If cryptocurrencies are self-regulating, aren’t the techniques used by these hackers actually the best and most effective way to play the game by its own rules? Calling this behavior “cheating” smells of sore-loserism.
There is a certain Bitcoin evangelist who will preach the gospel of a self governing currency that via a system of rules will automatically validate transactions between trust-less parties in a decentralized manner over a globe-spanning internet protocol but then complain when that same system does not prevent them from accidentally sending the entire contents of their "wallet" to an address in North Korea.
The system does not represent ownership the system only tracks of the validity of transactions and if the North Korean government proposes a valid transaction of your BTC or ETH to an address they control and a mining-node includes that transaction in a block which a majority of the network accepts then those assets are no longer yours they belong to North Korea.
The properties of the crypto-asset ecosystem which allow it to be ungoverned also make it ungovernable.
I would imagine exchanges these days routinely monitor incoming and outgoing transactions, and if they suspect the funds are stolen, they are freezed. I would imagine North Korea doesn't have really an easy job laundering that BTC they have stolen.
They are simply having to duplicate all the things Visa provides its customers.
BTC is inherently deflationary in the sense that once new coins cease to be mined the total number of BTC will decrease over time due to lose, theft and death. I know that I lost my wallet with the only BTC I owned 10 years ago. I can name several other people that have done the same. I would think this one property makes it undesirable for use as a currency.
> I know that I lost my wallet with the only BTC I owned 10 years ago. I can name several other people that have done the same. I would think this one property makes it undesirable for use as a currency.
How is this any different from losing your wallet with physical currency?
In many cases if you lose your physical wallet, someone else will find it and the cash will stay in circulation, but even if not, as physical currency is much more inflationary it's no big deal.
The second point is that most people keep a lot less money in a physical wallet, usually no more than say a few hundred dollars. Whereas a bitcoin wallet will often contain thousands or more so is more akin to a bank account.
These are but pricey bug bounties. This will lead to a more efficient and secure cryptocurrency market, as participants will insist on better financial controls, threatening to flee to the regulated fiat markets if their needs are not met. /s
It is a reference to Magic The Gathering. Blue decks are known for wildly changing the rules of the game. Black decks are known for interacting with death and the graveyard which is where cards go after they are used.
A paraphrasing of the GP without using magic terminology is to say that they are playing by the rules in an unexpected way using unexpected combinations and sequences. More briefly "playing by the rules as written".
I disagree. There's a tremendous amount of waste in the economy related to reconciling different companies' records of who owes what to whom and then getting that info to the bank and then hearing back from the bank about whether the debt was fully or partially paid and then relating that to whether the service continues to be rendered.
Moving from an accounts-receivable/accounts-payable model to a insert-coin-receive-service model would be a huge advantage.
It just hasn't happened because the vibes are wrong and it appears that they'll stay wrong for a while.
Maybe there were better words I could have used there, sorry.
You can of course track it however you want, but the complexity of what you end up tracking explodes if you're operating on something like a monthly billing cycle. Especially if you have more than one financial institution with an opinion about whether money should/did get moved.
I've been involved with the maintenance of several billing pipelines and having to handle events like maybe the bank was only able to collect half of this person's bill but it took them a few days to let us know that, but we've already sent that money over here so now we' have this deficit and do we shut off their service over a deficit of just $5...
It's a nightmare that's totally orthogonal to the business that's being run. Nobody wants to be on the billing team, but it's viewed as a necessary evil. But I'm saying that it's an unnecessary evil. If you can very quickly settle up for practically nothing, then you can just build the app to withhold service for a few milliseconds until payment clears and then there's no debts to keep track of and resolve later. And having it on a public blockchain means that if you're collaborating with other companies over how the pie gets sliced, there's a single source of truth for how big the pie actually is.
> There's a tremendous amount of waste in the economy related to reconciling different companies' records of who owes what to whom and then getting that info to the bank and then hearing back from the bank about whether the debt was fully or partially paid and then relating that to whether the service continues to be rendered.
Is all that really a tremendous waste, in the days of databases and instant communication? How much waste are we talking about here? I'd wager a lot of money it's at least one order of magnitude less than the literal heat waste produced by validating bitcoin transactions. Crypto is much more wasteful.
> Moving from an accounts-receivable/accounts-payable model to a insert-coin-receive-service model
The monetary system isn't what's preventing this. You can't provide a service and also charge for it in the exact same instant. If I hire a contractor to renovate my bathroom, there's a ton of negotiation, possible disagreements about whether the work is "done" or not, payment deadlines, etc., and crypto vs. fiat currency changes none of that.
> You can't provide a service and also charge for it in the exact same instant.
Sometimes you can, and it's those cases that I'm thinking of.
But even when you can't, why not create the transaction up front and include the conditions under which it should or should not proceed at a later date? If you want a third party as a mediator, just in case, why not make that part of the transaction too? Why not ensure now, that the money you'll be paid later, actually exists and can't be spent on something else in the meantime?
So much becomes possible if both parties are on the same page yet neither had to build that page from scratch.
> How much waste are we talking about here?
Well there's all the business that doesn't happen because while I'm a bit curious about your service, I'm not curious enough to give you my credit card and trust your pinky-promise that you'll charge me like you said you would.
And then there's the business that doesn't happen because micropayments are required for the business model (many tiny credit card transactions being prohibitively expensive).
And then there's all the money that gets wasted when resolving disputes in court when mediators could've been bound to the transaction up front--mediators who are more familiar with the parties and the situations and who have access to a single source of truth about the nature of the disagreement rather than having to reconcile both versions of some "handshake agreement".
And then there's maintenance for all that billing pipeline code which is implemented over and over again--slightly differently by each company but rarely meaningfully so--which has to account for two worlds: one which creates debts, another which eliminates them, just to align the conjunction of those worlds to an arbitrary cadence (typically monthly) which has no correspondence with the product's usage. If you offload the accounting to public infra immediately, then you don't have to build and maintain infra which keeps both worlds in sync.
All told, I think it's quite a lot. As for the waste heat from bitcoin--yes, bitcoin is stone-age crypto. What we need for this probably doesn't exist yet.
I just don't see most of what you're talking about as either actual problems, or as caused by fiat currency / solved by crypto.
> why not create the transaction up front and include the conditions under which it should or should not proceed at a later date
Forcing people to commit money to some Etherium contract before work can begin is not going to grease the wheels of commerce. You hire an engineering firm to design a new regional airport for tens of millions of dollars over three years, and you're supposed to stick all that money in some crypto account where nobody can touch it until an oracle says the work is complete? Where any bugs or security flaws or front-runners might just steal or lock away all the money with no recourse? In the real world, no party ever holds the entire pot of money all at once -- that's a cashflow nightmare! You seem to be lamenting the cashflow problems caused by our current system (which companies would indeed pay a lot to improve), and your solution is to lock up the entire contract value ahead of time?
The current way that people are paying each other is not a problem that needs to be fixed.
> the business that doesn't happen because micropayments are required for the business model
The world is lousy with microtransactions. I heard about this being a problem a decade ago, but not anymore. Besides, what are the current gas fees on major crypto platforms? Isn't crypto terrible for microtransactions?
> money that gets wasted when resolving disputes in court
If people are still signing contracts with each other, this is still happening. Crypto does not solve this. This will still happen, plus all the money that gets wasted when their bitcoin wallet is stolen or their contract is front-run or there's a bug in the exchange.
> maintenance for all that billing pipeline code which is implemented over and over again--slightly differently by each company but rarely meaningfully so--which has to account for two worlds: one which creates debts, another which eliminates them
There are somewhere around 20,000 cryptocurrencies in existence. Twenty thousand. You're lamenting the fact that different companies have to handle dual-entry accounting, a relatively simple practice that has remained basically the same for hundreds of years, to the complexity of implementing cryptocurrency exchanges and blockchains correctly? Why can't companies just rely on third parties for fiat transactions? You're comparing crypto and fiat on completely different playing fields here. A bug in your fiat accounting code requires a manual correction, maybe an audit, and possibly a court case. A bug in your crypto code can permanently cost you all your money with no possible recourse.
> What we need for this probably doesn't exist yet.
So you're comparing the problems with our current fiat system with some hypothetical perfect future crypto system and saying the crypto system is better. Yes, I could compare anything that is happening now with a hypothetical future perfect alternative that might not be possible, and the latter will always look better. That is utterly meaningless. When you compare our current fiat system with any crypto systems that currently exist, the crypto systems are significantly worse in almost every way, except for buying drugs and scamming people. If you have a thousand "innovation points" that you can spend making a cryptocurrency system that doesn't have these problems (doubtful), why not spend that innovation on specific improvements to specific problems with the fiat system instead?
> So you're comparing the problems with our current fiat system with some hypothetical perfect future crypto system and saying the crypto system is better
Well yes, I was attempting to refute:
> This is the only promise that cryptocurrency held
My claim is that there are other promises. I hear you say
> The current way that people are paying each other is not a problem that needs to be fixed.
...and I couldn't disagree more. Have you ever worked at a payment provider? Your code ends up with other payment providers in all directions and the user is nowhere to be found. It's just a big pile of parasites fighting over the money pipe. Outside of work I'd strike up a conversation with a merchant about how I'm familiar with their POS equipment, and there I'd learn that it's practically a hostage situation.
The liquor store near my house has two entirely separate POS systems pointing at two separate bank accounts and they just direct customers to whichever one happens to be enlisted in the least-objectionable shenanigans at the moment.
The needs of the people are not being served, especially if they're people who can't afford a lawyer.
I'm not proposing that anybody should have to use crypto. I'm saying that when crypto is ready, those who do use it will have a competitive advantage because they won't have to deal with the drag exerted by the existing system. The multiplicity of platforms won't be an issue because those two people--whoever they are--will agree on whichever one fits their use case (though I expect they will be fewer by then).
> why not spend that innovation on specific improvements to specific problems with the fiat system instead?
Because the fiat system was not designed to solve any of the problems we're talking about. It was designed to feed the Roman war machine, and since then its primary purpose has been to ensure that power structures established by varying forms of violence remain in effect without the need to trot out that violence again.
It's not the kind of thing you can incrementally improve on. It has the problems it does because the people who maintain it want it to have those problems.
Take credit card companies for example. There's a lot they could do to prevent fraud--there are many ways to build a system where payments happen without leaving secrets like credit card numbers out in the open. But they don't want to solve that problem because it's a problem that puts them in a privileged position--they get to be the money-censors, which is a powerful position that they frequently abuse.
Or consider health insurance claims. They could absolutely provide a price to the patient within a minute or two--fast enough for the patient to factor it into whether or not they get the procedure. But having the bill come six months later and full of surprises is a feature for them, not a bug.
We have a lot of harmful middlemen. Improving the fiat system would just to improve their capacity to do harm.
It may be in a pretty embarrassing state right now, which I hope it snaps out of, but crypto is at least compatible with the idea that we could put control over the system in the hands of its users. Fiat is not.
I know this is hard for techies to hear, but the way you fight existing power structures is by organizing, petitioning, protesting, voting. Political, in other words. No technology is going to come and save us from powerful people exploiting the poor if we keep voting for the biggest assholes on the planet. Ironically, most of the people advocating for crypto to save us from powerful people are exactly the same people voting for the absolute worst people whose campaign promises are to fuck over the poor and exact revenge on their political enemies. So it's hard to take the argument "I'm pro-crypto because it rages against the machine" in good faith when 99.8% of people making that argument are fighting tool and nail to make it illegal to oppose the machine. But I'll assume you're in the 0.2% for sake of argument. The point stands: these are political problems, not technological ones.
> Because the fiat system was not designed to solve any of the problems we're talking about. It was designed to feed the Roman war machine
This is exactly why I'm saying you're comparing fiat vs. crypto completely unequally. If fiat was designed to feed the Roman war machine, then crypto was designed to buy drugs online. You're being reductionist and pessimistic when describing fiat and blindly optimistic when describing crypto.
> its primary purpose has been to ensure that power structures established by varying forms of violence remain in effect without the need to trot out that violence again.
The primary purpose of the fiat system is to allow more control and regulation over the system, mostly to avoid huge boom-bust cycles in the economy and more Great Depressions. That's genuinely it. Yes, much of the purpose of government is to enable the transfer of power without violence. If we're redesigning government, can we please keep that part? Right now, if I break into your home and hit you with a wrench until you tell me the private keys of your bitcoin wallet, I can steal all your money assuming I get away. If I break into your home at hit you with a wrench until you give me your credit card, there's very little I can actually do with that. The violence you're talking about is the violence of anarchy -- the exact same anarchy that you're touting as a benefit of crypto.
> Take credit card companies for example. There's a lot they could do to prevent fraud
Credit card companies do an enormous amount to prevent fraud, and they're incredibly good at it. And are you seriously claiming that crypto will have less fraud? Most of the ways that credit card companies deal with fraud is by immediately detecting and canceling fraudulent transactions -- something that is inherently impossible with crypto.
> --there are many ways to build a system where payments happen without leaving secrets like credit card numbers out in the open
Yes, including in a fiat system! Here you are again comparing the current, flawed fiat system with some imagined future crypto system, but you can also imagine a better fiat system! And people are working on it, e.g. with chipped cards (yes it's annoying it's only for in-person purchases).
> Or consider health insurance claims. They could absolutely provide a price to the patient within a minute or two ... [previously] I'm not proposing that anybody should have to use crypto.
But if health insurance companies don't have to use crypto, and they benefit from the current system, then they just won't use crypto. So your problem is not solved. It's a political one, not a technological one.
Look, humanity has been getting incrementally better at this "government" thing over thousands of years. Yes, it's slow, and we backslide a lot. I'm pissed at entrenched power structures too. But these are political problems, and crypto just is not inherently a fix for these problems. The people "in power" could be megacorporations and aging narcissistic asshole rapist felons, or they could be scientists, human rights lawyers, passionate nerds, doctors, and even everyday people. It's largely up to us whether it's the former or the latter, and most crypto advocates today fight tooth and nail in favor of keeping power in the hands of narcissistic assholes.
If we're imagining a better world, why are we imagining one where existing shitty power structures just get torn down, and nobody has the power to stop scams, money laundering, illegal activity (we're not talking about buying fun drugs here either, we're talking about the bad shit), billions of dollars being funneled to North Korea (thanks, crypto!), small bugs in contract logic causing billions of dollars in losses, etc.? A world where a multi-billion-dollar project to build a new children's hospital requires some party to ever actually hold multiple billions of dollars in one pot, lock it up in some crypto contract for 5 years where it can't benefit the economy, and then have absolutely no possible recourse when it gets stolen and funneled to North Korea? Why is that the world we're imagining, and not one where power is just distributed better? Fuck crypto, vote better.
> these are political problems, not technological ones
That's a false dichotomy. Social media platforms are a technology, and it's a political problem that the biggest assholes on the planet tend to use them to get elected. The solution is a technological one, which is to build and use social media which do not give special privileges to an owner.
It's all bound up together.
> You're being reductionist and pessimistic when describing fiat and blindly optimistic when describing crypto.
My purpose in this thread is not to convince anybody that crypto is better than fiat, it's that crypto's potential is greater than fiat's potential. I'm being reductionist and pessimistic about fiat not to point out problems that it has not solved, but to point out problems that it is incapable of solving.
It's a bit like The Architect's speech in whichever Matrix movie: it's fundamental to the system that it creates these anomalies. It's not "the one" but it's definitely "the few".
> The primary purpose of the fiat system is to allow more control and regulation over the system
...and it does so by giving hopefully-trustworthy people the privilege to rewrite transaction history despite the transacting parties not having explicitly consented to that person having that power over that transaction.
The argument that crypto holds no promise besides grift rests on the wobbly assumption that the benefits of regulatory control cannot be achieved without creating those privileged positions--positions which end up being occupied by grifters.
It was once a necessary evil. We have a financial system based around scarcity because it was the only readily available implementation. The laws of physics ensure that certain things are scarce, so there was no need to build anything in order to enforce that scarcity. But there was also no hope of rewriting the rules of the system towards the elimination of its systemic problems. That has changed.
> most crypto advocates today fight tooth and nail in favor of keeping power in the hands of narcissistic assholes
That's true. It's horrible. Most crypto projects today are just a reimplementation of the scarcity-based system that the laws of physics handed our ancestors re: gold and such. We moved away from the gold standard for a variety of good reasons. The idea of returning to a gold-like system appeals to grifters because they don't like being limited by the fiat system. But there's no reason we can't build something that limits the grifters even more than fiat already does--and when we do that, should we really avoid using crypto for the job just because the grifters tend to use it also?
Crypto is not about artificial scarcity and passing tokens around. That's merely a rule-set that it supports. Is promise lies in the idea that we can implement other rule-sets as well--ones which are more sensitive to the needs of their users than either the physics-imposed system re: gold, or the bureaucracy-imposed system re: fiat.
I share your objections:
> detecting and canceling fraudulent transactions -- something that is inherently impossible with crypto
> and then have absolutely no possible recourse when it gets stolen and funneled to North Korea
...but these problems are the same as they were when we were moving chests full of gold coins around. It's a shame that people have used crypto to reinvent a scarcity-only system that the rest of us largely abandoned in the 1970's. But nothing about that precludes somebody using the same primitives to implement something better. It's like you're attacking angry birds and I'm defending mobile phones. The platform has merit, despite the existence of shitty apps. Let's stop using those apps.
We also want similar things. This sounds great:
> The people in power ... could be scientists, human rights lawyers, passionate nerds, doctors, and even everyday people
The structural problem with the fiat system is that those privileged positions--the ones that I claimed end up populated by grifters--when they end up populated by an altruistic person, they end up placing too heavy of a load on that person. The only way to do some of these jobs is to be at least partially negligent. I know several people who fit the description that you've given and they're doing good work. The last thing I want to do is encourage them to stop doing what they're doing and instead go be a politician--they're needed where they are.
The bureaucratic computer which implements fiat's rules is not sensitive to which users trust which other users. Sure, in some cases you need a bureaucrat whose full time job is to be the authority over some domain. But most of the time you don't. Most of the time you can get away with explicitly indicating an authority and giving them narrowly scoped power. Some scientist, some doctor, some passionate nerd... One who knows both parties to a contract/transaction, somebody who has a track record of keeping their promises. By all means lets vote for these people if they want a permanent political role, but we shouldn't have to wait for an election to do that. With crypto it can be much more granular.
We can come up with a set of rules that lets us unambiguously grant those individuals the kind of control that the fiat system gives us, but over such a limited scope that they don't have to stop doing whatever they were doing that makes them awesome to go be a politician instead, and which doesn't give them so much power that they become a magnet for the corrupting factors that plague the fiat system.
Sometimes you need a judge and a court and a lengthy trial, but other times you just need another professional to look at the work and say "yeah, that's good work, you should be paid for it". Crypto is a more flexible medium through which both parties' trust of individual can be made explicit and through which their assessment can be made binding.
> Fuck crypto, vote better.
We can vote better while also building better things. But if those things are operated by a single corruptible party, then they'll never be as good as equivalents that aren't (that means using crypto). Fuck artificial scarcity, let's build a world without it, because it's where the biggest assholes on the planet get their power.
Thank you for the good discussion. I think we share a lot of the same vision. I'm more pessimistic than you about inherent limitations in crypto (and more optimistic that there's still room for improvement in fiat), but I hope you're right that the limitations of current crypto can be overcome. Your vision sounds a lot like an idea I've had for a more "open-source government" where laws are drafted as series of commits by experts in that topic, and debate happens over individual merge requests, etc. I don't know how crypto is supposed to help with that but maybe there are things I'm just not seeing. I hope there's a way to get the best of both systems.
Thanks to you also. I hope we see your open source government thing happen.
I'm not sure how you're going to derive consensus about which experts are trusted in which topics, or how you're going to prove to the people that this commit, and not that one, is their chosen one. Not without using crypto in some way.
I don't think you can do something as important as that behind closed doors on AWS and have the people take you at your word that somebody with root access didn't have their finger on the scale--they're going to want to see proofs, to verify the outcomes on their own hardware--but I'd love to live in a world that actually is that trusting.
i agree smart contracts are the way forward, but you don’t need crypto or blockchain to implement them. You do need a trusted third party, to adjudicate when things go wrong.
Some people just ignore the courts, or delay them more or less indefinitely. This whole figure-it-out-after-the-fact-if-something-goes-wrong thing we're doing has a lot of opportunity for improvement.
> It just hasn't happened because the vibes are wrong and it appears that they'll stay wrong for a while.
No. A civil society needs to be able to issue judgments that override transactions / seize assets. And therefore they cannot have automatons determining where the assets belong.
When criminals are caught with their hand in the cookie jar, we can't just shrug and say "gee I wish we had a way to get that money back."
I'm a big fan of bitcoin and to some extent cryptocurrency. I think it has real value. But I'm not deluded enough to think it can somehow replace all ledgers everywhere.
I'm not proposing that this all happen on an L1, of course you need some time for various parties to decide whether settlement should proceed. Nor am I saying that all ledgers everywhere would benefit from this change.
I'm just saying that many businesses would benefit (or become feasible in the first place) if the time between service-rendered and payment-pending were sub-second and built into the product and instead of relying on month-long-billing cycles. It would also be beneficial if the infrastructure for handling that process were common to both parties rather than having each of them track it separately hoping they agree on what is owed after the fact.
And pretty unique online irreversible near instant transactions. For this reason it was often the cheapest way to buy bullion online in a way that cleared in less than an hour, since most banks charge for a wire and credit cards (or vendor risk departments) charge high vendor premiums on bullion transactions.
> Hackers then send the ether to “mixers”—crypto platforms that co-mingle tokens from various users, obscuring their ownership. After that, the ether is swapped for bitcoin and then converted into tether, a token whose value is linked to the U.S. dollar.
Good timing for the US to lift sanctions on Tornado Cash [0].
Too many people think "lock them up" is the solution to crime, without considering that crime relies on certain types of infrastructure to remain in business. And that people who are "tough on crime" often have good reasons to keep operational the things that facilitate said crimes.
adding sanctions to a smart contract address that cannot appeal itself was not a winning position in the US courts
and determing that a smart contract deployment was a "foreign asset" was also not a winning position in the US courts, as its not clear if it was deployed on a node outside of the US to begin with, or if the person that actually sent the deployment transaction was a non-US citizen
The Treasury with its new head just short circuited that challenge and stopped wasting taxpayer money on this
yeah, stick with prosecuting the actual crime instead of the laziest approach of calling everyone a criminal for using a sanctioned smart contract
North Korea launders its stolen cryptocurrency through every available means. Including Tornado Cash, quite aggressively, which is why they were sanctioned. It is very hard to understand why the Trump administration would reverse those sanctions unless they are trying to aid this kind of money laundering.
It's pretty incredible that a sizable percentage of North Korea's GDP derives from crypto theft. Actually about the same percentage as Spain was pulling from the Americas at the end of the colonial period.
"The Times 03/Jan/2009 Chancellor on brink of second bailout for banks"
The original point of Bitcoin was that someone else didn't keep custody of your money for you. You'd keep custody of it yourself, on your computer or a paper wallet.
Yet, there are tons of people who keep obscene amounts of Bitcoins on crypto exchanges or otherwise held by companies for them.
Why do people buy a cryptocurrency built on distrust of institutions that hold your money for you, and then give that cryptocurrency to an institution to hold it for them?
Did nobody learn anything when the former Magic: The Gathering Online Exchange imploded in 2013-2014?
Something tells me that WazirX's cold wallet wasn't actually cold - it was multisig but hot. The only thing that leaves the hardware running a cold wallet is a signed transaction that is limited in scope to the signed amount and recipient.
Blockchain is a perfect, transparent trustless global ledger that can't be hacked, so it's a misnomer to characterise these transactions as "cheating", "crimes" or "theft".
If you unlawfully or immorally gain access to information, such as my private keys, and then use that information to move money, you have absolutely committed a crime, cheated, and/or stolen from me.
If you deceive me into executing a transaction voluntarily by misrepresenting the destination (which is immoral and often illegal), you have absolutely committed a crime, cheated, and/or stolen from me.
What laws are a North Korean subject to that they have broken? Who decides when a transaction was cheating or stealing without a central authority and enforcer?
Moral laws and natural law, and moral people in a candid world. It's the same principle by which one people accuses another, over which they have no jurisdiction, of crimes against humanity or war crimes or of violating Nature's Laws. See the US Declaration of Independence for a short treatise on this topic.
To add to the other comments: do you really have a right to whatever it is that the bits unlocked by that key represent? Who granted you that? AFAICT, it's the systems running the blockchain that grants you that, and it's not governed by any contract outside the blockchain.
What is your theory for why you own any physical possessions? Do you only own things at the pleasure of your government which bestows you that privilege? I would think that if a coup replaced your government by force with one that did not respect rights of private ownership, you would cry "immoral", would you not? Or would you shrug and say "might makes right"?
Basically, you own what you control and can protect from leaving your control, by force, or punishment. The modern state is almost based around ownership and freedom, and takes the responsibility for a lot of that.
It may be immoral (not necessarily a crime, mind you) if someone deceives you, but so is using Bitcoin. You're burning the Amazon, while serving as a cash convertor for criminals. Just for personal gains.
I'm sorry, on the Blockchain we don't recognize legacy concepts like dead-tree nation state laws or ancient superstitions purporting to define morality. The future is all about registering ownership information in digital ledgers.
If you wanted to retain control of your keys, you should have encoded them in a secure, nonfungible image of monkey on the Ethereum Blockchain. That way, everyone would know those keys belonged to you.
What NK hackers are alleged to have done here is fraud, something that the US head of state has been convicted of, by courts in his own country. NK on the other hand, has not been tried nor convicted.
What possible legitimacy does the US even have to mark others as "thieves"?
Theft is first a moral concept, and only secondly a legal one, so there is no need to invoke the legitimacy of nation states' authority to have a meaningful discussion about theft.
Theft is a moral concept, but the legitimacy of a justice department to comment on it rests on its record of enforcing the legal limits consistently in its own remit. That is openly not the case anymore, voiding the legitimacy it may otherwise have held.
The issue of cybersecurity in crypto is becoming more critical by the day. The scale at which nation-state actors are targeting the crypto world shows just how vulnerable many systems still are.
Sure, in the same way that a primary use case of cash is that somebody can punch you in the face and take your money and whatever you can get away with is allowed.
The primary use of cash is to buy goods and services. That's not the primary use of crypto. The primary use of crypto, as far as I can tell, is to try to make money appear out of thin air whether via speculation or fraud. And, admittedly, to occasionally buy JPGs.
When i look around at all the positive innovations cryptocurrency has failed to deliver, it really does seem like they invented a currency exclusively useful for doing crimes.
I got into bitcoin around 2011ish for some time. I was never a True Believer but I was a 'soft believer'. At the time, when people asked me if Bitcoin is the future I would always say "I think it or something like it will be very useful". Fast forward 10 years and there's been no actual use of crypto. No killer app. No disrupting the finance world. It seems to be used exclusively by smart people as a means of extracting wealth from people who don't understand it.
> It seems to be used exclusively by smart people as a means of extracting wealth from people who don't understand it.
How is that any different from other financial markets? A fool and his money are easily parted, while targeting desperate people with get rich quick schemes are also an easy play. The crypto/stocks/etc are just different tools to achieve the same result.
Please try and think for a second. You're telling me you can't see the difference in investing in a S&P ETF vs. crypto investing? Really? There is no difference there for you?
you just put bumpers on it to make a smart ass comment. Investing in the S&P is not the only way to invest with stocks. People trying to take money from people are not peddling S&P investments.
In every market down turn, those that are not wealthy end up having to sell of stocks to stop the bleeding. Those that are wealthy increase their wealth by buying up what the others are selling. The concept of a forced market crash is not unthinkable. Especially the current situation. Those that are friendly to the current administration are about to be greatly rewarded.
The quiet majority who avoids such things are easily lost among all the pump and dump nonsense. A ~single digit percentage of the general population has basically zero morality, but they can have a huge impact.
I realized it was likely a profitable long term investment back when bitcoin was ~10-15$, but I objected to it on moral grounds and didn’t get involved. It’s not even something I regret, just another life choice.
If I buy and hold 1 kg of gold, in 50 years humanity still has that same 1kg of gold but it lost all the resources required to secure that gold from being stolen. As such buying gold “to hold” is actively harmful for humanity, the same is true of crypto.
I object to doing things that bring me wealth at the expense of humanity as IMO it’s just a diffuse form of theft. While you may disagree, I hope you can understand that such a stance is based on my personal morality.
In this framework, what kinds of assets are you allowed to own the title towards, and what forms of income and revenue are you allowed to have? are there other forms of wealth - like non-financial/social - that you weigh?
Personally I think most productive investments are a net positive which opens many options here. It’s mostly zero sum / predatory behavior like the worst pay to win games or online casinos that I have a problem with. A fast food restaurant isn’t serving particularly healthy food, but it is providing a service people want and minimizing food borne illnesses etc.
Similarly buying a T-Bill may arguably support some of the horrors that the US government does, but what are the alternatives revolutions and lawless societies suck.
What about you? What do you the externalities of various investments are?
so basically this framework only excludes spot commodities. yeah its not common for people to be permanently bullish on commodities outside of a few niches like bitcoin and precious metals, so you don’t hear too much about that aside from those communities.
yeah that makes it easy to adhere to, while many other asset classes dont really revolve around scarcity of the asset’s existence and ownership does convey access to a productivity. I understand your criteria now.
For me I don’t have that criteria and don’t mind zero sum things. Its an entertaining and stressful player versus player match in a massive multiplayer game. Some kinds of trades I make are not zero sum, but it’s not an important distinction for me.
I do have a criteria related to human suffering: I mainly avoid exposure to some sectors like defense contracting and publicly traded prisons. Because the incentives are out of whack and dehumanize people while hoping they suffer, said in obtuse terms.
I think there is a flaw in the resource exchange logic you presented. Where you owning 1 kg of gold means the effort to extract that gold had gone to waste. In spot commodities the scarcity and continued demand at higher prices of the commodity is what justifies the further investment into extracting that commodities from harder to reach places. If a single market participant finds utility from the use of that commodity, distinct from hoarding, then acquiring access to more is beneficial. Your hoarding helped. The main difference here is that you are looking at the resource expenditure to acquire the unit you are owning, as opposed to the future utility created by the scarcity you contribute to. That’s a choice, I wonder if there is room to re-evaluate that principle, as I’m not sure we are operating on the same information.
> If a single market participant finds utility from the use of that commodity, distinct from hoarding, then acquiring access to more is beneficial. Your hoarding helped.
Talking about marginal quantity for tiny fractions of a commodity get abstract so let’s scale it up and the assign a fraction of the difference to that 1kg.
Total quantity of gold in earths crust is constant, so let’s assume what changes is the timing of when a mine gets opened. IE a bit of land is either mined in 1975 vs 2025.
Everything else being equal it’s more efficient to mine today vs 50 years ago both from an effort perspective and environmental impact. EV mining equipment for example is a lot more common today than 50 years ago, they are also a lot safer. Thus removing 1kg of gold from the market for 50 years is also a dead loss.
Correct, and that EV mining equipment was only pursued because that 1kg of gold is $100,000 now instead of $5,750 in 1975. because of that constant quantity that is now unavailable. If gold was still worth $5,750/kg, it wouldn't matter what policy changes about mining regulations were done, nobody would pursue creating the more expensive equipment and mining gold.
The conclusion in your stated logic is to actually hoard as much gold as possible so that mining in the year 2075 is even more EV+ and safer.
Gold mining alone has basically zero impact on Caterpillar’s R&D into EV mining equipment. The mining industry mines vastly more copper, iron, tin, etc ore and gold is at such low concentrations it’s basically indistinguishable from other types of mining until chemical separation.
If nobody was holding gold as a store of value there’d be a glut of gold for industry and ~zero gold mining the next ~hundred years. Holding gold ultimately means mining sooner not later.
I have counterpoints to that, but my main disagreement is where you draw the line. This feels arbitrary. You look at present energy expenditure as waste, if the asset itself is not consumed for an equally arbitrary reason that you approve of, or generates an even more valuable asset or ongoing revenue stream. I view it as all intertwined with commodity economics whether prices are cyclical, seasonal, or permanently bullish. Low float assets aren’t controversial, a small trading or consumed supply dictates the value of the entire supply, for balance sheets, lending, securitization and more.
How? Efficiency of scale can never drive marginal coasts below 0.
> You look at present energy expenditure as waste, if the asset itself is not consumed for an equally arbitrary reason that you approve of, or generates an even more valuable asset or ongoing revenue stream.
I think you’re missing my point, a gold ring may be purely decorative but people actually want the ring. A gold bar sitting in a safety deposit box for decades is there purely an investment, the nature as a physical piece of gold is essentially irrelevant the person wants is a store of value not gold. At that point why not simply leave the gold unearth and use the potential location of a mine as a store of value?
IE, for a 50 gallon drum of oil to be sitting in my basement it must have already been extracted from the earth. We don’t extract oil as fast as possible and store it because the ground itself was already storing it instead people pump faster or slower in response to market conditions that’s efficient unlike silver, gold, etc sitting in a vault.
Thus using mined gold as an investment is simply inherently wasteful, a pure dead loss for humanity.
If people could use oil as an investment they would. It’s perishable and toxic to store.
I understand your position. It doesn’t matter that you overlook key economic relationships in environmentally friendly methods, and you don’t recognize how illiquid balance sheets drive markets through lending and collateral or consider that utility, the goal post moves to disliking the extraction method occurring at all.
I recognize that my counterpoints are all capitalist rationalizations and can be used to rationalize anything.
The difference between oil and silver / gold is only the scale of economic loss.
People have used physical oil as an investment, unrefined oil is stable across millions of years. The underlying economics mean people only attempt it in the short term when the price is unusually low. Or as a state sponsored hedge https://en.m.wikipedia.org/wiki/Strategic_Petroleum_Reserve_...
> Fast forward 10 years and there's been no actual use of crypto. No killer app. No disrupting the finance world.
Just today I answered call on my mom's phone from unknown number. Regarding payout from blockchain investment account. Not the killer app and disruption we deserve, but the only one we got.
The killer app is crime. Old scams have flourished. Entire new forms of scam have been invented. Crypto currency has been a game changer for criminal organizations.
It is certainly odd there's been nothing from the inventors not even using the vast wealth they have squirreled away. The alternative which is honestly kind of funny is that they lost their keys so can't access the coins and thus coming forward as the inventor would just put a target on their back for people who might want to steal their keys.
Lost keys is the most probable explanation, considering it was near worthless for a good chunk of its start. They likely didn't have backups or shrugged and moved on.
Depends a lot on when and how the keys were lost. If the creator(s) were sitting on it thinking they had this cache there's not much reason to mine so if they lost it later, say after home mining with single GPUs became woefully inefficient and ASIC farms ruled the roost it could have been out of economic reach to actually mine. Or they didn't realize for a while that they had lost the original keys, eg they forgot their passphrase or went to access the drive with the key on it and it has died or disappeared (lost in a move or something). There's also the off chance that they were simply pretty old and died before it really went crazy and their survivors just don't know that gramp's old flash drive actually had a fortune in coins on it.
Nobel Prize winner Paul Krugman famously estimated in 1998 that the impact of the Internet on the economy will be no more than that of the fax machine.
> First, look at the whole piece. It was a thing for the Times magazine's 100th anniversary, written as if by someone looking back from 2098, so the point was to be fun and provocative, not to engage in careful forecasting; I mean, there are lines in there about St. Petersburg having more skyscrapers than New York, which was not a prediction, just a thought-provoker.
> But the main point is that I don't claim any special expertise in technology -- I almost never make technological forecasts, and the only reason there was stuff like that in the 98 piece was because the assignment required that I do that sort of thing. The issues about Bitcoin, however, are not technological! Everyone agrees that it's technically very sweet. But does it work as money? That's a very different kind of question.
The only obvious mainstream "success" to come out of crypto is stable coins (Tether/Bitfinex is something like the 5th or 6th largest buyer of US treasuries ...and amusingly keeps all the yield from them). Ironically, this use case also happens to be one that doesn't really require a decentralised ledger (would work equally well with a few cross-border validators, ala DNS root server approach) and lends itself very well to tradfi involvement (since you need pegging to fiat).
For me crypto today looks like ~1998/~2000 ish internet. Big, powerful traditional entities have fully woken up to it and will now take it over and ensure whatever useful use cases exist will be controlled by them with profits also accruing to them. The speculative, lawless days of the crypto wild west (fuelled by oceans of QE & stimmy money); and promises of a satoshi enabled future are well and truly over.
In terms of ushering in a new decentralised monetary order, it has failed completely.
This is so incredibly ill-informed it's hard to respond to. Thanksfully, it's incumbent on the person making the extraordinary claim...
> currency exclusively used for doing crimes
... to provide extraordinary evidence.
On my end, my home is financed by a trust-minimized loan against my BTC, using a stablecoin. And I greatly prefer stablecoins to wires for paying international vendors.
Hm, is that perhaps how you feel about all billionaires? Can you name one you think is "good"?
I've made some money in the space, have kids and a family, and care deeply about special needs and access (partner is a former SpEd teacher, I've volunteered and donate to related causes), and have invested heavily in reproductive rights. Does that make me "good"?
In my experience, and by my values, there are plenty of good and neutral people in the space. They aren't often the ones that ham it up for the media, but it should be obvious why that is.
I've been skeptical ever since they were trying to claim the xz backdoor was from a state actor. All it took was 3 sockpuppet accounts, a lot of time and actual code contributions, something literally anybody with a computer science degree can do. Name: Jia Tan? Must be a CCP agent, never mind the fact that anybody can make their name and timezones anything...
Extraordinary claims with no way to verify, typical for WSJ. Now the question is which group benefits from policies aimed to combat this? Follow the money to see who misleads you …
Nobody in western society benefits from KYC laws, they make life hard for small business and destroy financial privacy while the big players get away with a slap on the wrist. There's absolutely zero empirical evidence of KYC leading to a reduction in the rate of any kind of crime.
https://archive.is/1vkXG
If cryptocurrencies are self-regulating, aren’t the techniques used by these hackers actually the best and most effective way to play the game by its own rules? Calling this behavior “cheating” smells of sore-loserism.
There is a certain Bitcoin evangelist who will preach the gospel of a self governing currency that via a system of rules will automatically validate transactions between trust-less parties in a decentralized manner over a globe-spanning internet protocol but then complain when that same system does not prevent them from accidentally sending the entire contents of their "wallet" to an address in North Korea.
The system does not represent ownership the system only tracks of the validity of transactions and if the North Korean government proposes a valid transaction of your BTC or ETH to an address they control and a mining-node includes that transaction in a block which a majority of the network accepts then those assets are no longer yours they belong to North Korea.
The properties of the crypto-asset ecosystem which allow it to be ungoverned also make it ungovernable.
I would imagine exchanges these days routinely monitor incoming and outgoing transactions, and if they suspect the funds are stolen, they are freezed. I would imagine North Korea doesn't have really an easy job laundering that BTC they have stolen.
You're right, many crypto exchanges operating on the right side of the law will freeze these funds.
For those interested in this, CT (crypto twitter) makes tracking North Korea's stolen winnings a bit of a sport.
samczsun, an excellent security auditor who's working at Paradigm these days, broke down some of the org in a post the other day.
https://x.com/samczsun/status/1906754853063565720?t=N4aqa6Vy...
Taylor Monahan at MetaMask also makes a habit of tracing funds and shares some pretty interesting finds around NK's laundering efforts.
They are simply having to duplicate all the things Visa provides its customers.
BTC is inherently deflationary in the sense that once new coins cease to be mined the total number of BTC will decrease over time due to lose, theft and death. I know that I lost my wallet with the only BTC I owned 10 years ago. I can name several other people that have done the same. I would think this one property makes it undesirable for use as a currency.
> I know that I lost my wallet with the only BTC I owned 10 years ago. I can name several other people that have done the same. I would think this one property makes it undesirable for use as a currency.
How is this any different from losing your wallet with physical currency?
In many cases if you lose your physical wallet, someone else will find it and the cash will stay in circulation, but even if not, as physical currency is much more inflationary it's no big deal.
The second point is that most people keep a lot less money in a physical wallet, usually no more than say a few hundred dollars. Whereas a bitcoin wallet will often contain thousands or more so is more akin to a bank account.
Because crypto wallets are more akin to bank accounts than wallets.
Most of the lost coins will all be recovered by quantum computers. There is no way to update or fix the wallets they are stored in.
You can imagine things all you want, the rest of us will be over here in the real world.
"The shocking theft at WazirX, India’s largest cryptocurrency exchange..."
Oddly I am not in the least bit shocked. Now if we found out that this was an inside job I would again not be the least bit shocked.
It appears crypto is just speed-running the last few hundred years on their way to modern financial regulation
These are but pricey bug bounties. This will lead to a more efficient and secure cryptocurrency market, as participants will insist on better financial controls, threatening to flee to the regulated fiat markets if their needs are not met. /s
> These are but pricey bug bounties.
This isn't sarcasm to me, but the rest of your comment is.
[flagged]
What does this sentence even mean?
It is a reference to Magic The Gathering. Blue decks are known for wildly changing the rules of the game. Black decks are known for interacting with death and the graveyard which is where cards go after they are used.
A paraphrasing of the GP without using magic terminology is to say that they are playing by the rules in an unexpected way using unexpected combinations and sequences. More briefly "playing by the rules as written".
Tangential recommendation, but anyone interested in North Korean hacking should check our the BBC World Service's Lazarus Heist podcast[0].
0. https://www.bbc.co.uk/programmes/w13xtvg9/episodes/downloads
The book is great too.
https://www.goodreads.com/book/show/58959520-the-lazarus-hei...
Oooh, this is going straight onto my reading list, thanks!
This is the only promise that cryptocurrency held. Avoid government barriers. So we should celebrate the fact that it was not a complete scam.
I disagree. There's a tremendous amount of waste in the economy related to reconciling different companies' records of who owes what to whom and then getting that info to the bank and then hearing back from the bank about whether the debt was fully or partially paid and then relating that to whether the service continues to be rendered.
Moving from an accounts-receivable/accounts-payable model to a insert-coin-receive-service model would be a huge advantage.
It just hasn't happened because the vibes are wrong and it appears that they'll stay wrong for a while.
>Moving from an accounts-receivable/accounts-payable model to a insert-coin-receive-service model would be a huge advantage.
Why would the method of payment affect how you track accounts payable/receivable in your books?
Maybe there were better words I could have used there, sorry.
You can of course track it however you want, but the complexity of what you end up tracking explodes if you're operating on something like a monthly billing cycle. Especially if you have more than one financial institution with an opinion about whether money should/did get moved.
I've been involved with the maintenance of several billing pipelines and having to handle events like maybe the bank was only able to collect half of this person's bill but it took them a few days to let us know that, but we've already sent that money over here so now we' have this deficit and do we shut off their service over a deficit of just $5...
It's a nightmare that's totally orthogonal to the business that's being run. Nobody wants to be on the billing team, but it's viewed as a necessary evil. But I'm saying that it's an unnecessary evil. If you can very quickly settle up for practically nothing, then you can just build the app to withhold service for a few milliseconds until payment clears and then there's no debts to keep track of and resolve later. And having it on a public blockchain means that if you're collaborating with other companies over how the pie gets sliced, there's a single source of truth for how big the pie actually is.
> There's a tremendous amount of waste in the economy related to reconciling different companies' records of who owes what to whom and then getting that info to the bank and then hearing back from the bank about whether the debt was fully or partially paid and then relating that to whether the service continues to be rendered.
Is all that really a tremendous waste, in the days of databases and instant communication? How much waste are we talking about here? I'd wager a lot of money it's at least one order of magnitude less than the literal heat waste produced by validating bitcoin transactions. Crypto is much more wasteful.
> Moving from an accounts-receivable/accounts-payable model to a insert-coin-receive-service model
The monetary system isn't what's preventing this. You can't provide a service and also charge for it in the exact same instant. If I hire a contractor to renovate my bathroom, there's a ton of negotiation, possible disagreements about whether the work is "done" or not, payment deadlines, etc., and crypto vs. fiat currency changes none of that.
> You can't provide a service and also charge for it in the exact same instant.
Sometimes you can, and it's those cases that I'm thinking of.
But even when you can't, why not create the transaction up front and include the conditions under which it should or should not proceed at a later date? If you want a third party as a mediator, just in case, why not make that part of the transaction too? Why not ensure now, that the money you'll be paid later, actually exists and can't be spent on something else in the meantime?
So much becomes possible if both parties are on the same page yet neither had to build that page from scratch.
> How much waste are we talking about here?
Well there's all the business that doesn't happen because while I'm a bit curious about your service, I'm not curious enough to give you my credit card and trust your pinky-promise that you'll charge me like you said you would.
And then there's the business that doesn't happen because micropayments are required for the business model (many tiny credit card transactions being prohibitively expensive).
And then there's all the money that gets wasted when resolving disputes in court when mediators could've been bound to the transaction up front--mediators who are more familiar with the parties and the situations and who have access to a single source of truth about the nature of the disagreement rather than having to reconcile both versions of some "handshake agreement".
And then there's maintenance for all that billing pipeline code which is implemented over and over again--slightly differently by each company but rarely meaningfully so--which has to account for two worlds: one which creates debts, another which eliminates them, just to align the conjunction of those worlds to an arbitrary cadence (typically monthly) which has no correspondence with the product's usage. If you offload the accounting to public infra immediately, then you don't have to build and maintain infra which keeps both worlds in sync.
All told, I think it's quite a lot. As for the waste heat from bitcoin--yes, bitcoin is stone-age crypto. What we need for this probably doesn't exist yet.
I just don't see most of what you're talking about as either actual problems, or as caused by fiat currency / solved by crypto.
> why not create the transaction up front and include the conditions under which it should or should not proceed at a later date
Forcing people to commit money to some Etherium contract before work can begin is not going to grease the wheels of commerce. You hire an engineering firm to design a new regional airport for tens of millions of dollars over three years, and you're supposed to stick all that money in some crypto account where nobody can touch it until an oracle says the work is complete? Where any bugs or security flaws or front-runners might just steal or lock away all the money with no recourse? In the real world, no party ever holds the entire pot of money all at once -- that's a cashflow nightmare! You seem to be lamenting the cashflow problems caused by our current system (which companies would indeed pay a lot to improve), and your solution is to lock up the entire contract value ahead of time?
The current way that people are paying each other is not a problem that needs to be fixed.
> the business that doesn't happen because micropayments are required for the business model
The world is lousy with microtransactions. I heard about this being a problem a decade ago, but not anymore. Besides, what are the current gas fees on major crypto platforms? Isn't crypto terrible for microtransactions?
> money that gets wasted when resolving disputes in court
If people are still signing contracts with each other, this is still happening. Crypto does not solve this. This will still happen, plus all the money that gets wasted when their bitcoin wallet is stolen or their contract is front-run or there's a bug in the exchange.
> maintenance for all that billing pipeline code which is implemented over and over again--slightly differently by each company but rarely meaningfully so--which has to account for two worlds: one which creates debts, another which eliminates them
There are somewhere around 20,000 cryptocurrencies in existence. Twenty thousand. You're lamenting the fact that different companies have to handle dual-entry accounting, a relatively simple practice that has remained basically the same for hundreds of years, to the complexity of implementing cryptocurrency exchanges and blockchains correctly? Why can't companies just rely on third parties for fiat transactions? You're comparing crypto and fiat on completely different playing fields here. A bug in your fiat accounting code requires a manual correction, maybe an audit, and possibly a court case. A bug in your crypto code can permanently cost you all your money with no possible recourse.
> What we need for this probably doesn't exist yet.
So you're comparing the problems with our current fiat system with some hypothetical perfect future crypto system and saying the crypto system is better. Yes, I could compare anything that is happening now with a hypothetical future perfect alternative that might not be possible, and the latter will always look better. That is utterly meaningless. When you compare our current fiat system with any crypto systems that currently exist, the crypto systems are significantly worse in almost every way, except for buying drugs and scamming people. If you have a thousand "innovation points" that you can spend making a cryptocurrency system that doesn't have these problems (doubtful), why not spend that innovation on specific improvements to specific problems with the fiat system instead?
> So you're comparing the problems with our current fiat system with some hypothetical perfect future crypto system and saying the crypto system is better
Well yes, I was attempting to refute:
> This is the only promise that cryptocurrency held
My claim is that there are other promises. I hear you say
> The current way that people are paying each other is not a problem that needs to be fixed.
...and I couldn't disagree more. Have you ever worked at a payment provider? Your code ends up with other payment providers in all directions and the user is nowhere to be found. It's just a big pile of parasites fighting over the money pipe. Outside of work I'd strike up a conversation with a merchant about how I'm familiar with their POS equipment, and there I'd learn that it's practically a hostage situation.
The liquor store near my house has two entirely separate POS systems pointing at two separate bank accounts and they just direct customers to whichever one happens to be enlisted in the least-objectionable shenanigans at the moment.
The needs of the people are not being served, especially if they're people who can't afford a lawyer.
I'm not proposing that anybody should have to use crypto. I'm saying that when crypto is ready, those who do use it will have a competitive advantage because they won't have to deal with the drag exerted by the existing system. The multiplicity of platforms won't be an issue because those two people--whoever they are--will agree on whichever one fits their use case (though I expect they will be fewer by then).
> why not spend that innovation on specific improvements to specific problems with the fiat system instead?
Because the fiat system was not designed to solve any of the problems we're talking about. It was designed to feed the Roman war machine, and since then its primary purpose has been to ensure that power structures established by varying forms of violence remain in effect without the need to trot out that violence again.
It's not the kind of thing you can incrementally improve on. It has the problems it does because the people who maintain it want it to have those problems.
Take credit card companies for example. There's a lot they could do to prevent fraud--there are many ways to build a system where payments happen without leaving secrets like credit card numbers out in the open. But they don't want to solve that problem because it's a problem that puts them in a privileged position--they get to be the money-censors, which is a powerful position that they frequently abuse.
Or consider health insurance claims. They could absolutely provide a price to the patient within a minute or two--fast enough for the patient to factor it into whether or not they get the procedure. But having the bill come six months later and full of surprises is a feature for them, not a bug.
We have a lot of harmful middlemen. Improving the fiat system would just to improve their capacity to do harm.
It may be in a pretty embarrassing state right now, which I hope it snaps out of, but crypto is at least compatible with the idea that we could put control over the system in the hands of its users. Fiat is not.
I know this is hard for techies to hear, but the way you fight existing power structures is by organizing, petitioning, protesting, voting. Political, in other words. No technology is going to come and save us from powerful people exploiting the poor if we keep voting for the biggest assholes on the planet. Ironically, most of the people advocating for crypto to save us from powerful people are exactly the same people voting for the absolute worst people whose campaign promises are to fuck over the poor and exact revenge on their political enemies. So it's hard to take the argument "I'm pro-crypto because it rages against the machine" in good faith when 99.8% of people making that argument are fighting tool and nail to make it illegal to oppose the machine. But I'll assume you're in the 0.2% for sake of argument. The point stands: these are political problems, not technological ones.
> Because the fiat system was not designed to solve any of the problems we're talking about. It was designed to feed the Roman war machine
This is exactly why I'm saying you're comparing fiat vs. crypto completely unequally. If fiat was designed to feed the Roman war machine, then crypto was designed to buy drugs online. You're being reductionist and pessimistic when describing fiat and blindly optimistic when describing crypto.
> its primary purpose has been to ensure that power structures established by varying forms of violence remain in effect without the need to trot out that violence again.
The primary purpose of the fiat system is to allow more control and regulation over the system, mostly to avoid huge boom-bust cycles in the economy and more Great Depressions. That's genuinely it. Yes, much of the purpose of government is to enable the transfer of power without violence. If we're redesigning government, can we please keep that part? Right now, if I break into your home and hit you with a wrench until you tell me the private keys of your bitcoin wallet, I can steal all your money assuming I get away. If I break into your home at hit you with a wrench until you give me your credit card, there's very little I can actually do with that. The violence you're talking about is the violence of anarchy -- the exact same anarchy that you're touting as a benefit of crypto.
> Take credit card companies for example. There's a lot they could do to prevent fraud
Credit card companies do an enormous amount to prevent fraud, and they're incredibly good at it. And are you seriously claiming that crypto will have less fraud? Most of the ways that credit card companies deal with fraud is by immediately detecting and canceling fraudulent transactions -- something that is inherently impossible with crypto.
> --there are many ways to build a system where payments happen without leaving secrets like credit card numbers out in the open
Yes, including in a fiat system! Here you are again comparing the current, flawed fiat system with some imagined future crypto system, but you can also imagine a better fiat system! And people are working on it, e.g. with chipped cards (yes it's annoying it's only for in-person purchases).
> Or consider health insurance claims. They could absolutely provide a price to the patient within a minute or two ... [previously] I'm not proposing that anybody should have to use crypto.
But if health insurance companies don't have to use crypto, and they benefit from the current system, then they just won't use crypto. So your problem is not solved. It's a political one, not a technological one.
Look, humanity has been getting incrementally better at this "government" thing over thousands of years. Yes, it's slow, and we backslide a lot. I'm pissed at entrenched power structures too. But these are political problems, and crypto just is not inherently a fix for these problems. The people "in power" could be megacorporations and aging narcissistic asshole rapist felons, or they could be scientists, human rights lawyers, passionate nerds, doctors, and even everyday people. It's largely up to us whether it's the former or the latter, and most crypto advocates today fight tooth and nail in favor of keeping power in the hands of narcissistic assholes.
If we're imagining a better world, why are we imagining one where existing shitty power structures just get torn down, and nobody has the power to stop scams, money laundering, illegal activity (we're not talking about buying fun drugs here either, we're talking about the bad shit), billions of dollars being funneled to North Korea (thanks, crypto!), small bugs in contract logic causing billions of dollars in losses, etc.? A world where a multi-billion-dollar project to build a new children's hospital requires some party to ever actually hold multiple billions of dollars in one pot, lock it up in some crypto contract for 5 years where it can't benefit the economy, and then have absolutely no possible recourse when it gets stolen and funneled to North Korea? Why is that the world we're imagining, and not one where power is just distributed better? Fuck crypto, vote better.
> these are political problems, not technological ones
That's a false dichotomy. Social media platforms are a technology, and it's a political problem that the biggest assholes on the planet tend to use them to get elected. The solution is a technological one, which is to build and use social media which do not give special privileges to an owner.
It's all bound up together.
> You're being reductionist and pessimistic when describing fiat and blindly optimistic when describing crypto.
My purpose in this thread is not to convince anybody that crypto is better than fiat, it's that crypto's potential is greater than fiat's potential. I'm being reductionist and pessimistic about fiat not to point out problems that it has not solved, but to point out problems that it is incapable of solving.
It's a bit like The Architect's speech in whichever Matrix movie: it's fundamental to the system that it creates these anomalies. It's not "the one" but it's definitely "the few".
> The primary purpose of the fiat system is to allow more control and regulation over the system
...and it does so by giving hopefully-trustworthy people the privilege to rewrite transaction history despite the transacting parties not having explicitly consented to that person having that power over that transaction.
The argument that crypto holds no promise besides grift rests on the wobbly assumption that the benefits of regulatory control cannot be achieved without creating those privileged positions--positions which end up being occupied by grifters.
It was once a necessary evil. We have a financial system based around scarcity because it was the only readily available implementation. The laws of physics ensure that certain things are scarce, so there was no need to build anything in order to enforce that scarcity. But there was also no hope of rewriting the rules of the system towards the elimination of its systemic problems. That has changed.
> most crypto advocates today fight tooth and nail in favor of keeping power in the hands of narcissistic assholes
That's true. It's horrible. Most crypto projects today are just a reimplementation of the scarcity-based system that the laws of physics handed our ancestors re: gold and such. We moved away from the gold standard for a variety of good reasons. The idea of returning to a gold-like system appeals to grifters because they don't like being limited by the fiat system. But there's no reason we can't build something that limits the grifters even more than fiat already does--and when we do that, should we really avoid using crypto for the job just because the grifters tend to use it also?
Crypto is not about artificial scarcity and passing tokens around. That's merely a rule-set that it supports. Is promise lies in the idea that we can implement other rule-sets as well--ones which are more sensitive to the needs of their users than either the physics-imposed system re: gold, or the bureaucracy-imposed system re: fiat.
I share your objections:
> detecting and canceling fraudulent transactions -- something that is inherently impossible with crypto
> and then have absolutely no possible recourse when it gets stolen and funneled to North Korea
...but these problems are the same as they were when we were moving chests full of gold coins around. It's a shame that people have used crypto to reinvent a scarcity-only system that the rest of us largely abandoned in the 1970's. But nothing about that precludes somebody using the same primitives to implement something better. It's like you're attacking angry birds and I'm defending mobile phones. The platform has merit, despite the existence of shitty apps. Let's stop using those apps.
We also want similar things. This sounds great:
> The people in power ... could be scientists, human rights lawyers, passionate nerds, doctors, and even everyday people
The structural problem with the fiat system is that those privileged positions--the ones that I claimed end up populated by grifters--when they end up populated by an altruistic person, they end up placing too heavy of a load on that person. The only way to do some of these jobs is to be at least partially negligent. I know several people who fit the description that you've given and they're doing good work. The last thing I want to do is encourage them to stop doing what they're doing and instead go be a politician--they're needed where they are.
The bureaucratic computer which implements fiat's rules is not sensitive to which users trust which other users. Sure, in some cases you need a bureaucrat whose full time job is to be the authority over some domain. But most of the time you don't. Most of the time you can get away with explicitly indicating an authority and giving them narrowly scoped power. Some scientist, some doctor, some passionate nerd... One who knows both parties to a contract/transaction, somebody who has a track record of keeping their promises. By all means lets vote for these people if they want a permanent political role, but we shouldn't have to wait for an election to do that. With crypto it can be much more granular.
We can come up with a set of rules that lets us unambiguously grant those individuals the kind of control that the fiat system gives us, but over such a limited scope that they don't have to stop doing whatever they were doing that makes them awesome to go be a politician instead, and which doesn't give them so much power that they become a magnet for the corrupting factors that plague the fiat system.
Sometimes you need a judge and a court and a lengthy trial, but other times you just need another professional to look at the work and say "yeah, that's good work, you should be paid for it". Crypto is a more flexible medium through which both parties' trust of individual can be made explicit and through which their assessment can be made binding.
> Fuck crypto, vote better.
We can vote better while also building better things. But if those things are operated by a single corruptible party, then they'll never be as good as equivalents that aren't (that means using crypto). Fuck artificial scarcity, let's build a world without it, because it's where the biggest assholes on the planet get their power.
Thank you for the good discussion. I think we share a lot of the same vision. I'm more pessimistic than you about inherent limitations in crypto (and more optimistic that there's still room for improvement in fiat), but I hope you're right that the limitations of current crypto can be overcome. Your vision sounds a lot like an idea I've had for a more "open-source government" where laws are drafted as series of commits by experts in that topic, and debate happens over individual merge requests, etc. I don't know how crypto is supposed to help with that but maybe there are things I'm just not seeing. I hope there's a way to get the best of both systems.
Thanks to you also. I hope we see your open source government thing happen.
I'm not sure how you're going to derive consensus about which experts are trusted in which topics, or how you're going to prove to the people that this commit, and not that one, is their chosen one. Not without using crypto in some way.
I don't think you can do something as important as that behind closed doors on AWS and have the people take you at your word that somebody with root access didn't have their finger on the scale--they're going to want to see proofs, to verify the outcomes on their own hardware--but I'd love to live in a world that actually is that trusting.
i agree smart contracts are the way forward, but you don’t need crypto or blockchain to implement them. You do need a trusted third party, to adjudicate when things go wrong.
We already have that. It's called courts.
Some people just ignore the courts, or delay them more or less indefinitely. This whole figure-it-out-after-the-fact-if-something-goes-wrong thing we're doing has a lot of opportunity for improvement.
I'm not saying smart contractors are more effective but they might be more accessible to the plebs than hiring a lawyer to prosecute your case.
Maybe if they're well regulated otherwise they'll just become another vehicle for corporations to take advantage of the same plebs.
What if there was a way for the masses to regulate them in a decentralized matter. Oh wait
Lmao, our Lord and Savior the market?
> It just hasn't happened because the vibes are wrong and it appears that they'll stay wrong for a while.
No. A civil society needs to be able to issue judgments that override transactions / seize assets. And therefore they cannot have automatons determining where the assets belong.
When criminals are caught with their hand in the cookie jar, we can't just shrug and say "gee I wish we had a way to get that money back."
I'm a big fan of bitcoin and to some extent cryptocurrency. I think it has real value. But I'm not deluded enough to think it can somehow replace all ledgers everywhere.
I'm not proposing that this all happen on an L1, of course you need some time for various parties to decide whether settlement should proceed. Nor am I saying that all ledgers everywhere would benefit from this change.
I'm just saying that many businesses would benefit (or become feasible in the first place) if the time between service-rendered and payment-pending were sub-second and built into the product and instead of relying on month-long-billing cycles. It would also be beneficial if the infrastructure for handling that process were common to both parties rather than having each of them track it separately hoping they agree on what is owed after the fact.
And pretty unique online irreversible near instant transactions. For this reason it was often the cheapest way to buy bullion online in a way that cleared in less than an hour, since most banks charge for a wire and credit cards (or vendor risk departments) charge high vendor premiums on bullion transactions.
It held also the promise of making me very, very rich.
How'd that work out?
> Hackers then send the ether to “mixers”—crypto platforms that co-mingle tokens from various users, obscuring their ownership. After that, the ether is swapped for bitcoin and then converted into tether, a token whose value is linked to the U.S. dollar.
Good timing for the US to lift sanctions on Tornado Cash [0].
Too many people think "lock them up" is the solution to crime, without considering that crime relies on certain types of infrastructure to remain in business. And that people who are "tough on crime" often have good reasons to keep operational the things that facilitate said crimes.
[0] https://home.treasury.gov/news/press-releases/sb0057
adding sanctions to a smart contract address that cannot appeal itself was not a winning position in the US courts
and determing that a smart contract deployment was a "foreign asset" was also not a winning position in the US courts, as its not clear if it was deployed on a node outside of the US to begin with, or if the person that actually sent the deployment transaction was a non-US citizen
The Treasury with its new head just short circuited that challenge and stopped wasting taxpayer money on this
yeah, stick with prosecuting the actual crime instead of the laziest approach of calling everyone a criminal for using a sanctioned smart contract
North Korea launders its stolen cryptocurrency through every available means. Including Tornado Cash, quite aggressively, which is why they were sanctioned. It is very hard to understand why the Trump administration would reverse those sanctions unless they are trying to aid this kind of money laundering.
Because code had never been sanctioned before, and it's a clear freedom of speech issue?
The current actions very much suggest otherwise that this administration cares about the first amendment.
It's pretty incredible that a sizable percentage of North Korea's GDP derives from crypto theft. Actually about the same percentage as Spain was pulling from the Americas at the end of the colonial period.
For others wondering, it's about 2%: 2023's GDP was $29.6b, and this article mentions that the $6b was "over a decade."
Satoshi identified!
"The Times 03/Jan/2009 Chancellor on brink of second bailout for banks"
The original point of Bitcoin was that someone else didn't keep custody of your money for you. You'd keep custody of it yourself, on your computer or a paper wallet.
Yet, there are tons of people who keep obscene amounts of Bitcoins on crypto exchanges or otherwise held by companies for them.
Why do people buy a cryptocurrency built on distrust of institutions that hold your money for you, and then give that cryptocurrency to an institution to hold it for them?
Did nobody learn anything when the former Magic: The Gathering Online Exchange imploded in 2013-2014?
Cheated?
From an outsider's perspective their methods seem typical.
Before there was crypto North Korea stole 1000 Volvo cars from Sweden. They simply ordered them and never payed.
Something tells me that WazirX's cold wallet wasn't actually cold - it was multisig but hot. The only thing that leaves the hardware running a cold wallet is a signed transaction that is limited in scope to the signed amount and recipient.
Kim Jong Un's keys: Kim Jong Un's coins.
Blockchain is a perfect, transparent trustless global ledger that can't be hacked, so it's a misnomer to characterise these transactions as "cheating", "crimes" or "theft".
If you unlawfully or immorally gain access to information, such as my private keys, and then use that information to move money, you have absolutely committed a crime, cheated, and/or stolen from me.
If you deceive me into executing a transaction voluntarily by misrepresenting the destination (which is immoral and often illegal), you have absolutely committed a crime, cheated, and/or stolen from me.
What laws are a North Korean subject to that they have broken? Who decides when a transaction was cheating or stealing without a central authority and enforcer?
Moral laws and natural law, and moral people in a candid world. It's the same principle by which one people accuses another, over which they have no jurisdiction, of crimes against humanity or war crimes or of violating Nature's Laws. See the US Declaration of Independence for a short treatise on this topic.
Don't crypto advocates claim it needs nothing at all from government?
What's the basis of unlawful? What contract is controlling these concepts and their adjudication?
To add to the other comments: do you really have a right to whatever it is that the bits unlocked by that key represent? Who granted you that? AFAICT, it's the systems running the blockchain that grants you that, and it's not governed by any contract outside the blockchain.
What is your theory for why you own any physical possessions? Do you only own things at the pleasure of your government which bestows you that privilege? I would think that if a coup replaced your government by force with one that did not respect rights of private ownership, you would cry "immoral", would you not? Or would you shrug and say "might makes right"?
Basically, you own what you control and can protect from leaving your control, by force, or punishment. The modern state is almost based around ownership and freedom, and takes the responsibility for a lot of that.
It may be immoral (not necessarily a crime, mind you) if someone deceives you, but so is using Bitcoin. You're burning the Amazon, while serving as a cash convertor for criminals. Just for personal gains.
I'm sorry, on the Blockchain we don't recognize legacy concepts like dead-tree nation state laws or ancient superstitions purporting to define morality. The future is all about registering ownership information in digital ledgers.
If you wanted to retain control of your keys, you should have encoded them in a secure, nonfungible image of monkey on the Ethereum Blockchain. That way, everyone would know those keys belonged to you.
What NK hackers are alleged to have done here is fraud, something that the US head of state has been convicted of, by courts in his own country. NK on the other hand, has not been tried nor convicted.
What possible legitimacy does the US even have to mark others as "thieves"?
Theft is first a moral concept, and only secondly a legal one, so there is no need to invoke the legitimacy of nation states' authority to have a meaningful discussion about theft.
Theft is a moral concept, but the legitimacy of a justice department to comment on it rests on its record of enforcing the legal limits consistently in its own remit. That is openly not the case anymore, voiding the legitimacy it may otherwise have held.
>transparent trustless global ledger that can't be hacked
51% attack says it isn't
Why are North Korean hackers so skilled? Are their technical skills top-tier?
They work for a government that can help with the threats, bribery and social engineering required to get access to employees of exchanges.
The issue of cybersecurity in crypto is becoming more critical by the day. The scale at which nation-state actors are targeting the crypto world shows just how vulnerable many systems still are.
I thought this was one of crypto's primary use cases? A kind of "anything goes, anything you can get away with is allowed" sort of approach.
Sure, in the same way that a primary use case of cash is that somebody can punch you in the face and take your money and whatever you can get away with is allowed.
The primary use of cash is to buy goods and services. That's not the primary use of crypto. The primary use of crypto, as far as I can tell, is to try to make money appear out of thin air whether via speculation or fraud. And, admittedly, to occasionally buy JPGs.
What we were promised: Crypto currencies would liberate journalists and dissidents
What we got: pedos, terrorists, and hostile countries got rich
In fairness, NK is not rich - perhaps slightly less poor...
So... the same balance of good and evil present in literally every technology?
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We should return the favor.
As a currency... crypto just seems worse and worse. There is no FDIC for crypto.So this is just gone.
What's worse, it's just a repeat of the 1920's as described here [1]
[1] - https://www.youtube.com/watch?v=ZpqreZlmHGU [video][8 mins][cnn interview]
When i look around at all the positive innovations cryptocurrency has failed to deliver, it really does seem like they invented a currency exclusively useful for doing crimes.
I got into bitcoin around 2011ish for some time. I was never a True Believer but I was a 'soft believer'. At the time, when people asked me if Bitcoin is the future I would always say "I think it or something like it will be very useful". Fast forward 10 years and there's been no actual use of crypto. No killer app. No disrupting the finance world. It seems to be used exclusively by smart people as a means of extracting wealth from people who don't understand it.
We built useful, legitimate services off crypto (think paying people out for doing work online). But the regulation became insurmountable.
I will admit however, almost everyone "interested" in crypto has never made a transaction.
How did crypto solve something that Zelle,PayPayl,cashapp,venmo, etc did not also solve for paying people remotely?
> It seems to be used exclusively by smart people as a means of extracting wealth from people who don't understand it.
How is that any different from other financial markets? A fool and his money are easily parted, while targeting desperate people with get rich quick schemes are also an easy play. The crypto/stocks/etc are just different tools to achieve the same result.
> How is that any different from other financial markets?
It's unregulated.
Although to be fair, it seems everything else is going in that direction too (https://news.bloomberglaw.com/esg/doge-targets-sec-next-for-...)
Please try and think for a second. You're telling me you can't see the difference in investing in a S&P ETF vs. crypto investing? Really? There is no difference there for you?
you just put bumpers on it to make a smart ass comment. Investing in the S&P is not the only way to invest with stocks. People trying to take money from people are not peddling S&P investments.
In every market down turn, those that are not wealthy end up having to sell of stocks to stop the bleeding. Those that are wealthy increase their wealth by buying up what the others are selling. The concept of a forced market crash is not unthinkable. Especially the current situation. Those that are friendly to the current administration are about to be greatly rewarded.
Cryptocurrencies is one of those things that makes me embarrassed for the whole tech industry. I wish it was the only thing...
The quiet majority who avoids such things are easily lost among all the pump and dump nonsense. A ~single digit percentage of the general population has basically zero morality, but they can have a huge impact.
I realized it was likely a profitable long term investment back when bitcoin was ~10-15$, but I objected to it on moral grounds and didn’t get involved. It’s not even something I regret, just another life choice.
which moral grounds? how does that involve buying and holding, the most passive outcome possible
If I buy and hold 1 kg of gold, in 50 years humanity still has that same 1kg of gold but it lost all the resources required to secure that gold from being stolen. As such buying gold “to hold” is actively harmful for humanity, the same is true of crypto.
I object to doing things that bring me wealth at the expense of humanity as IMO it’s just a diffuse form of theft. While you may disagree, I hope you can understand that such a stance is based on my personal morality.
In this framework, what kinds of assets are you allowed to own the title towards, and what forms of income and revenue are you allowed to have? are there other forms of wealth - like non-financial/social - that you weigh?
Personally I think most productive investments are a net positive which opens many options here. It’s mostly zero sum / predatory behavior like the worst pay to win games or online casinos that I have a problem with. A fast food restaurant isn’t serving particularly healthy food, but it is providing a service people want and minimizing food borne illnesses etc.
Similarly buying a T-Bill may arguably support some of the horrors that the US government does, but what are the alternatives revolutions and lawless societies suck.
What about you? What do you the externalities of various investments are?
so basically this framework only excludes spot commodities. yeah its not common for people to be permanently bullish on commodities outside of a few niches like bitcoin and precious metals, so you don’t hear too much about that aside from those communities.
yeah that makes it easy to adhere to, while many other asset classes dont really revolve around scarcity of the asset’s existence and ownership does convey access to a productivity. I understand your criteria now.
For me I don’t have that criteria and don’t mind zero sum things. Its an entertaining and stressful player versus player match in a massive multiplayer game. Some kinds of trades I make are not zero sum, but it’s not an important distinction for me.
I do have a criteria related to human suffering: I mainly avoid exposure to some sectors like defense contracting and publicly traded prisons. Because the incentives are out of whack and dehumanize people while hoping they suffer, said in obtuse terms.
I think there is a flaw in the resource exchange logic you presented. Where you owning 1 kg of gold means the effort to extract that gold had gone to waste. In spot commodities the scarcity and continued demand at higher prices of the commodity is what justifies the further investment into extracting that commodities from harder to reach places. If a single market participant finds utility from the use of that commodity, distinct from hoarding, then acquiring access to more is beneficial. Your hoarding helped. The main difference here is that you are looking at the resource expenditure to acquire the unit you are owning, as opposed to the future utility created by the scarcity you contribute to. That’s a choice, I wonder if there is room to re-evaluate that principle, as I’m not sure we are operating on the same information.
> If a single market participant finds utility from the use of that commodity, distinct from hoarding, then acquiring access to more is beneficial. Your hoarding helped.
Talking about marginal quantity for tiny fractions of a commodity get abstract so let’s scale it up and the assign a fraction of the difference to that 1kg.
Total quantity of gold in earths crust is constant, so let’s assume what changes is the timing of when a mine gets opened. IE a bit of land is either mined in 1975 vs 2025.
Everything else being equal it’s more efficient to mine today vs 50 years ago both from an effort perspective and environmental impact. EV mining equipment for example is a lot more common today than 50 years ago, they are also a lot safer. Thus removing 1kg of gold from the market for 50 years is also a dead loss.
Correct, and that EV mining equipment was only pursued because that 1kg of gold is $100,000 now instead of $5,750 in 1975. because of that constant quantity that is now unavailable. If gold was still worth $5,750/kg, it wouldn't matter what policy changes about mining regulations were done, nobody would pursue creating the more expensive equipment and mining gold.
The conclusion in your stated logic is to actually hoard as much gold as possible so that mining in the year 2075 is even more EV+ and safer.
You’re missing two important points.
Gold mining alone has basically zero impact on Caterpillar’s R&D into EV mining equipment. The mining industry mines vastly more copper, iron, tin, etc ore and gold is at such low concentrations it’s basically indistinguishable from other types of mining until chemical separation.
If nobody was holding gold as a store of value there’d be a glut of gold for industry and ~zero gold mining the next ~hundred years. Holding gold ultimately means mining sooner not later.
I have counterpoints to that, but my main disagreement is where you draw the line. This feels arbitrary. You look at present energy expenditure as waste, if the asset itself is not consumed for an equally arbitrary reason that you approve of, or generates an even more valuable asset or ongoing revenue stream. I view it as all intertwined with commodity economics whether prices are cyclical, seasonal, or permanently bullish. Low float assets aren’t controversial, a small trading or consumed supply dictates the value of the entire supply, for balance sheets, lending, securitization and more.
Thanks for explaining your preference.
> I have counterpoints to that
How? Efficiency of scale can never drive marginal coasts below 0.
> You look at present energy expenditure as waste, if the asset itself is not consumed for an equally arbitrary reason that you approve of, or generates an even more valuable asset or ongoing revenue stream.
I think you’re missing my point, a gold ring may be purely decorative but people actually want the ring. A gold bar sitting in a safety deposit box for decades is there purely an investment, the nature as a physical piece of gold is essentially irrelevant the person wants is a store of value not gold. At that point why not simply leave the gold unearth and use the potential location of a mine as a store of value?
IE, for a 50 gallon drum of oil to be sitting in my basement it must have already been extracted from the earth. We don’t extract oil as fast as possible and store it because the ground itself was already storing it instead people pump faster or slower in response to market conditions that’s efficient unlike silver, gold, etc sitting in a vault.
Thus using mined gold as an investment is simply inherently wasteful, a pure dead loss for humanity.
If people could use oil as an investment they would. It’s perishable and toxic to store.
I understand your position. It doesn’t matter that you overlook key economic relationships in environmentally friendly methods, and you don’t recognize how illiquid balance sheets drive markets through lending and collateral or consider that utility, the goal post moves to disliking the extraction method occurring at all.
I recognize that my counterpoints are all capitalist rationalizations and can be used to rationalize anything.
So I’m just watching at this point.
The difference between oil and silver / gold is only the scale of economic loss.
People have used physical oil as an investment, unrefined oil is stable across millions of years. The underlying economics mean people only attempt it in the short term when the price is unusually low. Or as a state sponsored hedge https://en.m.wikipedia.org/wiki/Strategic_Petroleum_Reserve_...
Well at least we redeemed ourselves with NFTs huh?
Honestly with POTUS and his family releasing NFT's I'm not sure whether you're joking.
> Fast forward 10 years and there's been no actual use of crypto. No killer app. No disrupting the finance world.
Just today I answered call on my mom's phone from unknown number. Regarding payout from blockchain investment account. Not the killer app and disruption we deserve, but the only one we got.
The killer app is crime. Old scams have flourished. Entire new forms of scam have been invented. Crypto currency has been a game changer for criminal organizations.
> It seems to be used exclusively by smart people as a means of extracting wealth from people who don't understand it.
I'm all for an era of crypto feudalists
My pet theory is some government agency created bitcoin for one of two reasons:
Tracking financial transactions (open ledger).
Funding dark ops.
The whole Natoshi riding into the sunset after bitcoin booms, like an old Western movie, is not very plausible IMHO.
It is certainly odd there's been nothing from the inventors not even using the vast wealth they have squirreled away. The alternative which is honestly kind of funny is that they lost their keys so can't access the coins and thus coming forward as the inventor would just put a target on their back for people who might want to steal their keys.
Lost keys is the most probable explanation, considering it was near worthless for a good chunk of its start. They likely didn't have backups or shrugged and moved on.
I like this idea. They should’ve been able to do some decent mining early on after losing the keys and make money.
Depends a lot on when and how the keys were lost. If the creator(s) were sitting on it thinking they had this cache there's not much reason to mine so if they lost it later, say after home mining with single GPUs became woefully inefficient and ASIC farms ruled the roost it could have been out of economic reach to actually mine. Or they didn't realize for a while that they had lost the original keys, eg they forgot their passphrase or went to access the drive with the key on it and it has died or disappeared (lost in a move or something). There's also the off chance that they were simply pretty old and died before it really went crazy and their survivors just don't know that gramp's old flash drive actually had a fortune in coins on it.
This is the opinion of Nobel Prize winner Paul Krugman too, in his post Crypto is for Criming https://paulkrugman.substack.com/p/crypto-is-for-criming.
Nobel Prize winner Paul Krugman famously estimated in 1998 that the impact of the Internet on the economy will be no more than that of the fax machine.
Krugman's response:
> First, look at the whole piece. It was a thing for the Times magazine's 100th anniversary, written as if by someone looking back from 2098, so the point was to be fun and provocative, not to engage in careful forecasting; I mean, there are lines in there about St. Petersburg having more skyscrapers than New York, which was not a prediction, just a thought-provoker.
> But the main point is that I don't claim any special expertise in technology -- I almost never make technological forecasts, and the only reason there was stuff like that in the 98 piece was because the assignment required that I do that sort of thing. The issues about Bitcoin, however, are not technological! Everyone agrees that it's technically very sweet. But does it work as money? That's a very different kind of question.
https://www.businessinsider.com/paul-krugman-responds-to-int...
That's fair. Making predictions is risky business, economist or not. https://www.snopes.com/fact-check/paul-krugman-internets-eff...
Same Krugman who wrote "Bitcoin is Evil" in 2013.
Most of the time, the difference between crimes and ventures depends on the hand holding the stick.
Obviously - if you are doing things that are legal - you have no need for Crypto.
Now, I think some crypto people will argue that there are many good and ethical things you could do which are illegal that you now can do with crypto.
However, all none of those things are happening. All that is happening is speculation and unethical crime.
The only obvious mainstream "success" to come out of crypto is stable coins (Tether/Bitfinex is something like the 5th or 6th largest buyer of US treasuries ...and amusingly keeps all the yield from them). Ironically, this use case also happens to be one that doesn't really require a decentralised ledger (would work equally well with a few cross-border validators, ala DNS root server approach) and lends itself very well to tradfi involvement (since you need pegging to fiat).
For me crypto today looks like ~1998/~2000 ish internet. Big, powerful traditional entities have fully woken up to it and will now take it over and ensure whatever useful use cases exist will be controlled by them with profits also accruing to them. The speculative, lawless days of the crypto wild west (fuelled by oceans of QE & stimmy money); and promises of a satoshi enabled future are well and truly over.
In terms of ushering in a new decentralised monetary order, it has failed completely.
This is so incredibly ill-informed it's hard to respond to. Thanksfully, it's incumbent on the person making the extraordinary claim...
> currency exclusively used for doing crimes
... to provide extraordinary evidence.
On my end, my home is financed by a trust-minimized loan against my BTC, using a stablecoin. And I greatly prefer stablecoins to wires for paying international vendors.
I’ve never see a “good” crypto millionaire/billionaire.
They’re always a smug racist/sexist/misogynist/ablist tech bro with fucked up visions of the future.
Hm, is that perhaps how you feel about all billionaires? Can you name one you think is "good"?
I've made some money in the space, have kids and a family, and care deeply about special needs and access (partner is a former SpEd teacher, I've volunteered and donate to related causes), and have invested heavily in reproductive rights. Does that make me "good"?
In my experience, and by my values, there are plenty of good and neutral people in the space. They aren't often the ones that ham it up for the media, but it should be obvious why that is.
Probably not a crypto millionaire/billionaire.
Isn't that tech billionaires in general?
Sure, but crypto millionaires are acting like they’re billionaires.
They tend to use their projected future gains to raise influence and clout today.
Bill Gates, Steve Ballmer, Mark Cuban....they're not like this. Granted it's a pathetically short list.
And how much money was made off of companies that were created to support cryptocurrencies?
Does anyone around here know of any?
Bueller?
Dirty money for dirty deeds...
and these dirty deeds weren't even done dirt cheap!
Apparently the title of this story changed at The WSJ. That word "Cheat" seems wrong, while the old title makes more sense.
The archive link from the @Bostonian comment below has the original I guess: https://archive.is/1vkXGOK, we've put that in the title above. Thanks!
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Super skeptical of all hacking attribution claims made by MSM.
I've been skeptical ever since they were trying to claim the xz backdoor was from a state actor. All it took was 3 sockpuppet accounts, a lot of time and actual code contributions, something literally anybody with a computer science degree can do. Name: Jia Tan? Must be a CCP agent, never mind the fact that anybody can make their name and timezones anything...
Who is MSM?
[M]ain[S]tream [M]edia
Extraordinary claims with no way to verify, typical for WSJ. Now the question is which group benefits from policies aimed to combat this? Follow the money to see who misleads you …
Who benefits from policies aimed to combat this? Western society.
Nobody in western society benefits from KYC laws, they make life hard for small business and destroy financial privacy while the big players get away with a slap on the wrist. There's absolutely zero empirical evidence of KYC leading to a reduction in the rate of any kind of crime.
> There's absolutely zero empirical evidence of KYC leading to a reduction in the rate of any kind of crime.
We are discussing an article about a crime that KYC trivially solves.