[HN Gopher] Binance founder 'CZ' leaves prison on Friday
       ___________________________________________________________________
        
       Binance founder 'CZ' leaves prison on Friday
        
       Author : svenfaw
       Score  : 110 points
       Date   : 2024-09-27 14:41 UTC (8 hours ago)
        
 (HTM) web link (fortune.com)
 (TXT) w3m dump (fortune.com)
        
       | hyggetrold wrote:
       | "He got his bag"
        
         | TyrianPurple wrote:
         | 60 billion is a beautiful payday. That's now clean (hopeully),
         | he can now start something else.
        
       | Gys wrote:
       | Crime pays?
        
       | optimalsolver wrote:
       | Meanwhile, SBF is settling right into prison gang life:
       | 
       | https://www.reddit.com/r/wallstreetbets/comments/1av88z5/fir...
       | 
       | No tats visible in the pic, tho.
        
         | trollied wrote:
         | It was being reported that he is now sharing a space with Sean
         | "Diddy" Combs.
        
           | DaiPlusPlus wrote:
           | There's a joke in there about which of the two screwed more
           | people...
        
         | pants2 wrote:
         | That was from February. Can't seem to find anything more
         | recent.
        
         | lordfrito wrote:
         | He's leveled up to expert level polycule
        
       | startupsfail wrote:
       | Bitcoins are clearly negative sum game (resources used, GPUs
       | burned, CO2 emitted, money changed hands). Wish we could do less
       | of it.
        
         | jsheard wrote:
         | At least the broader crypto ecosystem mostly moved over to
         | proof-of-stake, even if Bitcoin will probably always be proof-
         | of-work, so at least most of their Ponzi schemes aren't boiling
         | the oceans in the process anymore. Small victories.
        
           | pants2 wrote:
           | Bitcoin _can 't_ always be proof-of-work. Given the capped
           | supply, the mining rewards will eventually diminish to the
           | point that the network is no longer secure. It will have to
           | transition to proof-of-stake or some other mechanism long
           | before that happens.
        
             | tromp wrote:
             | It intends to rely on fees, i.e. to have a constant backlog
             | of high fee paying transactions. We'll see how that plays
             | out within a few decades as the block subsidy becomes
             | insignificant.
        
               | pants2 wrote:
               | Transaction volume goes up and down. Just look at ETH gas
               | prices - varying between 1 and 1000 month-to-month. BTC
               | holders aren't going to be OK with a temporary lull in
               | transactions leading to a double-spend attack etc.
        
               | tromp wrote:
               | I agree it seems wildly optimistic.
        
           | rvz wrote:
           | We are still waiting for AI (Deep Learning) to do the same
           | and move to efficient alternatives without incinerating the
           | environment and consuming the oceans to cool their GPUs
           | whilst training and doing inference on their AI models.
           | 
           | So many years, yet no practical efficient solutions currently
           | in production to reduce the emissions AI is producing. Much
           | more urgent than crypto since that already has largely moved
           | to proof-of-stake.
        
         | earnesti wrote:
         | Binance was not really about Bitcoin, it was more like a
         | shitcoin casino and a money laundering machine.
        
         | matrix2003 wrote:
         | I'm just curious - if you were to try making a decentralized
         | currency as a fun project, what mechanism would you use
         | instead?
         | 
         | I'm someone who doesn't really use it, but was fascinated with
         | it before "blockchain" became a buzzword.
         | 
         | edit: proof-of-work. I have been out of the loop for years :)
         | 
         | My next question is are there downsides to proof-of-stake, and
         | why has bitcoin not moved towards it?
        
           | wmf wrote:
           | https://vitalik.eth.limo/general/2017/12/31/pos_faq.html
        
           | _heimdall wrote:
           | I've also been fascinated by bitcoin but never made the leap.
           | 
           | The problem I always come back to is that it isn't a
           | currency, a store of value, private, and I disagree with
           | bitcoin's approach to decentralization. (A long list, I know.
           | Every couple years I get the itch then rediscover all my
           | complaints).
           | 
           | Attempting to create a decentralized currency based on
           | anything other than a supply-constrained natural resource is
           | simply a losing game as far as I see it. The currency will be
           | based only on promises, belief, and trust. A decentralized
           | network is more akin to a Mexican standoff, trust and belief
           | aren't what keep everyone from pulling the trigger.
        
             | woodrowbarlow wrote:
             | but most national currencies have long since abandoned of
             | the idea of being backed by physical resources, and have
             | shifted towards promises, belief, and trust. are you saying
             | that de-centralization introduces unique aspects that make
             | physical backing a necessity?
        
               | Yiin wrote:
               | bluntly put you can pay taxes only in that currency and
               | governments have power to enforce it, meanwhile btc has
               | only as much power as currencies you can exchange it to.
               | If you couldn't exchange btc to fiat, it would lose value
               | rapidly.
        
               | _heimdall wrote:
               | Exactly. State currencies have their issues, but they do
               | at least accept that a currency built only on faith and
               | trust must be centralized.
               | 
               | I am proposing that making a currency decentralized
               | creates certain limitations. Without a central authority
               | its extremely unlikely that a monetary system built on
               | faith will last long. For bitcoin the claim is that the
               | network is what you must have faith in, not a central
               | authority. I don't find that compelling personally,
               | mainly because I haven't found the protocol to be so
               | bulletproof that I only need to trust it and can believe
               | that the network will hold regardless of how many bad
               | actors may attempt to corrupt it (not saying that is
               | happening today, only that it is inevitable with time).
        
           | acoard wrote:
           | > My next question is are there downsides to proof-of-stake,
           | and why has bitcoin not moved towards it?
           | 
           | There are minor downsides in theory. Proof-of-stake is a bit
           | less "democratic" and gives more voting share to those who
           | have more money, vs. just are mining. In practice, proof-of-
           | stake coins seem to be doing fine. The main one here is
           | Ethereum.
           | 
           | The main reason Bitcoin hasn't is due to inertia and the
           | interest for miners (who do proof-of-work) to use their
           | democratic power to keep bitcoin invested in proof-of-work.
        
             | schlauerfox wrote:
             | Proof-of-stake ruins it's security with a rich get richer
             | endgame where the stakers concentrate until it's not
             | distributed enough and one entity or group can collude and
             | control the system and there's no way to exit that state.
        
               | HPsquared wrote:
               | Wouldn't any such holder want to avoid this condition
               | developing as it would devalue the whole currency?
        
             | keyringlight wrote:
             | Wasn't there a few times when one of the large
             | cryptocurriencies were almost under control of large mining
             | pools where their combined computation would have gone over
             | half? That seems like another "who has more money".
        
               | Sohcahtoa82 wrote:
               | With Proof-of-Work, "rich get richer" is a side effect.
               | 
               | With Proof-of-Stake, "rich get richer" is essentially
               | coded into law.
        
           | r00fus wrote:
           | Why do we need a so-called decentralized currency anyway? I'd
           | be less antagonistic if its major use case wasn't money
           | laundering.
        
             | diego_sandoval wrote:
             | Just some examples:
             | 
             | https://en.wikipedia.org/wiki/Corralito
             | 
             | https://en.wikipedia.org/wiki/Argentine_currency_controls_(
             | 2...
             | 
             | https://www.statista.com/statistics/316750/inflation-rate-
             | in...
             | 
             | https://hongkongfp.com/2023/12/15/hong-kong-govt-amends-
             | nati...
             | 
             | https://www.ibanet.org/article/5584f623-6456-4287-8c34-1907
             | b...
             | 
             | https://edition.cnn.com/2022/02/20/americas/canada-
             | trucker-p...
        
               | alfredol wrote:
               | In the case of Argentina, in most cases people have
               | turned to the much safer USD.
        
               | diego_sandoval wrote:
               | Only when and where they've been allowed to.
        
               | llamaimperative wrote:
               | How are these solved by cryptocurrencies?
        
             | ok123456 wrote:
             | Capital controls are becoming more and more erratic and
             | authoritarian. A decentralized currency provides a relief
             | valve.
        
               | pavlov wrote:
               | More erratic and authoritarian compared to what time?
               | 
               | As recently as 1989, most of the world's currencies were
               | tightly controlled and exchange rates were fixed. In many
               | countries like the Soviet Union, you were not even
               | allowed to bring local cash outside of the country at
               | risk of high penalties. Sending an international wire
               | transfer was a multi-day operation that probably involved
               | telex messages and several phone calls.
               | 
               | Today you can send money instantly across the European
               | continent in a single currency at essentially zero cost.
               | The USA is also catching up and finally bringing their
               | banks to the 21st century with Fedwire. Everybody has
               | multiple credit cards and uses them for online shopping
               | across the world. Any physical product you might imagine
               | can be ordered from China with a one-click digital
               | payment.
               | 
               | None of these improvements were thanks to Bitcoin or any
               | other cryptocurrency.
        
           | wongarsu wrote:
           | Bitcoin's advantage is mainly its name recognition and
           | unchanging nature (== trust and protocol stability). You
           | could never get the necessary support for any meaningful
           | changes.
           | 
           | For people who want proof-of-stake there are plenty of coins
           | doing that. Etherium is probably the best known most
           | established option.
           | 
           | But no coin really solves the other big challenge of crypto-
           | currency: barely anyone uses them as currency. Most of those
           | that do do it for illegal purposes: ransomware payments,
           | marketplaces for illegal goods and services (including the
           | malware SaaS providers), illegal money movements etc. But for
           | the vast majority of people it's more like digital gold than
           | like digital cash: an investment vehicle that derives its
           | value from its limited supply.
           | 
           | As an investment it doesn't actually create economic value
           | (unlike investing in real companies), so you need to have a
           | pretty positive view of the other use cases to judge the
           | overall impact as positive
        
             | pishpash wrote:
             | Whoever is using it as digital gold certainly sees economic
             | value, e.g. preserving wealth to invest elsewhere.
        
             | beloch wrote:
             | Bitcoin's advantage is that it's value has continued
             | climbing, aside from some fairly big blips, irrespective of
             | its design or utility. That's why people buy it and hold
             | it. It's a magic piggy bank.
             | 
             | If a truly stable cryptocurrency was released that was
             | actually suitable for everyday transactions at scale, the
             | people who buy bitcoin would laugh at it for not offering a
             | return on investment. It seems like such a currency will
             | have to be adopted from the bottom up to succeed, not
             | trickle from the top down.
             | 
             | Here's a question for you: What happens to the value of
             | bitcoin when some other crypto-currency starts doing the
             | things bitcoin has only promised? Does it crash, or does
             | the magic bubble around a completely useless technology
             | persist for as long as people are willing to believe in it?
        
               | modzu wrote:
               | it's called monero
        
               | wongarsu wrote:
               | About a decade ago Dogecoin made a big push to get online
               | and offline business to accept it. Making a block every
               | minute was quite beneficial for that, and the price used
               | to be somewhat stable. Today nobody pays in Dogecoin.
               | Lots of companies that used to except
               | Bitcoin/Litecoin/Dogecoin stopped doing so because off
               | lack out demand.
               | 
               | The issue isn't that crypto currencies can't be used as
               | currency, it's more that they don't get used as currency
               | outside niche use cases because they don't have a good
               | USP. Most countries have decent enough currencies and
               | payment systems
        
             | n_ary wrote:
             | I have actually used it to rent VPS, buy game keys(mostly
             | steam), donate to some OSS devs who were promoting crypto
             | currency, donated some to random friends(all of whom lost
             | interest or their wallet secrets), converted to other
             | currencies, lost my own wallet key etc.
             | 
             | All these happened in very early days of bitcoin when one
             | could mine using CPU and join a mining pool and others like
             | litecoin were up and coming.
             | 
             | But then, I lost interest as txn fees were eye watering and
             | I was scammed several times by various steam key selling
             | sites never completing my order and blocking me immediately
             | if I complained. I realized that, this non-reversible form
             | of currency was excellent for scam and fraud and I could
             | not cry on the phone about these scams unlike how I can for
             | my MasterCard/Visa/Amex.
             | 
             | Now I come to think of it, if I held onto my bitcoins, I
             | would be retiring wealthy, but alas, I was young and naive
             | :')
        
             | poincaredisk wrote:
             | >But no coin really solves the other big challenge of
             | crypto-currency: barely anyone uses them as currency
             | 
             | Monero mostly is. What's also important, monero users are
             | also against any kind of speculation. Of course most monero
             | transactions are probably related to illegal activity, but
             | they are in fact used as cash would.
        
           | tromp wrote:
           | I would change the emission so as to deter speculation and
           | instead make it fair across generations: fix the block
           | reward. I would make it as simple as possible so as to better
           | stand the test of time.
        
           | SkyMarshal wrote:
           | _> My next question is are there downsides to proof-of-stake,
           | and why has bitcoin not moved towards it?_
           | 
           | The main threat against any cryptocurrency is that a
           | malicious actor will gain control of 51% of the voting power
           | of the system, and use it in nefarious ways that ultimately
           | break the cryptocurrency. Different Proof-of-X systems handle
           | that problem in different ways.
           | 
           | It's generally considered that Proof-of-Work is easier to 51%
           | attack, but also easier to recover from that Proof-of-Stake.
           | The attack and recovery both use the same mechanism - add
           | more hardware mining power to the system. There is no hard
           | limit on this baked into the system, it's just a matter of
           | how much mining power is available to purchase irl. And
           | recovery can be accomplished without having to hard fork the
           | network.
           | 
           | Proof-of-Stake on the other hand may be more difficult to 51%
           | attack since it requires an attacker to obtain 51% of all the
           | currency value in the system. But if this is accomplished,
           | then it's difficult or impossible for the honest participants
           | to rectify, since there's no more currency available to
           | purchase. The attacker isn't going to sell them any of his
           | 51%. So there's an inherent hard limit baked into the system,
           | and the attacker now has 51% of it (including 51% of all
           | newly created currency as well, since new currency is created
           | by staking existing currency). The only fix is for the honest
           | participants to hard-fork the network and create a new
           | version of it that excludes the attacker. (There are other
           | mitigations like slashing for malicious behavior designed to
           | prevent attackers from gaining 51% in the first place).
           | 
           | There are other differences, but I believe those are the main
           | ones, and one reason why Bitcoin hasn't moved to it.
        
           | hanniabu wrote:
           | Proof of stake is superior. The downside others are saying
           | has been proven false time after time but bitcoiners continue
           | to spread the misinformation because Bitcoin relies on people
           | not understanding it's downside.
           | 
           | https://vitalik.eth.limo/general/2020/11/06/pos2020.html
        
           | harimau777 wrote:
           | I think that the best solution would be gold.
        
           | eitland wrote:
           | Proof-of-work in its current form needs to die.
           | 
           | If it is based on proof-of-work it needs to be something
           | useful.
           | 
           | If someone can prove proof-of-work won't work without wasted
           | work then we need to make some sacrifices to make it
           | workable. Because we cannot allow slow as molasses and/or
           | extremely wasteful for all future.
           | 
           | If it is based on proof-of-stake there needs to be a fair
           | distribution model.
           | 
           | I have some ideas for both, especially the first but I want
           | to give them some more thought :-)
        
             | HPsquared wrote:
             | On the one hand we have people wanting a proof of work
             | system there the work has value. On the other hand we have
             | a developing AI industry giving out vast amounts of "work
             | needing done". Someone needs to try connecting those.
        
           | ruuda wrote:
           | There are some downsides but also huge upsides aside from not
           | wasting energy, for example offering very fast finality.
           | 
           | Bitcoin has not moved to it, because arguably the new system
           | would not be Bitcoin any more. It's a coordination problem
           | where you have to get most users (including centralized
           | exchanges) to stop following the PoW chain and start
           | respecting the PoS chain, but they will only do that if they
           | believe everybody else will. Ethereum was able to pull that
           | off because Ethereum foundation and Vitalik (its creator)
           | announcing and implementing, and practicing the switch many
           | times, has a lot of weight. (And then still, some miners
           | remained, but that chain is now known by a different name and
           | not generally known as "Ethereum".) Bitcoin is a lot less
           | coordinated in that sense, even less invasive changes to the
           | protocol are difficult to pull off.
        
           | FactKnower69 wrote:
           | even just proof-of-work where the work isn't completely fake
           | and worthless would be a huge improvement, but even that
           | obvious layup is beyond the reach of web3 geniuses
        
           | woah wrote:
           | Proof of stake is no different than most traditional
           | governance structures such as corporations in that it relies
           | on a committee with an honest majority to keep the system
           | secure. Validators are supposed to act like some kind of
           | completely neutral, decentralized system, but they are not.
           | 
           | For example, the fundamental principle of PoS is slashing for
           | equivocation: when validators present two alternate versions
           | of history (this could be part of a "double spend" attack),
           | they are supposed to be slashed and have their stake taken
           | away.
           | 
           | It takes 1/3 of validators to successfully pass off two
           | versions of history to a double spend victim. However, 1/3 of
           | validators can censor this slashing transaction. So if a
           | double spend attack happens, the perpetrators of the attack
           | are in charge of punishing themselves.
           | 
           | So, the fundamental security mechanism of PoS, equivocation
           | slashing, can in fact never work in practice to punish an
           | actual attack!
           | 
           | Another example is the idea that participation in a PoS chain
           | is permissionless. This is the case in PoW. However, in PoS,
           | 1/3 of the existing validator set could censor any new
           | validators that would like to join, maintaining complete
           | control of the chain. The existing validators only _act_ as
           | if the system is permissionless.
           | 
           | There has been a large amount of thought put into this
           | paradox, and the PoS research community has settled on the
           | idea that if the validator set breaks these norms, then users
           | can just use a new chain with the same state, and a new, more
           | trustworthy validator set. This has several problems:
           | 
           | - Philosophically, what is the point of creating a system
           | that obviously doesn't work as intended, and then when this
           | is pointed out saying "that's not a problem because users
           | don't have to use the system"?
           | 
           | - The coordination of this hypothetical switch to a better
           | validator set is completely unexplored since it is totally
           | outside of the PoS protocol. It may be very disruptive to
           | users and result in downtime, loss of funds sent during the
           | switchover period, multiple new blockchains, or other issues
           | and confusion.
           | 
           | - The fact that the system does not work, and there must
           | always be the possibility of human operators sorting things
           | out based on an undefined recovery procedure means that truly
           | autonomous and truly secure clients are not possible in PoS.
           | This is a problem for both far-out concepts like self-owned
           | self-driving cars, and for bridges between blockchains, which
           | must always rely on either trusting the validators, or a
           | multisig made of trusted people who can stop or reconfigure
           | the bridge.
           | 
           | In fact, there is no clear dividing line between a PoS
           | blockchain, a PoA blockchain (this has a predefined validator
           | set), a multisig, and a single entity running a chain. The
           | only differences between these models are a matter degree of
           | diffusion of authority.
           | 
           | This is what Bitcoin people do not like about PoS. PoW has
           | its own problems, but they are different, and PoW chains do
           | not rely on a set of trusted operators in the same way.
        
         | slavboj wrote:
         | All currencies are negative sum when you only consider minting
         | and transaction costs.
        
           | nativeit wrote:
           | So where's the productive output?
        
             | s1artibartfast wrote:
             | This is correct, All currencies have transaction costs, but
             | compete on having lower transaction cost than the
             | alternative. The theoretical maximum is zero transaction
             | cost for a transaction. It cant go positive. Components of
             | transaction cost are triangulation, transfer, and trust.
             | Currencies attempt to lower the cost of the transfer and
             | trust components.
             | 
             | Any positive value a currency claims to have as method for
             | settling transactions is just a differential with another
             | method.
             | 
             | There is a cost to going to an ATM and carrying USD cash,
             | but it is lower than carrying around 100lbs of cabbages to
             | barter with.
        
               | Mathnerd314 wrote:
               | Don't forget externalities. E.g. you can get a fee-free
               | bank account with fee-free cash withdrawals, courtesy of
               | the bank being able to loan out that money under
               | fractional-reserve restrictions. In that sense
               | transactions can pay for themselves. Presumably nobody
               | would print money if it wasn't being put to use. Hence,
               | novel currencies can enable novel business models and
               | potentially do more than just lower transaction costs in
               | a zero-sum way. (Admittedly the value of such business
               | models at present, e.g. crypto scams, is somewhat
               | debatable)
        
               | s1artibartfast wrote:
               | Im not sure I follow what you are saying.
               | 
               | What externalities are you talking about?
               | 
               | What does do you mean by a transaction to paying for
               | itself?
               | 
               | What does it mean to lower transaction costs in a zero-
               | sum way? This seems like a contradiction
        
               | JumpCrisscross wrote:
               | > _What externalities are you talking about?_
               | 
               | Economic activity. Switching from free banking [1] to a
               | centralised currency made trade easier in America which
               | increased the amount of trade. It's why monetary unions
               | work [2].
               | 
               | Bitcoin, similarly, has enabled certain modes of trade
               | that previously didn't exist.
               | 
               | [1] https://en.wikipedia.org/wiki/Free_banking
               | 
               | [2] https://ciaotest.cc.columbia.edu/olj/cato/v24n1-2/cat
               | o_v24n1...
        
               | s1artibartfast wrote:
               | I think that is more of consequence resulting from lower
               | transaction costs, rather than an economic externality.
               | That said, I understand the definitions of externality is
               | changing in popular usage.
        
               | JumpCrisscross wrote:
               | > _that is more of consequence resulting from lower
               | transaction costs, rather than an economic externality_
               | 
               | An externality is "an indirect cost or benefit to an
               | uninvolved third party that arises as an effect of
               | another party's (or parties') activity" [1]. If Visa
               | reduced its fees, the merchant's additional profit is an
               | externality.
               | 
               | > _understand the definitions of externality is changing
               | in popular usage_
               | 
               | Third-party economic consequences have _always_ been the
               | definition [2].
               | 
               | [1] https://en.wikipedia.org/wiki/Externality
               | 
               | [2] https://www.jstor.org/stable/26617802
        
               | s1artibartfast wrote:
               | As I see it, I think the distinction between consequences
               | and externalities is that externalities are applied to
               | cost and pricing, but not concepts.
               | 
               | Wikipedia doesn't go too deep into when externality
               | analysis is appropriate or useful, but hints at this in
               | the following sentence to the one you quoted.
               | 
               | >Externalities can be considered as _unpriced components_
               | that are involved in either consumer or producer market
               | transactions
               | 
               | Something like the advent of centralized currency isnt a
               | priced good or action, so it doesnt make sense to say it
               | has a positive externality (e.g the transaction price of
               | "centralized currency adoption" is not a priced object).
               | 
               | This is why it is more appropriate to say something like
               | the advent of centralized currency has consequences
               | instead.
               | 
               | Regarding the Visa example, the merchant isn't a
               | uninvolved 3rd party, so the profit is not an
               | externality. Value on the table during an economic
               | exchange is not an externality. Similarly, the value
               | created or lost for each interacting party is not an
               | externality.
               | 
               | One more thoughts on common externality misconception.
               | 
               | The general connotation is that externalities describe
               | pricing failure and market failure (e.g. pollution). The
               | usefulness externality analysis breaks down quickly when
               | you move from realized external costs or benefits to
               | opportunity costs or benefits.
               | 
               | If a $1 pill saves a worker's life, is the value that
               | person generates over the remainder of their life an
               | externality. Technically yes. If you sell them a pill
               | again a year later, the same is true. That doesnt mean
               | the pill is priced incorrectly.
               | 
               | This illustrates how externalities can be duplicative and
               | should not be confused with pricing errors.
        
               | JumpCrisscross wrote:
               | > _the transaction price of "centralized currency
               | adoption" is not a priced object_
               | 
               | Of course it is. Joining a currency union carries costs.
               | 
               | Broadly speaking, you're correct: the term has ambiguous
               | meaning. My point is that isn't something new, but an
               | element that has always been with the term.
        
               | s1artibartfast wrote:
               | I think that still runs afoul of the "uninvolved 3rd
               | party" part of the definition.
               | 
               | Two actors can both generate value from a transaction due
               | to a difference between price and their respective
               | utility value for what is traded. This producer and
               | consumer surplus is explicitly distinct from
               | externalities.
               | 
               | If there is a currency deal between the US and Argentina,
               | the consequences to those countries are not an
               | externality. However, if this deal produces a 2nd order
               | change in the Chinese RMB, some would call that an
               | externality, although I would call it a consequence
               | (because externality implies mispricing)
        
             | PeterisP wrote:
             | For the economic impact of monetary systems, the main role
             | of currencies is handling credit - handling direct
             | transactions is intuitively the direct application, but the
             | impact of transaction costs ('costs' in the economic theory
             | sense, not only the direct expenses but also any barriers,
             | difficulties, risks, etc) on the economy, while
             | significant, is not as huge as the impact of availability
             | of credit and supply of money.
             | 
             | For example, when considering dollars, having the
             | possibility to detach the dollar from the gold standard was
             | so extremely valuable to the economy that all the possible
             | transaction costs with handling paper or coins are a
             | rounding error compared to that. Enabling fractional
             | reserve banking is an immense effect on the productive
             | output, due to the big increase in productive investment it
             | enables, so it matters a lot whether a monetary system can
             | support that. Historical changes to what metals were used
             | for coins had a huge impact on economy not because of some
             | decrease in transaction costs but because of changes to
             | money supply. Etc.
             | 
             | At it's core, the primary function of finance is (and
             | arguably has historically always been) handling debt, not
             | handling transfers. So evaluating a currency system on the
             | basis of how good it is for transactions is kind of putting
             | the cart ahead of the horse, if the nature of that currency
             | has, as most cryptocurrencies do, a major impact on the
             | money supply (and thus handling debt).
        
             | guywithahat wrote:
             | Currencies are used to facilitate trade, which I suppose
             | would be their productive output
        
         | ada1981 wrote:
         | If you think crypto is a zero sum game, try fiat!
        
         | rvz wrote:
         | At least they don't take people's jobs away or threaten /
         | replace them. Unlike AI, which also burns GPUs, emits CO2 and
         | the money is all evaporated into inference and training costs
         | with little to no efficient alternatives to reduce it and also
         | wasting tons of water.
         | 
         | Cryptocurrencies at least have alternative efficient methods of
         | consensus, such as proof-of-stake making it possible to reduce
         | the said resources as much as 95%.
         | 
         | AI (Deep Learning) still does not have practical efficient and
         | viable greener alternatives to neither inference or training in
         | production.
        
           | n_ary wrote:
           | While you may see that I vigorously comment against all the
           | AI hype, I do not believe AI is as useless and wasteful as
           | crypto currencies.
           | 
           | Beyond the LLM fad, AI is also being used in other
           | pharmaceutical and scientific research as well as modern
           | weather and disaster forecasting.
           | 
           | Also, I believe LLMs will get better over time and far
           | cheaper to operate once they become more widely adapted.
           | Think the super computers of our grand-dad era vs your
           | Android/iPhone.
           | 
           | AI will get better over time and become more beneficial to
           | us, but not in the form of current over hype fad that is
           | flying because Sama needs to protect his investment and exit,
           | he is a businessman above all else. AI innovation will come
           | from the silent group who are busy with actual development
           | and less hype generation. There is a saying that empty
           | whistle makes most noise etc.
           | 
           | My IDE(mostly jetbrains products) make me 10x more
           | productive. Claude/Phind saves me immense amount of time not
           | having to sort through 100 garbage SEO spam results or try to
           | waste time reading incoherent out dated
           | documentation(followed by having to look through the source
           | code) to find an important concept or reference to some third
           | party library/application. These are real values that not
           | only makes my day less stressful, it also makes my employer
           | benefit accordingly by having me available to other important
           | stuff with my freed time during working hours.
           | 
           | Crypto currency did not help anyone, only helped some
           | grifters get rich, some ignorant people to lose money and
           | numerous crooks to run ransomware attacks and easier time
           | moving the loot.
        
         | SkyMarshal wrote:
         | _> GPUs burned_
         | 
         | Bitcoin doesn't use GPUs, just ASICs. You may be thinking of
         | Ethereum or others.
        
           | lagniappe wrote:
           | Ethereum doesn't use GPUs. You may be thinking of others.
        
         | 127 wrote:
         | According to the same logic, life is also a negative sum game.
        
         | jameslk wrote:
         | Seems like a privileged point of view if you live somewhere
         | with a mostly stable currency (ie not rapidly inflating
         | currency) and easy access to banking
        
       | wmf wrote:
       | His "fortune" is mostly ownership of Binance which is now under
       | the thumb of the US government. If--as widely theorized--
       | Binance's secret ingredient is crime then it's not going to be
       | worth what it once was.
        
         | earnesti wrote:
         | I'm pretty sure that he also has personal BTC stash. Maybe not
         | billions though.
        
           | TrainedMonkey wrote:
           | Most likely multiple anonymous wallets of different cryptos.
           | The real question is whether anyone else has access to
           | them... if yes I expect there to be nothing left.
        
             | wmf wrote:
             | I think his wife is holding everything in Dubai.
        
           | mr90210 wrote:
           | After SBF, he'd be pretty stupid for not stashing his assets
           | just in case.
        
         | monero-xmr wrote:
         | Binance far and away dominates non-United States volume of
         | crypto trading. If you think that Coinbase, a publicly traded
         | US company, has real volume and earns a fee for that, then it's
         | not hard to understand why Binance has real revenues and value.
        
           | malux85 wrote:
           | I don't think anyone is disputing it's volume and fees, I
           | think what they are pointing out is that a nontrivial, maybe
           | majority of that, is proceeds of crime, which makes the
           | business somewhat less attractive.
        
         | mise_en_place wrote:
         | Let's just say they were very ambivalent about KYC. They had a
         | lot of phantom liquidity as well, Binance pioneered the scam
         | wick.
        
         | krmboya wrote:
         | There is Binance US and Binance the global version. I expect
         | Binance US to be tailored to US laws and regulations, but are
         | you implying the global version is also under tight US govt
         | control?
        
           | wmf wrote:
           | May 2024: "The United States Department of Justice (DOJ)
           | appointed Forensic Risk Alliance (FRA) to serve as the
           | outside monitor over the crypto exchange Binance. Binance
           | must undergo a monitorship of three years as part of its plea
           | deal with the DOJ related to money laundering violations."
           | https://www.theblock.co/post/293834/doj-taps-fra-over-
           | sulliv...
        
           | colechristensen wrote:
           | Yes, global banks also fall under US control if they want to
           | transact with anything in the US financial system. Less so if
           | they don't have American customers, but they still do have to
           | follow American laws.
           | 
           | For example several very old Swiss banks have been shut down
           | by US regulators because they were doing business in the US
           | with US citizens and their secrecy was being used to break US
           | law by Americans.
        
             | poincaredisk wrote:
             | Do you have a source for that? It sounds interesting and I
             | want to learn more, as I was not aware of anything like
             | this happening.
        
               | gomerspiles wrote:
               | AFAIK significant banks didn't really shut down over
               | FATCA, some have paid fines or higher tax rates and most
               | of them do the minimum for anyone who matches any of the
               | criteria for persecuting a possible US person, within the
               | limits of the institution's local laws, if any.
               | 
               | From a general government structure POV, I respected a
               | Congress more than the prevalent US views, but I don't
               | respect the US Congress any more.
        
             | TeaBrain wrote:
             | The decrease in the number of Swiss banks prior to the UBS-
             | Credit Suisse merger was largely a product of Swiss bank
             | consolidation in the 1990s. UBS and Swiss Bank Corporation
             | were the first and third largest Swiss banks when they
             | merged in 1998. Credit Suisse was the second largest Swiss
             | Bank when they acquired Switzerland's then fourth largest
             | bank, Volksbank in 1993 and they had also acquired
             | Switzerlands oldest bank, Bank Leu just a few years before
             | that.
        
         | tim333 wrote:
         | Google says net worth 60bn. I think he'll be ok even if that
         | goes down a bit.
        
       | hn_throwaway_99 wrote:
       | Journalist: "What are you going to do next??"
       | 
       | CZ: "I'm buying Disney World!"
        
         | whaleofatw2022 wrote:
         | Well played.
         | 
         | Tbh it will be curious to see next steps.
        
       | ddtaylor wrote:
       | CZ was at Lompoch I take it at a Low?
        
         | mchannon wrote:
         | Far more likely he was at the (a?) satellite camp at Lompoc.
         | Minimum security satellite camps share a small percentage of
         | their facilities with a nearby low or medium:
         | 
         | R&D (that's Receiving & Discharge to you), warehouse, mail
         | center.
         | 
         | FYI, Lompoc is pronounced Lom-poke to the townies. Not sure how
         | the inmates pronounce it.
        
       | toomanyrichies wrote:
       | https://archive.ph/WHXYL
        
       | Vecr wrote:
       | Hope he has something in place for the kidnap risk. Also hope his
       | lawyers credibly claim they will demand continual proof-of-life
       | to engage, otherwise kidnapping might not be the end to it.
        
       | 2OEH8eoCRo0 wrote:
       | Where is Kyle Davies of 3AC?
        
       | stonethrowaway wrote:
       | Based Mr. Zhao, showing us crime pays while we're all cheering
       | "and how!"
        
       | Eddieethan wrote:
       | Money or Crypto asset lost to Scammers are Recoverable, i was
       | able to recover 180K worth of bitcoin i lost to an investment
       | scam, thanks to easyrecoveryassets@gmailom as guaranty they get
       | the job done, they take payment only after my funds was
       | successfully recovered.
        
         | ronsor wrote:
         | You have negative karma because you are promoting a scam to
         | solve a scam.
        
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