Functional money is built around trust and consensus.
A critical weakness of crypto is that the actors involved are *less* trustworthy than government.
And this lack of trust and transparency and oversight; combined with the fact that anyone and his brother can mint their own crypto, makes a general consensus on the value of crypto unlikely.
As Tether goes, so goes the entire crypto eco-system.
Tether underwrites the entire crypto marketplace. It is involved in more than half of all crypto trades. And it's unlimited supply is totally controlled by crypto market makers with every incentive to use it to manipulate the crypto market.
It's like giving NASDAQ and the NYSE control over the Federal Reserve. No possible conflict of interest there, right?
Tether is a centralized bank that happens to use a blockchain as a backend. When people say "crypto is transparent" that doesn't mean you can't build things that are not transparent that use crypto. Similarly, one can benefit from a fully-open laptop (with open firmware running Linux or whatever) even if it allows people to still develop closed source software that runs on it, and even if some of that software is merely a front for software that runs on it is just a client for some remote server whose behavior cannot be modeled... because on the locked down device (imagine an iPhone) you can never develop something whose behavior is transparent as you can never discount what the platform is letting the developer hide from you.
Tether is basically a bank with none of the regulations, not actually a blockchain. All transactions done in USDT are public, but the backing money isn't. But trust me, it's all there, and it's totally not in speculative Chinese bonds.
> A critical weakness of crypto is that the actors involved are less trustworthy than government.
If anything, "crypto" is based on the idea that people can't be trusted, and is thus a trustless system, based on an agreed upon protocol with cryptographic controls. It isn't meant as an improvement to an existing system, but as an alternative system, and while we often hear of people who say it is a scam, that it won't work, that it can't work, the unbiased reality is that it is being used for value transactions and has been non-stop for over a decade now.
The phrase "a general consensus on the value of crypto" is equal to "a general consensus on the value of money". Crypto (as in cryptocurrencies, cryptoassets, and, in general, blockchain based digital ledgers) is a vast subject. Nothing stops someone from creating their own paper currency or non-blockchain digital currency (Nectar points, air miles).
There are for sure questions to be asked here about how unregulated, crowd managed currencies can be integrated into existing societies were money is heavily regulated, but that is another subject.
> If anything, "crypto" is based on the idea that people can't be trusted, and is thus a trustless system, based on an agreed upon protocol with cryptographic controls.
Those controls only address problems created by the distributed nature of crypto (double spend), but don't touch the most common types of financial fraud which is why wash trading and rug pulls are so common. Crypto effectively assumes that people can't be trusted to exchange currency fairly, but can (and indeed must) be trusted to do everything else (pricing, disclosure, governance, etc.) fairly.
They address more than just double spend attacks, but also ownership and control. Without a private key, in a protocol where every transaction must be signed, no changes can be made to a ledger where balances are associated with corresponding public keys.
The human issues that we have from use of the system, fraud, P&D schemes, non-custodial wallets (exchanges) etc, aren't fundamental issues with the technology itself, but with the periphery. Cash can be used to buy drugs, bank accounts can be used for money laundering, financial markets can be manipulated.
We must be cognisant of the fact that where there are people, there will be misuse. Crypto is no different.
> Crypto effectively assumes that people can't be trusted to exchange currency fairly, but can (and indeed must) be trusted to do everything else (pricing, disclosure, governance, etc.) fairly.
Must we assume that pricing is to be trusted? What pricing is this, exchange pricing? If you're using centralised exchanges then the issue is whether you trust the centralised exchange to keep an honest order book, and whether you're able to determine whether the exchange rate reflects the value of the token/asset.
Many people have recently begun trading on financial markets, see Gamestop, wallstreetbets etc, without the proper knowledge required to ensure they're making the right decisions. This is no different from buying BTC because your neighbour told you it'll hit $100k by Christmas.
These are societal problems from people who want to get rich quick and almost always get hurt trying.
If anything, "crypto" is based on the idea that people can't be trusted, and is thus a trustless system
LOL!
When you buy crypto, how do you determine what price is fair? Most people turn to an unregulated "exchange" that can easily manipulate prices in a multitude of different ways.
This is called "trust" --- blind, misplaced trust --- without any oversight or transparency.
You have reiterated a common crypto fallacy --- that blockchain accounting somehow makes the overall system "trustless". Nothing could be further from the truth.
I'm not sure this is the forum for capital lols, but to answer your question:
> how do you determine what price is fair?
Well that comes down to you, doesn't it? Would you buy a litre of milk for $10? $5? $3? $2? $1? What about if you were buying some sterling to come and visit us here in the sunny UK, what exchange rate would you say is fair? £0.50? £0.75? £0.80? £0.85? What about if I was selling you a kg of Palladium, would you pay $100,000? $90,000? $70,000? [Assumed dollar currency but arbitrary to the point.]
That last question may be harder to answer without a google, as you might find it hard to determine what price is fair. If you can't determine the fair price for something you're buying, the question should be whether you should be buying it at all.
> You have reiterated a common crypto fallacy --- that blockchain accounting somehow makes the overall system "trustless". Nothing could be further from the truth.
It seems to me that you're having an adverse reaction to my comment, so I won't address the final two lines.
Sorry. At this point, hearing people still try to defend crypto as being "trustless" is kinda comical --- sorta like people who trusted and defended Bernie Madoff because he was once chairman of NASDAQ.
How many crypto rug pulls would be enough to convince you otherwise?
Got examples? I can't see how an untraceable blockchain could still be considered a blockchain (or what use it would be). Isn't the whole point to be perfectly traceable?
Every UTXO is also randomized as far as input selection and distribution and also the way they're labeled as they travel through the system. For the simplest example, reference early monero code (at the time BMR, and MRO) where Borromean Ring Signatures were used, where the same operation is performed multiple times per-input effectively mixing inputs at the atomic level, rather than in later iterations (RingCT, Arcturus, etc) that extended this further to obscure also the amounts of these inputs and to trim some of the inefficiencies of Borosigs.
Private blockchains. Imagine a crime cartel with a private blockchain. Obviously they are not KYC. You can withdraw funds from the cartel, or pay for cartel services with the coin.
Ironically, a version of this was in private fiat currency - the coins in the John Wick movies were used this way.
That's still a traceable blockchain though, just privately kept. As soon as you start keeping a ledger, you make transactions traceable. With a single or low number of ledgers, network analysis becomes easier the more heavily each actor uses the currency as well, compromising anonymity.
Private blockchain is a term that refers to blockchain tech that does not divulge balances and transaction history without being a signing party to that transaction or without a delegated 'view' key created by the keyholder for the purposes of the audit. It's a confusing term which should have a better name, I agree.
For an example, most cryptonote networks function this way unless they have explicitly damaged or disabled the functions responsible, like in the case of Electroneum.
I think I got the below right, correct me if wrong:
What's stored in the blockchain that makes it work are public keys, and how you can talk to nodes who can append to the blockchain have to work over a network. You can always walk the whole chain at any time and account for all the activity of all public keys, and that is actually required because it's the primary way that the network knows "who" has what.
So what connects the public key to a person?
If:
- private keys are never in the hands of a third party (public keys don't matter), and
- transaction processors/miners are only available over secure channels that somehow dissociate the involved keys from loggable networky things like IP address, and
- information like IP address is not stored in the blockchain,
then a blockchain would be untraceable to anyone who does not have a complete view of all Internet activity between all the participants.
Anyone with your private keys (which you can make more up any time you want) could transact under those keys as long as they can talk to enough processors/miners through any transport method, and alter "your" stuff, that's why you guard those with your life.
The most sensible thing to do with blockchain is to track produce from when it's picked to when it's sold for QC. Every other use suggested, like voting, is just stupid trouble.
Yeah this is the fundamental problem, the only benefit you get with a blockchain is you know the data hasn't been altered from the original but there's no guarantee the data originally entered was correct. All the pitches about tracking shipments have the same issue, shipping companies already do most of that without blockchain and the main issue of people lying to the computers isn't solved by adding a chain to the mix.
It’s not, but if you say that you’re also saying that the people who’ve already put a lot of money into the system won’t get rich reselling their tokens.
It's not needed that's my point, the proposals for blockchain in most instances are best served by a WORM database and even that doesn't solve the actual issue of lying to the machine. The proponents all have a vested interest in something making their tokens worth while or at least bringing in new money so they can actually cash out. That's why NFTs exploded they were a great way to bring in new real money to allow people who were *coin rich to cash out to real usable money.
Because a blockchain can operate in the presence of even large and powerful malicious actors.
The issue here is a social/regulatory/legal one. The current international shipping game is a cartel business, and the cartel doesn't want competition - so they can use government, brand recognition, etc to maintain their moat.
It's not that the blockchain version isn't clearly better, it's that the getting there part is a very difficult and tricky process.
Think the idea is to use economic incentives rather than legal incentives, e.g. lose a bunch of money if caught cheating. This allows new participants to compete better across jurisdictions.
> The most sensible thing to do with blockchain is to track produce from when it's picked to when it's sold for QC.
I don't understand why even this is sensible. Why not just use a database? The only miners/validators on a produce blockchain are likely to be agri-companies anyway.
I also find it to be a confusing use case. The point of blockchain is that it's useful if you assume that some parties are malicious. Who are we protecting against in the produce supply chain?
> I don't understand why even this is sensible. Why not just use a database?
Who's gonna run it? Any individual company in the chain has a vested interest in fudging the data, and the technical means to do so. A private third-party lacks oversight (and thus could also be given a vested interest in fudging data). A government agency could do it (assuming one's government is trustworthy, which is often a poor assumption), but that would likely preclude international cooperation unless it's something like the UN running it (and even then).
> The only miners/validators on a produce blockchain are likely to be agri-companies anyway.
Preferably you'd use an existing public blockchain rather than spinning up an entirely new one.
Even if there was such a blockchain solely for tracking produce, the fact that no individual agri-company has control over its data makes it more trustworthy/impartial than some centralized database.
The problem is that blockchains cost more and add significant performance reliability problems without adding trust. You could solve this problem using PKI with orders of magnitude lower computational and storage cost, and that'd remove the requirement to have an always-on network service.
However, that's still missing the point that this is fundamentally a problem about humans in the real world and the technology can't magically change that. The problems with supply chain authenticity aren't a question of record keeping but whether those records are accurate. If my inspector is being paid off, he'll do the same thing for the blockchain record that he was doing with paper. If things are being tampered with in shipping, the same people will do the same things and you'll have the same dodgy goods arriving at their destination except they'd now have valid but inaccurate blockchain records.
As usual, the blockchain solution isn't adding anything except creating a market for the people selling it. It doesn't solve the real problems and if you spend time tackling those, you won't derive any benefit from diverting more your revenue to some VC's yacht fund.
From each participant's perspective they cost far less, both in terms of implementation and ongoing maintenance, than attempting to build and run a centralized database oneself (and if you're gonna match a blockchain's trustworthiness, every participant would indeed need to run a database oneself).
> and add significant performance reliability problems
1. Nothing beats the performance of /dev/null.
2. They do the precise opposite of adding reliability problems; they're in fact notoriously difficult to bring down given the sheer degree of data replication.
> without adding trust.
The comment to which you replied describes at length how they add considerable degrees of trust. They only "don't add" trust if - again - every participant is running one's own database, at which point - if they're expected to agree with each other - you've got an ad-hoc, informally specified, bug-ridden, ludicrously expensive version of half of a blockchain.
> If my inspector is being paid off, he'll do the same thing for the blockchain record that he was doing with paper.
Which would then be public and uncensorable evidence against that inspector.
> If things are being tampered with in shipping, the same people will do the same things and you'll have the same dodgy goods arriving at their destination except they'd now have valid but inaccurate blockchain records.
And that inaccuracy would - upon detection - become public and uncensorable evidence against those tamperers.
> From each participant's perspective they cost far less, both in terms of implementation and ongoing maintenance, than attempting to build and run a centralized database oneself
This comparison isn’t valid: you’re using a shared blockchain service with high transaction costs but then saying the comparison can’t use a shared service.
> 2. They do the precise opposite of adding reliability problems; they're in fact notoriously difficult to bring down given the sheer degree of data replication.
So you’re saying I can process blockchain transactions without a reliable, high-speed network connection? I never have to worry about fee increases or high volume impacting my clearance time?
> The comment to which you replied describes at length how they add considerable degrees of trust.
It describes a number of distractions from the core problem but doesn’t solve any of the hard ones. The fundamental misunderstanding you and the poster are operating under is that this kind of system is based on anonymity. Since the real world is not, you don’t need anything which PKI doesn’t give you far more efficiently.
> > If my inspector is being paid off, he'll do the same thing for the blockchain record that he was doing with paper.
> Which would then be public and uncensorable evidence against that inspector.
Just like it is currently, except with hefty transaction fees. The problem here is that you need someone to figure out where things are being faked in-person. A blockchain can't solve that because the problem happens in the real world and if you setup an oracle to inject that information you're just renaming that existing trust relationship, not removing it.
> > If things are being tampered with in shipping, the same people will do the same things and you'll have the same dodgy goods arriving at their destination except they'd now have valid but inaccurate blockchain records.
> And that inaccuracy would - upon detection - become public and uncensorable evidence against those tamperers.
Just like it is currently, except with hefty transaction fees. Again, “public” isn't relevant — all of the parties already know each other and if it goes to court they're going to produce records — and “uncensorable” is just meaningless blockchain marketing fluff because that's not a relevant problem or one which a blockchain effectively prevent.
In all of the cases I outlined, the problem requires real world checks to find who is faking the records. Whether those records are paper, actions tracked on a website, PKI signed documents, or transactions recorded on a blockchain is a rounding error on the difficulty of setting up the real world legal system and monitoring which actually prevent cheating. If I have a problem with counterfeit goods showing up, everyone involved is going to say that their records were accurate and the problem must have been somewhere else – all a blockchain tells you is that you paid more to store the receipt, not that it was accurate.
> This comparison isn’t valid: you’re using a shared blockchain service with high transaction costs but then saying the comparison can’t use a shared service.
The parenthesized bit immediately following what you quoted (in addition to other parts of the comment and its grandparent) specifically explains why the comparison can't use a shared service: who's going to run it while being trustworthy for all users of it?
> So you’re saying I can process blockchain transactions without a reliable, high-speed network connection?
You need one for any other database, especially a shared one as you suggested above. In fact, it'd need to be more reliable and more high-speed for a non-blockchain solution; even full nodes don't require continuous uptime (that's only needed for mining or staking, neither of which is necessary to query and post transactions), and blockchain transactions tend to be pretty light on bandwidth.
> Just like it is currently, except with hefty transaction fees.
1. Citation needed on "hefty transaction fees". There are blockchains other than Ethereum, in case you weren't aware.
2. You're forgetting (or perhaps deliberately ignoring) that it's considerably easier to "figure out where things are being faked in-person" when the evidence of fakery is permanently in the public record. There's also far less room for plausible deniability on the faker's part.
> “uncensorable” is just meaningless blockchain marketing fluff
You might be surprised to learn that traditional database records, unlike those on blockchains, are trivial to destroy or otherwise tamper with. The inability to cover up fraud by editing transactions after-the-fact is nowhere near as meaningless as you assert.
> Whether those records are paper, actions tracked on a website, PKI signed documents, or transactions recorded on a blockchain is a rounding error on the difficulty of setting up the real world legal system and monitoring which actually prevent cheating.
And setting up said real world legal system and monitoring is considerably easier when the digital records are auditable by pretty much anyone and effectively impossible to modify.
> all a blockchain tells you is that you paid more to store the receipt, not that it was accurate
A blockchain tells you that the receipt was not and will never be modified. If there's an inaccuracy, that makes it much easier to detect it. If there's a pattern of inaccuracies, that makes it even easier to detect it and quantify it. What would've previously taken weeks or months worth of wrangling records from filing cabinets or arbitrary databases can instead be done in minutes or even seconds - freeing up time for the actually-hard parts of such investigations.
> The traditional banking model achieves a level of privacy by limiting access to information to the parties involved and the trusted third party. The necessity to announce all transactions publicly precludes this method, but privacy can still be maintained by breaking the flow of information in another place: by keeping public keys anonymous. The public can see that someone is sending an amount to someone else, but without information linking the transaction to anyone. This is similar to the level of information released by stock exchanges, where the time and size of individual trades, the "tape", is made public, but without telling who the parties were.
> Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve. We have to trust them with our privacy, trust them not to let identity thieves drain our accounts. Their massive overhead costs make micropayments impossible.
- Satoshi
The reality is that Satoshi envisioned bitcoin very differently from how things are currently implemented. They envisioned public keys being rotated, single use addresses, etc.
The current systems don't provide any of the privacy that the original paper sought.
> It is high time for blockchain enthusiasts to ask this question: Have the primary principals underlying bitcoin’s design — privacy, fraud proof, non-inflationary— been completely destroyed by today’s blockchain operators?
You can pick apart this Medium post if you'd like but I think it's really an excellent question. Read the original paper and ask yourself if what we're seeing in the market is really the "Satoshi vision".
Satoshi+in their writings) didn't understand the side channel attack of the Blockchain-meatspace bridge. Bitcoin only meets its design guarantees in a purely virtual world or with anonymous terminals. Bitcoin is already expensive enough to transact in, are you also going to move to a different location every time your transact?
I don't think it even really gets to the point of side channels. People sign up with their github account and a photo ID so that a 3rd party can store their private key for them.
The fees increase with demand, but throughput does not. Bitcoin's current incarnation cannot scale. If it is cheap to transact now, it is only because the demand for its use as an actual currency has been reduced since the last fee explosion.
If everyone in the world tried to use bitcoin as a replacement for bank transfers, etc. then the fees would be astronomical
I’ve not read the paper, but was the original intention that Bitcoin would be almost immediately transferred to an external store of value? How are single use addresses funded without the transaction being recorded?
> The reality is that Satoshi envisioned bitcoin very differently from how things are currently implemented. They envisioned public keys being rotated, single use addresses, etc.
That’s literally how all wallets work in 2022, no?
Public keys are constantly rotated, addresses are single use.
Not to my knowledge? I believe Coinbase lets you manage any number of public keys but there's nothing enforcing a "burn on use". Also, obviously, there's a central authority that has your name, government id, and keys.
Proof of work was invented from the start, as an anti-spam measure. The user sends data to a server and alongside of that, sends some proof of work data. This simple system has a downside though, that is ASICS. A specialized ASICS hub of servers, can create as much spam as they wish, because proof of work for the specialized system is trivial to compute. One solution to that problem, is for ASICS hubs, to create the proof of work, and sell it to users. Add on top of that a public database of what ASICS proof of work was sold to who, and you've got Bitcoin. It is really that simple. Instead of fighting the ASICS hubs, you work with them.
This technique, is so simple it should not be even be considered a technology, it is just a technique. A myriad of technologies can use this technique to add some additional properties, to an already existing technology. For example, in the IOT world, an oven connected to the internet, could be used only by a particular key in the blockchain, thus proving ownership to control the oven. One microtransaction can turn on the oven, or turn it off.
The most important aspect of bitcoin, is of course spam prevention. Gmail servers just block any unknown mail provider, just in case they are spammers. When spam was limited to email messages, that was a viable solution for the internet. This however is gonna change.
Synthetic data, i.e. deepfakes, are really gonna take off right now. Synthetic faces of people can be uploaded by the tens of millions to facebook each day. Synthetic photographs of places can be uploaded to Insta. Synthetic conversations can can be uploaded to twitter by the billions. Synthetic songs can be uploaded to bandcamp, terabytes of them every day. Synthetic videos can be uploaded to youtube, or tik-tok, petabytes every day.
The advertisement based free model of posting information on the internet, will go down in flames in less than 4 years.
A new technique is going to emerge, in which we send value to the hosting providers, for our information they are willing to host for us. That value, trillions and quadrillions of microtransactions, less than a cent each per day, it is difficult to track, but it can be done, the question which arises is, what can someone gain doing that?
Yeah, it's entirely built on the idea that every transaction is known by everyone. I think Lance is a bit confused. Maybe he should look into Monero.
The point of Bitcoin is to enable anyone to exchange value with anyone. And it does that very well. When the US justice department declared that credit card companies had to stop processing donations to wikileaks I could still donate through bitcoin.
I don't think they're confused, I think the vast majority of people involved in crypto or who are spectators of crypto are confused. I have repeatedly heard that crypto enables "anonymous" transactions for years.
Also he literally links the original paper, quoting the part where it talks about transactions being harder to trace. "without telling who the parties are".
The "without telling who the parties are" is more about non-personal identifiers. Similar to how knowing your IP address doesn't really identify you by itself, you need to go through (often several levels of) other parties to get that info. Which in addition is ephemeral, others will be assigned your IP and tracing which requests were made by you vs. someone else is a lot harder than tracing a credit-card.
This seems to be lost on a lot of folks, which I find strange in a tech-centric forum. Bitcoin is perfectly pseudonymous, as it strives to be, and not anonymous, which it has never attempted to be.
And some wallets do this automatically. But if you send a transaction and the change flows directly from your previous wallet to your next wallet, you're not accomplishing much.
The Bitcoin designers did not pretend it was anonymous – it’s obviously not to anyone who looks at the architecture! - but the people selling Bitcoin have loudly lied about this since the beginning, however. If you search here you’ll find like 14 years of people pointing out that it’s easily traced and getting a bunch of word salad from the sales guys in response.
Well, "crypto" does allow that--and has for years!--using zero-knowledge proofs (as in Zcash), at least within some bounds (that I would say are quite reasonable for conversational purposes... hell: someone in the government seems to think this stuff works, hence the sanctions on Tornado Cash); Bitcoin, one very specific technology from crypto, however, does not.
The problem is also one of credibility, Bitcoin was supposed to be private and breaching privacy has proved to be pretty trivial. Encryption is hard, but maintaining anonymity is much harder.
That paper is from 2018. I expect they've been remediated by now, though everything is going to be vulnerable at some point in some way. What matters is for how long.
Theory vs. practice. When there's a DoJ case with a web that's all unified through Monero, then you have proof Monero has been busted.
Monero hasn't been busted.
From the paper - "Our techniques show that Monero is not necessarily a dead end for investigators."
And then offers zero evidence to demonstrate that investigators were able to use anything from the seizures.
This is not evidence - "They (mistakenly?) advised their hopeful subscribers to publish their email addresses (hexencoded, but publicly visible) in the Monero blockchain, leading to these transactions being identified" [31]
> When the US justice department declared that credit card companies had to stop processing donations to wikileaks I could still donate through bitcoin.
If any appreciable amount of money was sent this way you would see blacklisting of bitcoin addresses where sending / receiving money from that address would get you in legal trouble. Bitcoin creates a situation where you cannot be physically prevented from sending the money but everyone including the gov’t will know you did it so it’s so it’s not censorship resistant to any gov’t that cares to get a wrench.
Right. It calls their bluff and makes them actually present a case in a court of law. There are no regulations or laws involved when the DOJ tells payment processors to blacklist journalists they don't like and the payment processors are happy to comply without it.
Ask anyone outside your tech circle to explain Bitcoin and it will be something like "It's an anonymous digital currency that can't be traced, unlike bank accounts."
Well yes, but we still get people regularly claiming here that anonymity is one of the great benefits of crypto, so there are a lot of people out there that still need to find this out.
Lots of comments here guffawing at the lack of revelation, but anonymity is central to blockchain-related popular understanding (and endless crypto pr).
If you own significant sums of money and its completely anonymous, or the origin is untraceable, you can't use it.
Just like drug cartels know how to collect and store anonymous money but find it very hard to use it. Every time you try to buy something expensive or normal financial assets, you have to explain where the money is from or you may lose it.
Try to buy a house with anonymous crypto and find out.
But crypto wasn't invented for rich people and drug lords to launder the money, so why would anyone give a shit about their problems in the first place?
It still would make a lot of sense for regular folks who prefer their online habits not to be tracked by corporations and sold around.
> Unfortunately, this aspect of his brilliant design was one of the first things to be undermined by subsequent blockchain operators. Many cryptocurrencies that have been created since are unlimited in supply, including some of the most heavily speculated ones like Solana, Dogecoin and Shiba Inu.
> This is worse than what the central banks have done.
No, it's not. Even a coin that is emitted one per second forever is disinflationary. Not only is the yearly supply inflation rate perfectly predictable (unlike fiat), it also steadily converges toward zero (again, unlike fiat).
In the long term, the difference between finite and infinite supply is negligible as long as the yearly supply never increases [1].
If I print a trillion schrute bucks, have I devalued the US dollar? If I print another trillion schrute bucks, does the US dollar suffer inflation, or does the schrute buck?
Yes people can make an infinite number of currencies, but they are all parallel systems. Making a new coin doesn't inflate the supply of bitcoin, it is just one more thing that bitcoin could potentially be exchanged for. And in practice it seems unlikely that more than a few thousand could be adopted by enough people to have a value appreciably different from zero.
Indeed, there are tens of thousands of various coins created, but 74% of wealth stays in just two of them - Bitcoin and ETH (if we exclude centralized tokens USDT, USDC, XRP, BNB etc). It's something like geometric series.
Yeah, that one in particular was a pretty bad take. Who cares how many shitcoins people create? Just ignore them. That's like me claiming that the stock market has been undermined because people can start an unlimited number of companies.
It is a good take but it doesn't apply to random L1 currencies. It applies to L2 scaling layers with poor interoperability. Bridges create a wrapper of the bridged token. Once you have multiple bridges the ecosystem is fragmented. This means bridges and L2 scaling are a dead end.
I found this article to be poorly-written and deliberately inflammatory. I'll gloss over the regular criticism of "stop conflating cryptocurrencies with blockchains".
It makes continual leaps from Satoshi Nakamoto's intentions to short-comings of non-BTC cryptocurrencies, and then snowballs this into the tremendously non-sequitur subheading Bitcoin has failed. Cryptocurrencies and DeFi platforms are now more vulnerable to privacy breaches and hacking than traditional banking.
Personally, all I see are a string of obvious scams collapsing. These scams were perpetrated by imposters pretending to be a part of a movement so that they could better tug on their victims' heartstrings. But I fail to see how the goals of these imposters should be conflated with the intentions of Satoshi Nakamoto, purely because the imposters bastardized Nakamoto's tech.
Also - the title is barely the subject of the article, but even if it were, I don't think that it, in any way, stands contrary to the goals of Bitcoin. I could see it being an issue for a blockchain meant for privacy, like Monero, but I didn't see any such reference in the article.
>Personally, all I see are a string of obvious scams collapsing.
I think you and rational people agree, it's just the rational people see the whole space as a scam, and they're not wrong.
It's been, from it's very start, a Dunning-Kruger trap sold on lies. First it was supposed to be a currency, but was created from the ground up to be deflationary, which is a death knell for a currency and leads to perpetual recession.
Then it was an asset that can only go up, until the price crashed and people realized its intrinsic value is 0 and there is no floor.
Then it was an inflation hedge that would keep you up when markets went down, except it turned out to be largely correlated to the market.
Every use case they come up with is a bag of magic beans with the sole intention of getting you to carry their bags. I've heard it described as digital beanie babies and that moniker is more apt then most could have imagined.
I mean, I would argue that the use cases people come up with simply pre-suppose the idea that "absolute power corrupts absolutely" and that there will be at least some people out there who would--or at least should--value avoiding giving those players such power.
If, tomorrow, everyone suddenly forgot what e-mail was and someone suddenly tried to invent it there would be a ton of people angry that it served no purpose and would ever catch on because it would be full of spam and people would have to run their own email servers instead of using centralized messaging servers and all the same arguments people make about crypto would re-surface ("well, maybe people could run servers on behalf of other people" "well doesn't that undermine your precious decentralization?" "somewhat, sure, but federation is still valuable" etc.).
>Then it was an inflation hedge that would keep you up when markets went down
All of these are just random narratives that you sometimes see being pushed on reddit or twitter. No credible person would make the last two claims.
I get it, shitting on crypto has become hip especially in the last couple of years. But it doesn't change the fact that the general trend for bitcoin has been a steady increase in value, and given how much money is currently being invested to crypto adjacent businesses I don't see the trend changing anytime soon.
So can you tell us what the use case is? Because I've been watching for far longer than the last couple of years, and I've seen those three narratives being pushed exactly as GP described. If there's someone credible who knows, they're not making themselves heard and it's certainly not clear to me right now what it's for if not those.
> I get it, shitting on crypto has become hip
To be honest if GP was trying to shit on crypto they would've mentioned the ridiculous NFT craze and multitude of shitcoin grifts of the last few years. They're being very charitable by sticking to some very simple things.
> the general trend for bitcoin has been a steady increase in value
There has been nothing steady about Bitcoin's value, wild swings up and down are the norm. I mean if you look at the exchange rate to an actual currency 10 years ago vs today then pretend nothing happened in between, then yes that's a nice steady rate of growth. However that would be ignoring multiple huge, sudden spikes and falls that have happened during this period.
There is no usecase just look at RAI or maybe the unlaunched Nuon, they are cryptocurrencies that try to minimize volatility. That turns the rest of the ecosystems into a bad joke. The point of these cryptocurrencies is to beat the central banks at their own game.
The modern monetary system used to have all of the same obvious scams. They made participating in any economic activity risky and depressed local as well as global economic activity as a result. None of these scams are new and the regulations and tools that crypto is attempting to get away from were created as a response to these scams in the past.
To my mind Crypto has not yet made the case that it is better than the current system and the extreme impact that all these scams have on the currencies they are run on, e.g. high volatility in price, indicates that they are substantially worse as a currency than the US dollar.
This argument pops at least 10 times everytime crypto is mentioned but I'm not sure it holds water when you compare Bitcoin and the traditional system.
The traditional monetary system prevents fraud by relying on trust and reputation of participating entities. Frauds can happen naturally but also can be reverted by making a few calls.
Of course this system suffer from its own problems specially being prone to corruption. You need permission to participate on a monetary network that is controlled by few. I'm not even talking about underground gray black market activity because unless you were living in a cave it wasn't long ago that Robinhood and others were blocking, reverting and force selling stocks from Gamestop and AMC.
Such things are rooted on the creation Bitcoin: "The Times 03/Jan/2009 Chancellor on brink of second bailout for banks" is written on the genesis block.
Bitcoin transactions are final and do not depend on trust. You don't need permission to participate. Bitcoin won't kick you because you spoke some wrong on social media or is trying to raise money from a cause your government doesn't like like Belarus or Nigerian protests.
As many things in life the alternatives have trade offs. Personal responsibility is important. Keep your keys safe and do not participate in scammy or bleeding edge experimental defi or meme coin schemes.
I'm pretty good at stuff like keeping keys safe and personal op sec. But even I have issues where I need a key reset or some other escape hatch at least once every couple years. The level of care required to participate in the crypto world as you describe means it's effectively a non-starter for me beyond the occasional speculation.
Everything you said above is true and as a result crypto is fundamentally unsuited for the vast majority of the human population to use and always will be. Unless they begin to adopt the same safeguards that the current monetary system uses.
Putting on my conspiracy robe, I would posit Bitcoin was created by an intelligence agency. You need cryptography smarts and the ability to glue all the various components together aswell as keep it all hush, something an intel agency can do with ease. How else do you uncover vast criminal networks? It was purposefully made to ensnare cyber-criminals.
Now as for Monero, I would imagine it has them shaking in their boots.
agree, because bitcoin / silk road and tor all popped up at the more or less the same time. and they all need each other as a boot strap.
Also - Satoshi - who? no one knows, really?
Dread Pirate Roberts, name insinuates that the role (of site administrator) was handed over to him. There has been speculation that he was not the creator of the site.
Tor - created by the Navy.
Why? - Black money / create an "open source", super duper encrypted method of communicating that cannot be broken (unless you control 70% of the exit nodes, whoopsies), get people invested in using it. How many of the dealers that supplied on silkroad where "free-lance" and scooped up later (along with their product and cash)
That's because when most people use "blockchain" or "DeFi" they're using AML/KYC entities that post their transaction logs to public servers. Law enforcement eats this up because it saves them the trouble of getting warrants for investigations.
Bad for customers to be sure. Most have no idea what they're doing and have fallen for a scam hook, line, and sinker. They (loudly, incessantly) proclaim to their friends the benefits of a new money paradigm while deriving all sustenance through the umbilical cord of OldFi. ChromaFlair on a Model T.
The article itself is a hot mess of muddled thinking. It starts by talking about the Bitcoin white paper (not a "manifesto"), then asking the absurd question: "Why can't DeFi make good on the promise?" The reason is that "DeFi" is about as far from Bitcoin as "car" is from "carpet."
The Bitcoin white paper describes the application of proof of work to the problem of electronic cash. The vast majority of DeFi projects are just centralized ledgers operating through trusted institutions. They are the very definition of "mint" in the white paper - a single, corruptible player that sets the rules - arbitrarily if need be.
Sounds like you've never used a DeFi application...Yes, the bridging between on-chain/off-chain still happens through centralized entities, but things like uniswap are entirely run on-chain and don't require any central authority or centralized ledger.
not entirely correct; if you both earn and spend all of your crypto directly as cryptocurrency, then you can fairly easily just remain entirely anonymous. This just doesn't apply to most people, at least most who do legal business.
For me and the vast majority of people that is a complete non-starter. And the primary value of a currenyc is that it gives you liquidity to participate in the economy. Until crypto can claim the same thing it only barely qualifies as a currency in my mind.
Sounds like a recipe for an audit, at least once they can clear their backlog. At which point, I'm pretty certain they're going to want to know more than "generic cap gains sale"/"revenue paid to me in cryptocurrency". They pretty clearly do not want anonymity in the flow of money.
That many things these days are called Blockchain, as if to appear secure, but they're no more sophisticated than centralised databases, while actual blockchains, like Bitcoin as exemplified in its whitepaper, is designed to be a secure and decentralised chain of transactions.
"Blockchain" has stopped meaning anything when people decided to use it for anything remotely related to internet money. It's just become a fancy word executives put on investor decks to woo venture capitalists.
But it doesn't mean that the actual cryptographic technology called blockchain, i.e. a chain of digitally signed transactions with a distributed consensus mechanism, is itself insecure.
Bitcoin is traceable due to its very implementation. Unless you know how to use it properly, it's very easy to deanonymize yourself on accident. And once that happens, all the transactions thereafter are easy to follow.
Monero, on the other hand, is designed to intentionally be hard to trace history of transactions on.
Yes, I edited it out from my comment because I knew someone would point that out and I didn't really want to go on a tangent about it. I meant it's untraceable by some very narrow definitions of tracing.
You'd know that hex address X sent money to Y, but you wouldn't necessarily know that X is John Doe that lives at 1234 Main St., nor you'd be able to tell that, knowing address X, John Doe also owns address Z.
With KYC laws you have a lot more metadata to be able to do correlations like that, but I'm specifically talking about the protocol and the technology itself.
It's important though to mention that you don't need KYC to attach a real identity to a bitcoin wallet. It's harder to do at scale, but if you're interested in finding the bitcoin wallet(s) of a specific person, or the person behind a specific wallet, this can be done with analysis of the blockchain itself and information from other parties to their transactions (which include their ISP, the ISP of some Bitcoin nodes where they advertised their transactions, and the seller sending them physical goods if they are using BTC for that). Also, if a BTC wallet is linked to a physical identity at any time, all past transactions of that physical identity can generally be discovered, often even if they are using separate wallets.
> Bad for customers to be sure. Most have no idea what they're doing and have fallen for a scam hook, line, and sinker.
I wouldn't call it a scam, it's written into laws we should all be pretty mad about. It's only a matter of time before KYC companies are the only way to engage legally with cryptocurrencies. While I don't think having all your transactions in a public ledger was ever a smart move for your average joe, just one de-anonymizing event and you're out to dry. I think the bigger issue is the ever eroding privacy policy in many countries.
> That's because when most people use "blockchain" or "DeFi" they're using AML/KYC entities that post their transaction logs to public servers. Law enforcement eats this up because it saves them the trouble of getting warrants for investigations.
Well, except for the important detail that KYC requirements don't preclude the need for warrants...
> They (loudly, incessantly) proclaim to their friends the benefits of a new money paradigm while deriving all sustenance through the umbilical cord of OldFi.
Yeah, it's almost like crypto can't possibly be a fully self-contained ecosystem, and thus it must by necessity have integration points with the rest of the world. Who could have ever predicted that...
> Well, except for the important detail that KYC requirements don't preclude the need for warrants...
Banks and law enforcement frequently share data without caring about warrants. One example: if you send a $10K wire (in the US), your bank may voluntarily submit a Suspicious Activity Report. And since they may be liable if they choose not to report, but are not liable if they do report, guess which option they typically choose?
Warrants are not a high a hurdle in practice when they are needed. The US has the third-party doctrine, so all information you've communicated to someone does not need a warrant unless otherwise protected. In the US you need to establish real probable cause (otherwise the fruit may be poisoned), but PC is a low legal standard. Non-US jurisdictions don't use the fruit of the poisoned tree doctrine and so the actual legal standard is more like "arguing probable cause for the warrant shouldn't look like an outright perversion of justice". The world's best limbo performer can't dance under that bar.
Hell with KYC a government imposed search of your papers is dictated by law without even a warrant/PC/RAS. Where I live, you can legally carry a concealed gun in a bank without ID but you can't open a damn account and put $20 even with a US passport (without some proof of address).
The whole article is a plug for Chainalysis, a company that sells its ability to trace crypto transactions to the US government who ironically gave them KYC, the most fundamental and lazy ability to start a business that traces stuff like this.
What I'd like to see Grigg admit to with a straight face is his companies ability
to trace monero. his company got the US Government bid for a $625,000 bounty to trace it, and its been two years...so i suspect Grigg's releasing this presser to take some of the heat off the inevitable "no, we cant" he's going to need to admit sooner or later.
> limitation to all sender-obfuscating cryptocurrencies
Only those that allow sending coins to recipients without their explicit approval. On pure Mimblewimble blockchains, the recipient must sign for receipt and is much less likely to accept poisoned funds.
Sort of, but not really. It is a very nuanced probabalistic attack. The problem is fundamentally that you need others to use your outputs as decoys in order to have plausible deniability.
Call me skeptical of any assumed ill intentions as $625,000 is not a big enough chunk of change to convince me that there is some form of grift going on here, as there's millions to be made elsewhere grifting crypto.
This comment is one of the laziest ones that you can make. "No it isn't" is literally the top (least useful) strata of the argument pyramid, provides precisely zero extra information, and doesn't belong on Hacker News.
That may work if you're a known entity who is known to be an expert on the subject, but for an anonymous forum, just saying "you're wrong" without any explanation is stupid and useless.
If you don’t go through it point by point and just reject the entire comment, then how is everyone else supposed to know that it’s misinformation? Right now it’s just your word that it’s incorrect. You have to back your claims up.
The fact that you made a second comment, yet provided absolutely no refutations of any of the points in the original comment under discussion, suggests that you cannot refute their points.
Although, the phrase "What HN needs is less engagement with useless, time consuming misinformation, and more outright rejection of it." instead suggests that you are of the totalitarian nature that prefers to suppress dissenting thought entirely, so I'm not sure what to think.
The traceability of very much part of design of most blockchains, starting with Bitcoin. The whitepaper makes this clear in section "10) Privacy" and the article quotes half of the relevant text.
The remaining half states: "As an additional firewall, a new key pair should be used for each transaction to keep them from being linked to a common owner. Some linking is still unavoidable with multi-input transactions, which necessarily reveal that their inputs were owned by the same owner. The risk is that if the owner of a key is revealed, linking could reveal other transactions that belonged to the same owner"
Unlike Bitcoin, account based blockchains make this extra measure of privacy harder as the receiving and sending address is one and the same, however there's no limit to how many accounts one can have, so anonymity is still possible as long as acquiring the coins doesn't reveal your identity.
Those who sign up for cryptocurrency service providers (who are required by law to perform AML/KYC checks - and do so with the consent of their customers) trade away the privacy (of some of their) transactions for the benefits (most commonly, yield and ease of use) said services offer. This is not different from use cases of cash money, where getting cash money from an ATM or most money transmitters will reveal your identity, and while one is free to make in person transactions and remain "anonymous", if one wants to have a bank account or invest legally, then some level of KYC will be in place.
The article indeed asks the wrong question. DeFi can't operate legally without KYC/AML and customers know it. Your comment on the other hand seems to me to be making an error in believing DeFi users don't know this.
> The recent spate of losses suffered by crypto exchanges and digital wallets
... have been on-going for years.
Complex systems introduce a huge amount of attack surface. Verifying systems is expensive and slow. And this was all a scam anyway.
This is mostly an article about the exchanges and gets a few details wrong but the overall gist is that the federal agencies and regulators are cracking down and finding out what the black hats knew all along.
Wait, you mean something that literally tracks any and all actions in a literal chain of history that is immutable is easy to track?!?
You mean that pattern recognition can be applied to even “randomized” in both size, time, and destination of transactions can be done to track like how they can track burner phones?
How are people going to do moral things against an immoral enforcer when the enforcer becomes immoral, if we assume all are too immoral to have the right to privacy?
Laws are generally not retroactive (though admittedly this principle does get violated).
> The Ex Post Facto Clause, contained in Article I, Section 9, Clause 3 of the Constitution, provides: “No . . . ex post facto Law shall be passed.” The phrase “ex post facto,” Latin for “after the fact,” refers to laws that apply retroactively. While the Ex Post Facto Clause on its face might appear to bar all retroactive legislation, courts have applied the Clause only to penal laws.
> Congress has much greater leeway to enact retroactive legislation in the civil sphere than in the criminal sphere. However, certain constitutional limits apply, and courts interpreting ambiguous statutes apply a general presumption against retroactivity.
Paper money is tracked all the time. US bills have serial numbers. This has resulted in the arrest of bank robbers, ransomers, and hijackers in the past.
For money to be effectively tracked it needs to be scanned and recorded at every transaction the reality is that most bills especially lower denominations tend to circulate without being deposited, in fact many of them would circulate until they are in such bad shape that they have to be destroyed without ever being deposited back at a bank.
Even when they are deposited at a bank the banks don’t tend to keep those records forever, they have lists of serial numbers that they need to watch for but if you deposit cash into your account the bank would hold the bill information for a relatively short period of time and they don’t actively share that information with LEOs or other agencies unless explicitly requested to do so.
Even with robberies it sometimes takes years or even decades before enough bills surface to actually trigger an alert and many of them never do.
Not to mention that there are billions in counterfeit dollars in circulation at any point in time and many of them are rarely caught because they never reach a point where a good enough forgery would be discovered.
When it comes to cryptocurrencies, a lot of people involved are so ignorant that "water is wet" statements come as a genuine revelation to them. Why? Bitcoin advocates have been deliberately targeting very ignorant and naive people because they're easy money.
Bitcoin advocates have generally been exceedingly clear about these kinds of things. To the point of begging people to listen. From "not your keys, not your coins" to "KYC/AML bought coins are easy to trace" to "please, for the love of god, don't give your coins to the centralized Celsius to try to eek out an extra 10% gains you greedy dumbass".
People consistently don't listen.
Crypto pumpers on the other hand tend to not care and say whatever BS they want to pump their bags.
> Bitcoin advocates have generally been exceedingly clear about these kinds of things. To the point of begging people to listen. From "not your keys, not your coins" to "KYC/AML bought coins are easy to trace"
Such advocates are the fringe. Most bitcoin advocates are saying "If you're not buying bitcoin you're an idiot! It's easy money! My critics are no-coiners who didn't listen to me!"
Such advocates are the ones with the credentials to actually bother listening to, like core devs or the people who literally wrote the book on understanding the technical nature of the system.
They're not the fringe, they're the core that the fringe pump monkeys looking for a quick buck latch onto and promptly ignore.
The majority of people who talk about literally anything aren't worth listening to, and if you can't differentiate between the two, we have bigger problems to work through.
That speaks more about the people you're surrounded by than it does the incredible people actually doing the very interesting work of developing the bitcoin ecosystem behind the scenes.
It is a shame that your only exposure to the space comes from pump monkeys who don't understand that a blockchain is barely more than a distributed linked list (hell, it's basically just glorified git) and the real innovation was not the data structure, but the integration of proof of work to create Byzantine fault tolerance.
I'm pretty sure the only difference between a Merkle tree and an Oak is the theoretically infinite branching. Is that right? /s
FYI, I regularly interact with people who actually understand blockchain and cryptocurrencies, so your assumptions are a little mistaken. None of those people are telling me to buy Bitcoin though, so I don't count them among "Bitcoin advocates".
My (very rough) estimate is that somewhere between 1% and 5% of those who enthuse about crypto-currencies are actually interested in the underlying tech. The rest being in it for one of "it's a safe way to do nefarious economy" and/or "it's easy money".
Me? I think the tech is intellectually interesting, but doesn't really scale to the point where it can provide a "world economy". If nothing else, with Proof-of-Work, you need 51% of ALL available computing resources dedicated to maintaining the chain, which is an incredible waste (if you don't have a majority of all available computing power, the chain is vulnerable). With Proof-of-Stake, you need a majority of the economic system dedicated to just maintaining the economic system.
So, intellectually interesting, but practically useless.
If your investment horizon is long enough and your secure storage space cheap enough, Lego might be a more prudent investment.
Basic strategy: buy and hold unopened copies of the 'flagship' sets of each Lego theme. If a theme is small enough, get complete sets of sets. For instance, the Muppets minifigs were sold in blind bags, but every case was guaranteed to hold three complete sets, so buy a whole case, not random bags. The Speed Champions line, after the switch to 8-stud wide models, had a dozen or so sets over two years (so far).
At your time horizon, decide whether you want to sell as parts or sets.
In 2000, the UCS X-wing (7191-1) was about $150 new. There appears to be one incomplete set on the open market for $831. The parts are worth about twice that if sold individually. I suspect an unopened set would go for about $2000, implying a return rate of about 12.5% APY.
Side note re: Lego, I have fond memories of the first Lego X-Wing and Snowspeeder. I’ll never forget losing pieces in the grass outside and calling up Lego. They asked me for the page number and sent me more pieces than I needed.
People think "burner phones" are not traceable. They watch too much CSI etc.
Pattern matching has been successfully applied to phone logs between seemingly randomized src and dst phones. I'm busy at work and terrible at communicating clearly but what I am trying to say is that even when person A is using multiple phones and person B is also using multiple phones, there is still enough of a pattern involved such as call lengths, time of calls, etc to be able to sniff out and match these seemingly random devices to specific users.
I would have to dig up papers/reports on times this has been successfully done and reported publically.
But my point is that even running shit through coin mixers etc there is a high probability of there /still/ being enough latent information floating around to suss out a track between src and dst of blockchain transactions.
> they could see that a given assassin had an “operational phone in his front pants pocket” and “in the back pocket a phone that he used to call his girlfriends.”
1. Bitcoin addresses are 100% traceable from the first to the last transaction that's ever taken place.
2. Tracing a Bitcoin address to an individual depends on the individual's OpSec.
For example: bank account to exchange to Bitcoin is traceable with the help of the exchange's KYC records, assuming they have them. From there, any further Bitcoin transactions can be traced to an individual. Buying Bitcoin with cash in person may make traceability to an individual more difficult, but then you'd have to trust who you're meeting in person to not take photos / videos or have a meeting place swarming with CCTV, and both parties not already be using individually traceable Bitcoin addresses.
Monero and / or exchanges with little to no KYC (therefore, use at your own risk) may allow for some level of 'cutout' in the traceability. Or tumblers or coin mixers or other shady, questionably trustworthy services.
Here's an amusing exercise: count up how many top FBI executives over the neoliberal period (roughly beginning in the mid-1970s under Ford/Carter) have gone to work for various Wall Street-linked investment banks, hedge funds, law firms, etc. after 'retirement' (the number is comparable to that of generals and admirals who migrated to the corporate boards of defense contractors post-'retirement'). This reality supports the notion that the FBI's central role is to serve as the enforcement arm of the organized white-collar crime cartel known as 'Wall Street'.
A competing monetary system relative to the Federal Reserve isn't something these interests are all that thrilled about. Hence, regardless of the soundness or unsoundness of various cryptocurrency approaches, ex-FBI officials should hardly be viewed as independent credible third-party voices on the issue.
Well, that's the point at which the USA really began migrating from a fundamentally industrial-centric economy to a fundamentally financial-centric economy, in terms of where the profits and power accumulated.
That's a lot of words to levy a simple ad hominem.
Regardless of the truth or falsehood of your observation, publicly-verified blockchain-backed currencies are easily traced (especially now that they've become valuable enough for companies with money to invest in solving the problem). The possibility that the messenger has a vested interest in amplifying this message is orthogonal to the truth of it.
I'd also note that the qualifier easier to trace than paper money is a kind of misdirection tactic. Is crypto also easier to trace than electronic $US funds hidden behind a web of shell companies and offshore accounts, and with ownership further obfuscated by various cut-out strategies? For example:
Nothing will beat taking a bunch of cash and exchanging it for goods. Yes you could theoretically be traced by serial codes, but entirely impractical at any scale.
That’s why government and banks will push for banking apps and going entirely digital.
327 comments
[ 2.3 ms ] story [ 250 ms ] threadA critical weakness of crypto is that the actors involved are *less* trustworthy than government.
And this lack of trust and transparency and oversight; combined with the fact that anyone and his brother can mint their own crypto, makes a general consensus on the value of crypto unlikely.
Has anyone seen the financial records for Tether?
Tether underwrites the entire crypto marketplace. It is involved in more than half of all crypto trades. And it's unlimited supply is totally controlled by crypto market makers with every incentive to use it to manipulate the crypto market.
It's like giving NASDAQ and the NYSE control over the Federal Reserve. No possible conflict of interest there, right?
https://www.theverge.com/22620464/tether-backing-cryptocurre...
If anything, "crypto" is based on the idea that people can't be trusted, and is thus a trustless system, based on an agreed upon protocol with cryptographic controls. It isn't meant as an improvement to an existing system, but as an alternative system, and while we often hear of people who say it is a scam, that it won't work, that it can't work, the unbiased reality is that it is being used for value transactions and has been non-stop for over a decade now.
The phrase "a general consensus on the value of crypto" is equal to "a general consensus on the value of money". Crypto (as in cryptocurrencies, cryptoassets, and, in general, blockchain based digital ledgers) is a vast subject. Nothing stops someone from creating their own paper currency or non-blockchain digital currency (Nectar points, air miles).
There are for sure questions to be asked here about how unregulated, crowd managed currencies can be integrated into existing societies were money is heavily regulated, but that is another subject.
Those controls only address problems created by the distributed nature of crypto (double spend), but don't touch the most common types of financial fraud which is why wash trading and rug pulls are so common. Crypto effectively assumes that people can't be trusted to exchange currency fairly, but can (and indeed must) be trusted to do everything else (pricing, disclosure, governance, etc.) fairly.
The human issues that we have from use of the system, fraud, P&D schemes, non-custodial wallets (exchanges) etc, aren't fundamental issues with the technology itself, but with the periphery. Cash can be used to buy drugs, bank accounts can be used for money laundering, financial markets can be manipulated.
We must be cognisant of the fact that where there are people, there will be misuse. Crypto is no different.
> Crypto effectively assumes that people can't be trusted to exchange currency fairly, but can (and indeed must) be trusted to do everything else (pricing, disclosure, governance, etc.) fairly.
Must we assume that pricing is to be trusted? What pricing is this, exchange pricing? If you're using centralised exchanges then the issue is whether you trust the centralised exchange to keep an honest order book, and whether you're able to determine whether the exchange rate reflects the value of the token/asset.
Many people have recently begun trading on financial markets, see Gamestop, wallstreetbets etc, without the proper knowledge required to ensure they're making the right decisions. This is no different from buying BTC because your neighbour told you it'll hit $100k by Christmas.
These are societal problems from people who want to get rich quick and almost always get hurt trying.
LOL!
When you buy crypto, how do you determine what price is fair? Most people turn to an unregulated "exchange" that can easily manipulate prices in a multitude of different ways.
This is called "trust" --- blind, misplaced trust --- without any oversight or transparency.
You have reiterated a common crypto fallacy --- that blockchain accounting somehow makes the overall system "trustless". Nothing could be further from the truth.
> how do you determine what price is fair?
Well that comes down to you, doesn't it? Would you buy a litre of milk for $10? $5? $3? $2? $1? What about if you were buying some sterling to come and visit us here in the sunny UK, what exchange rate would you say is fair? £0.50? £0.75? £0.80? £0.85? What about if I was selling you a kg of Palladium, would you pay $100,000? $90,000? $70,000? [Assumed dollar currency but arbitrary to the point.]
That last question may be harder to answer without a google, as you might find it hard to determine what price is fair. If you can't determine the fair price for something you're buying, the question should be whether you should be buying it at all.
> You have reiterated a common crypto fallacy --- that blockchain accounting somehow makes the overall system "trustless". Nothing could be further from the truth.
It seems to me that you're having an adverse reaction to my comment, so I won't address the final two lines.
Sorry. At this point, hearing people still try to defend crypto as being "trustless" is kinda comical --- sorta like people who trusted and defended Bernie Madoff because he was once chairman of NASDAQ.
How many crypto rug pulls would be enough to convince you otherwise?
Ironically, a version of this was in private fiat currency - the coins in the John Wick movies were used this way.
For an example, most cryptonote networks function this way unless they have explicitly damaged or disabled the functions responsible, like in the case of Electroneum.
What's stored in the blockchain that makes it work are public keys, and how you can talk to nodes who can append to the blockchain have to work over a network. You can always walk the whole chain at any time and account for all the activity of all public keys, and that is actually required because it's the primary way that the network knows "who" has what.
So what connects the public key to a person?
If:
- private keys are never in the hands of a third party (public keys don't matter), and
- transaction processors/miners are only available over secure channels that somehow dissociate the involved keys from loggable networky things like IP address, and
- information like IP address is not stored in the blockchain,
then a blockchain would be untraceable to anyone who does not have a complete view of all Internet activity between all the participants.
Anyone with your private keys (which you can make more up any time you want) could transact under those keys as long as they can talk to enough processors/miners through any transport method, and alter "your" stuff, that's why you guard those with your life.
- enter the data somewhere
- put a tag on the product
- scan a tag
and where they could, knowingly or not, produce false data?
The issue here is a social/regulatory/legal one. The current international shipping game is a cartel business, and the cartel doesn't want competition - so they can use government, brand recognition, etc to maintain their moat.
It's not that the blockchain version isn't clearly better, it's that the getting there part is a very difficult and tricky process.
I don't understand why even this is sensible. Why not just use a database? The only miners/validators on a produce blockchain are likely to be agri-companies anyway.
Who's gonna run it? Any individual company in the chain has a vested interest in fudging the data, and the technical means to do so. A private third-party lacks oversight (and thus could also be given a vested interest in fudging data). A government agency could do it (assuming one's government is trustworthy, which is often a poor assumption), but that would likely preclude international cooperation unless it's something like the UN running it (and even then).
> The only miners/validators on a produce blockchain are likely to be agri-companies anyway.
Preferably you'd use an existing public blockchain rather than spinning up an entirely new one.
Even if there was such a blockchain solely for tracking produce, the fact that no individual agri-company has control over its data makes it more trustworthy/impartial than some centralized database.
However, that's still missing the point that this is fundamentally a problem about humans in the real world and the technology can't magically change that. The problems with supply chain authenticity aren't a question of record keeping but whether those records are accurate. If my inspector is being paid off, he'll do the same thing for the blockchain record that he was doing with paper. If things are being tampered with in shipping, the same people will do the same things and you'll have the same dodgy goods arriving at their destination except they'd now have valid but inaccurate blockchain records.
As usual, the blockchain solution isn't adding anything except creating a market for the people selling it. It doesn't solve the real problems and if you spend time tackling those, you won't derive any benefit from diverting more your revenue to some VC's yacht fund.
From each participant's perspective they cost far less, both in terms of implementation and ongoing maintenance, than attempting to build and run a centralized database oneself (and if you're gonna match a blockchain's trustworthiness, every participant would indeed need to run a database oneself).
> and add significant performance reliability problems
1. Nothing beats the performance of /dev/null.
2. They do the precise opposite of adding reliability problems; they're in fact notoriously difficult to bring down given the sheer degree of data replication.
> without adding trust.
The comment to which you replied describes at length how they add considerable degrees of trust. They only "don't add" trust if - again - every participant is running one's own database, at which point - if they're expected to agree with each other - you've got an ad-hoc, informally specified, bug-ridden, ludicrously expensive version of half of a blockchain.
> If my inspector is being paid off, he'll do the same thing for the blockchain record that he was doing with paper.
Which would then be public and uncensorable evidence against that inspector.
> If things are being tampered with in shipping, the same people will do the same things and you'll have the same dodgy goods arriving at their destination except they'd now have valid but inaccurate blockchain records.
And that inaccuracy would - upon detection - become public and uncensorable evidence against those tamperers.
This comparison isn’t valid: you’re using a shared blockchain service with high transaction costs but then saying the comparison can’t use a shared service.
> 2. They do the precise opposite of adding reliability problems; they're in fact notoriously difficult to bring down given the sheer degree of data replication.
So you’re saying I can process blockchain transactions without a reliable, high-speed network connection? I never have to worry about fee increases or high volume impacting my clearance time?
> The comment to which you replied describes at length how they add considerable degrees of trust.
It describes a number of distractions from the core problem but doesn’t solve any of the hard ones. The fundamental misunderstanding you and the poster are operating under is that this kind of system is based on anonymity. Since the real world is not, you don’t need anything which PKI doesn’t give you far more efficiently.
> > If my inspector is being paid off, he'll do the same thing for the blockchain record that he was doing with paper.
> Which would then be public and uncensorable evidence against that inspector.
Just like it is currently, except with hefty transaction fees. The problem here is that you need someone to figure out where things are being faked in-person. A blockchain can't solve that because the problem happens in the real world and if you setup an oracle to inject that information you're just renaming that existing trust relationship, not removing it.
> > If things are being tampered with in shipping, the same people will do the same things and you'll have the same dodgy goods arriving at their destination except they'd now have valid but inaccurate blockchain records.
> And that inaccuracy would - upon detection - become public and uncensorable evidence against those tamperers.
Just like it is currently, except with hefty transaction fees. Again, “public” isn't relevant — all of the parties already know each other and if it goes to court they're going to produce records — and “uncensorable” is just meaningless blockchain marketing fluff because that's not a relevant problem or one which a blockchain effectively prevent.
In all of the cases I outlined, the problem requires real world checks to find who is faking the records. Whether those records are paper, actions tracked on a website, PKI signed documents, or transactions recorded on a blockchain is a rounding error on the difficulty of setting up the real world legal system and monitoring which actually prevent cheating. If I have a problem with counterfeit goods showing up, everyone involved is going to say that their records were accurate and the problem must have been somewhere else – all a blockchain tells you is that you paid more to store the receipt, not that it was accurate.
The parenthesized bit immediately following what you quoted (in addition to other parts of the comment and its grandparent) specifically explains why the comparison can't use a shared service: who's going to run it while being trustworthy for all users of it?
> So you’re saying I can process blockchain transactions without a reliable, high-speed network connection?
You need one for any other database, especially a shared one as you suggested above. In fact, it'd need to be more reliable and more high-speed for a non-blockchain solution; even full nodes don't require continuous uptime (that's only needed for mining or staking, neither of which is necessary to query and post transactions), and blockchain transactions tend to be pretty light on bandwidth.
> Just like it is currently, except with hefty transaction fees.
1. Citation needed on "hefty transaction fees". There are blockchains other than Ethereum, in case you weren't aware.
2. You're forgetting (or perhaps deliberately ignoring) that it's considerably easier to "figure out where things are being faked in-person" when the evidence of fakery is permanently in the public record. There's also far less room for plausible deniability on the faker's part.
> “uncensorable” is just meaningless blockchain marketing fluff
You might be surprised to learn that traditional database records, unlike those on blockchains, are trivial to destroy or otherwise tamper with. The inability to cover up fraud by editing transactions after-the-fact is nowhere near as meaningless as you assert.
> Whether those records are paper, actions tracked on a website, PKI signed documents, or transactions recorded on a blockchain is a rounding error on the difficulty of setting up the real world legal system and monitoring which actually prevent cheating.
And setting up said real world legal system and monitoring is considerably easier when the digital records are auditable by pretty much anyone and effectively impossible to modify.
> all a blockchain tells you is that you paid more to store the receipt, not that it was accurate
A blockchain tells you that the receipt was not and will never be modified. If there's an inaccuracy, that makes it much easier to detect it. If there's a pattern of inaccuracies, that makes it even easier to detect it and quantify it. What would've previously taken weeks or months worth of wrangling records from filing cabinets or arbitrary databases can instead be done in minutes or even seconds - freeing up time for the actually-hard parts of such investigations.
> Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve. We have to trust them with our privacy, trust them not to let identity thieves drain our accounts. Their massive overhead costs make micropayments impossible.
- Satoshi
The reality is that Satoshi envisioned bitcoin very differently from how things are currently implemented. They envisioned public keys being rotated, single use addresses, etc.
The current systems don't provide any of the privacy that the original paper sought.
> It is high time for blockchain enthusiasts to ask this question: Have the primary principals underlying bitcoin’s design — privacy, fraud proof, non-inflationary— been completely destroyed by today’s blockchain operators?
You can pick apart this Medium post if you'd like but I think it's really an excellent question. Read the original paper and ask yourself if what we're seeing in the market is really the "Satoshi vision".
Yesterday the average transaction cost was 0.7 USD. That’s pretty cheap as far as money transfers go, definitely beats most banks.
If everyone in the world tried to use bitcoin as a replacement for bank transfers, etc. then the fees would be astronomical
That's actually how the majority of Bitcoin wallets operate. I'm not sure what you mean here.
That’s literally how all wallets work in 2022, no?
Public keys are constantly rotated, addresses are single use.
Not to my knowledge? I believe Coinbase lets you manage any number of public keys but there's nothing enforcing a "burn on use". Also, obviously, there's a central authority that has your name, government id, and keys.
This technique, is so simple it should not be even be considered a technology, it is just a technique. A myriad of technologies can use this technique to add some additional properties, to an already existing technology. For example, in the IOT world, an oven connected to the internet, could be used only by a particular key in the blockchain, thus proving ownership to control the oven. One microtransaction can turn on the oven, or turn it off.
The most important aspect of bitcoin, is of course spam prevention. Gmail servers just block any unknown mail provider, just in case they are spammers. When spam was limited to email messages, that was a viable solution for the internet. This however is gonna change.
Synthetic data, i.e. deepfakes, are really gonna take off right now. Synthetic faces of people can be uploaded by the tens of millions to facebook each day. Synthetic photographs of places can be uploaded to Insta. Synthetic conversations can can be uploaded to twitter by the billions. Synthetic songs can be uploaded to bandcamp, terabytes of them every day. Synthetic videos can be uploaded to youtube, or tik-tok, petabytes every day.
The advertisement based free model of posting information on the internet, will go down in flames in less than 4 years.
A new technique is going to emerge, in which we send value to the hosting providers, for our information they are willing to host for us. That value, trillions and quadrillions of microtransactions, less than a cent each per day, it is difficult to track, but it can be done, the question which arises is, what can someone gain doing that?
The point of Bitcoin is to enable anyone to exchange value with anyone. And it does that very well. When the US justice department declared that credit card companies had to stop processing donations to wikileaks I could still donate through bitcoin.
Also he literally links the original paper, quoting the part where it talks about transactions being harder to trace. "without telling who the parties are".
I came here hoping for an interesting discussion about Monero, ZCash, Tornado Cash on Ethereum, and Halo/ZK proofs. Disappointing!
https://arxiv.org/pdf/1704.04299/
The problem is also one of credibility, Bitcoin was supposed to be private and breaching privacy has proved to be pretty trivial. Encryption is hard, but maintaining anonymity is much harder.
From the paper - "Our techniques show that Monero is not necessarily a dead end for investigators."
And then offers zero evidence to demonstrate that investigators were able to use anything from the seizures.
This is not evidence - "They (mistakenly?) advised their hopeful subscribers to publish their email addresses (hexencoded, but publicly visible) in the Monero blockchain, leading to these transactions being identified" [31]
[31] - https://steemit.com/shadowbrokers/@wh1sks/ theshadowbrokers-may-have-received-up-to-1500-monerousd66-000-from-their-june-monthly-dump-service
Link is broken - where is the evidence that 1500 XMR was transacted?
https://www.getmonero.org/2018/03/29/response-to-an-empirica...
If any appreciable amount of money was sent this way you would see blacklisting of bitcoin addresses where sending / receiving money from that address would get you in legal trouble. Bitcoin creates a situation where you cannot be physically prevented from sending the money but everyone including the gov’t will know you did it so it’s so it’s not censorship resistant to any gov’t that cares to get a wrench.
Just like drug cartels know how to collect and store anonymous money but find it very hard to use it. Every time you try to buy something expensive or normal financial assets, you have to explain where the money is from or you may lose it.
Try to buy a house with anonymous crypto and find out.
It still would make a lot of sense for regular folks who prefer their online habits not to be tracked by corporations and sold around.
> This is worse than what the central banks have done.
No, it's not. Even a coin that is emitted one per second forever is disinflationary. Not only is the yearly supply inflation rate perfectly predictable (unlike fiat), it also steadily converges toward zero (again, unlike fiat). In the long term, the difference between finite and infinite supply is negligible as long as the yearly supply never increases [1].
[1] https://john-tromp.medium.com/a-case-for-using-soft-total-su...
[1] https://docs.google.com/spreadsheets/d/1geg5HHgDO-ht0u6CSTHp...
Yes people can make an infinite number of currencies, but they are all parallel systems. Making a new coin doesn't inflate the supply of bitcoin, it is just one more thing that bitcoin could potentially be exchanged for. And in practice it seems unlikely that more than a few thousand could be adopted by enough people to have a value appreciably different from zero.
It makes continual leaps from Satoshi Nakamoto's intentions to short-comings of non-BTC cryptocurrencies, and then snowballs this into the tremendously non-sequitur subheading Bitcoin has failed. Cryptocurrencies and DeFi platforms are now more vulnerable to privacy breaches and hacking than traditional banking.
Personally, all I see are a string of obvious scams collapsing. These scams were perpetrated by imposters pretending to be a part of a movement so that they could better tug on their victims' heartstrings. But I fail to see how the goals of these imposters should be conflated with the intentions of Satoshi Nakamoto, purely because the imposters bastardized Nakamoto's tech.
Also - the title is barely the subject of the article, but even if it were, I don't think that it, in any way, stands contrary to the goals of Bitcoin. I could see it being an issue for a blockchain meant for privacy, like Monero, but I didn't see any such reference in the article.
I think you and rational people agree, it's just the rational people see the whole space as a scam, and they're not wrong.
It's been, from it's very start, a Dunning-Kruger trap sold on lies. First it was supposed to be a currency, but was created from the ground up to be deflationary, which is a death knell for a currency and leads to perpetual recession.
Then it was an asset that can only go up, until the price crashed and people realized its intrinsic value is 0 and there is no floor.
Then it was an inflation hedge that would keep you up when markets went down, except it turned out to be largely correlated to the market.
Every use case they come up with is a bag of magic beans with the sole intention of getting you to carry their bags. I've heard it described as digital beanie babies and that moniker is more apt then most could have imagined.
If, tomorrow, everyone suddenly forgot what e-mail was and someone suddenly tried to invent it there would be a ton of people angry that it served no purpose and would ever catch on because it would be full of spam and people would have to run their own email servers instead of using centralized messaging servers and all the same arguments people make about crypto would re-surface ("well, maybe people could run servers on behalf of other people" "well doesn't that undermine your precious decentralization?" "somewhat, sure, but federation is still valuable" etc.).
>Then it was an asset that can only go up
>Then it was an inflation hedge that would keep you up when markets went down
All of these are just random narratives that you sometimes see being pushed on reddit or twitter. No credible person would make the last two claims.
I get it, shitting on crypto has become hip especially in the last couple of years. But it doesn't change the fact that the general trend for bitcoin has been a steady increase in value, and given how much money is currently being invested to crypto adjacent businesses I don't see the trend changing anytime soon.
> I get it, shitting on crypto has become hip
To be honest if GP was trying to shit on crypto they would've mentioned the ridiculous NFT craze and multitude of shitcoin grifts of the last few years. They're being very charitable by sticking to some very simple things.
> the general trend for bitcoin has been a steady increase in value
There has been nothing steady about Bitcoin's value, wild swings up and down are the norm. I mean if you look at the exchange rate to an actual currency 10 years ago vs today then pretend nothing happened in between, then yes that's a nice steady rate of growth. However that would be ignoring multiple huge, sudden spikes and falls that have happened during this period.
Not exactly the reassuring defense of crypto.
To my mind Crypto has not yet made the case that it is better than the current system and the extreme impact that all these scams have on the currencies they are run on, e.g. high volatility in price, indicates that they are substantially worse as a currency than the US dollar.
The traditional monetary system prevents fraud by relying on trust and reputation of participating entities. Frauds can happen naturally but also can be reverted by making a few calls.
Of course this system suffer from its own problems specially being prone to corruption. You need permission to participate on a monetary network that is controlled by few. I'm not even talking about underground gray black market activity because unless you were living in a cave it wasn't long ago that Robinhood and others were blocking, reverting and force selling stocks from Gamestop and AMC.
Such things are rooted on the creation Bitcoin: "The Times 03/Jan/2009 Chancellor on brink of second bailout for banks" is written on the genesis block.
Bitcoin transactions are final and do not depend on trust. You don't need permission to participate. Bitcoin won't kick you because you spoke some wrong on social media or is trying to raise money from a cause your government doesn't like like Belarus or Nigerian protests.
As many things in life the alternatives have trade offs. Personal responsibility is important. Keep your keys safe and do not participate in scammy or bleeding edge experimental defi or meme coin schemes.
Everything you said above is true and as a result crypto is fundamentally unsuited for the vast majority of the human population to use and always will be. Unless they begin to adopt the same safeguards that the current monetary system uses.
Now as for Monero, I would imagine it has them shaking in their boots.
Also - Satoshi - who? no one knows, really? Dread Pirate Roberts, name insinuates that the role (of site administrator) was handed over to him. There has been speculation that he was not the creator of the site. Tor - created by the Navy.
Why? - Black money / create an "open source", super duper encrypted method of communicating that cannot be broken (unless you control 70% of the exit nodes, whoopsies), get people invested in using it. How many of the dealers that supplied on silkroad where "free-lance" and scooped up later (along with their product and cash)
Bad for customers to be sure. Most have no idea what they're doing and have fallen for a scam hook, line, and sinker. They (loudly, incessantly) proclaim to their friends the benefits of a new money paradigm while deriving all sustenance through the umbilical cord of OldFi. ChromaFlair on a Model T.
The article itself is a hot mess of muddled thinking. It starts by talking about the Bitcoin white paper (not a "manifesto"), then asking the absurd question: "Why can't DeFi make good on the promise?" The reason is that "DeFi" is about as far from Bitcoin as "car" is from "carpet."
The Bitcoin white paper describes the application of proof of work to the problem of electronic cash. The vast majority of DeFi projects are just centralized ledgers operating through trusted institutions. They are the very definition of "mint" in the white paper - a single, corruptible player that sets the rules - arbitrarily if need be.
"Blockchain" has stopped meaning anything when people decided to use it for anything remotely related to internet money. It's just become a fancy word executives put on investor decks to woo venture capitalists.
But it doesn't mean that the actual cryptographic technology called blockchain, i.e. a chain of digitally signed transactions with a distributed consensus mechanism, is itself insecure.
Monero, on the other hand, is designed to intentionally be hard to trace history of transactions on.
You'd know that hex address X sent money to Y, but you wouldn't necessarily know that X is John Doe that lives at 1234 Main St., nor you'd be able to tell that, knowing address X, John Doe also owns address Z.
With KYC laws you have a lot more metadata to be able to do correlations like that, but I'm specifically talking about the protocol and the technology itself.
I wouldn't call it a scam, it's written into laws we should all be pretty mad about. It's only a matter of time before KYC companies are the only way to engage legally with cryptocurrencies. While I don't think having all your transactions in a public ledger was ever a smart move for your average joe, just one de-anonymizing event and you're out to dry. I think the bigger issue is the ever eroding privacy policy in many countries.
Well, except for the important detail that KYC requirements don't preclude the need for warrants...
> They (loudly, incessantly) proclaim to their friends the benefits of a new money paradigm while deriving all sustenance through the umbilical cord of OldFi.
Yeah, it's almost like crypto can't possibly be a fully self-contained ecosystem, and thus it must by necessity have integration points with the rest of the world. Who could have ever predicted that...
Banks and law enforcement frequently share data without caring about warrants. One example: if you send a $10K wire (in the US), your bank may voluntarily submit a Suspicious Activity Report. And since they may be liable if they choose not to report, but are not liable if they do report, guess which option they typically choose?
What I'd like to see Grigg admit to with a straight face is his companies ability to trace monero. his company got the US Government bid for a $625,000 bounty to trace it, and its been two years...so i suspect Grigg's releasing this presser to take some of the heat off the inevitable "no, we cant" he's going to need to admit sooner or later.
https://en.wikipedia.org/wiki/Monero#Efforts_to_trace_transa...
Updated to reflect the thousands, not mil. bounty.
The problem is a well-understood but innate limitation to all sender-obfuscating cryptocurrencies.
Only those that allow sending coins to recipients without their explicit approval. On pure Mimblewimble blockchains, the recipient must sign for receipt and is much less likely to accept poisoned funds.
What HN needs is less engagement with useless, time consuming misinformation, and more outright rejection of it.
Although, the phrase "What HN needs is less engagement with useless, time consuming misinformation, and more outright rejection of it." instead suggests that you are of the totalitarian nature that prefers to suppress dissenting thought entirely, so I'm not sure what to think.
The remaining half states: "As an additional firewall, a new key pair should be used for each transaction to keep them from being linked to a common owner. Some linking is still unavoidable with multi-input transactions, which necessarily reveal that their inputs were owned by the same owner. The risk is that if the owner of a key is revealed, linking could reveal other transactions that belonged to the same owner"
Unlike Bitcoin, account based blockchains make this extra measure of privacy harder as the receiving and sending address is one and the same, however there's no limit to how many accounts one can have, so anonymity is still possible as long as acquiring the coins doesn't reveal your identity.
Those who sign up for cryptocurrency service providers (who are required by law to perform AML/KYC checks - and do so with the consent of their customers) trade away the privacy (of some of their) transactions for the benefits (most commonly, yield and ease of use) said services offer. This is not different from use cases of cash money, where getting cash money from an ATM or most money transmitters will reveal your identity, and while one is free to make in person transactions and remain "anonymous", if one wants to have a bank account or invest legally, then some level of KYC will be in place.
The article indeed asks the wrong question. DeFi can't operate legally without KYC/AML and customers know it. Your comment on the other hand seems to me to be making an error in believing DeFi users don't know this.
... have been on-going for years.
Complex systems introduce a huge amount of attack surface. Verifying systems is expensive and slow. And this was all a scam anyway.
This is mostly an article about the exchanges and gets a few details wrong but the overall gist is that the federal agencies and regulators are cracking down and finding out what the black hats knew all along.
Wait, you mean something that literally tracks any and all actions in a literal chain of history that is immutable is easy to track?!?
You mean that pattern recognition can be applied to even “randomized” in both size, time, and destination of transactions can be done to track like how they can track burner phones?
I’m shocked! Shocked I say!
Because some people are corrupt, you feel no law should apply to you or anyone?
Or... really, I can't come up with any sensible interpretation of what you wrote other than that.
> oh so you think you're above the law now?
The ledger as a permanent history available to the world, in real time, of every single transaction.
arguably a selling point. just not for selling large quantities of online drugs.
> The Ex Post Facto Clause, contained in Article I, Section 9, Clause 3 of the Constitution, provides: “No . . . ex post facto Law shall be passed.” The phrase “ex post facto,” Latin for “after the fact,” refers to laws that apply retroactively. While the Ex Post Facto Clause on its face might appear to bar all retroactive legislation, courts have applied the Clause only to penal laws.
> Congress has much greater leeway to enact retroactive legislation in the civil sphere than in the criminal sphere. However, certain constitutional limits apply, and courts interpreting ambiguous statutes apply a general presumption against retroactivity.
https://sgp.fas.org/crs/misc/IF11293.pdf
Paper money was never designed to be tracked, and IMO that's a good thing.
You're saying you'd like to see better tracking of paper money?
Even when they are deposited at a bank the banks don’t tend to keep those records forever, they have lists of serial numbers that they need to watch for but if you deposit cash into your account the bank would hold the bill information for a relatively short period of time and they don’t actively share that information with LEOs or other agencies unless explicitly requested to do so.
Even with robberies it sometimes takes years or even decades before enough bills surface to actually trigger an alert and many of them never do.
Not to mention that there are billions in counterfeit dollars in circulation at any point in time and many of them are rarely caught because they never reach a point where a good enough forgery would be discovered.
People consistently don't listen.
Crypto pumpers on the other hand tend to not care and say whatever BS they want to pump their bags.
Such advocates are the fringe. Most bitcoin advocates are saying "If you're not buying bitcoin you're an idiot! It's easy money! My critics are no-coiners who didn't listen to me!"
They're not the fringe, they're the core that the fringe pump monkeys looking for a quick buck latch onto and promptly ignore.
The majority of people who talk about literally anything aren't worth listening to, and if you can't differentiate between the two, we have bigger problems to work through.
These are fringe. The cynical and predatory advocates are the ones who are actually heard by the naive marks.
It is a shame that your only exposure to the space comes from pump monkeys who don't understand that a blockchain is barely more than a distributed linked list (hell, it's basically just glorified git) and the real innovation was not the data structure, but the integration of proof of work to create Byzantine fault tolerance.
I'm pretty sure the only difference between a Merkle tree and an Oak is the theoretically infinite branching. Is that right? /s
Me? I think the tech is intellectually interesting, but doesn't really scale to the point where it can provide a "world economy". If nothing else, with Proof-of-Work, you need 51% of ALL available computing resources dedicated to maintaining the chain, which is an incredible waste (if you don't have a majority of all available computing power, the chain is vulnerable). With Proof-of-Stake, you need a majority of the economic system dedicated to just maintaining the economic system.
So, intellectually interesting, but practically useless.
It's pretty much focused on heavily tech-savvy people.
Basic strategy: buy and hold unopened copies of the 'flagship' sets of each Lego theme. If a theme is small enough, get complete sets of sets. For instance, the Muppets minifigs were sold in blind bags, but every case was guaranteed to hold three complete sets, so buy a whole case, not random bags. The Speed Champions line, after the switch to 8-stud wide models, had a dozen or so sets over two years (so far).
At your time horizon, decide whether you want to sell as parts or sets.
In 2000, the UCS X-wing (7191-1) was about $150 new. There appears to be one incomplete set on the open market for $831. The parts are worth about twice that if sold individually. I suspect an unopened set would go for about $2000, implying a return rate of about 12.5% APY.
Pattern matching has been successfully applied to phone logs between seemingly randomized src and dst phones. I'm busy at work and terrible at communicating clearly but what I am trying to say is that even when person A is using multiple phones and person B is also using multiple phones, there is still enough of a pattern involved such as call lengths, time of calls, etc to be able to sniff out and match these seemingly random devices to specific users.
I would have to dig up papers/reports on times this has been successfully done and reported publically.
But my point is that even running shit through coin mixers etc there is a high probability of there /still/ being enough latent information floating around to suss out a track between src and dst of blockchain transactions.
The Hezbollah Connection https://www.nytimes.com/2015/02/15/magazine/the-hezbollah-co...
https://archive.ph/4uWfM#selection-1937.0-1937.13
Section 5+
> they could see that a given assassin had an “operational phone in his front pants pocket” and “in the back pocket a phone that he used to call his girlfriends.”
1. Bitcoin addresses are 100% traceable from the first to the last transaction that's ever taken place.
2. Tracing a Bitcoin address to an individual depends on the individual's OpSec.
For example: bank account to exchange to Bitcoin is traceable with the help of the exchange's KYC records, assuming they have them. From there, any further Bitcoin transactions can be traced to an individual. Buying Bitcoin with cash in person may make traceability to an individual more difficult, but then you'd have to trust who you're meeting in person to not take photos / videos or have a meeting place swarming with CCTV, and both parties not already be using individually traceable Bitcoin addresses.
Monero and / or exchanges with little to no KYC (therefore, use at your own risk) may allow for some level of 'cutout' in the traceability. Or tumblers or coin mixers or other shady, questionably trustworthy services.
A competing monetary system relative to the Federal Reserve isn't something these interests are all that thrilled about. Hence, regardless of the soundness or unsoundness of various cryptocurrency approaches, ex-FBI officials should hardly be viewed as independent credible third-party voices on the issue.
Regardless of the truth or falsehood of your observation, publicly-verified blockchain-backed currencies are easily traced (especially now that they've become valuable enough for companies with money to invest in solving the problem). The possibility that the messenger has a vested interest in amplifying this message is orthogonal to the truth of it.
https://www.cnbc.com/2021/12/07/treasury-wants-to-crack-down...
That is true but honestly cryptocurrency isn't a threat to the Fed at all.
That’s why government and banks will push for banking apps and going entirely digital.