[HN Gopher] How the Feds bounced Binance: Crypto isn't "incentiv...
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How the Feds bounced Binance: Crypto isn't "incentive compatible"
Author : haskellandchill
Score : 18 points
Date : 2023-12-16 21:39 UTC (1 hours ago)
(HTM) web link (www.programmablemutter.com)
(TXT) w3m dump (www.programmablemutter.com)
| jfengel wrote:
| _Binance will not only help the US government monitor the money
| flows (the argument of our book), but plausibly act act as a
| regulatory super-spreader, transmitting "know your customer
| rules" across the ecoystem like an epidemiological contagion (the
| argument of an important academic article on 'viral governance'
| by Gregoire Mallard and Jin Sun)._
|
| Or, people will flood out to someone who hasn't been hit by that
| "contagion", because the entire point is to have unregulated
| money.
| mjr00 wrote:
| > because the entire point is to have unregulated money.
|
| For some vanishingly small percentage of crypto-faithful,
| maybe. For the vast majority, the point is to turn (regulated)
| fiat money into more (regulated) fiat money. Or lose it all
| trying.
| toomuchtodo wrote:
| Chainalysis monitors all public chains for law enforcement and
| regulators. Monero, Zcash, and other privacy focused crypto can
| be squeezed out under money laundering, KYC, AML laws and
| regulations. Interestingly, violations of law have a permanent
| record on an immutable blockchain. You simply need someone
| technical to perform data analysis and hand it over to
| enforcement.
|
| TLDR there is always a throat to choke in meatspace.
|
| https://en.wikipedia.org/wiki/Chainalysis
| dsugarman wrote:
| I don't really understand how any crypto is "unregulated money"
| and it's intrinsically the most tracable money store
|
| [Edited for some horrible mobile autocorrect attrocities]
| kzrdude wrote:
| There are fully anonymous transactions in some of the
| cryptocurrencies, like in Zcash I believe. I thought such
| innovations would overtake and make the original bitcoin
| obsolete, but I've been very wrong, because bitcoin is still
| popular.
| I_Am_Nous wrote:
| I think this fact points out the disparity between people
| using crypto for ideological reasons and them using it for
| investment reasons. Most people don't care about the
| whitepaper, just that "stonks only go up" and buy
| accordingly. So small, good projects aren't as reliable an
| investment vehicle as a larger, more established coin that
| is almost guaranteed to be sellable if needed.
| jMyles wrote:
| Obviously there are different points of view on this point,
| but I view transparency and regularity as orthogonal
| features.
|
| Crypto is easy to make both transparent and regular.
| block_dagger wrote:
| Traceable via otherwise anonymous addresses. It's the de-
| anonymization that's hard.
| jongjong wrote:
| My understanding of crypto (having worked in the industry for
| years) is that it's not about decentralisation so much as it is
| about reliability and transparency.
|
| The decentralization aspect was mostly necessary in the early
| days to avoid being shut down by government. Now that crypto is
| widespread, it is not as important. What is important though are
| things that are missing from our current fiat monetary system;
| transparency and reliability.
|
| While the fiat monetary system appears to be very reliable for
| the individual, it is in fact extremely unreliable due to its
| lack of transparency. Governments can easily manipulate the
| supply (and therefore the true value) of currency behind the
| scenes without your knowledge and that is one of the primary
| mechanisms via which it steals wealth from individuals and
| deprive them of opportunities.
|
| Arguments against cryptocurrency are essentially saying that
| these individuals who are being robbed and deprived of
| opportunities don't matter because the system only needs to work
| for rich people and fool the poor into thinking that it doesn't
| harm them.
|
| Unfortunately, many poor people understand exactly how the system
| robs them.
|
| - It devalues our salary contracts via inflation of buying power.
|
| - Centralized currency creation centralizes opportunities due to
| the Cantillon Effect and this creates an asymmetric playing field
| which unfairly benefits corporations and large organizations.
|
| - Given that income tax is levied against each transfer between
| individuals, newly issued currency cannot travel very far from
| the government money printers as each hop away from the printers
| incurs a significant additional tax in the remaining untaxed
| amount which keeps shrinking. This exacerbates the Cantillon
| Effect and punishes regional areas and individuals who are far
| from the centers of money printing.
| dale_glass wrote:
| > My understanding of crypto (having worked in the industry for
| years) is that it's not about decentralisation so much as it is
| about reliability and transparency.
|
| None of those have panned out. Reliability and transparency
| aren't there either, because the state of crypto so far is that
| people keep on falling for scam after scam and getting screwed.
|
| No, just like with the original concept of "Peer-to-Peer
| Electronic Cash System", there's very few true believers that
| are into it for any such reasons like decentralization,
| reliability or transparency.
|
| The vast, vast majority just wants to get rich. It's that
| simple. The technical merits or characteristics of the
| underlying system are completely unimportant to the vast
| majority.
| bragr wrote:
| It is going to being very interesting to see all the prosecutions
| that result from this. The feds know how to make good use of the
| access they're about to have based what they've been able to do
| with other exchanges' records.
| dale_glass wrote:
| > But the blockchain's entire purpose is political. If crypto is
| no longer about teh magic of decentralization, then why would
| anyone want to use it?
|
| Making big $$$, obviously.
|
| It's very clear that the whole decentralization tech angle failed
| a long time ago. I had a passing interest, but completely lost it
| around 2017-ish, when BTC blocks started filling up.
|
| It seemed completely clear to me that a "Peer-to-Peer Electronic
| Cash System" couldn't tolerate such dysfunction. Usage as cash
| wasn't working. In the end capacity had to be promptly increased,
| or obviously there'd be huge problems for everyone.
|
| The first nail in the coffin was that blocks weren't expanded.
| The second one was that while there were plenty alternatives, BTC
| retained dominance, and that even forks that theoretically were
| superior because they did what they were supposed to do far
| better, BTC still won out.
|
| So clearly I was wrong, BTC wasn't functioning as a "cash
| system", and this obviously didn't matter to the BTC users, and
| didn't matter to the world at large either.
|
| Thus eventually it dawned on me that there were maybe a few
| people out there that had some interest in a "Peer-to-Peer
| Electronic Cash System" and the "tech", but the vast majority out
| there were only interested in a world-wide game of hot potato,
| where the only point is to accumulate coins early, then sell them
| to some fool on the top, and cash out.
| dist-epoch wrote:
| When will Tether implode?
|
| I've been reading about how that is imminent here for 3 years
| now.
| mgaunard wrote:
| In practice people use the blockchain to move assets between
| accounts tied to some of the many competing centralized trading
| markets (of which Binance is only the biggest one).
|
| They also use it for OTC transactions, which are typically also
| hedged on centralized markets due to their uncertainty.
|
| The centralized markets also function as banks, where you can
| borrow or cross-margin your positions.
|
| So it works, it's just that only using blockchain is not good
| enough to deal with speculation needs and market volatility.
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