of the US economy,
| it is central to its role in leading the world economy.
|
| Additionally, finance is what controls and directs the
| economy. It is the business of money itself, in both the
| public and private sector.
|
| Banks play a central role to any economy. Digital
| currencies can be centralized and controlled in the same
| way as any state owned enterpeise.
| leppr wrote:
| Cryptocurrency/web3 is at its core just technology.
| Fundamentally, the technology is still not that far advanced
| from the early Bitcoin days, but the little that is currently
| implemented successfully allows for ponzis and gambling.
| Cryptocurrencies currently trade for over $2 trillion, most
| of that value may indeed be a net negative for society, but
| that doesn't say anything about the core technology in
| itself. If cryptocurrency didn't exist, people would be
| trading tulip bulbs or pumping stocks like TSLA to $700B (oh
| wait...).
|
| This may be a relatively lawless environment, but as for its
| current atmosphere, blame the world's central banks, not the
| crypto builders who are mostly as disgusted by the current
| situation as sidelined observers.
|
| Decentralized networks have the potential to resolve many of
| the issues we techies love to complain about. Only a tiny
| percentage of that $2 trillion is allocated to teams actually
| working on solving these issues (Binance and Coinbase
| definitely aren't a part of it), so please try to reserve
| your judgment when you see developments coming out of crypto.
| Most of it is under-developed, over-hyped, and just an
| extension of the tech-bubble ponzi, but some of it will
| actually change the world. In the same way Tesla is actually
| positive to society overall and we shouldn't shun their cars
| just because the company's stock is a meme used in zero-sum-
| game gambling.
| Daishiman wrote:
| > Decentralized networks have the potential to resolve many
| of the issues we techies love to complain about.
|
| I continue to hear this yet I never get a _single_
| convincing example from DeFi advocates.
| admg wrote:
| Totally get your point here, however the counter that always
| gets me is the rate of quantitative easing in the US/UK. Not
| sure on accuracy of this but I've seen figures(cityam
| website) saying around 18% of all US dollars were created in
| 2020. There's a good argument that it's safer financially to
| put money into crypto. Personally I feel quite unsettled with
| both traditional finance and crypto at the moment.
| tiborsaas wrote:
| Blockchain tech is a next generation internet still in its
| early days. I don't think it will go away. What do you think
| these networks will look like in 20 years?
|
| It might be a negative for society now (I assume you are
| referring to the shady nature of using it as an alt
| currency), but it's precisely the tech you need to provide an
| alternative against Facebook or other walled gardens many
| people love to hate on here.
|
| It solves multiple problems at the same time. Content
| creators can get paid by design, tech is open an transparent
| and scalable. It's unlike anything we've seen before.
| Jasper_ wrote:
| > What do you think these networks will look like in 20
| years?
|
| Exactly the same as it looks today. Because nothing has
| changed in the last 15 years either (Bitcoin was released
| in 2006).
|
| > it's precisely the tech you need to provide an
| alternative against Facebook or other walled gardens many
| people love to hate on here.
|
| How does cryptocurrency help with any of that?
|
| > tech is open an transparent and scalable.
|
| Citation needed.
| tiborsaas wrote:
| Just as an example, have you heard of smart contracts?
| There's a cambrian explosion happening now among
| networks, everybody tweaks something to be different from
| others. I suggest you to take a look around, there's a
| shocking diversity.
|
| > How does cryptocurrency help with any of that?
|
| How can a globally spanning Turing complete computer
| help? I don't know, but we will see attempts.
|
| > Citation needed.
|
| Haha, I always forget we are at academic level of
| discussions :)
|
| But for fun's sake, go to https://coinmarketcap.com/
| click a random currency and click source code / read the
| whitepaper.
|
| Smart contracts deployed to the networks are also open to
| be inspected, here, take a look: https://etherscan.io/add
| ress/0x00c83aecc790e8a4453e5dd3b0b4b...
| dylkil wrote:
| > Bitcoin was released in 2006
|
| It wasnt. It was released 9 January 2009
| paulpan wrote:
| The possibility of cryptocurrencies being banned in the U.S. is
| probably greater than what many people realize, especially
| those current holders. At least an attempted ban not unlike
| what happened in India.
|
| While the whole "illicit transaction" argument is bullshit,
| Yellen and other Treasury officials probably realize that
| cryptocurrencies like Bitcoin could pose an existential threat
| to the U.S. dollar and needs to be snuffed out early. Companies
| like Microstrategy and Tesla have already began using them as
| substitutes for U.S. treasuries. Together with the decline of
| oil dependency and the petrodollar, a day will come when the de
| facto currency is no longer the U.S. dollar and with it goes
| the world currency status. Yellen's department, the U.S.
| Treasury, would become a minor department and a shadow of its
| current self.
|
| An apt analogy could be the U.S. government is like Nokia in
| the early days of the iPhone.
|
| That said, a U.S. ban may actually unintentionally lead to
| greater adoption as it effectively means cryptocurrencies
| withstood and prevailed an attack by the world's foremost
| national power.
| Swizec wrote:
| > it effectively means cryptocurrencies withstood and
| prevailed an attack by the world's foremost national power
|
| That's a big if.
|
| For now the USA remains the world's richest and biggest
| unified market. Surviving a ban from said market is not a
| given for any product. In fact I imagine it's a death
| sentence for most global products.
| jayd16 wrote:
| >Wait until you hear about cash.
|
| What if I told you the Treasury Secretary doesn't think your
| book keeping system in the same as legal tender?
| Consultant32452 wrote:
| The people in power are balancing the business opportunities
| against their own loss of control over the issuance of currency
| and some financial market functionalities (with smart
| contracts, etc.). I think it's a given they will always choose
| their own power over the business opportunities of others.
| maerF0x0 wrote:
| > Wait until you hear about cash.
|
| anecdote time: I once travelled to Vietnam for a vacation,
| people in vietnam prefer $100 bills because they're easier to
| use for hiding wealth, transporting cross border, and other
| slightly less than legal reasons. Additionally it's the
| preferred currency of criminals in the country too (so I
| heard). They will even pay higher exchange rates for ones in
| better condition or with more anti-counterfeiting features
|
| So yeah, USD is used for a lot of crime globally.
|
| EDIT: changed "anti-moneylaundering" to "anti-counterfeiting"
| by suggestion
| nerfhammer wrote:
| they prefer USD in parts in SE Asia because the local
| currency has experienced hyperinflation in the past. the
| problem is there is no easy way for them to exchange overly
| worn bills back to the Federal Reserve, so they have like
| rotting old falling-apart $1 bills that look like they're on
| the verge of disintegrating.
| retrac wrote:
| In Canada, organized crime holds on to the $1000 notes.
| They're the largest value banknote commonly used in the West
| in the last few decades. They were last issued in 1992 and
| then officially withdrawn in 2000 for concerns over
| moneylaundering. They're not legal tender anymore, but can be
| exchanged at the bank. There's about $1 billion in
| circulation, and that will likely remain true for a long time
| yet. They move in a closed loop in the drug trade, stuffed in
| briefcases and in safes of criminals who effectively act as
| banks settling debts. No one wants to cash them because of
| the risk of being traced, but because they can be cashed in
| theory, they retain full value. The EUR500 is slowly
| displacing them, in Canada and abroad.
|
| I saw one as a child. Most Canadians have not, as far as I
| know. An acquaintance of a friend of my father's had several,
| and my father was interested in numismatics, so he traded one
| for $100s. The implications of the man who had some "pinkies"
| (called so for their colour) being a biker with a facial scar
| didn't click into place until I was much older.
| tonfa wrote:
| CHF still has 1k banknote (and with negative interest rates
| this with a safe might be a better option than a bank
| account).
| noxer wrote:
| Hows that better than a bank account? You can hold CHF on
| a bank account as well and it keeps the same value as the
| note. (both lose value due to inflation)
|
| Also dont forget insurance for banknotes in a safe.
| bellyfullofbac wrote:
| > Hows that better than a bank account?
|
| GP said it, negative interest rate, i.e. the bank
| charging you to hold on to your money when you have more
| than a certain amount (was it 100k or 25k CHF).
|
| So if you put in 100k in the bank and wait a year, you'll
| be able to withdraw maybe 99.8k CHF. If you hoard 100x
| 1000 CHF notes, you'll still have 100k CHF. Sure in 1
| year those 100k CHF will probably buy less Big Macs then
| the present, but the 200 CHF loss will mean even less Big
| Macs.
| noxer wrote:
| Its meaningless, if someone puts over 100k on a bank
| account where inflation eats it away they probably dont
| care about interest rates and its just a fraction of
| someone holdings that is deposited at super low risk/high
| availability. This only makes sense if you have way more
| and the rest is actually invested and grows. Storing you
| whole savings like that is rather stupid regardless of if
| you reach the limit and pay interest rates or not. and
| putting it as banknotes in a safe is similar stupid
| potentially even more stupid because there is real chance
| you physically lose it all.
| bellyfullofbac wrote:
| Yes there are saner things to do with 100k, but GP was
| just comparing the 2 options, and you asked "Hows that
| better than a bank account?" and I answered...
| noxer wrote:
| Its clearly not better, its worse. You exchange possible
| interest rates with a rather incalculable risk of total
| loss or some absurd insurance fees which are likely to be
| higher. If putting paper in a safe would be better then
| someone (probably the bank itself) would offer that as a
| service. If they cant make it lucrative at scale you
| certainly cant either.
| bellyfullofbac wrote:
| Sigh, you made me regret responding to your initial
| question.
|
| FWIW commercial banks have had negative interest rates
| for a few years now.
|
| https://www.truewealth.ch/en/blog/negative-interest-
| switzerl...
| asah wrote:
| "with more anti-laundering features" ? did you mean anti-
| counterfeiting? just checking...
| maerF0x0 wrote:
| I think so. Basically things to make it harder to fake
| them.
|
| Changed original post
| puranjay wrote:
| In Uzbekistan, I saw a disproportionately large number of
| people with gold teeth. When I asked my host about it, he
| said that that was the older Soviet-era generation that would
| get gold teeth so that they could carry some useful wealth
| with them in case they had to flee their homes all of a
| sudden.
| BobbyJo wrote:
| If the sum total of the wealth you are trying to hide is a in
| the thousands, you aren't who the government is concerned
| about. At least, not enough for policy changes. So, while
| cash is likely far more prevalently use in crime, you're
| talking about the huge long tail of low level drug dealers
| and smugglers, not the oligarchs and money launderers.
|
| Deposited/electronic money tends to be necessary when you hit
| a million plus. At that point cash sucks and is super risky
| to hold.
| maerF0x0 wrote:
| fun fact, each bill is 1g. So $1M in 100s is 10KG (or
| 22LBs) . Plus the briefcase and hand cuffs if we're going
| movie style.
| Salgat wrote:
| That doesn't stop cryptocoins from being the currency of
| choice for criminals that need completely anonymous digital
| transactions, which is why they are the standard for the
| online black market and for ransomware. It's hard to argue of
| the advantages of cryptocoins while in the same breathe
| arguing that cash is better for crime.
|
| The bigger issue is that very few people want to hold onto
| cryptocoins if their goal is to spend the money. You can't
| really buy much directly with cryptocoins in comparison to
| cash which is universal. I can't use it at Walmart, I can't
| use it at McDonalds, I can't use it to buy a house, I can't
| use it damn near anywhere. The only way I can use it is
| through a scheme that converts it to cash first. No criminal
| wants to add that papertrail step to their operations.
| nullifidian wrote:
| >Wait until you hear about cash.
|
| Tell me when 95+% of cash transactions don't serve any good
| purpose like it currently is with cryptocurrencies
| (speculation, waste of energy, malware ransoms, money
| laundering, hiding wealth / tax evasion, other illicit use)
| devops000 wrote:
| Yeah, they say it every week.
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