It may have already been noted elsewhere but it seems important to note that the author was (is?) the CTO of private blockchain start up and choosing to not disclose this in any of his crypto criticism seems very dishonest
I guess it would be embarrassing for him to admit that he tried to compete against Ethereum after Cardano destroyed his private blockchain startup.
Stephen Diehl is also no better than the crypto maximalists with his extreme absolutism. You won't see him debate and test his arguments with a balanced panel discussion so that you can easily see how extreme his arguments are. He has a book to sell and is full time, 24/7 tweeting the 'all of crypto is scam' chorus.
Not all cryptocurrencies, tokens will survive, but only a select few of them and their technologies will still be around to be used under regulations.
He makes some good arguments and is certainly better read in economics than the youtube conspiracy theory video level/back cover summary of the Creature from Jekyll Island economics most crypto enthusiast stochastic parrot back as truth.
The 24/7 crypto is a scam community is extremely odd though. I can't stand the sport of NASCAR but I can't imagine enveloping my entire thought and identity around how much I think NASCAR is a bullshit sport and trying to convince people to stop watching NASCAR.
Finding an anti-passion to that degree seems extraordinarily unhealthy mentally.
Crypto might well be the biggest vehicle for financial fraud the world has ever seen.
Whatever you think of Crypto more broadly, millions of innocent people are being prayed on, who have lost collectively, literally billions of dollars, some more vulnerable to the impact of that than others.
To a lot of (good) people, it’s unacceptable to allow that to go unchallenged.
So yeah I think I can see how it’s a bit different.
It’s an extension of the culture war. Tons of right wing culture warriors got really rich off crypto without doing anything to deserve that wealth, so left wing culture warriors are naturally opposed to it. You check out /r/Buttcoin, they also hate GameStop (valid) and Elon Musk (much less so, he’s doing great work outside of Twitter despite his immaturity) for those same fundamental reasons. It’s more of the same social media derangement cycle that sucks in so many people on both sides, even if they fundamentally have a point about a lot of crypto being based on nothing
I think it would be more accurate to say his companies are doing great work.
He's an idea guy, but mostly he's just an investor. A toxic, thin-skinned, sometimes fraudulent investor, but it's hard to argue with the work being done by companies like SpaceX and Tesla (not just what's being promised, but what has actually been done). IMO it's important to understand both sides of that coin.
Nah. Tesla is doing good work. They're far from perfect, but it's an interesting product, and they were first to market in many ways. I can't see it lasting that much longer in it's current form, but that doesn't undermine the work they've already done.
It's also important to note that Musk isn't the founder of that one. He just has a contract that gives him the title "founder".
And there's definitely a trend where his earlier companies were less likely to be scams. Zip2 and Paypal were both successful AFAIK. Boring Company is a bust unless it's radically reorganized (without underground vacuum tunnels), OpenAI is probably BS too. It's a little hard to say right now.
Elon Musk, personally, is an asshole. He is also majorly addicted to Twitter, which toxifies him, and his acquisition of Twitter is the equivalent of a severe alcoholic buying Anheuser-Busch.
Nevertheless, Teslas are great cars and SpaceX is doing phenomenal work in space travel. Hating Musk with a passion is extremely weird, and tons of online people really do
> Not all cryptocurrencies, tokens will survive, but only a select few of them and their technologies will still be around to be used under regulations.
No chance in hell.
The only sustained market this technology has are illegal transactions/black market.
To begin with: a regulated Blockchain is an oxymoron. The technology ceases to have any meaning if the government has the ability to regulate the chain. They'd be able be more effective with regular acid databases and certificates for the web of trust, like they've been doing for a very long time now. You be combining the downsides of Blockchain with the downsides of traditional banking, gaining only the weaknesses of both.
It happens, but generally only if the marketing of the weaker technology won out while both technologies were still growing.
This is not that kind of situation, the crypto hype train derailed ages ago and only one country attempted to switch to a crypto currency, which predictably ended in a disaster and turned out to be a money laundering scheme of the person that was driving the initiative.
Except he compares Bitcoin's irreversable final settlement transactions per seconds metric to Visa's tps which is more akin to the lightning network. Apples to Oranges.
Crypto absolutely has value, and the price of Bitcoin will never go to zero. NFTs are useful.
That's because the value these things provide is money-laundering, bypassing of international financial regulations and tax fraud.
Yeah that's a superb value proposition right there, and definitely something we want to keep free and available /s
The current system is flawed in many, many ways, but none of it happened arbitrarily; the restrictions we have are the because malicious actors abused the system.
> For example, illegal transactions, scams and gambling together make up less than 3% of volume.
Note that:
1. This quote is talking specifically about bitcoin, not crypto overall
2. This paper is written by a notable crypto skeptic, so he's not using bro logic. He found the main usage by volume is speculation, with very little illegal activity.
In fact, the US underground economy is 11-12% of US GDP[1], which is a much worse proportion than bitcoin.
1. >flows to addresses which have been identified as illegal
These are only identified as illegal. First off, only a small number of adressess has been marked as illegal, since it doesn't make much sense to have everyone know the dirty deals you're making, most of the real illegal traffic is not there. Also a large number of DN markets uses 1-time wallets, so it's impossible to identify those.
2. Most of the traffic analysis is based on private to/from exchange and exchange to/from exchange data. As exchanges require a KYC, it can be assumed that most of the exchange routed transactions aren't illegal, or first go into a mixer if they are coming from an exchange, decreasing the odds that it can be classified as illegal.
3. Analysis was done in a crypto bubble market, where everybody and their moms were trading it on a daily basis to earn money.
In conclusion - the paper is bull. Yes, a large amount of usage is speculation, but illegal activity is way larger than assumed in the paper. But also, when you remove trading/gambling for speculative profits, what usages remain?
Mostly illegal ones, small amount of legal ones and a few believers.
The paper is not so simplistic as you make it sound.
1. They analyzed clusters of addresses, not individual addresses, so one-time addresses are accounted for (unless the vendor never collected their payment from the DN, in which case they gave away the drugs for free)
And anyway since 5 years ago all the DNMs use monero, not bitcoin, so talking about DNMs in the context of bitcoin is an anachronism. If you use a traceable currency with a public ledger for drugs, you're not very bright.
2. Volume associated with a mixer is classified as illegal in the paper, so it's part of the 3%. Bitcoin mixers are not plausibly deniable the way Tornado Cash is (because of UTXOs) - mixers still leave an obvious trail.
3. The analysis covers data from 2015-2021, so it covers two halving cycles.
> flows to addresses which have been identified as illegal
transactions, scams, and gambling together make up about 4% of the volume at the
beginning of our sample in 2015. By the end of of our sample in the middle of 2021,
this fraction has fallen to less than 0.4%
Illegal activity is 0.4% in a bull market and 4% in a bear market. Overall it averages to the headline 3%. You can infer speculation volume goes up 10x in a bull market.
As the other comment said, "illegal transactions" makes no sense. Al Capone's bank account did not receive directly millions from racket and drug selling. Everything in there was clean. Where did it come from ? Accounts that are also thought to be clean. Otherwise, if there were direct proof of illegal transactions, he'd have been arrested earlier.
The whole point of it is _not_ to get caught. In a space like cryptocurrencies where creating a new wallet to launder your money through and no longer have anything associated with evil_wallet_of_bad_illegal_man (which had all its funds sent to a tumbler and came back to the new account anyways). The whole point of underground transactions is to not be tracked.
is using bitcoin to transfer some of l your wealth out of country to avoid currency controls fraud? I don't think so but IANAL
I read that crypto is also being used for rapid cross country remittances, which may be totally legal.
--
Don't think I'm a crypto fan. The value is all based purely on shared beliefs. At least government fiat is backed by the taxing authority (while undermined by the printing authority)
If it's being used instead of some other wire transfer in order to dodge government rules on capital controls etc, then yes it's used to evade the legal system and thus also fraud. The fees are not incredibly low nor is the service particularly user friendly or reliable compared to something like Western Union. Bitcoin et al is not providing a useful alternative to existing, legal services. They do of course provide an alternative for other services.
"main usage by volume being speculation" doesn't help the case. A little bit of speculation helps price discovery. A lot leads to tulips etc, and is very dangerous.
Fun fact: so are Rolex watches and so many other luxury nonsense products with a high price. Wear one on each arm. Travel via airplanes across borders. Sell the watches. Now you have a lot of untraceable cash. Fly back and forth for business purposes seven times in one week. Maybe bring more expensive watches, perhaps that $200,000 USD Patek Philippe is a great way to get that payoff across borders.
Crypto and NFTs are just easier, less risk, less chances of being caught.
Maybe we should talk diamonds. Inherently worthless objects, easy to hide and transport, easy to make part of jewelry, and thus free to transport almost anywhere. Yet that one tiny rock can cost tens of thousands and will allow the corrupt politician to sell for cash money perfectly fine.
Problem with that though is finding a buyer, let’s say I buy 2 rolexs for 50k, I want to pay off my dealer in Ireland, so I fly there with my two watches.. how do I sell them? Do I just hawk em in a pawn shop, if so would I still get back my 50k?
I buy 50k in bitcoin on a US exchange and send it to someone in Ireland and they transfer it to their exchange and cash it out do they get back exactly 50k?
Sometimes.. sometimes more, sometimes less.
The point is there is a crypto exchange they can cash out at, in fact many.. and usually the prices are similar across exchanges.
John’s pawn shop doesn’t offer the same price for the Rolex as Patricia’s pawn shop.. anyway.. not really important in the grand scheme of things.
Bitcoin bad mmmkay ;)
Even if the market price of crypto is magically stable and the exchanges are perfectly in sync, you're still paying the big-ask spread plus the fees to send the crypto itself.
I suspect in most cases Wise or similar would be cheaper and safer.
> Even if the market price of crypto is magically stable and the exchanges are perfectly in sync, you're still paying the big-ask spread plus the fees to send the crypto itself.
Today, I can buy USDC/USDT in the US, head to any country in SE Asia and sell it locally there, paying less in fees than I would with USD. No KYC on the receiving end.
Wise is a pain the KYC ass and has a lot of limits.
Diamonds are anything but "inherently worthless". Their exceptional hardness affords them many interesting industrial applications. And trying to write off their asthetic value as "not worth" requires a definition of "worth" that is at the very least extremely unintuitive.
E.O. Wilson once said of communism, 'Great idea, wrong species.' Whether or not that was true of communism, it seems true of crypto. It has brilliant technical ideas and clever solutions to problems with traditional currencies, but the result is a system that doesn't work in practice because of how human individuals, communities, and social systems function.
> The current system is flawed in many, many ways, but none of it happened arbitrarily; the restrictions we have are the because malicious actors abused the system
This seems like a good example of the just-world fallacy.
The current system absolutely has many arbitrary restrictions. The problems those restrictions allegedly solve don't have only one possible solution, but that's what we got stuck with.
Is it really accurate to call things “arbitrary”? Usually if you look at any safeguard you’ll find a real historical problem it was designed to reduce. Sometimes that’s something best solved otherwise – the drug war provides many examples of that - but I’d usually describe those as ineffective rather than arbitrary.
The distinction matters because it raises the question of that process repeating again. Since it’s not random, the same forces will push in the same direction unless those problems can be recognized and countered in a different means.
I think an outcome that could have gone another way but for some random historical circumstance counts as arbitrary.
For instance, do you think our regulatory framework would look the same today had Prohibition not happened? That's a case where the State created a problem (black market funding large scale organized crime) and then added yet more rules to try and fix that problem.
Edit: so one could argue that we "need" those regulations because of crime, but another could say if we eliminate the prohibitions funding those crime syndicates, then the problem is equally solved. Doesn't that make those regulations kind of arbitrary?
The common definition of “arbitrary” has a connotation of randomness to it. My point was that this isn't random but directed, and that if you don't understand who those rules serve you'll just end up repeating it in a different form or having the old rule adapted for new purposes, similar to how various measures originally intended to prevent alcohol or drug money being laundered were repurposed as part of the War on Terror but they all stemmed down to the base problem of law enforcement wanting a way to trace previously anonymous cash flows.
Since this was a very vaguely defined claim, it might be more useful if you had something specific to talk about.
> The common definition of “arbitrary” has a connotation of randomness to it. My point was that this isn't random but directed
Yes, it's directed at solving a problem, but the specific solution we arrived at is somewhat random. I'm not sure how to make this clearer.
If you take any set of historical problems and the regulations that were intended to address them, do you agree that a different set of regulations could have solved the same problems? If different ones would also have worked, then aren't the ones we ended up with somewhat arbitrary?
Bitcoin is a useful mechanism for exchanging value, but NFTs have yet not shown any utility. The difference is that a currency only needs to solve scarcity and double spend, which blockchains accomplish, but ownership of property requires physical and/or legal protections, which they do not. Once you introduce an organization that enforces property rights there's no reason to use an expensive blockchain instead of a cheap Merkle tree.
>...but ownership of property requires physical and/or legal protections, which they do not.
This is not true for digital property. Digital property is just as "made up" as the NFT that proves its ownership. People hear "NFT" and for some inexplicable reason jump to physical art.
If the network believes, by whatever consensus methods for proof of ownership that are employed by this network, that you own one coin then those same methods can be used so that the network can believe that you own a certain digital asset. That ownership is just as real as the ownership of a coin.
What people get confused with is the concept of copying or using (both are actually the same problem) this asset. But, this is not an NFT problem, it is a digital problem. All digital assets have this problem, if you give me the asset I can copy and use it without your consent.
Example: I can trivially copy the entire Netflix catalogue on my hard-drive. Since those bits land on my system to be shown on a screen they can just as easily land on my HD as an mp4 file. Are we on any disagreement that Netflix owns those shows? No. But once made available to me, I can use them however I want. Ownership and "use" are to unrelated things when it comes to digital.
Why would anyone care about digital ownership? The only reason anyone cares about bitcoin is you can translate it in to physical ownership of things later.
Digital ownership is enforced by the code that’s interpreting the data, so the app publisher is the organization responsible for enforcing property rights. Tokens signed by an app-trusted key solve the problem with almost zero resource cost.
Digital ownership is enforced by laws and nothing else. There is no amount of code that can technically prevent me from copying any data that lands on my system.
>Tokens signed by an app-trusted key solve the problem with almost zero resource cost.
This ensures safety against access and not against copying. Of course I can not copy assets I don't have access to but the same is true for NFTs.
I’m not aware of any legal protections available to the person holding the private key that last signed an NFT. Digital property rights are enforced by client apps / DRM as well as legal trade agreements, but legal enforcement will be based on traditional registrations and won’t cover on-chain NFT transactions. You can buy my house’s NFT, but I will still legally own my house. Since, as you point out, DRM can always be broken, there is effectively no enforcement of NFT property rights at all.
Please refer back to my original comment about people hearing NFTs and for some reason which I fail to understand jump to "physical property". NFTs do not work for physical property but they do for digital.
Enforcement of digital rights is actually easier via NFTs than contracts/client apps etc. because NFTs mathematically can prove ownership (courts just have not caught up yet).
Gambling. Crypto is globalized gambling. It's a money laundering vector, for sure, but for the same reasons crypto competes poorly in the transaction market it's close to a last resort for high-volume launderers.
Completely and utterly unlike and in no way whatsoever similar, at all, to stock markets, futures exchanges, CFDs, options, CDOs, etc, etc, etc.
Crypto is just a speculative digital asset. Sure it's been a playground for all kinds of scams and charlatanry, because there's no oversight, just as stock markets once were (and still can be in some areas eg pink sheets), but crypto is not a scam in itself.
Notably unregulated gambling available without oversight and also readily available to addicts and children. Helpful in smashing down that redundant bureaucratic red tape the gambling industry so desperately is in need of at the small price of destroying, debilitating or general increase in suffering in peoples lives.
> The current system is flawed in many, many ways, but none of it happened arbitrarily; the restrictions we have are the because malicious actors abused the system.
And from that you can tell you live in a nice country with reasonable laws. You can't fathom that not all countries are like that.
That is a fault of their own systems, not the system I live within.
If people in Venezuela want to use bitcoin, they can go ahead. That doesn't mean we should embrace is in the Western world. It's a net negative for us.
The western system sucks too. In the US it's still federally illegal to buy weed and it can be very difficult to get abortion pills depending on your state. Darknet markets are desperately needed
Financial regulations differ. For example, in a certain country at this very time, transferring money for another country's defense fund is punishable by 20 years of hard labor in very very cold places. The system where governments have complete control over money transfers is only a few decades old. Before that, people actually had some freedom in how they spend their money.
Bitcoin has theoretical value. However, how many people are in bitcoin because of said reasons? I'd argue less than 1%. The other >99% are in it to make money out of thin air. So indeed, the value will never go to zero but the current nominal value of bitcoin is orders of magnitude higher than the intrinsic value.
You identified a source of genuine (if perhaps undesirable) value for cryptocurrency, but not necessarily bitcoin.
And is BTC goes close enough to zero, double spend protection becomes increasingly tenuous, and the incentive to switch to something else gets stronger.
You don't need crypto to run a scam. Financial scams are as old as money is.
The fallacy in this argument is that there's something special in crypto that makes this more likely to happen. There isn't. In fact, you could argue that the enormous activity of scammers in this space actually points to some inherent qualities that might be useful beyond just running ponzi schemes and other scams.
One of these qualities is that scammers are unusually aware and mindful that they might get robbed by people equally untrustworthy on the same platforms that they use. So, the notion that that isn't happening on popular blockchain platforms is useful to them, and others. Tamper proof ledgers are useful for all sorts of things. The history of money is basically increasingly elaborate measures to prevent theft, forgeries, and other abuse. People trying to abuse the system are a constant.
Blockchains and other cryptographic tools are just that: tools. I expect banks to gradually incorporate these tools into what they do. That's already happening. E.g. China rolled out the the e-yuan currency last year. Not a decentralized blockchain but it obviously incorporates some of the technology. Other countries are doing similar things.
> The fallacy in this argument is that there's something special in crypto that makes this more likely to happen.
I think this goes without saying: money and financial systems are regulated—to some degree—everywhere in the World. They are regulated by Governments, and there are real penalties for evading those regulations and getting caught. Many of these regulations were put in place to prevent the kind of shenanigans that is commonplace in crypto.
In crypto, by design, there is no regulation, nor is it really possible. This is the something that's special about crypto.
Crypto can also be regulated and it probably will get regulated.
Regulation always comes after the fact. The history of the "modern" banking system is that merchants at some point got bored getting robbed of their gold while traveling from A to B. Also, moving around tonnes of gold is actually expensive and tedious. So, they started sending each other bank notes underwritten by bankers who kept the gold in their vaults. Out of that modern banking and eventually central banks emerged. The notion of keeping gold in a vault became optional some time later. The regulation we have resulted from robbery getting more sophisticated. Initially all of this was unregulated. Regulation just happened as a reaction to all the inevitable bad stuff that happened.
What's a bank: a ledger of value denominated in currencies and a promise to account those ledgers correctly. Why do banks need regulation? Because ledgers are manipulated by people that can and will cheat if they can get away with it.
What's a blockchain: a tamper proof, shared ledger. If that sounds like a useful tool to have in a bank that would be because it is. You need a bit less regulation to keep the ledger correct. But you still need some regulation to ensure bankers use them properly and appropriately. Technology doesn't fix their tendencies to not do that.
Using an unregulated blockchain is not a whole lot different from using bank accounts in dodgy jurisdictions to evade taxes and oversight. Popular with the same types of people for the same types of reasons.
The fact that crypto people will tell you with a straight face that the irreversibility of transfers is a feature and not a bug should be enough of a tell...
Crypto allows irreversible transfers, but traditional reversible transfers are also possible on smart contract chains, although definitely not the norm.
The real bug is that irreversibility, and immutability in general, isn't possible in centralized systems. Which is why you can never be 100% sure that your bank account won't be empty next time you check. This doesn't happen in crypto.
In crypto, you have two options when it comes to keeping your money safe:
1. You can try to keep your keys and devices safe from hackers (The equivalent of buying a safe. DIY security)
2. Or you can trust an exchange to keep your money safe.
In either case, don’t be surprised if you wake up and find your account empty.
Anyone who's ever been screwed by PayPal or the like has plenty of reason to support the irreversibility of transfers. That's not to say that there should not be a way to recoup losses, but the fact that a third party can just pull money out of your account, pecunia ex machina, goes way too far in the other direction. And no, the reams of incomprehensible legalese that supposedly justify this are not good enough.
> In crypto, by design, there is no regulation, nor is it really possible.
That's demonstrably untrue—at least, that it's not possible. (I'm perfectly willing to believe it was designed to be unregulatable; it's just that, as usual, programmers echo-chambering at each other about how they think the law works didn't actually take into account how the law really works.)
Crypto is becoming regulated more and more as time goes on.
There's nothing special and magical about it; it was just new, and with the US Congress hopelessly dysfunctional, it was not hard to predict that it would take some time for them to actually catch up and start doing something about it.
4 real. The networks regulate themselves to the extent of their protocols’ game theoretic designs, which cover Sybil-resistance and Byzantine-fault-tolerance. The VMs will define some permissions for owning and transferring resources and cryptography for validating transactions.
Beyond the protocol is the arena of application standards and legal jurisdictions, which is the subject of economics.
> In crypto, by design, there is no regulation, nor is it really possible. This is the something that's special about crypto.
If by "regulation" you mean an external authority dictating rules to the crypto world, then yes, there is no regulation. But how many times have regulatory authorities for legacy finance lost track of the ball and permitted dangerous activity and even outright fraud? In the late aughts, regulators were so blind to reality that they permitted the Madoff scam and even the completely reckless trade in CDOs & CDSs that tanked the global economy. Then they promulgated "too big to fail" and bailed out the banks that had defrauded us (though at least Madoff went to jail).
On the other hand, if by "regulation" you mean a set of rules that can help guarantee the credibility, transparency and stability of financial institutions, then crypto can absolutely do that via e.g. smart contracts. That regulation would be entirely opt-in and the onus would he be on the buyer to evaluate the crypto for dangerous & vulnerable bits. That may be easier said than done.
Regardless, GP's point is well made, and the story about crypto regulation isn't so clear-cut.
Crypto is insanely regulated. For example, anyone who touches it in the US has to report every single transaction when they do their taxes. Not to mention the heavy hurdles involved in establishing an exchange.
If you use a debit card, you earn interest on your balance, and there's no anonymity. Britcoin supposedly won't bear interest. How do they implement traceability? Surely not blockchain - that's an environmental disaster. So presumably a centralized ledger, which WILL be hacked, even if the BoE runs it. But they probably won't - the current government doesn't like the state running anything. If the high street banks wanted to offer shitcoin acccounts, they'd already be doing it; so I guess Britcoin will have to be implemented by the sort of people who are already into shitcoin.
[Edit] If you use coins and banknotes, you get anonymity AND interest on your balance. What's the potential benefit of Britcoin?
> E.g. China rolled out the the e-yuan currency last year. Not a decentralized blockchain but it obviously incorporates some of the technology. Other countries are doing similar things.
Governments will do it as they need a regional monopoly on their fiat scam. The new centralization and financial tracking are features.
It's not clear to me what you are trying to say. Local laws on fraud protect both fiat and crypto. Someone stealing $20,000 or 1 bitcoin is subject to the same penalties.
I'd like to remind the readers that some people use crypto as a payment method and do not speculate.
As far as I know there is no alternative with the same level of convinience that crypto provide (KYC-less and fast payments to anyone in the world with just one secret).
Remember that next time you suggest something among the lines of "crypto should be made illegal".
I bought a new video game in 2011 with BTC and whenever I tell the story the crypto bro in the room laughs at me for not holding on to what amounts to something like half a million dollars now. Sort of like people keep bringing up the guy who bought pizza 2 years prior.
How dare I use a self-proclaimed currency as a currency. I lost all interest once I realized very few people actually want it to be a currency and the main excitement stems from the potential to make money, not the tech or a very idealistic view of banking independent from banks.
You are right, the stupidest part of this is ignoring the fact that real-world use would cause the currency to appreciate. I would say there is value in whatever path led you to investigate a "revolutionary" technology during its infancy.
Crypto-- the original view of it-- is anarchy. The crypto ecosystem we see today is a mode of failure of anarchy as a governance model.
You ultimately need a financial authority to promote "stable" prices, and even that statement is highly political. You also need some serious gravitas to protect the currency, and this is where the crypto episode is most curious. Governments that for years prohibited "competition" of this nature for years in the most draconian of ways, suddenly have been missing in action. That created an environment where crypto metastisized into something socially corrupt, and also it fosters doubt in the competency and motivation of governments to protect what has forever been their turf.
Anarcho-capitslism has always been laughably self-destructive if you are half-serious about modeling the incentives. Most anarchists don't seem to believe that capitalism as-is and anarchism can co-exist. Market socialists are probably the closest you get to having them co-exist.
This is what jumped out at me too. I agree with most of his statements but not with “Crypto is not a medium of exchange”. Yes, all the investment and speculation and “financial instrument” stuff is a mug’s game, but it does mean when I want to make a transaction it’s easy for me to buy some Bitcoin and it’s easy for the other party to sell that Bitcoin. I barely trust my bank to transfer money between different accounts inside the bank; when it goes from bank to bank it’s passing through at least two inscrutable “fraud detection” algorithms implemented by bankers, and if it’s going international it’s likely going through at least two more “fraud detection” algorithms implemented by governments.
The killer app for crypto is "KYC-less" which usually means "I can evade taxes or sell illicit goods". Otherwise, real money is faster, more scalable, and more resilient to users making mistakes.
Nothing I do is illegal; I pay my taxes; sometimes I make mistakes. Why would I ever want to use crypto over real money?
Didn't think I'd see a "I've got nothing to hide" argument on HN. Are you also against E2E messaging apps for the same reason?
Being able to anonymously transfer value should be a fundamental right, as part of our fundamental right to privacy. In the past, cash could be used for that, but with society going increasingly cashless and some governments trying to make large cash transfers illegal, crypto is now the only way to keep this right.
When has anonymously transferring large values of money ever been a right? It’s never been a right.
It’s like saying money laundering should be a right or evading taxes should be a right.
Cash transactions and commerce has been regulated for most of human history, whether it’s been for tax collection purposes or to regulate certain types of transactions.
People who work in cash businesses have never had a right to anonymity. They’ve always had to report sales receipts and earnings so they can pay income, sales taxes or value added taxes.
If you want to buy things with cash, you can. If they don’t take paper currency, use a gift card.
Keep in mind, you’re on camera everywhere and your phone is always tracking you. Practically speaking, it’s very unlikely you’ve been anonymous for some time.
I don't know where to begin telling you how wrong you are. Hammurabi's code has plenty of examples of a punishment of being put to death because you didn't have witnesses, a contract, or a receipt for paying for something. (It's easy for someone else to accuse you of stealing.)
Even in Hammurabi's code, receipts for agents, witnesses, and contracts, were only used for settling disputes in court where fraud may have been committed. Those instances with conflicting claims were a tiny minority of overall transaction volume, meaning receipts were optional and not required for the vast majority of transactions; especially between trusted parties.
As far as that "state" was concerned, all transactions were anonymous until a dispute was brought to court.
Incorrect. The reason fraud was rare was because of the general insistence on documentation. Court challenges were rare because people did in fact KYC.
False. What Hammurabi's code describes is a customer keeping proof of agreement for settling disputes which is Know Your Seller (KYS) not KYC, and it was not required.
Wrong. The transactions everyone is talking about here (whether Bitcoin or conventional financial transactions) fall under the banking laws, not the ones about simple purchases.
It seems you have abandoned your original argument.
How long do you believe KYC has existed? How long do believe believe banks have existed?
When Mansa Musa decimated the global gold market for atleast a century by distributing large sums of money to millions of people on his Hajj (possibly the single largest event of anonymous value transfer in human history), what regulation or law did he violate?
This was a relatively recent event where human history is concerned.
> Being able to anonymously transfer value should be a fundamental right
Why? That doesn't seem like that would produce good outcomes. It's not a 'fundamental right' to transfer unlimited amounts of money with no oversight.
Money is not speech. If you care at all about governments being able to function from taxes, financial regulation, and myriad other things, you don't want people to be able to anonymously transfer as much money as they want.
Even cash has regulations about reporting, especially over certain amounts.
I feel like you're conflating my argument a bit. I'm not saying "People with nothing to hide... etc". I'm saying that as a user, I'm going to pick the option that is best for me.
Crypto is never going to be the option that is best for me. Nor most of 8 billion other people on the planet.
Given the transparent nature of the blockchain, it's actually very hard to hide illegal activity on it. Much of the reason for my bullishness on crypto is that it makes graft harder. I wonder how much of the sentiment against crypto stems from beneficiaries of opaque institutions.
Have you ever paid for anything substantial with real money? It's a huge pain in the ass. I have to go into a bank, even during the height of the COVID-19 pandemic. I have to pay outrageous fees to transfer money & participate in something called a "wire". Where my money will simply be magically transferred to another party somehow. There are a zillion steps, none of which are disclosed to me. It should work fine, but it is also takes an indeterminate amount of time. No one can explain where the money is in the interim period. Also the money could go to the wrong person. Also, the other party has no way of knowing the money arrived. I have to call them and remind them that I sent it & they need to check to see if their bank received it.
3 - Banks making it really hard to do transfer large sums of money.
I can't solve 1, but I can tell you that crypto definitely doesn't solve it. Because making a mistake with crypto is irreversible. The money is just gone. Mom forgot her password because she's getting old? Well, too bad, now Mom is broke and her money is gone forever.
Two is a solvable problem and it's getting better over time. It used to be even slower.
But 3, I'm in favour of. I want it to be hard for me to transfer away my life savings. I want there to be many steps in which my ID is checked and people look me in the eye and verify that yes, this is the thing I want to do. Because I am an idiot, and if you give me a gun I will shoot myself in the foot. I don't want it to be easy to accidentally go broke.
You don't realize that the reason they are slow is because they are insecure. Why don't wires go on weekends? Because there is a possibility of an error, that a human clerk would need to sort out in his working time. Bitcoin can go on weekend because its mathematically secure.
Good point, I've had one hell of a time making down payments on cars or first/last month's rent with cashier's checks when my bank doesn't have physical branches in my area.
If I could have paid with, say, a dollar-backed stablecoin from a reputable institution, I could have made the payment digitally and closed the sale/rental without waiting days for a bank to mail me a check. In the apartment rental case, I might not have gotten passed up because someone else arrived check-in-hand ready to close the deal.
Swift transfers are slower than crypto. And governments have placed various restrictions on it called "capital controls". They say it's to encourage investment into their own economies, but investors knows it doesn't achieve that.
Some U.S. bank transfers are slow. This is not true globally or immutable, and the main reason it’s not a problem is that the payment systems the vast majority of Americans use are fast - much faster than cryptocurrencies.
Capital controls are a political topic. You can disagree with them, dissent is important, but it’s also important to be honest and say that you’re seeing an advantage through breaking the law, which is like discovering that your business is more profitable if you don’t pay taxes.
Mhmm I disagree. A couple of months ago someone in a city subreddit I frequent came asking for help. I wanted to give him some money anonymously, so I used a cryptocurrency to do it. Any other methods available in my country could trace de transfer to me.
It was useful to me for that use case. How would you have done that?
Right... So my bank allows me to gamble online via my c.c (casino) but i am not allowed to buy crypto with my c.c So the bank is telling me what I may or may not do.
Tomorrow, I might not be able to buy goods from some of their vertical intergrated partners.
Freedom to transact has many forms. Sue you pay youre taxes and do nothing illegal now. But that is only true as far as you follow their laws of what is right and not illegal.
Bitcoin itself won't, but the exchanges will; even when your coins are not on an exchange, addresses will be listed as suspect and watched closely if for example a hacked exchange's cryptocurrencies are transfered to it, basically freezing it. No exchange will touch it, and in extreme cases, the blockchain can be forked to undo a transaction.
Sure, that's true, but you don't need the exchange to transfer value if you're using Bitcoin. Granted, you need them to get that value in your local currency and in cash (just like you need another Bank to transfer Paypal into cash).
> No exchange will touch it, and in extreme cases, the blockchain can be forked to undo a transaction.
How often has the fork happened though ... twice? three times? If we're getting into that kind of rareness, we'll lose all relevance. Banks sometimes outright steal from their customers, but it's so rare that I wouldn't put it up as an argument against using a bank.
As for receiving tainted coins: that's a more interesting point. Has anyone ever tried tainting large wallets by transferring known-bad coins to them?
That says you shouldn’t use PayPal, just as the billions locked or stolen by cryptocurrency exchanges says you should be careful about who you entrust with large amounts of money.
PayPal is one of company of many. If you want bad customer service, they've been delivering that for a couple of decades but that's a problem specific to them and there are better alternatives available.
It is definitely an area where regulation can help but the point is that you don't need to wait to give your business to someone else.
Is more customer-friendly regulation of Paypal (they're a bank in Europe, you don't get more regulation than that) really something that is reasonably going to happen?
Lots of things would be vastly improved if only improbable things would happen (Google fights SEO-spam! Fusion brings unlimited energy too cheap to meter! Humanity unites in peace!), but would you place your bets on them happening instead of assuming the messed up reality we're in an dealing with it?
Faster? It's been 4 days since I sent a wire to my family in another country and it's not there yet. I have been waiting for 2 weeks recently for an ACH transfer between my two accounts in the US.
Because often payment processors arbitrarily agree with eachother decide not to do business with someone you want to do business with. With crypto, they can't stop you from paying for someone.
Payment processors are currently a form of zero representation government that decides what businesses are allowed to exist online, and they frequently abuse this power. They can only by avoided by using crypto. This is the one big use case of crypto i see as important, really...
Just out of curiosity, which country are you based in? Because for people based in countries with high inflation, crypto is a great tool to get paid in usd and reinvest it without being forced by their governement to convert it into their currency. Obviously, if you're based in a country with a strong currency and where all financial intstruments are available, that's not important.
“ Because for people based in countries with high inflation, crypto is a great tool to get paid in usd and reinvest it without being forced by their governement to convert it into their currency.”
I hear this quite a lot. Do we have any figures that say it’s actually happening at any scale?
Compare how many teams in crypto come from argentina (and latam in general) and south east asia compared to e.g. fintech or ai. In my experience many started by accepting remote jobs paid in crypto and then later working full time in the field.
So they don't use cryptocurrencies per se. They pay people in us dollars aka fiat.
Same as companies using offshore bank accounts for the same purpose, or paying out cash in envelopes.
People getting paid in USDC of course still need to convert a large amount of it into local cash/cash-equivalent because they still have to pay rent, pay for food etc.
They use a blockchain to transact in USDC because it's more convenient that posting cash across borders. Freelancers usually don't have the financial means to open offshore companies.
I think weaving tampons into your hair expresses your unique individuality and shows strong character, and you should definitely go for it, especially if you will be attending weddings, funerals, speaking in public, going on a blind date, receiving an award, sitting for an oil painting, or giving an acceptance speech for being elected to public office. Just stay out of the rain!
1 BTC currently is 22,987 USD. "The 2023 Honda Civic has a base MSRP of $24,650" [1]. No sane person, i.e. person not having more money than they can count [2], wanting to buy a car would ever spend the 1 BTC today for a Honda Civic, maybe the 'market' will go up and they will be able to afford a 48K Mustang Mach-E, or maybe it will go really up and be able to afford a 250K Lucid Air Sapphire. Actually spending the crypto 'money' is irrational behaviour, from an economical standpoint: just wait a few months/years, maybe it will go up: crypto forces the users into typical pyramidal thinking, a forever delayed gratification.
Ok. So maybe you can accept as economically rational to spend a few Satoshis for a bagel. Then where do you draw the line where BTC (or the other cryptos) stops being an effective currency? 15K?, 10K?, 1K? Let's say you want to buy a computer: 1 ETH is currently 1,637 USD, one Macbook Pro 13 M2 is 1,300 USD. Aren't you an irrational economic agent if you spent the 1 ETH today instead of waiting a few months maybe ETH will be back at the 4.6K ATH, when you will be able to buy a MacBook Pro 16 with M2 Max?
Yes, stocks are also an awful mechanism through which the East India Company fooled some "spice bros" to give them money for worthless papers. However, no Wall Street person will argue with a straight face if I want a bagel I just have to sell some BRK.A.
One must stop once in a while and ask themselves: what are they are trying to achieve, do they really want to be an effector in maximizing the pain and suffering of the world through vapid technology.
> However, no Wall Street person will argue with a straight face if I want a bagel I just have to sell some BRK.A.
That's exactly what you're doing when you buy something: trading an asset (dollars) that can appreciate in value in a savings account for some good you want or need right now.
Sure, but no one expects that the 25K they have in their savings account to be worth tommorrow 250K. With crypto that could be a possibility, it more certainly could be 0, but a possibility nonetheless. I just don't think a society should have a gambling mechanism as a large scale economic operator.
Arguably a big part of crypto's volatility is because it isn't widely used enough. If as many people traded in Bitcoin as currently traded in USD, I think that would average out most fluctuations.
I'm also not sure how you delineate between speculation and gambling. Are you for the current system of speculative trading of regular currencies?
I could agree in principle on the volume argument, perhaps after looking over some economic models. However, a big part of the USD stability in the past 78+ years stems from the causation chains which make the following fact possible: the US Navy is the second air force in the world [1]. In order to believe in the stability of BTC, I must ask the stalinist question: "how many divisions has Satoshi?" [2]. It is a sad reality but might will make right in this silly world of ours for the foreseeable future. Now that's an invariant which I would have loved to see cryptocurrencies tackle, but they seem to have no interest in this, it's more of a changing of the guard ceremony, this crypto-fiat dance.
Coming to your question, to regulate or not to regulate [3]. I come from the very far left field (pun intended). The most different approach that I've seen recently, one which could maybe move the world in a significant way, is the financo-fiction detailed in Yanis Varoufakis' Another Now [4]. One of the more radical proposals from the book is that the persons starting a company should have only one share each: more of a library card system than a market. In another presentation, Varoufakis says something along the lines: compounding interest becomes a tool of exploitation when the poor are forced to borrow more and more from the rich which only get richer. Therefore, no, I am against the status quo as much as you can get, and although I am not an optimist, I believe it is up to us to decide in what kind of world we want to live and what kind of future we want to nurture.
[3] I asked ChatGPT to make a poem starting from Shakespeare's verse:
"To regulate or not to regulate, that is the question asked,
Whether 'tis nobler in the realm of finance to keep markets free,
Or to take action against the sea of risks and save us from a crash.
The pitfalls of speculation oft bring economic pain,
Should we not protect, regulate, and keep it in check to gain?
The choice is ours, the consequences dire,
Let us ponder, deliberate and make a wise decision, not retire."
The difference is stocks have a reliable basis for going up based on an underlying asset that generates wealth. Most crypto is backed by nothing, some is backed by other crypto which is also in the end nothing.
Generates what wealth? Dollar "wealth" which is also backed by nothing.
There is no such thing as intrinsic value, value is only ever determined inter-subjectively. Crypto has value as long as people want it, just like every other asset or currency.
> The difference is stocks have a reliable basis for going up based on an underlying asset that generates wealth.
In theory, in practice it's a supply / demand game that can be manipulated by news, sentiment, and rich people.
Tesla does not have the underlying asset that made its stock worth as much as it did. It is/was a small player in the car manufacturing world in terms of sales and profits etc, yet its stocks and the company was somehow worth more than all the other car manufacturers combined.
It's a deflationary currency. I hear the country got into trouble with those 90 years ago, but if the only alternative is a hyperinflationary currency, the dynamics of a deflationary currency might be a danger worth approaching.
It's not so much a deflationary currency as an unstable one; its value has gone from $100 (or even less, the charts don't go back that far) to over $60.000 and back to the $20.000 range. That's incredibly unstable and not something I'd willingly would choose as a currency.
If by some weird magic I had today all the BTCs forever locked in Nakamoto's wallet, currently around $23 billion, I would give them all away just to be able to live in 2140, the year the last BTC will be mined. So I guess BTC is actually a currency after all, haha.
Speaking of convenience, secret, fast, out of govt' oversight..
Hawala https://en.wikipedia.org/wiki/Hawala is in practice for long long time, and it is almost exclusively used to avoid tax and for underground operations (ex. illegal betting).
Huge volume is moved, so should it made legal? No.
Why should betting be illegal in the first place? A private transaction that hurts no one seems to be none of the government's business. It shouldnt have to be underground to start with.
> There is a legitimate argument for creating KYC-light rails for small global transfers
Then let's do it! I keep hearing that we "should" fix regulation or we "should" improve global transfers. Competition spurs innovation. The global financial hegemony can now consider themselves competed against. The proper move is not to ban your competition, the proper move is to build a better product.
If, for every citizen in every country on earth, we fix regulations, build efficient payment rails, solve corruption, and stop printing money and causing hyperinflation, crypto truly will have no use case and will quickly go to 0. I'd love to see that happen. Your move, incumbents.
> Competition spurs innovation. The global financial hegemony can now consider themselves competed against
This isn’t how politics works. Crypto threw a flaming lint ball of fraud at the rich world. Pleading that it’s also helping the disenfranchised doesn’t help advance a KYC-light discussion as much as a regulatory-vacuum one. It’s easy to ban (or heavily tax and erect stricter KYC guardrails at the interfaces between crypto and the fiat and real economies, what I’m concluding is the best middle path) and punt the “what did we learn” bit to a committee with a few years to write a report. Especially when the beneficiaries don’t vote for you.
Nobody used cryptocurrencies for payment before speculation happened. You had people paying 10k BTC for a pizza and;.. that was it, because they were funny internet coins. The only reason people take cryptocurrencies as payment now is because they have value. Why do they have value ? Because people can speculate on it.
Saying that cryptocurrency should be made illegal is a stupid idea, of course. However, cryptocurrency miners should have to declare their activities and pay much higher electricity prices, so that we could actually use that electricity for more useful things.
EDIT: because the argument of "how is this different than the dollar hurr durr": it's not! The dollar has value because people trust the US government to keep existing, because I can exchange it for actual goods and people want it. The primary goal of the USD isn't to speculate, it's to exchange goods. The same cannot be said about your favorite shitcoin.
The lack of value for funny internet coins doesn't come from it being digital, it comes from being absolutely worthless because noone wants to take it. When a government, a physical entity is formed and says "the US Dollar is the currency we'll use to exchange goods", you have value in the USD because you know you're going to be able to use it. You'll be able to buy your lunch with it, because the state you live in says that you have to take it.
Your bitcoin only has value because it can be used to... have more value. It's worthless, and should speculation be gone, you'll go back to it being an unused toy.
Dollars have value because they force you to pay taxes with them. They used to be valuable to foreign nations, because the oil cartel OPEC used to force them to use U.S. Dollars to buy oil. Nowadays nations can use Dollars, Rubels, and Yuan.
Agree with you but would say that it’s more like virtual silver. A legit commodity of sorts but whose accessibility and supply makes it a good vehicle for bad actors to act.
The big difference is the infrastructure required. If crypto goes out of fashion, your random numbers get riskier to test as virtual silver because transactions will get slower and riskier.
The other big thing is that crypto fills a void between dealing with bank settlement costs and cash. Once the US government or Eurozone come up with a digital currency model, crypto is pretty much dead as a means of transacting.
These risks are what make it so attractive to scammers.
It's only KYC-less until you need to buy something that can't be bought with crypto, which is 99+% of the things I buy.
Payments are fast and relatively easy if the recipient wants to be paid in crypto. There are lots of fast and easy payment options if the sender gets to dictate how the value is stored. I can email you an IOU right now. But most people would prefer their local currency, and getting currency A -> crypto -> currency B is neither fast nor easy and almost always involves a KYC process.
You can do the same with cash, why not extend that to digital money? After receiving a cyrpto paying you can declare it to the goverment if it goes above the minimum required by law (exactly as with cash). It would be ridiculous if you had to KYC for a 200$ cash payment.
Ah, yes; the immoral, oppressive rules of "I can't make as much money as I want by lying to people so they give me their money in exchange for nothing."
^ This is a classic logical fallacy called a false syllogism. The archetypal example is "All men are mortal. Socrates is mortal. Therefore, all men are Socrates."
I assure you that all cryptocurrency is neither a moral good, nor is it Socrates.
Alright, because of the unknown number of users that use it and don't speculate - we'll keep the Ponzi scheme going, ignoring the damage and abuse caused so far. Is that good enough solution or?
But most cryptocurrencies are terrible for payments because they are so volatile. The ones that are useful for payments are stablecoins, which are scams in a different way—when Tether falls a lot people are going to lose their shirts.
I don't really understand people trying to defend absurd positions like this. What's even the point? It doesn't seem like it's necessary for this to be true if you want to argue that crypto "should" be eliminated, all you need to do is argue that it's decisively more bad than good. When somebody makes weak arguments like this I'm just going to ignore their thoughts in the future because they've demonstrated that they have faulty reasoning.
Crypto is awash in scams. On top of the scams you have people who are not intentionally scamming but are misguided and will end up doing harm to others and/or themselves. On top of that there is crypto that could genuinely work under certain circumstances (ie have a use-case that provides value to its users without significantly adversely affecting others).
Crypto takedowns are basically what this guy does. [0] Just like you have the religious crypto evangelists, you have the religious anti-crypto people. This is about feelings, not reason so that's why the arguments tend to be a bit far-fetched/weak.
[0] https://news.ycombinator.com/from?site=stephendiehl.com
> On top of that there is crypto that could genuinely work under certain circumstances (ie have a use-case that provides value to its users without significantly adversely affecting others).
To me personally, this is the biggest lie there is about crypto/ blockchain. To this day no application has been identified that could not be better solved with existing tech.
The whole crypto space seems to be a solution in search of a legitimate problem to solve. (Plenty of illegitimate use cases sure)
Let’s not hand wave: Can you actually spell out the use-cases that provide value to its users without significantly adversely affecting others?
The trouble with crypto is most of the use-cases it claims to solve, either aren’t solved, or they’re often better solved with more efficient and time-tested solutions.
So, let’s get specific and jump into the technical details of specific use cases.
Let's say I wanted to order weed, or lab tested LSD, MDMA or whatever from the internet and from a reputable seller. Can you show me how I'd do that with USD?
(It feels weird to defend crypto as I've always been extremely dismissive of the entire tech/community but again, the GP is right. You don't have to make absurd arguments, like that all crypto is just being used for scams or that it has absolutely 0 use, to make a coherent anti crypto argument.)
"could genuinely work under certain circumstances"
Ok I will be that guy. Not trolling. But after more than a decade, isn't it clear that crypto as a whole has failed to live upto the promise. The idea of decentralization is awesome but doesn't work in practice especially for payments.
I am not necessarily dismissive of crypto but increasingly, it is becoming difficult to see any real practical applications. Almost everything around it is a Scam.
Seems I hit a sore spot to provoke such a pedantic reply.
Obviously the cryptography was not enabled by crypto currencies, but the possibility to accept ransom payments at scale with little risk. Are you going to argue that crypto didn't facilitate the absolute boom in ransomware we've seen the past few years? The article you link says it did.
Paradoxically, extreme positions like this implicitly argue in favor of crypto because they attack a strawman that is far more useless and bad than crypto, so you walk away feeling like crypto is actually kind of useful and good.
Then don't buy it. If it's a scam it will go to zero and be forgotten as it does not have any fundamental value, as you say. If it does have fundamental value, then it's not a scam. What a stupid hyperbole.
What's the point of making yet another article blasting it with the same old tired arguments that have been continuously repeated ad nauseam for the last 12 years or so? I'm honestly surprised the article does not link to the Line Goes Up youtube video...
Oh dear lord I just had a look at the rest of his blog.
This guy has an unhealthy obsession against crypto, and paired with https://news.ycombinator.com/context?id=34693042 I'd say it's either sour grapes or has some kind of agenda, even if it's a personal vendetta.
In any case he's not even worth the bytes used to receive the webpage.
It's weird. As I noted in another comment, he's extremely vocal against crypto... yet he worked on it and apparently got destroyed by it. It's not savior complex, it's just sour grapes.
> scam /skæm/ (noun): a clever and dishonest plan for making money
This fits many projects in the cryptocurrency space. But what about the first successful cryptocurrency Bitcoin? Was it dishonest? What about Ethereum, is it also dishonest?
Seems like yes, there are lots of scams in cryptocurrency. But there is also projects that are not, so in the end, the title ends up being clickbait, which I (just like you) fell for...
Broadly brushed, there are legitimate academic questions in crypto/blockchains/web3. The moment the work is remunerated for something other than its intellectual value, however, it's fair to revoke the benefit of doubt.
I'm sorry, I don't understand what you mean with "Bitcoin as practiced". "Bitcoin as practiced" made Bitcoin into a scam while it wasn't one before "it was practiced"?
Bitcoin as practised is a Ponzi scheme (I say it's valued $5 and if you want to join my cool buddies you need to pay $5 and we paid $0, the next person needs to pay $10 and so on and the value disappears if we don't get new people to our cool clique).
The way it works (place data in a file, distribute file to everyone, use cryptography to verify that data in file placed by $someone is valid) is great.
If Bitcoin is a Ponzi scheme, then fiat currencies are even worse.
The central bank plainly admits a 2.5% inflation target. That means they capture all progress in technology that allows daily life to be cheaper, and on top of that dilutes the purchasing power a further 2.5% per year.
Ever since the fiat system was implemented, the gap between the rich and poor has been increasing.
> If Bitcoin is a Ponzi scheme, then fiat currencies are even worse.
Fiat wasn't mentioned here, unless you want to argue that I purposely specified US dollars - I did so because of easy numbers.
Just because one way of handling currency sucks, it doesn't mean it justifies crypto, which sucks but way worse (because it can be abused by entire population instead of several hundred governments).
> Bitcoin is one way to side-step this debasement.
It isn't. It's not being used for payments. People hold it (or, to be fully crypto-compatible - HODL).
Its network is slow, we all know it's 7 TPS.
It requires too much processing power.
And the list goes on.
It's being used as a Ponzi scheme, the difference between crypto and fiat is that regular mortals have access to scam too, not only the governments.
You didn't say a word about how the value is being added to BTC, but I guess that's what your fiat comparison was about. I'm sorry, but you sound like regular crypto-bro who doesn't actually grasp how things work but thinks they do.
If you want to sell me a Bitcoin with the promise that I'll be able to sell it for more in the future, then that'd be a scam. But if you just sell it to me without any promise of future profits, would it still be a scam in that scam?
None the less, it does sound like Bitcoin itself is not a scam in this scenario, but rather there are scammers who use Bitcoin to perform their scams. Not that Bitcoin itself is a scam. Would that be correct?
> don't understand what you mean with "Bitcoin as practiced"
The paper and concept are fine. People marketing Bitcoin as an investment, et cetera, or more broadly selling anything related to it, are enabling a scam.
Ok, so Bitcoin itself is not a scam, but people can use it to do scams?
That makes sense and I'd agree with that. Author of the submission don't seem to think that's a useful distinction though, which seems slightly extreme.
I'm not sure why that should necessarily be the case. E.g. if a vendor sells a legitimate good and accepts bitcoin as an alternative mode of payment to fiat, and the buyer acquired those coins in a legitimate manner, in what way is that perpetuating a scam? Isn't that the original purpose outlined in the whitepaper?
I think it's hard to ascribe intent to Satoshi and it seems the Eth creators are sincere in their beliefs thus far. SBF also seemed sincere. I think that the author of the piece is lumping together acts of pure deception with acts of self-deception. Bitcoin may not be an explicit ploy by the creators to steal money but it's still a nonsense product destined to fail and leave everyone else holding the bag.
I mean, it's an expression. If you own coins when they crash then you are "holding the bag". If you sold at the peak then you robbed everyone at the bottom.
- Like indulgences, crypto made value out of thin air
- Indulgences were a scam so crypto is a scam
- Crypto doesn't fit with Keynesian economics and is therefore false
I am not Catholic, but his tone implying that anyone who is religious is a fool feels more like an ad hominem attack than anything.
As to the veracity of Keynesian economics, I am less than convinced he got everything right.
That said, I am personally suspicious of crypto but I don't think it has no use just because it has no intrinsic value. We do not use paper dollars because of their material or their craftsmanship.
This is silly. No religious person today who has even a passing understanding of church history thinks that indulgences weren’t a scam. You’re aware that the Reformation has happened since then, right? As to Keynesian economics, the author isn’t arguing for a Keynesian worldview per se, he’s using Keynes definition of economics, which is a definition not unique to him.
It's used a lot in the third world. In Georgia you can buy a burger paying crypto via NFC terminal. I also know people who get their salaries in crypto. And it's used a lot for donating to opposition where it's illegal, like in most dictatorship.
Georgia is/was absolutely mad. I was in Tbilisi for a while and met _a lot_ of crypto bros. Probably highest concentration of crypto bros I've seen in a single city ever, or at least I struggled to find "expats" that weren't into crypto when I was there. This was before the war, I suspect the demographic is different now.
Everyone was openly talking about how they use it to evade tax because Georgia isn't a CRS reporting country (didn't know what that meant before I met them). Or people paying 1% tax "legitimately" (I have no way of verifying their claims) due to some loophole.
So many places advertising cash for crypto and vice versa. There was also something going on near Svaneti where there was free electricity and people were using it to mine crypto and the mafia was involved, I don't know the details. Apparently there is cool snowboarding around there, but I stuck around in Gudauri since it looked like a pain to travel all the way to Svaneti from Tbilisi.
On a side note, I don't think Georgia is classed as third world, right? Technically it's probably "second world" since it's a former soviet country. But even stepping away from the technicalities, the infrastructure there was pretty great. Great 4g coverage for a great price.
I have no estimates, only my experience from visiting these countries, but I found an article regarding Georgia [1].
But it's pretty widespread, Navalny, the main Putin opponent uses crypto as the main source of donations since all his accounts were frozen, Ukrainian army accepts donations in crypto, Belarus opposition uses crypto, hundreds of thousands of Russians used crypto to move their savings out of Russia, Iranians, Chinese and Venezuelans use it a lot too.
I feel bad for them then. I don't know enough about economics or politics, but it would seem preferable if they could be paid in US dollars.
Maybe orthogonal (?) but it sounds a little like an argument in support of lotteries. Though lotteries seem to primarily draw money away from the working class that can least afford it, banning the lottery would seem to take away that sliver of a chance that they can be lifted out of poverty.
> but it would seem preferable if they could be paid in US dollars
There are USD-bound cryptos like USDT, it's all about infrastructure.
The point is that using Visa, Swift and other infra is usually bad option. In the 90s people used cash USD to transfer value, but risks were higher than with crypto, so now crypto is popular as USD cash replacement, a mean to transfer value under the radar or malicious government, bypassing sanctions, avoiding hyperinflation etc etc.
If only people were forced to use it by a local authority so you could easily transact in it, then it would be useful. Satoshi should have thought of that in his whitepaper.
Be grateful you live in the EU or the US and don’t need crypto. It has been a major lifeline for my family and friends in Lebanon and Venezuela, both of which lack fully functioning financial services. I can send Bitcoin just fine though!
As well as thousands of Russians outside of Russia got their banks accounts blocked and sanctions restricted our money to be 100_000 EUR max per person.
Hundreds of years of liberal ideas of individual rights just crushed below collective responsibility idea for some dictator actions.
People moved billions out of Russia with bitcoin and other currencies. They saved their money after sanctions with passports based discrimination and their whole country actions against them. But rich people from first world country will still push these ideas, that's it all scams and casinos.
And the only alternative they provide as "real money" is something like "give all your money to our banks, sign some contract with humiliating visa conditions, pay us 40% taxes and pray we won't take it back". Yeah, sure, thank you very much!
If you are interested, me, personally, was partially affiliated with libertarian party and left Russia after first police visit in early 2021 (so a year before the war, even better in your terms). But that's just an ad hominem and doesn't matter in fact.
Talking generally, that's true that most people didn't leave, and that's totally fine. People don't deserve to play heroes and suffer in prisons because they were unlucky enough to born in wrong place in wrong time. Everybody deserve to have a peaceful life with their families, hobbies and jobs. Wanna play hero - get a visa, go to Russia, give your life, get shit done, if that's so easy. Humanity will be grateful for you.
If you don't - don't say people to do that just because they have different color of passport or speak other language. There is nothing wrong in being a "coward", people just want to live their lives, it's not a game, there is no savepoints.
Each person in the world can be only judged by his own actions, not by others'. Simple, but extremely important, idea which was an outcome of 2 world wars. If you create more hate by nationality or citizenship - you are just like Putin with his "bandera" fetish. Just different objects, really.
Out of curiosity, could you describe the last-mile experience for those remittances? Once they receive it in their wallet, can they easily spend it at local merchants, or do they need to convert it to an account in the local currency? If the latter, what prevents the account’s bank from receiving a transfer?
Yes, if your definition of “just fine” involves long waits, transaction fees, and fluctuating value. All symptoms of the fact that bitcoin and crypto in general is a giant casino for 99% of users.
Certainly it’s a valid way to send money, but it’s not hard to see the faults.
The Lightning Network is being used to send BTC with instant confirmation & near zero fees.
I just used it to pay someone from a US bank account to a Costa Rican bank account. $1000 payment, it reached their bank account in 12 seconds (we counted) and we paid a total of $1.80 in total fees (18 basis points).
I can’t think of a faster or cheaper way to pay internationally.
On the US side, I used the Strike app so my balance is in USD and I’m not exposed to the fluctuating value of BTC.
On the CR side, they used an instant off-ramp converting the BTC to CRC instantly, also limiting their exposure to BTC volatility.
No scam involved. It’s just the cheapest, fastest, easiest way I’ve found to send money from the US to countries with lackluster banking infrastructure.
BTC enhanced the transaction because it's a bearer instrument, not a promise of future settlement. This reduces the cost to process a transaction & increases the speed of settlement.
Strike [0] has money transmitter licenses in every state in the US (except NY?).
Ridivi [1] has a money transmitter license in Costa Rica.
That is not really a vindication of crypto, it’s just an extra condemnation of what is happening in Lebanon and Venezuela. And although it may help individuals it is not a sustainable solution to the issues in those countries.
99.99% of crypto is unsustainable speculation on a game of musical chairs or outright scams / ransomware.
If you look at the entire picture, crypto has such a negative impact on this world. It makes me sad.
> although it may help individuals it is not a sustainable solution to the issues in those countries
Sometimes what you need are not "sustainable solutions", that's something you can afford when you are not struggling daily just to stay alive. Sometimes you just need something that solves the problem right now, damned by "sustainability".
Just like most people in poverty don't give a fuck about climate change, there are so many other problems on their mind about their daily life, that there is no space to focus on "bigger problems" or "sustainability", it's just about surviving and finding ways around whatever problem arises.
If people in countries like Libanon or Venezuela have to survive by “dumping a barrel of oil each day in the ocean”, and this is basically the only “legitimate” use case for “oil” this is clearly not a vindication for the existence of oil.
It’s just all bad, there is no justification for “oil” to exist.
If you could somehow get money by dumping a barrel of oil into the ocean and you had no money at all with a hungry family, you'd find it hard to argue against dumping that barrel quickly.
> You may (deliberately) miss the point: that people survive this way doesn’t mean it vindicates oil existing.
What does it mean to "vindicate" oil existing? It simply does. As does crypto.
Now, some people, maybe you, might ask that people who dump oil into the ocean should be physically punished, even if that is the only way for them to survive. This seems a morally absurd position to me, but so be it.
> That is not really a vindication of crypto, it’s just an extra condemnation of what is happening in Lebanon and Venezuela. And although it may help individuals it is not a sustainable solution to the issues in those countries.
Look, condemnation is not enough. First fix Lebanon and Venezuela, then outlaw Bitcoin afterwards.
There is no product being sold. People are being convinced to surrender working currency in exchange for a public database entry that records the fact they were duped.
The product is clearly the ability to exchange financial value friction-free and with no middle men or central authority. The various crypto coins achieve this property quite well with various tradeoffs on speed, anonymity, etc.
The exchanges are both --- the middle men *and* the central authority.
They set the "financial value" of crypto. They mint their own "stable coins" at will without any verifiable backing and use it to trade against their own "customers" --- because there is nothing to prevent it.
And yes, I am aware of the peer-to-peer exchanges --- which provide no real, practical alternative but to more or less follow along with the prices set by centralized exchanges.
Exchanges are not necessary for crypto. Not sure why you're conflating them.
Also, there is no central authority telling exchanges how they have to operate, that they have to collect certain kinds of data or regulate certain kinds of transactions (in theory). If you don't like an exchange's rules you can move to another or create your own fairly easily.
By contrast, consider how difficult it would be to start a bank.
Yes they absolutely are. Without them, there would be no crypto *market* --- centralized or otherwise. Everyone turns to the exchanges to value their crypto --- even those doing peer-to-peer (DEX).
Also, there is no central authority telling exchanges how they have to operate
Exactly! In the absence thereof, they become the defacto "central authority" --- by the sheer weight of their trading volume and the fact that they mint stable coins which can be used to influence any trading.
> Everyone turns to the exchanges to value their crypto.
Not everyone. And the fact that most turn to exchanges says nothing about crypto's dependence on them. If all exchanges were outlawed tomorrow Bitcoin would still not disappear.
Furthermore, the existence of multiple exchanges already refutes your claim that there is a central authority, de facto or otherwise.
Furthermore, the existence of multiple exchanges already refutes your claim
Bitfinex and Binance control the market by sheer weight of their trading volume.
The others have no choice but to follow their lead. If they don't, these "Big Two" will arbitrage against them and they have an unlimited supply of "stable coins" to work with.
Yeah, I remember when cryptobros talked about self-contained crypto economy. In that ideal scenario exchanges aren't necessary. But 14 years have passed and nothing has come of it. Off-ramps are still necessary.
Exchanges that deal with real money have to abide by rules and regulations of their jurisdiction. Governments can tell them what to do.
Crypto exchanges that deal with crypto only can indeed hide from governments, but if they steal your money - there's nothing you can do.
> And yes, I am aware of the peer-to-peer exchanges --- which provide no real, practical alternative but to follow along with the centralized ones.
Why? Centralised exchanges are more convenient, but as you've said you can use a local p2p exchange. It will cost you more, and take more time, but you can. In comparison, you can't make a SEPA transfer without a bank.
You can trade with third-parties, and if you want a paper trail you could notarize the trade, without having to submit your data to a huge private centralized database.
It is because you don't know what you are talking about when it comes to economics.
A currency that doesn't inflate, doesn't get spent. It gets horded and stops acting as a medium of exchange. Exactly what we see with crypto and why the currency part is bullshit with it.
It is just embarrassing how ignorant people into crypto are with economics. This is economics 101 stuff, most basic ideas.
it’s more that using fluctuations is bad logic for both crypto and fiat
being a user of US currency over the last 100 has been generally good for all involved
i’d say the same is true for ethereum (i’m a bit eth maxi with small holdings of other crypto)
if you are at all actually curious i wouldn’t read anything about crypto since the writing is so polarizing (crypto =scam or crypto is saving the world).
neither is true but no amount of words will give conviction.
download metamask, buy $500 of eth, swap it into usdc on uniswap, buy a shitty nft on opensea. then see if you like it. do not treat the $500 as investment. treat it like education.
I just want currency that won't be arbitrarily inflated, is digital that some group of people can't control my spending. I just want something that is a unit of value that I can trade for things I want. And it doesn't need to be traced either, I don't want the government to know how much I spend on steak.
"Every day I write something about crypto to the nature of “crypto is all a scam”"
Yet he still write daily about Crypto. Very weird. Whoever wanted to be convinced that is a scam should be convinced by now, everyone else just want to hold some coins.
So what is the utility in writing the same articles and screaming the same points over and over again, to those who are still holding coins, and are clearly not interested in selling because "it might go to zero"?
"You're an idiot, it's a scam, it's a ponzi, why are you still holding????"
I disagree with this, it seems to me that if you follow author's logic you can call US dollar scam too - a lot of it's value is same thin air called "debt"?. The problem with argumentation and particulary with church comparison is that in order for something to be called scam, as per definition provided in the article, someone must be there who planned it, who gets all the profits. But crypto has no central entity, no final scammer, there are just programmatic rules - and crystal transparency, everyone is free to do whatever fits in this paradigm, and this is future of currency
Some would go far as to say all fiat currency is a total scam. "Fake money", as I think Robert T. Kiyosaki, author of "Rich Dad Poor Dad" describes it.
So a totally fake and bankrupt scammer and anti-vax spammer who advises investing in MLM scams and who is aptly described as a racist idiot Trump supporter himself describes all fiat currency as a total scam and "fake money", huh?
Do you also have high praise for the book he wrote with Donald J Trump about "Why We Want You to Be Rich?"
Who you choose to worship and parrot says so much about you and the quality of your advice and beliefs.
>The Intercept wrote critically of the book's advice, including the recommendation by Trump and Kiyosaki to invest in multi-level marketing companies, asserting instead that these are harmful pyramid schemes.[1] The Intercept contrasted assertions in the book with promises by Trump during his 2016 campaign for president, writing Trump's later views were contradictory with the work.[1] San Antonio Express-News was critical of the contradictory advice imparted in the book, writing, "Trump and Kiyosaki argued that because they were already rich, they had no need to make more money, all the while cashing in on the very books that said so."[8] The paper marveled at the reaction among consumers, "Fans responded to this kind of contradiction by praising both the authors' earlier financial success and their shrewdness in taking advantage of the new opportunity to sell."[8]
>The Ultimate Hypocrite: Robert Kiyosaki and His Company’s Bankruptcy
>A story came across the news this weekend about Robert Kiyosaki, the author of Rich Dad, Poor Dad, and how his company went bankrupt last month. Basically, the company didn’t pay the proper royalties on its seminars, and when they lost in court, they didn’t have enough money to pay at all. It wasn’t a personal bankruptcy, rather, a corporate bankruptcy. However, a corporation with money should be able to pay up for a minor royalty dispute (only $23 million compared to $400+ million in revenues). And when your name is attached to a company, and your business is built around creating wealth, the word bankruptcy associated with it usually isn’t a good thing.
>However minor you may consider it, I find it appalling as a personal finance writer. This guy made a living on selling “his story” and encouraging others to fork out tons of money to hear it. In the end, the story crumbles, and it just makes him a hypocrite.
>The Rich Dad Poor Dad Guy Is a Racist, Idiot Trump Supporter So Please STFU About That Shitty Book Forever
>People who pray at this altar are specifically susceptible to the sort of symbiotic grift that has made Robert Kiyosaki a rich man.
>If you’ve never heard of Robert Kiyosaki or his Rich Dad Poor Dad empire of financial advice, I want you to stop reading this, I want you to get on your knees, and I want you to thank God for granting you such luck. You are blessed. You are highly favored. Unfortunately, many of us are not as fortunate, as this book exists in the curricula of Shit Frequently Cited by Douchebags Who Say Dumb Shit Like “I’ll Sleep When I Die” and “Rise and Grind” and “We Need Black-Owned Prisons.”
>If you ask someone to name their favorite reads, and they list this or The Art of War or The 48 Laws of Power, it’s a foolproof tell of a money-centered morality—a devotion based on the belief that people with money are better than those without it. Not wealthier or more privileged or provided more opportunity to live a better life, but inherently smarter, harder-working, less impulsive, and more trustworthy. It doesn’t matter how you got the money, or who you stole from (or killed) to have it. If you have it, you’re God.
>People who pray at this altar are specifically susceptible to the sort of symbiotic grift that has made Robert Kiyosaki a rich man. (Well, rich-ish.) He convinces you to buy a book with Fisher-Price financial advice, and then encourages you to spread the gospel of grift to others—which creates the sort of following that allows him to charge tens of thousands for Matryoshka doll-constructed seminars where he delivers gems like “invest in things” and “dimes are worth twice as much as nickels.”
[...Kiyosaki's ranting racist anti-vax pro-trump plannedemic conspiracy theory tweets redacted...]
>THIS IS YOUR FINANCIAL ADVICE KING??? This guy??? Darth Dale Carnegie is your money mentor??? This is the guy who Danny Ocean steals shit from in movies. I wouldn’t trust this man to crack an egg.
>If this information upsets you, and you find yourself in dire need of a new source for surefire financial advice, don’t fret! I got you! It even remixes Rich Dad Poor Dad. You ready for it? Ok, here it comes:
>1. Have a rich dad.
>Thank you for attending my seminar. That will be $17,000. I take Cash App and Venmo.
Kindly, I'm not from your country, and I didn't ask about your politics, or ideology.
I've just offered a quote from a book I read a few years ago, and thought it was an interesting concept. From what I've recently read, it doesn't seem to be an idea that rests purely at the feet of Kiyosaki, either. Many others seem to have good evidence backing it up.
Do you have a counter argument, or enhancement to offer to the idea that fiat currency could be fake money?
Still, debt is money created out of thin air, with best hopes that air is not so thin. There were number of events where debt was looking secure, but in fact it was all thin air, and the global economy followed with a crash.
It shouldn't happen if you really don't get into debt without anything on the other side, yet, it happens?
I use cryptocurrencies to pay for services where I want to stay anonymous for no ill/illegal reason. I just don't feel comfortable being watched wherever I go and whatever I do even if I don't do anything evil.
This entire comment section seems premised on this idea that crypto is useful because it's anonymous. But with the exception of a couple tokens like Monero and Zcash, which are rarely used, crypto is significantly LESS anonymous than cash.
There's a reason it's called a public ledger. So odd.
Sure, I use Monero, Zcash and mixers. I absolutely can't imagine using BitCoin or similar currencies the plain way so everybody would see precisely where and when, for how much and, indirectly, what I buy - this seems insane, do people really do this?
The only problem still making me feel slightly uncomfortable is I don't understand how do Monero and Zcash achieve anonymity, how is it possible to transfer money without registering who (whose wallet) pays who. Ideally you should understand how do your tools work. But I don't care enough to dedicate time to study this.
Cash can only be used anonymously in-person. Lots of commerce happens virtually today over the internet. Using cash to pay for digital goods/services is not a sustainable solution.
Sure, you can mail an envelope with cash for a very small number of online services. But, the US government OCRs the return+to address on every letter in the country. So, even your envelope with cash is being traced. And there's the risk of the letter being lost/stolen. There's also a carbon footprint involved in sending physical letters around the globe on cars/planes.
Bitcoin is more private than bank/credit card transfers even if you don't try to hide your identity, because it costs more to follow your trail (especially if you bought it from a natural person rather than a KYC centralized exchange). But it is pretty convenient, as it can be done fully online.
> However, crypto represents a divergence entirely from a Keynesian worldview in that it has created this bizarre simulacrum of markets with all the trappings and veneer of finance but which has no pretense of being tethered to the economic problem at all. No goods, services or resources are being exchanged. Crypto is a Keynesian beauty contest for zero-sum get-rich-quick schemes. I call it the nothingness game, a bizarre contest in which participants continuously punt on get-rich-quick schemes for lumps of nothing based on their perception of which lump of nothing others believe is the most attractive.
What a bizarre argument. Keynes wrote in the 1920s and 30s, so according to Diehl, did economics and finance not exist prior to Keynes? Was it all just a simulacrum until Keynes showed up and whipped out his General Theory? The map is not the territory.
This isn't even factually true. Crypto is in fact used in the real economy of places that have such bad monetary systems that crypto is much more stable. Look at Venezuela or even Ukraine and how much crypto is used there because the formal financial system is shambolic.
Crypto scams may be more common in the developed world where formal institutions are decent enough that the marginal cost of using crypto in the real economy is just too high compared to the legacy financial system.
The US dollar is pretty much the de facto currency of places where the official currency is unstable/distrusted. Places like El Salvador made a big deal of adopting Bitcoin, but it was mostly smoke and mirrors.
Moving dollars in and out of authoritarian or war-torn countries isn't trivial. That's why I mentioned Venezuela and Ukraine.[0] Russia itself also has a significant crypto economy. None of this is to say there isn't demand for dollars in those places, just that supply of dollars is not exactly abundant. Thus, they go to crypto.
Crypto enables DAOs. For the first time in human history, large scale financial and economic organization for the general public is possible. And its possible to do it in a transparent manner.
In 'normal' life this kind of organization, investment, company creation and management et al are all gated behind legal complications and requirements of minimum capital and many others. Even when a major movement succeeds in setting up a foundation, the running of it is complicated, non-transparent and anti-democratic.
Even with companies it is the same - for the ordinary person creating or participating in a company is difficult and it requires understanding legal implications and responsibilities. Even if you do, there are various legal and economic barriers to investing and participating in such large companies.
With DAOs, everything is in broad daylight - depending on how the DAO is set up of course. But any properly set up DAO gives the power to the people in taking up the culture that we created in Open Source Software movement up a notch - by enabling organized economic movements.
That DAO which tried to buy the US constition failed. There was no way a new, emergent, new way of doing things could gather enough money in enough time to overcome the already aggregated private capital that it competed with.
But it proved something - for the first time in history, such things are possible. Economic organization for the masses.
Those who criticize crypto seem to have scarce awareness, leave aside understanding of what DAOs represent, and what is happening in DAO space. Of course, its hard to blame people - some understanding of at least Early Modern human history, economic systems and organization patterns and the development of democracy would be required to understand how big a change DAOs are. And that requires an ample interest in history itself.
In any case, you could make similar arguments about banks and the "Federal" Reserve being scams. In fact, quite a few well regarded politicians of old made exactly those arguments. The implicit agreement in this particular argument is that the scam we've accepted is somehow better.
Almost all money is a scam. People don't typically realize that 'making money from thin air' is the oldest of all scams.
In history books they tell that people used salt, animal furs, shells etc. as money. What's forgotten is that there was always a 'bro' who shilled these new forms of money to other people. This bro had found a way to produce these cheaply and could get rich.
Eventually people realized this scam and moved onto rare metals which can't be produced from thin air, without work. However, these were minted into standard coinage, and eventually they were clipped or mixed with cheaper metals. Again, someone found a way to scam.
Next, we moved onto gold-backed paper money and then to fiat currency, and yet again the scamming continues, even easier than before. They've even made the scamming official, by mandating the 2% inflation target.
I gotta disagree with this author on the whole "no intrinsic value" thing when it comes to crypto. Sure, it's true that cryptocurrencies aren't physical assets like gold or silver, but that doesn't mean they don't have value. People are willing to pay money for them, which gives them value. It's supply and demand, plain and simple. Plus, with blockchain technology, crypto is much more secure and transparent compared to traditional forms of currency. So don't be so quick to dismiss it as just entries in a database created out of thin air. There's definitely more to it than that.
Yeah, it most likely is but the first half of the last decade I spent buying questionable stuff from markets was totally worth it and be fondly remembered for the rest of my life.
Every now and then I read a press release from some organization about how they're using crypto or going to use crypto (aka blockchain) to solve some industry problem. For the life of me, I can't figure out how any of these ideas will ever bare any fruit.
Does anyone know if companies are actually using blockchain for production, revenue generating business (real companies, not crypto companies)?
Quant Networks. The token is used as a license key for using the Overledger network. Clients pay in FIAT, Quant network uses this to buy the token and secure the use of the Overldger functionality. Overledger enables interoperability between distributed ledgers (permissioned and permissionless like BTC, ETH etc.) in use by banks today. IMHO this is a legitimate and specific use case and very very rare in the crypto world. The company Quant Networks is a legitimate company.
> Overledger enables interoperability between distributed ledgers
That sounds fancy, but who's actually using it in production? All these blockchain companies are highly self referential. It all sounds like 1) Build Block chain. 2)???? 3) Overledger.
Quant is a private company with NDA's limiting the freedom of communication they have with their partners. But LACCHAIN (https://www.lacchain.net/home?lang=en) uses Overledger nodes (see the dashboard at https://dashboard.lacchain.net) Oracle uses the Overledger product as part of their Oracle Blockchain proposition which is offered via Oracle Cloud. The use of their token is not a means to an end, it's only used for licensing of use of their software. Clients do not know nor care that it's a ERC-20 token, they pay their licenses in FIAT.
>Similarly, the “crypto as currency” and “crypto as investment” narratives have been thoroughly debunked because the truth value of these statements is predicated on factual claims that are demonstrably falsifiable.
It must be nice to be able to just state something is thoroughly debunked and not have to give any evidence, despite billions of people not knowing, and be magically right...
> It must be nice to be able to just state something is thoroughly debunked and not have to give any evidence (...)
That's quite the amusing comment, given the fact that crypto-bros reiterate that crypto is somehow money in spite of if repeatedly failing each and every single trait that makes something a currency.
Now, when someone points out that fact, here we are with a newfound passion for argumentative formalities as if you can make this fact go away by petitioning the ref.
Yeah, but I didn't use it (because I think it's a scam) therefore it's not money nor currency. I can't understand these people.
I have a bank account with FIAT, and I also have BTC. I use both to pay for things. Although I mostly use FIAT, I also have a credit card that I charge with BTC to pay for things, but if I have the option I also pay with BTC directly. How is that "not a currency"? Because some people use it as a way to run scams and pay off ransomwares? Because people prefer to hold it and sell it at a higher price to get rich? Or simply because you do not understand it?
Remember crypto-pushers continuously getting outraged at comments noting that crypto is not "an investment"?
A lot less of that going on now, with the current argument being all about "due diligence". Crypto works as an inefficient payments mechanism and a ledger for trusted and equal peers. It somehow did not magically break the fundamental rules of investment nor collective ecosystems.
A transparent anonymous and independent system of transactions is possible, but it is vastly different from the incentives existing in the space now.
> * that so many people think crypto is either perfect or totally evil and admit no middle ground.
Such a strawman right in the leading hypothesis. What makes it so hard for you to face the actual criticism directed at crypto? Do you find it so indefensible that you prefer to avoid it altogether?
Do you think it is possible that at least some part of crypto, was once or will be, at least partly, not a scam?
Because if you do, you already agree with me.
And if not, you're going to have to explain how you know literally everything about 1000s of projects with a billion users...
That's the problem with the ultra extreme position the article and many many people here take.
I'm not here to defend crypto. I am not a true believer. I just find it strange that such a huge complex thing with so many users etc apparently is not just 99.999% scam, but 100%. And some how people have discovered this and know if for fact. And yet are unable to share their sources, or methods...
It's almost like such people have no more idea what is happening than the true believers...
I'm still wondering if there is good evidence that crypto is useful for Venezuelan economic refugees. I imagine such evidence is hard to find publicly because removing the obscurity would raise the probability that a friend of Maduro uses it against such refugees.
I agree think honestly there is room for middle ground here.
Crypto didn’t stop humans from being humans. There are always people trying to make a quick an easy dollar. The tech really has little do with this aspect of human behavior.
People also say things like “the US dollar is stable” without citing economics papers because it’s reasonable to assume the audience isn’t a saucer full of aliens who just arrived and have no prior knowledge.
Even bitcoin proponents no longer claim it’s a currency - many of them even pretend never to have claimed otherwise when it interferes with the sales pitch - and the investment claims have been similarly defined by lots of people losing money and learning what an unsecured asset run by less than fully forthcoming people means.
If you disagree with the conventional wisdom on either point, the onus is on promoters to back that claim up with hard data. In particular, data from sources who weren’t making glowing claims about Luna, 3 Arrows, FTX, etc. right up until reality asserted itself.
If an economist wrong an article that's title was "the usd is stable", he would either need to show that, or it would be a rather pointless article wouldn't it? Similarly, an article whose title and whole content is just "Crypto Is All a Scam" should probably actually contain something more than "because we all agree, don't ask questions"...
And if such an economist were challenged on whether the USD is stable, he would presumably be able to cite decades of data of inflation rates, FX etc.
It would be a bit crazy to write a whole article about one thing, but say nothing because the thing is obvious and widely accepted (so why write it)...
Plus, "Crypto Is All a Scam" is the claim here. So if people making claims are the ones obliged to support them then...
As I say elsewhere, I am not some crypto evangelist. I am just tired of both sides being so vacuous and relying on prejudice and publishing such poor materials...
An economist wouldn’t publish an article saying the USD is stable because that’s the accepted baseline. The same is true of saying cryptocurrency has failed to deliver value after 15 years and billions of dollars in real money have been consumed with almost no real world impact other than renaming a stadium.
How can a blanket statement be core to your philosophy? If a blanket objective claim is core to your belief system, it's not a philosophy, it's an ideology.
Which is fine, but call it what it is.
Also, he says most counterarguments are in bad faith. Foes that mean some aren't? Wouldn't refusal to address these good faith claims mean you're arguing in bad faith as well?
Listen, have you ever observed a troll writing a book?
Really? Currency is a scam. You get paid in paper, pay taxes on it, which gets stolen( sorry in edged) in corrupted corps, with a debt system where you are just a slave of your mortgage - unless you're a clever troll, and you bought 10btc 10 years ago, write a book to put the price down, while at the same time, being the most biased possible to trigger HN readers in the hope of getting a Google page rank.... Pathetic.
Then tell me at least one "non scam" business for me to see ?
By your definition, all business needs to be scammy in some scene to make money, for survival.
Proof is simple: Non of any existing business will tell you anything on why it's bad, nor why you should not use it. And by proof of contradition (Nothing is perfect), you got the proof.
Meta won't tell you why it's bad for your psy health, no warning at all.
Google won't tell you why it's bad for your privacy, or why its search result is so bad for you, because Ad result is shit.
In my opinion this is not quite true, because there's a basic form of "investment" scheme going on. People exchange value (money, energy) for some kind of token, expecting to get some value back. They may actually be satisfied with getting only a fraction back in many cases (money laundering...).
Cryptocurrencies do have some non-scam value because they fulfill the technical end of such a belief based value store. Don't get me wrong. Plenty of scams in that business...
Let me just point out how incredibly poor the word "scam" is defined in that dictionary. By that literal definition a lot of different things become scams because they are "clever", dishonest and are about making money.
Some here are pathetically-misinformed regarding crypto's utility and social benefits. Read the Latin America section of Chainalysis 2022 report (Pgs. 19 - 27) before claiming "it's all a scam" (and so spreading mis-information):
For those not aware, the company that produced this report, Chainalysis, actively aids prosecution of illegality in the crypto space, acting as primary advisors to the FBI, IRS etc. They may just know what they're talking about:
As a Latin American the largest uptake I see is among criminal groups for money laundering.[0]
But with an open mind I read the section you called out and I have several issues.
The first is that the report doesn’t actually discuss or show the numbers. The country reporting only talks about inflation in those countries and percentage of transactions, how much volume and coins are these countries actually moving?
They have the stats, but know it’s all wash trading. Funny how ‘wash trading’ or even ‘money laundering’ doesn’t even make it I to the report. Really makes the branding of building trust in blockchains laughable.
Second this report is very outdated.
This is seen in the Mexico section; it talks about inflation numbers and the potential for remittances. It even mentions coinbase’s program which was shutdown in sept 22 for lack of usage (as in a couple hundred bucks a week).
Page 20 shows amounts in billions received by each country, eg Mexico looks like ~57.5 billion.
In the Mexico section it says:
> Bitso alone has already processed more than $1 billion in US-to-Mexico remittances in 2022 as of June, representing a year-over-year growth rate of 400% and a grip on 4% of Mexico’s remittance market.
A wee bit more than a couple hundred per week. Maybe Bitso cornered the market there?
Slightly related. The Reddit subforum for Bitcoin is managed by people supporting the scam and they very actively promote it and will ban any opposition. I think that should be illegal.
While the "Reddit's /r/{something} is supported by people with a financial interest in {something}" can be distasteful, under what theory of law would or should it be made illegal?
Corruption? Scam? I don't know which universal theory of law you are talking about, but if you are actively lying or hiding information to further your own interests then that surely could and should be illegal. You'll have to construct this theory of yours yourself though.
If you are claiming that they are acting fraudulently or acting as financial advisors and misrepresenting information... that's already a thing. If you think its a boiler room scheme - that's already illegal to.
If you are saying that someone with some stock in AAPL and would be pleased if it went up can't be a mod of /r/apple and should have criminal liability for moderating a community's activity (and would likely ban people who consistently post 'Apple is bad, buy Dell instead' or 'Avoid apple - Steve Jobs was a bad man') then you're suggesting a different thing that would be harder (in my eyes) to argue for.
The worst thing is the terrible incentives it's created by making it so easy for people to exploit free CPU capacity, and transfer money with no monitoring for fraud or ability to reverse it.
So no-one can offer free/demo tier CPU access anymore e.g. on low-end box VMs, ISP shell servers, etc.
Likewise any sort of interaction with strangers get absolutely bombarded with fake accounts pushing crypto scams - second-hand sales, dating apps, meetups, pen pals, language exchanges, property listings, job boards, etc., there was always spam before but it was harder to directly monetise.
I hope it all gets banned soon. If we can ban Russia from SWIFT, we can do the same to all accounts that ever have transactions with known cryptocurrency exchanges, and refer their owners to the local tax authorities for auditing, etc.
https://twitter.com/dystopiabreaker/status/14701269278180679...