[HN Gopher] Crypto community slams 'disastrous' new amendment to...
___________________________________________________________________
Crypto community slams 'disastrous' new amendment to big
infrastructure bill
Author : belter
Score : 180 points
Date : 2021-08-07 11:03 UTC (11 hours ago)
(HTM) web link (techcrunch.com)
(TXT) w3m dump (techcrunch.com)
| eingaeKaiy8ujie wrote:
| Is it possible to for cryptocurrency projects to rename proof-of-
| stake to something like proof-of-work 2.0 and validators to
| miners to get around this? Are these terms clearly defined
| anywhere?
| throwthere wrote:
| The proof-of-work versus proof-of-stake thing is kind of weird.
| Some people here and elsewhere are saying the gov shouldn't add
| different reporting requirements to them because the
| environmental consequences are so different.
|
| I guess you can get around that by targeting both equally. If
| you're concerned about reporting-- well, just because you're
| using a technology that technically can be anonymous doesn't mean
| you're legally entitled to anonymity.
| redisman wrote:
| That's how it was before the BTC whales got Portman to exclude
| them
| BLKNSLVR wrote:
| I have much the same feeling about this as when I realised that
| journalists aren't actually experts in any of the topics about
| which they write stories that society-as-a-whole take as the
| whole truth.
|
| It took me a long time to know what the phrase "going off half-
| cocked" meant. This is an excellent example.
|
| It also feels quite exemplary of some of the recent discussion on
| HN of the stereotypical situation where management makes
| decisions on a very simplified understanding of a situation and
| will remain in stoic avoidance of having any exposure to the
| details that may impinge upon their chosen world view.
|
| Although maybe not quite to this scale[0][1].
|
| [0]: https://www.newscientist.com/article/2140747-laws-of-
| mathema...
|
| [1]: https://www.newscientist.com/article/2140747-laws-of-
| mathema...
| sebow wrote:
| Yea but 'orange man bad so it's okay as long as he's not the
| president'.
|
| On a more serious note since it's inevitable going into politics,
| the fact that some people call this 'Unintended consequences',
| like this article, it's very wishful thinking at best.(By the way
| things would have not stayed much better if Biden hadn't won,
| maybe different approaches.)
|
| These are not coincidences or 'unintended effects'.The purpose
| for _them is clear, while it may not be for the average citizen:
| trace money, impose control of the industry through
| stablecoins/regulations/&fees/etc.What should concern more people
| is also the fact that covid is used politically to delve into the
| acceptance of these measures by the majority of the population.
|
| Yes it's pretensed under 'protection against drugs/illegal
| activities/pedos/whateverthefuck' but 'remember we're gonna do it
| this time, we're eradicating all evil' - said every government
| while achieving ~nothing, always.
| papito wrote:
| This is puzzling to me because all this effort would have been
| more effective if it were spent on fighting the actual problem -
| people becoming filthy rich and then essentially leaving our
| system of government and taxation.
|
| Fighting tax loopholes increases the revenue without "tax-
| increase" optics, and it's extremely popular.
|
| This is happening because our system is completely broken beyond
| the point of return. Once wealth takes hold of law-making powers,
| that's it.
|
| I guess I answered my own question.
| mule1 wrote:
| It is baffling how lawmakers who have so little understanding of
| the technology write these things into law.
|
| Software should be protected with the same rights we have with
| speech. If the Wyden/Toomey/Loomis amendment doesn't pass today
| this will effectively censor and control the code that an
| American software dev would have to write to comply with proper
| reporting. This bill, if passed, should be taken to the courts.
| marcinzm wrote:
| >Software should be protected with the same rights we have with
| speech.
|
| ... you do realize just how many restrictions exist and have
| historically existed on speech, right?
|
| https://en.wikipedia.org/wiki/Censorship_in_the_United_State...
| dosman33 wrote:
| You're suggesting this is an accident. Lawmakers don't write
| any laws any more, that happens on K-Street by lobbyists. But
| the same idea applies to whoever is writing these horrific
| things. We're still living with the DMCA all these years later
| too.
| kktkti9 wrote:
| It's a shared planet and resources but unfortunately you don't
| own any of it.
|
| Political ownership calls the shots. Might look different if
| the politically detached organized against rent seeking and
| monopoly but you're all busy building rent seeking startups,
| easily monopolized blockchains for pump and dumpers funded by
| nation states.
|
| What a shock politics are going fascist.
|
| Remember when taxes were high and people were politically
| engaged, America was held up as a haven.
|
| Now it's mocked as a shit hole.
| glenvdb wrote:
| > It is baffling how lawmakers who have so little understanding
| of the technology write these things into law.
|
| And this happens constantly, on all types of things, not just
| technology.
| pavlov wrote:
| _> "Software should be protected with the same rights we have
| with speech."_
|
| And also regulated the same way as anything else. If you're
| operating as an unlicensed money transmitter, you can't pretend
| that it's legit because your ledgers are printed and therefore
| protected by the First Amendment. Same applies to "but it's
| just code".
| Taek wrote:
| Agreed, but the current clause in the infrastructure bill is
| not about regulating unlicensed money transmitters, the
| wording of the bill is extremely broad and covers everyone
| who writes any type of software that handles digital assets,
| whether or not the author of that code is operating anything.
|
| It's basically saying "if you've made a pull request to the
| bitcoin-core codebase, even just as a bugfix, you may be
| responsible for providing KYC'd information on all users of
| Bitcoin and on all Bitcoin transactions, regardless of where
| they happen or what your relationship to those people is".
|
| Which is why the entire crypto ecosystem is up in arms. This
| bill is an extreme over-reach and would threaten the
| viability of essentially all crypto startups in the entire
| US.
| speeder wrote:
| The bill is also about "digital assets" and previously even
| in-game currency has been ruled as such (for example World
| of Warcraft gold, Second Life currency to buy land,
| etc...).
|
| It also may apply to other non-crypto digital money,
| although that might be the point of the bill, since it
| would allow the US more easily to chase anyone evading its
| sanctions (for example: China is creating digital currency,
| Iran has some ideas too, they could use this to ignore
| SWIFT and thus ignore sanctions, this bill would allow US
| to sanction that thing too)
| brotherofsteel wrote:
| Why should the transmission of money require a license?
| otterley wrote:
| Because money laundering.
| brotherofsteel wrote:
| What about it?
| otterley wrote:
| See, e.g., https://fas.org/sgp/crs/misc/R46486.pdf and ht
| tps://www.goodwinlaw.com/~/media/Files/Publications/Attor
| n...
|
| Money transfer fraud also goes all the way back to
| "steamship agents" in the early 20th century. See, e.g.,
| https://digital.library.temple.edu/digital/collection/p16
| 002...
| IfOnlyYouKnew wrote:
| It's baffling how people here continue to insist that anybody
| disagreeing with them must be stupid.
|
| More specifically:
|
| > this will effectively censor and control the code that an
| American software dev would have to write to comply with proper
| reporting
|
| The idea that software today isn't _already_ , and has been
| from the times when bugs were actual insects, been the subject
| of (or had to account for) regulation is simply absurd.
|
| As just the most obvious example, the financial sector is
| heavily regulated, and that includes the software, from KYC
| rules similar to those now proposed for cryptocurrencies, to
| endless requirements for documentation and archival or the
| exact prescription of the algorithm to be used to settle
| transactions.
|
| The software in your car, plane, phone, or nuclear plant is
| required to follow a few dozen regulations, ISO standards, and
| _best practice_ standards elevated to requirements. Every
| website accepting payments must implement some minimum of
| consumer and data protection. Your emails should respect the
| Oxford Dictionary and The New York Times Manual of Style, and
| the ADA may or may not include some requirements, although I'm
| not sure how binding they are.
|
| What's happening here is the collision of reality with two
| fundamental misunderstandings in the crypto community: first,
| they considered themselves valiant warriors challenging the
| FED/$/governments, certain to be immediately targeted by "the
| establishment" trying to defend its mighty power. Then, they
| expected to win that fight with superior technology. Or, as
| seems to be happening here, the idea that "it's online" and
| thereby outside the jurisdiction of the law.
|
| What happened was that for a decade or so, "the establishment"
| reacted with some mixture of mild interest, bemused looks, and
| just not giving a shit. Then, when cryptocurrencies had proven
| worthless except for scams, tax evasion, and CO_2 production,
| they started cutting it down to size, with maybe a few weeks'
| effort at the SEC and probably half a dozen backbenchers'
| amendments to the "Stuff We Should Do IDK Could Start To Get
| Annoying Act of 2022".
|
| I guess what will be most annoying, besides being the last fool
| sitting on a million $' worth of random strings, is how
| maddeningly unspectacular the end will be.
| mule1 wrote:
| Do you sincerely think these 70 year old politicians
| understand the technology and implications? There can be
| varying amounts of regulation and oversight for software, but
| the whole point of a decentralized crypto currency is it's
| ungovernable.
|
| If you're for this increased regulation fine, just understand
| it will push innovation and capital elsewhere in the world.
| And despite what you may want, bitcoin will not die.
| IfOnlyYouKnew wrote:
| Do you sincerely believe these 70 year old politicians
| write these amendments themselves, without any input from
| an army of underpaid graduates of Harvard Law and Caltech,
| or the ability to call Elon Musk whenever they are having
| trouble setting up their granddaughter's bottle rocket?
| naasking wrote:
| Except they're not calling Elon Musk either, because Wall
| Street is sitting right next to them telling them what to
| type in order to protect their vested interests.
| bishoprook2 wrote:
| >Do you sincerely think these 70 year old politicians
| understand the technology and implications?
|
| Politicians of any age aren't domain experts and don't
| appear to be any smarter than they have to be to get and
| hold office. Judging from reading the writings from
| politicians of yore, I do have to say that the better minds
| in Congress can't compare to their 19th C. equivalents. It
| could simply be that a classical education served as a sort
| of filter.
|
| As far as implications, humans are notably bad at that
| generally, whether it's tax law or something that involves
| those computer things. The laws of unintended consequences
| continue on, but that never stopped the writing (by
| Congressional staff) of more and more rules for us all.
| imtringued wrote:
| >If you're for this increased regulation fine, just
| understand it will push innovation and capital elsewhere in
| the world.
|
| What does this even mean? What innovation did Bitcoin bring
| to the world other than an easy way to bypass government
| control? That cat and mouse game has existed as long as
| governments existed. This only helps if you are fleeing
| from a worse government to a better government. Completely
| avoiding governments is impossible. Even on El Salvador
| Bitcoin acceptance depends on the government.
|
| Pushing capital doesn't even make any sense. What are you
| going to do with all your "Bitcoin" capital if nobody is
| trading their USD for BTC? Is the economy of El Salvador
| really powerful enough to counteract the loss of USA as
| your trading partner? USD and BTC are just numbers on a
| balance sheet. You still need to convince people in the
| real world to give up their real wealth in exchange for it.
| For the USD it's pretty obvious. People pay their taxes and
| debts in USD. If the number of people doing that is
| shrinking then the amount of real wealth you can extract
| will shrink. That also applies to BTC. It's not like moving
| BTC from USA to El Salvador will also move factories (you
| know, the capital in capitalism) there.
| mule1 wrote:
| Bitcoin brought a trustless way of moving capital or
| digital property to any location throughout the world
| with no intermediary.
|
| Today it might just be El Salvador but bet on more
| countries joining the network based off of the game
| theory of the network. This innovation is profound and
| will revolutionize economies in the 21st century leading
| to better allocation of capital and the world finally
| getting off of the petrodollar.
| pyrale wrote:
| > but the whole point of a decentralized crypto currency is
| it's ungovernable.
|
| Why should governments care about opinions from the crypto
| industry, if the whole point is to evade legislation?
| jl2718 wrote:
| Not true. With the notable exception of malware and an
| ambiguous thin line on cracking software, these regulations
| only apply to operational facilitation, usually requiring
| financial participation in the activity. Of course when the
| activity is associated with terrorism, treason, or 'crimes
| against humanity', almost anything goes. Admittedly this
| could be a very wide net, as we saw with crypto regulation in
| the 90s, although I don't know that any open source
| contributors were prosecuted.
|
| But, reality check, it will not be a matter of laws once the
| threat becomes existential.
| prirun wrote:
| "It is baffling how lawmakers who have so little understanding
| of the technology write these things into law."
|
| It's actually easy to explain: lawmakers don't write laws;
| lobbyists write laws and lawmakers rubberstamp them. Lawmakers
| don't even _read_ laws, eg, they routinely vote on legislation
| that is hundreds of pages long that was modified and printed
| the night before they voted on it.
| JumpCrisscross wrote:
| > _lawmakers don 't write laws; lobbyists write laws and
| lawmakers rubberstamp them_
|
| You don't want generalist lawyers to write laws. You don't
| want specialists to write laws and then have generalists
| debate them, since apparently the current multi-week
| unfinished legislative process is rubber stamping to you.
| gigatexal wrote:
| Crypto folks crying is the new sugar. ;)
| jacoblambda wrote:
| I don't get what the hate boner for crypto adds to this
| conversation?
|
| The original wording in the bill and the Warner amendment are
| horrific overreaches that should be severely concerning. They
| would render anyone who hosts a validator node (aka a full
| cryptocurrency node regardless of if you are mining or running
| a stake pool or just using the network) as a traditional
| financial broker with all the regulatory oversight, KYC, and
| tax compliance responsibilities that comes with. Additionally,
| any developer who writes software for the cryptocurrency space
| would also be included in that.
|
| The Warner amendment opens a whole new can of worms but on top
| of that it explicitly excludes PoW miners (but not validator
| nodes or SW devs) which would near guaranteed kill any
| alternative consensus protocol development in the US (and
| likely globally due to the tendency for other nations to follow
| the US's stance on financial decisions).
|
| The complete infeasibility of this would put a defacto ban on
| anyone operating any decentralised software in the US as the
| wording includes anybody who develops or operates effectively
| any software that "facilitates financial transactions". If this
| was a reasonable move towards regulatory compliance that would
| be one thing but the wording here is mutually incompatible with
| the operation of effectively all cryptocurrency and a
| significant portion of federated or decentralised software.
| gigatexal wrote:
| Crypto coins are nothing but Ponzi schemes. Wake me up when
| their value is not tied to how many dollars they buy or used
| for ransom payments or dark-web payments.
|
| Blockchain though that's interesting.
|
| The coins have been around for years and years and have not
| had much success with greater adoption other than another
| asset class to speculate with. I submit the utility of crypto
| in coins is zero but the blockchain might be marginally above
| zero.
|
| And all this will lead to is crypto coins backed by
| governments built on blockchains where citizens of said
| governments will be coerced into using because what person is
| outside of the jurisdiction of their government? The e-yuan
| and the e-dollar are coming and each will be controlled by a
| central bank and fiat currency 2.0 will be here and the silly
| anarcho-capitalist utopia of the crypto hippies will die out
| to pragmatism.
|
| So yes, crypto-bull tears are sweet because crypto coins are
| inherently useless.
| sakopov wrote:
| > I submit the utility of crypto in coins is zero but the
| blockchain might be marginally above zero.
|
| I disagree. If blockchain had such amazing utility we'd be
| seeing it successfully applied in different technology
| sectors, but it isn't despite how long it's been around.
| It's just a glorified database. In fact, I don't think a
| blockchain is worthy of any praise without crypto which
| allows individuals to transact on new basis of trust. This
| is the innovation, not blockchain.
| cratermoon wrote:
| There's a vast space between "marginally above zero" and
| "amazing utility".
| gigatexal wrote:
| Also "hate-boner" is hilarious. I'm going to bookmark that
| for later.
| djohnston wrote:
| Why is crypto even part of an infrastructure bill? If you want to
| pay for the bridges and stuff just fix all the corporate tax
| loopholes that add up to more money anyway.
| akeck wrote:
| I may be incorrect, but I think there's a section that updates
| parts of the tax code to pay for it. I think the crypto
| language got slipped in there.
| sakopov wrote:
| These loopholes have been around for decades with little
| interest from either side of the political spectrum to address
| them. They're clearly beneficial. Hence, it's much easier to
| just drain retail investors who have been very creative at
| generating wealth and finding investment opportunities lately.
| I'd say more so than Wall St.
| frankbreetz wrote:
| Why would fixing corporate tax loopholes be part of
| infrastructure? Seems as arbitrary as taxing crypto. They
| should really do both.
| runbathtime wrote:
| Instead of trying to pass an amendment to the bill just for
| crypto they should be against passing the entire bill. What
| hypocrites- they do not care about freedom, only about what is
| good for their industry.
|
| Also, it is clear that congress could care less about
| understanding what crypto really is in a deep way. They only care
| about using power and extracting their rents.
| thysultan wrote:
| (cough cough) hAve fUn stAying p0or...
| timbit42 wrote:
| Have fun watching your fiat lose value to inflation and the
| printing of trillions of dollars every year to keep the ponzi
| scheme going. Then have fun watching the ponzi scheme collapse
| and your fiat becoming worthless.
| imtringued wrote:
| What an amusing comment! Fiat is worthless and everyone knows
| that. It's just an entry in a balance sheet. Wealth doesn't
| exist in the balance sheet. The balance sheet merely
| allocates wealth. Inflation can only hurt the balance sheet
| if it results in people abandoning the instrument. Inflation
| doesn't destroy real wealth. Deflation doesn't create real
| wealth.
|
| Inflation causes people to flee into the real world. They
| instinctively create durable real wealth as a result of
| inflation because the real world degrades slower than money.
|
| Deflation causes people to flee the real world and seek
| safety in the balance sheet. Their allocation of resources
| increases simply because the rules of the balance sheet say
| so. In fact, people are incentivized to destroy real wealth
| early as the balance sheet lets their allocated share of
| wealth grow faster than if they put in the effort to create
| real wealth.
|
| It's the gold standard that collapsed under deflation and if
| fiat were to collapse today, it would again collapse under
| deflation.
| PragmaticPulp wrote:
| > Have fun watching your fiat lose value to inflation
|
| Where did crypto fans get this weird idea that the only two
| options for storing wealth are fiat cash or cryptocurrency?
|
| It's bizarre that these crypto investors think anyone with
| significant wealth is keeping it in a bank account earning
| 0.05% APY and losing to inflation. I suspect many of them
| aren't coming from backgrounds with much, or maybe any,
| education about basic personal finance.
|
| I don't understand how these crypto people can talk about
| their crypto prices all day in terms of fiat dollar value,
| yet not realize that we do the same thing for stocks, bonds,
| real estate, and other assets too.
|
| This idea that crypto is the only way to escape inflation is
| one of the weirdest and most easily disprovable myths, but
| every crypto thread is full of crypto holders who want to
| believe it's true. It's also silly to watch the proliferation
| of ever-increasing numbers of crypto currencies and crypto
| assets being generated out of thin air being willfully
| ignored in the money printing conversations. Do people really
| not understand that crypto currencies are being printed and
| injected into the crypto ecosystem all the time?
| mouzogu wrote:
| > ...real estate, and other assets too.
|
| This is why i "invest" in crypto. Because people have been
| treating real estate as investment and i'ts gone too far.
|
| crypto is pretty much the ONLY way i will ever afford a
| home without taking on soul destroying debt.
| afrodc_ wrote:
| Can you expand on this? What about crypto will make it
| such that you can afford a home? That more people
| throwing in more money will increase your valuation such
| that you can exit to fiat and leave the bag for someone
| else to hold for them to hope people throw in more fiat?
| ajkdhcb2 wrote:
| The issue is that people are forced to hold cash, and this
| disproportionately impacts the low class that are not
| financially educated and do not own or understand stocks,
| bonds, real estate. Inflationary currency is a class
| warfare attack on the poor. Stocks, bonds, real estate are
| not a potential replacement to fix this malicious situation
| because they are not suitable for transactions. It also
| allows creep into many metrics such as minimum wage which
| are not fairly adjusted.
|
| https://wtfhappenedin1971.com/
| imtringued wrote:
| Inflation has been at roughly 2% for 20 years. It's been
| below 5% for at least 40 years. If high inflation is
| really that bad for the "low class" then how come they
| are doing so poorly despite avoiding it for so long?
| cratermoon wrote:
| Your insight is doubly poignant because even though
| inflation has been thoroughly throttled for most of the
| time Paul Graham has been alive, the average American
| worker _still_ somehow has ended up earning less, in
| inflation adjusted dollars, than 40 years ago.
| https://www.pewresearch.org/fact-tank/2018/08/07/for-
| most-us...
|
| Think about that. In 40 years the average worker hasn't
| even gotten a 5% raise.
| afrodc_ wrote:
| So that points to it not being a fiat currency issue, but
| more something along the lines of labor exploitation?
| Excluding some industries, there has been no forcing
| factor to increase wages and the outsourcing of labor
| just taking money off the table entirely. That's in stark
| contrast to incredible year over year profits for corps.
| cratermoon wrote:
| > something along the lines of labor exploitation
|
| That's a gentle way of putting it, but essentially
| correct.
| zepolen wrote:
| While it's not wrong that there are other options for
| storing wealth, crypto is the first one that is easily
| transferable across borders and thus far has shown to be
| resilient at not being controllable by government.
|
| Multiple attempts have been made over a decade to control
| crypto. The most recent China banning miners for example
| showed that crypto just adapts and overcomes.
|
| This of course is scary for the people who used to have
| complete control over money, and even more so for countries
| that can no longer control their citizens by seizing their
| assets.
| lottin wrote:
| Governments continue to be able to seize assets, I don't
| know where you get the impression that they no longer
| are.
| zepolen wrote:
| They can't seize crypto.
| lottin wrote:
| Crypto is tiny proportion of your assets. Even in the
| most favourable scenario, where you own nothing but
| crypto, you're still vulnerable because you have a
| physical body. The simple fact is that crypto does
| nothing to hinder the government's ability to control
| citizens.
| w4llstr33t wrote:
| I agree that some crypto folks may not have basic personal
| finance education (although some people investing in
| stocks, and promoting that to others, also do not have
| basic personal finance education). I also agree though that
| some cryptos basically print money (as one example, go look
| into the inflation rate of Curve DAO, a popular DeFi
| protocol, which I don't invest in, due to the inflation
| rate).
|
| Bitcoin does not print money or have a high inflation rate,
| and that is the point of it (it was the original
| cryptocurrency that took off, so saying that the whole
| crypto sphere is bad is kind of like saying that because
| there is some bad software that all software is bad, or
| that because there is one stock that is bad that all stocks
| are bad). The max supply of Bitcoin is capped. I don't
| think that Bitcoin is the only digital asset worth
| investing in, but I also don't think it is valid to claim
| that all crypto is printing money, or that all crypto is
| bad.
|
| I am a crypto fan. I don't think that it's the only way of
| storing wealth. I also invest in an S&P 500 index. I do
| think that crypto has a higher potential to beat inflation
| over time, with inflation currently at 5.4% [1], vs stocks.
| US stocks have been propped up by The Fed printing USD
| (which they can due to it being the world reserve currency,
| which may or may not last forever) and investing it into
| Wall Street, as well as dropping lending rates to
| essentially zero, since the March 2020 crash. The Fed has
| already signaled their intention to raise rates in the next
| few years, which would damper some of the bullishness of
| the stock market.
|
| Crypto is a new asset class that investors can consider if
| they have some risk tolerance, with the potential for a
| high reward. The thing that I think a lot of people miss is
| that traditional finance is by no means perfect. There are
| negative interest rates in some parts of the world (i.e.
| see Europe). There have been synthetic assets in
| traditional finance like CDO's (i.e. see The Big Short),
| which are detached from reality (and assets like that will
| continue to be created because big money will continue to
| be bailed out). The current P/E ratios of even some popular
| stocks (i.e. TSLA) don't reflect traditional fundamentals,
| so there is a lot of speculation, just like with crypto (I
| don't think that speculation is bad, there are folks
| betting on what a company or a technology can become in the
| future). Also, the US Debt increases every year, with no
| signal that they will ever pay it back. Based on all this,
| I think it is worth considering some other asset classes to
| invest in vs purely traditional finance.
|
| Anyway, just because crypto is not perfect and the space
| has many digital assets (and not everyone understands
| them), it doesn't mean that as a whole that it's bad and
| should be destroyed. There's so much already invested in
| the crypto space, and it's not just capital, it's startups
| and human time invested (like any other software project or
| field). People will continue down this path in one way or
| another. Regulation will likely mature the space and more
| people will feel comfortable to invest in it based on that.
| I think that crypto will at least exist alongside
| traditional finance, even if it does not completely
| transform it, and it's worth being open to seeing how this
| technology can benefit us all.
|
| [1]
| https://www.usinflationcalculator.com/inflation/current-
| infl...
| jl2718 wrote:
| Here's something to consider: Right now AMZN is worth
| something because it is believed that it can be sold to the
| next person for more than was paid to the previous holder.
| What about the last person that will ever hold that share?
| How will they profit from owning it?
| porb121 wrote:
| > Right now AMZN is worth something because it is
| believed that it can be sold to the next person for more
| than was paid to the previous holder.
|
| this is....not how stocks work
| pyrale wrote:
| > What about the last person that will ever hold that
| share? How will they profit from owning it?
|
| They will have voting rights on the board and perceive
| dividends from one of the most successful companies in
| recent history?
|
| Even if the company stopped its activities today,
| liquidating its assets: land, patents, infrastructure,
| contracts, data, etc. would bar the stock from going to
| zero.
| lottin wrote:
| > Right now AMZN is worth something because it is
| believed that it can be sold to the next person for more
| than was paid to the previous holder.
|
| This is not the reason AMZN is worth something _at all_.
| The reason is because 1. assets > liabilities and 2.
| it's a business that generates a stream of net income.
|
| And this is independent from what the stock market thinks
| AMZN is worth. For example, if the stock market thought
| AMZN was worth zero, you could buy the entire company for
| nothing and liquidate it for a profit, or keep it running
| and pocket the business profits, so it would still be
| worth something.
| imtringued wrote:
| We have hundreds of articles complaining about companies
| doing stock buy backs... how companies value their
| shareholders more than their employees. There is even an
| internet myth that companies have to be maximally
| profitable if they don't want to be in legal trouble
| versus their shareholders.
|
| It's really quite simple. Companies grow and make
| profits. They issue dividends or do stock buybacks and
| return excess cash to investors. The market might be
| overvalued but bubbles burst eventually.
| rvz wrote:
| > but every crypto thread is full of crypto holders who
| want to believe it's true.
|
| It's because they want their crypto holdings to go to the
| moon. HODLing works if you got in early which in the case
| of BTC when it was around <$9 - $500 with more than 50,000x
| returns. Right now? It does not.
|
| They do not know how to trade it and take profit, so they
| just hold it all the way up and never take it out; even if
| it crashes back down, which you can buy it back at a lower
| price.
|
| > It's also silly to watch the proliferation of ever-
| increasing numbers of crypto currencies and crypto assets
| being generated out of thin air being willfully ignored in
| the money printing conversations.
|
| Yes. Everyday there are new worthless tokens and coins
| being generated and listed on lesser known exchanges and
| NFTs being minted it out of thin air. Almost all of them
| have no use case or reason to exist other than having the
| creator dumping their creation onto the retail crypto
| holder. Thanks to cointool [0], now anyone can create and
| list their own ERC-20 scam coin and anyone can create a
| .PNG, .JPG NFT and mint it out of thin air.
|
| > Do people really not understand that crypto currencies
| are being printed and injected into the crypto ecosystem
| all the time?
|
| They will find out the hard way. Some are doing this very
| quickly until a 2018 style crash will come due to more
| regulations or a full crackdown.
|
| [0] https://cointool.app/dashboard
| Retric wrote:
| Who exactly keeps a significant fraction of their savings in
| money? It's function as a medium of exchange is largely
| independent of it's fiction as a store of value.
|
| Of course debt is different because that's paying interest.
| imtringued wrote:
| Store of value and medium of exchange are complete
| opposites of each other.
|
| A perfect medium of exchange never stops circulating.
| Saving money takes money out of circulation.
| jl2718 wrote:
| Actually I think there is some Gresham's law going on here.
| The worst store of value will become the dominant medium of
| exchange.
| [deleted]
| yawaworht1978 wrote:
| I hear that argument often, but don't crypto traders always
| cash out to fiat sooner or later and thus, end up in the same
| loop? It was naive to think cryptocurrencies will ever have
| wide spread adoption without getting regulated at least as
| much as fiat I think.
| Taek wrote:
| The long term goal for many in the crypto community is to
| get to a point where you don't need to cash out. More
| merchants accepting crypto, landlords accepting crypto,
| etc. We aren't there yet, but that remains the goal.
| imtringued wrote:
| That will never happen. If I were a merchant that accepts
| Bitcoin I would want to acquire as much today as possible
| and my desire to adopt it would shrink as its value goes
| up.
|
| The best years for Bitcoin adoption are already over.
| snowwrestler wrote:
| It's never going to happen unless they can solve the
| deflation problem. Why would I use a unit of
| cryptocurrency to pay my rent today, if I think the real
| value of the cryptocurrency unit will buy even more rent
| next month? The Internet is full of stories from people
| who bought like a pizza with Bitcoin years ago and
| realize that same amount of Bitcoin would be worth like
| $10,000 today.
|
| Using cryptocurrency to transact every day items is
| directly contrary to the "HODL" culture around
| cryptocurrency that exists today. It works in society
| like an investment, not a currency.
|
| The ever-decreasing value of the dollar is a feature not
| a bug. It encourages people to transact their dollars for
| items of real value like pizza, and store their wealth in
| items of real value like real estate, stocks, etc.
| yawaworht1978 wrote:
| However, that guy buying pizza and all the early darknet
| market purchases have been necessary adoption steps.
| Without these, adoption never happens.
| ajkdhcb2 wrote:
| This is a completely invalid argument. You have no choice
| but to pay rent. If there is an asset that goes up in
| value, you will want to store your wealth in it. if you
| can directly pay with something that is also a good store
| of value, then for the individual that is simply the
| superior choice.
|
| >Using cryptocurrency to transact every day items is
| directly contrary to the "HODL" culture around
| cryptocurrency that exists today. It works in society
| like an investment, not a currency.
|
| That is due to other factors, not deflation. Not many
| people accept payment, people are forced to hold dollars,
| paid in dollars and there is friction when converting.
| Bad money gets spent first (Gresham's law). If you have
| dollars from your job anyway and your risk profile is to
| hold some % in crypto, then of course it doesnt make
| sense to spend your investment which would need to rebuy
| to rebalance your portfolio.
|
| The deflation problem that you imagine doesn't exist.
| There are other more worthwhile arguments against
| deflation but you didn't use them
| imtringued wrote:
| >This is a completely invalid argument. You have no
| choice but to pay rent.
|
| I don't know what you think you are saying but you've
| just proven the argument. If you only make the minimum
| necessary transactions then your economy will be of
| minimum size.
|
| >If there is an asset that goes up in value, you will
| want to store your wealth in it.
|
| It's just a balance sheet. If the value of the asset goes
| up it just means the allocation of resources is biased to
| BTC earned in the past. You also cannot store wealth in
| Bitcoin. You have to give up real wealth to own Bitcoin.
|
| >if you can directly pay with something that is also a
| good store of value, then for the individual that is
| simply the superior choice.
|
| Sure, the individual wants his share of wealth to grow at
| the expense of everyone else. After all, who the hell
| would be against free shit that you don't have to work
| for?
|
| >That is due to other factors, not deflation. >Not many
| people accept payment, people are forced to hold dollars
| paid in dollars and there is friction when converting.
|
| Literally nobody is forced to hold onto dollars. If
| anything central banks want people to stop holding
| dollars because of low inflation/the deflation problem.
|
| > Bad money gets spent first (Gresham's law).
|
| I don't know if you have noticed but bad money being
| spent first is snowwrestlers' argument. You've supported
| a supposedly completely invalid argument yourself...
|
| >The deflation problem that you imagine doesn't exist.
| There are other more worthwhile arguments against
| deflation but you didn't use them
|
| They boil down to the same thing. Deflation doesn't
| increase real wealth it only responds to real wealth
| increases by allocating the real wealth to people who
| held onto more currency. It is equivalent to an income
| tax that is then redistributed via a UBI that pays out
| proportional to how much BTC you own. If you know that
| you will get more wealth extorting other people you will
| refuse to spend your Bitcoin because it increases your
| ability to extort people in the future.
| christophilus wrote:
| We've had pretty long periods of time when currency
| valuations remained flat or slightly deflationary. In
| reality, folks buy what they want when they want with the
| currency that is most convenient. I think you're
| overthinking it.
| DennisP wrote:
| I'm fine with rational regulation that doesn't effectively
| outlaw the technology and keeps a level playing field,
| which is the opposite of what they're attempting right now.
| gifwithaj wrote:
| All living creatures who want the planet to still be habitable in
| 20 years celebrate 'wonderful' new bill that will lower
| incentives for people to burn coal to collect imaginary tokens.
| mandmandam wrote:
| Funnily enough, this bill actually does more to quash next-gen
| green alternatives to bitcoin.
|
| By misrepresenting validators as "brokers", cryptocurrencies
| such as Nano, which uses six million times less energy per
| transaction, are effectively outlawed in the US.
|
| Miners, on the other hand, are not penalised by this bill
| whatsoever.
| dcolkitt wrote:
| You misunderstand, and should actually read the current
| amendment. Because it actually bans everything _but_ miners.
| I.e. the electricity guzzling miners would keep running, but
| all the software devs trying to transition crypto networks to
| low resource usage consensus mechanisms would be made illegal.
|
| If you feel that crypto is an environmental disaster, you
| should be vigorously _opposed_ to the Portman-Warner amendment.
| ianai wrote:
| Would it change the effect much to add miners? It seems like
| this would tank the prospects of most mainstream crypto as
| is.
| T0Bi wrote:
| But the new ammendment explicitly exempts proof of work miners
| thereby only hindering the green creation of imaginary tokens.
| jacoblambda wrote:
| Actually part of the issue is that the bill is worded such that
| effectively everyone involved in a cryptocurrency (including
| developers) would be treated as financial brokers and would be
| subject to all the regulations and tax compliance laws that go
| with that EXCEPT Proof of Work miners...
|
| The base wording is untenable to a certain extent. The Wyden
| amendment is a reasonable compromise but the Warner amendment
| (which is the one with White House support) that came out at
| the last second includes absolutely everyone in the ecosystem
| except those that burn extraordinary amounts of power.
| practice9 wrote:
| So if we look closer we can see that US energy companies will
| benefit short-term from the fact that miners are excluded
| from the bill.
|
| The lobbying is strong.
| [deleted]
| mule1 wrote:
| Clean renewable energy is becoming cheaper and more accessible.
| Miners are already being incentivized because of economics to
| move to green energy sources up to 50 percent of mining is done
| with clean energy.
|
| I've never understood this narrative. There is no narrative
| about other industries like gold mining that also consume
| exorbitant amounts of power that you could deem useless. If you
| do not believe in the thesis of a decentralized currency and
| the freedom it brings it is easy to say things like this.
| PragmaticPulp wrote:
| > Miners are already being incentivized because of economics
| to move to green energy sources up to 50 percent of mining is
| done with clean energy.
|
| That green energy could easily be used to take coal-fired
| plants offline, if it wasn't being arbitrarily consumed for
| crypto. Also I seriously doubt that anywhere near 50% of
| mining is done with clean energy.
|
| Miners don't care where energy comes from as long as it's
| cheap. Energy consumed for one thing is energy that can't be
| used for something else.
|
| It almost doesn't matter which power plant they're closest to
| because we have a power grid that ties everything together.
| This idea of miners being isolated from the grid and
| consuming clean energy that would otherwise go to waste is
| pure myth.
|
| > I've never understood this narrative. There is no narrative
| about other industries like gold mining that also consume
| exorbitant amounts of power that you could deem useless.
|
| Gold is extremely useful in many industrial processes and
| many products. It's not even close to "useless".
|
| Crypto mining is literally designed to burn power. No other
| industrial process is literally designed to be inefficient
| with energy consumption. Nothing compares.
|
| Proof of work is an algorithm that burns power as an input to
| the algorithm. Miners have to burn power just to continue the
| existence of the currency, which isn't comparable to one-time
| extraction costs of resources.
|
| Worse, proof of work is literally designed to be more
| inefficient with every new miner while also incentivizing new
| miners to join. Can you name any other industry that
| incentivized everyone to do things to make the system _less_
| efficient while burning _more_ power all of the time?
| poontang1 wrote:
| > It almost doesn't matter which power plant they're
| closest to because we have a power grid that ties
| everything together. This idea of miners being isolated
| from the grid and consuming clean energy that would
| otherwise go to waste is pure myth.
|
| It's not a myth it's exactly what happens. Stranded power
| is a real thing and not every country has the same power
| grid infrastructure that the US has.
|
| As soon as China actually built out a high voltage grid
| that can make use of some of their stranded power they
| kicked out the miners, who moved to other areas with near
| free power.
| nixass wrote:
| Sure, miners definitely use up to 50% renewables, especially
| asian ones. Why wouldn't that green energy be used for
| something actually useful?
|
| The rest: Cough whataboutism cough
| dudeman6969 wrote:
| Because it is in a remote location where that much energy
| isn't neeedwd for daily use
| porb121 wrote:
| so your belief is that China built a bunch of renewable
| power plants in the middle of nowhere with no demand for
| them, and generous miners stepped in to use the excess
| capacity?
| lottin wrote:
| Why on earth would anyone build a power plant in a remote
| location where no energy is needed?
| rapnie wrote:
| Dear clickbait title editor, can you be more specific in
| distinguishing between cryptocurrency and crypto communities?
| autophagian wrote:
| As painful as it is, I think that with general/popular tech
| media this particular ship has sailed quite a while ago
| Taek wrote:
| Similar to the change in definition for the word 'literally',
| the common parlance has evolved and 'crypto' now means
| cryptocurrency.
|
| A good test is to look at a sentence like "are you into
| crypto?". Absent any other context, the majority of the English
| speaking world will interpret that question as being about
| cryptocurrency, and most won't even try to disambiguate.
| Someone who wanted to ask if you are into cryptography would
| have disambiguated in the first place.
| fakesheriff wrote:
| > Absent any other context, the majority of the English
| speaking world will interpret that question as being about
| cryptocurrency,
|
| There aren't many contexts where "crypto" means cryptography
| anymore.
|
| gcc -lcrypto
|
| _Military grade_ crypto
|
| Anything else?
| pcthrowaway wrote:
| Military grade crypto will refer to a new proof-of-weapon
| chain anyway.
| 0xdeadb00f wrote:
| I haven't opened the article but I'm guessing it's all about
| cryptocurrency
| davidgerard wrote:
| I am sorry to inform you that "crypto" has been completely
| standard finance jargon for crypto-tokens traded for money for
| a few years now.
|
| Of course, _we_ know that "crypto" really stands for
| "cryptosporidium". You can even substitute the full word into
| most articles about "crypto" tokens and it'll still be
| accurate.
| varispeed wrote:
| Why are they not so eager about tax evasion and avoidance done by
| big corporations? Tax payer loses much much much more money
| through that, than through any crypto fiddles. Makes you think
| who lawmakers work for...
| BLKNSLVR wrote:
| This tacked on addition to an important bill makes it clear how
| incredibly threatened the existing power base feels about the
| growth of cryptocurrency.
| dcolkitt wrote:
| I understand that a lot of folks here are crypto skeptical. But
| regardless of your overall view, one thing to to understand about
| the Portman-Warner amendment is that it exempts proof-of-work
| (PoW) miners but _not_ proof-of-stake (PoS).
|
| When you hear about the environmental consequences of crypto, the
| massive amounts of electricity, the GPU shortages, that's all
| PoW. PoS is designed to eliminate that and make crypto no more
| resource intensive than any other p2p network like BitTorrent.
|
| Regardless of your view on crypto, there's no defensible
| justification for the Portman-Warner amendment. It'd be like
| passing a bill banning electric vehicles but not gasoline, or
| shutting down solar plants but not coal plants.
| mule1 wrote:
| Agreed but for a slightly different reason. PoW vs PoS is a
| much more nuanced debate for reasons other than the
| environmental impact talked about in mainstream circles.
|
| Bitcoin is PoW for many reasons, a fork of bitcoin could switch
| it to PoS and end the discussion, but its decentralized nature
| where one hash = one vote is part of the core of its economic
| policy.
|
| Ethereum and other PoS chains take trade off but advantages
| from utilizing PoS one that it desires to be a blockchain that
| can settle contracts on its layer 1.
|
| This Portman-Warner amendment favors PoW chains dissuading
| competition between the two.
| Taek wrote:
| Portman-Warner is not just favoring PoW over PoS, it's
| favoring PoW over ALL alternatives. It completely shuts down
| all potential for new solutions to gain adoption in the
| United States.
|
| Even if you don't like PoS, you still shouldn't like the
| Portman-Warner amendment.
| dcolkitt wrote:
| Agreed. There are many subtle and complex trade offs that
| come between PoW, PoS, and alternative consensus
| mechanisms. But one thing I can say with confidence is that
| Rob Portman is in no way qualified to understand, let alone
| make those decisions.
| alfiedotwtf wrote:
| Then make the very first block PoW, which switches to PoS
| from there after. I'm sure the bill hasn't been written
| to take into account any duration and so is merely a
| binary question.
| mule1 wrote:
| Agreed
| loceng wrote:
| So is it regulatory capture, trying to squeeze out competition?
| vitus wrote:
| I'm actually a little confused by the text.
|
| (source:
| https://twitter.com/jerrybrito/status/1423429377459736577)
|
| The exclusion is for "validating distributed ledger
| transactions through proof of work (mining)" -- is that meant
| to cover validation by any full Bitcoin node (e.g. random
| person who wants full control over transactions involving a
| personal wallet), or adding new transactions to the ledger via
| mining?
|
| (I guess, this basically comes down to what's meant by
| "validating through proof of work" -- the actual PoW is
| provided by the miner, but other full nodes are needed to
| validate the actual transaction.)
|
| Because to me, either the validators are affected (thereby
| significantly impacting the overall robustness of the network,
| which I would hope reduces its trustworthiness and therefore
| the currency's value as a result, as well as the ability for
| individuals to control their own wallets), or miners are
| affected directly.
| Taek wrote:
| The text is "validating... through proof of work (mining)",
| which would seem to imply that it only protects miners. It
| does seem though like the author's of the text are missing a
| super important distinction, which is that proof of work
| mining is _not_ intended to be the main method through which
| blockchain transactions are validated. The participants in
| the network are all expected to validate the transactions
| themselves (independent of the miners).
|
| A mistake like this really suggests that the proposed
| regulation is not well thought out, and that it should
| probably be revisited after further education and discussion.
|
| Worth saying a million times: the massive uproar in the
| crypto industry this week is not because we don't want to be
| regulated. It's because these proposed regulations are:
|
| + massively over-reaching + proposed at the last minute +
| attached to a must-pass bill + given very little room for
| proper discourse
| SV_BubbleTime wrote:
| > A mistake like this really suggests that the proposed
| regulation is not well thought out, and that it should
| probably be revisited after further education and
| discussion.
|
| What kind of sarcasm is most appropriate here? A coy
| shocked face or faux outrage?
| SamPatt wrote:
| It's also worth stating that crypto is already regulated.
| If people are avoiding taxes that's already illegal.
|
| This is an attempt to expand surviellance to make revenue
| collection easier for the state.
|
| Excuse me if I'm not thrilled about the state having even
| more information about our lives. I pay my taxes to avoid
| being jailed, but they're never satisfied until they have
| complete control over society.
| vitus wrote:
| Right, that seems to be the consensus read.
|
| I guess my point is that even PoW systems won't be entirely
| unaffected (albeit not quite to the extent that PoS systems
| are), since validators are crucial to the integrity of the
| blockchain.
|
| To attempt to extend the electric car ban analogy: this
| feels like adding onerous/infeasible reporting requirements
| to pipeline operators (PoW validators) and power plants
| (PoS stakers), neither of whom know anything about the end
| customer refueling at the pump / charger station, but not
| the oil refineries (PoW miners).
|
| And yes, the reporting requirements would also be in place
| for the electric utility (PoS validators), which still
| doesn't know anything about the charger station's
| customers.
| tboyd47 wrote:
| I felt the same way about the text.
|
| In Bitcoin, it could either be interpreted as exempting both
| miners and node operators or neither. That is because the
| Bitcoin node software does both validation and mining, but
| the economic environment and network topology means typically
| people running the software will only do one of the two. Very
| strange turn of events.
| nomoreplease wrote:
| Perhaps the PoW profiteers are lobbying against PoS?
| SV_BubbleTime wrote:
| No politician wrote this themselves, so... yes probably.
| SheinhardtWigCo wrote:
| It depends how "work" and "mining" are defined in this context.
|
| In PoS, as in PoW, security comes from computations done by
| network participants. For example, in Algorand, nodes generate
| a proof that they ran a lottery with the correct seed. That's
| still work, is it not? Does it matter that it's more efficient
| work than the work that is done to maintain the Bitcoin
| blockchain? Can someone formulate an argument as to why this
| should be excluded from the definition of "mining"?
|
| Without rigorous technical definitions, the result may just be
| that PoS networks adopt terminology like Efficient PoW and
| Efficient Mining.
| sunshinerag wrote:
| Reading the bills, they are not banning anything. Just changing
| the reporting requirements. Doesn't POS supporters want
| government oversight of the pseudo-decentralised actors
| required in POS?
| jacoblambda wrote:
| Government oversight isn't required at all or even desired in
| most cases.
|
| Proof of Stake relies almost entirely on the internal game
| theory of the system and while external influence (such as
| some level of proof of authority via gov oversight or hybrid
| PoS/PoW) can be used as a crutch, they open the system up to
| a new set of vulnerabilities.
|
| Additionally, while the bills are "just" changing the
| reporting requirements, those new requirements are incredibly
| vague and whether read in a narrow or a wide sense they
| impose such a significant reporting requirement that it would
| be anywhere from very difficult for an individual on their
| own to legitimately impossible even with unlimited funding
| and manpower. The reporting requirements would effectively
| impose KYC reporting on any validator (including full nodes)
| or software developer involved in a cryptocurrency ecosystem
| for all users of the ecosystem. This effectively prevents US
| validators or SW devs from even participating in the
| ecosystem outside of creating a completely siloed "US only"
| cryptocurrency ecosystem.
|
| The originally proposed wording is bad, the Warner amendment
| is worse. The Wyden-Lummis-Toomey amendment is a reasonable
| compromise that provides some capacity for tax compliance
| oversight without burdening the entire ecosystem with
| reporting requirements that are mutually incompatible with
| 99% of networks.
| rebelos wrote:
| And here I thought all the value was in a decentralized
| blockchain that's immune from government interference. /s
| throw123123123 wrote:
| This is not a problem for the network, its a problem for
| americans or residents in america that wish to perform
| this duty safe from state prosecution or punishment.
| hanniabu wrote:
| When the regulation requirements are literally impossible to
| meet, you're essentially banning it.
| yawaworht1978 wrote:
| Does not come as surprise. Simply too many unaccounted for scams,
| money laundering, extortion as a service incidents. I think many
| other countries will follow the US steps, more or less willingly.
| space_rock wrote:
| The govt will not learn any new information just put miners in
| legal gray area so the businesses move to other countries.
| People can still use tokens. Cracking down on crime is a
| different topic
| Proven wrote:
| Just seeing the both sides appeal and beg politicians for favors
| makes me sick. Does ANYONE involved have any clue about what
| cryptocurrencies are about? Bunch of socialists.
| bassrattle wrote:
| >tightening tax compliance within the historically under-
| regulated arena of digital currency
|
| "historically under-regulated" is the most biased way I could
| imagine to present this information
| optimiz3 wrote:
| None of the amendments sufficiently clarify the role of mining
| pools. I.e. the pool does validation, but it also divides up the
| mined yield. If you regulate pools, this will significantly
| reduce and centralize the entities with control over distributed
| ledgers.
| catlifeonmars wrote:
| Am I the only one who thinks the term "crypto community" is
| ambiguous in the article title. I thought I was going to be
| reading an article about how a particular bill has digital
| privacy implications due to misunderstood regulation of
| cryptography.
| ziml77 wrote:
| It is ambiguous and lacking context clues to point to one or
| the other. I think they should both be spelled out in titles.
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