But it’s also kind of the opposite, if you’re poor you can’t access your rights and privileges. The government expects rich people to, so decides to save taxpayer resources and skipping the whole charade with deferred prosecution agreements
First-time non-violent offenders are treated softly under U.S. laws, both small and big fish.
A defendant will get even softer treatment if they willingly surrender themselves and plead guilty, saving law enforcement the effort of a manhunt and prosecutors the stress of an extradition and criminal trial.
Zhao already knew he was going to be indicted because of the subpoenas from the U.S. Justice Department. He retained lawyers to negotiate a deal before finally arriving in the US to plead guilty.
I've been saying this from day 1, and here it goes again: 99% of the people involved in crypto is a scumbag. And every day that goes by evidence accumulates in my favor.
All of the other reasons barely register. One thing you may note about the list is how many are crimes or are crime adjacent. Even the honest speculators are living in a world that promises unreasonably high returns funded by the criminal activities of the rest of the items. You're probably saying "but ideological reasons doesn't necessary mean crimes", but when you ask them what those ideological reasons are they pretty much always boil down to not paying taxes or evading law enforcement for reasons they don't want to explicitly state.
I've seen folks mention that it's about "the future" in a hand-wavy, abstract, nebulous sense. But their actions demonstrate profiteering, opportunism, and the greater-fool theory in action. Basically, for me, it seemed like all the ideology was intellectual cover (aka rationalizing) for plain ole greed, so they don't have to admit to themselves and others that it has nothing to do with the betterment of humanity and the future, and they just want to get rich quickly. To call it greed would be somewhat unbecoming, and the ideological arguments sounded good enough to assuage any psychological conflicts in oneself.
Might not be a generous interpretation, but if the ideology were indeed at the core of it, I feel like other areas of their lives would reflect said ideologies.
For the record, greed was at the core of my own interest in crypto when I was looking into it, so I could be projecting. Or it could be that said people and myself both experienced this as the driving force behind our interest in crypto as laymen.
I think there is a strong technological interest in crypto, Bitcoin kicked off a triple-entry bookkeeping system so there is a new tech interest and ability to make money in a new financial space, many good communities have arisen out of that.
There is many tech communities buzzing with blockchain related tech and some serious innovation, a lot of interesting new projects from lower cost faster international transactions through to distributed GPU rendering, identity systems, and the possibilities with NFT's have barely got started.
It's also a new asset class for investors with ETF's from BlackRock etc round the corner its evident it's a now a rapidly maturing space, what's happened with Binance is evident that regulation is starting to catch up, but its regulation being so slow and indecisive that has made it easy pickings for illegal activity to occur.
I think that there are a lot of legitimate reasons to work on developing new distributed ledger tech. There are interesting potential use cases. However, I do think that pessimistic list applies to most people who are currently investing a substantial amount of their wealth into crypto. Whatever the potential for the technology, most of the current use isn't great.
I think you are largely correct but I don't think it was always this way.
When I first heard about Bitcoin the price had just hit $5 and everyone was either a hardcore libertarian or they thought the idea of a digital currency was very scifi and exciting. I fell into the latter camp and became increasingly disinterested as the years progressed despite making really good money off a brief mining stint.
This is so cynical it's hilarious. Why is ideological mentioned last? Most people I know who are into crypto (and I know a lot) are into it because they believe in economically sound, censorship resistant currency.
I'll take the other side of this argument and point out: it probably took decades if not centuries to start using paper currency. Will crypto fail? Maybe. But to say that people building an alternate currency to the one we currently have are "scumbag" is a bit much. They are building a financial system that we might one day decide is better than what we currently have available to us. Sure, some are opportunistic bad-actors, but 99%? I don't think thats fair.
The first people to accept paper were almost certainly scammed. That's because the thing was totally unregulated in its first hundreds of years of use.
I'm confident that I personally know more than 1% of the engineers who contribute to production crypto codebases, and I have to say, I've not met the cohort you describe.
Every ethereum event is filled with the most tolerant, peaceful, healthy, hopeful, lovely, hard-working people.
I love playing these events, because the crowds are always so warm and enthusiastic and so apt so break into sing-along. :-)
Right back atcha pal. Crypto trades full transparency for full autonomy. It's hell for authoritarian regimes and corrupt middlemen both. 99% of people against crypto benefit from one of those two.
Binance admitted that they enabled funds to be sent to Hamas, ISIS and Al-Qaeda, in addition to Russian-occupied Ukrainian territories, Russian darknets, tens of millions of dollars in ransomware, North Korean hackers, and more than 1,000 child porn transactions.
The most heinous crimes and atrocities in today's world are being funded with cryptocurrency.
At this point, somebody will jump in with: "So what, cash dollars are being used by Hamas too!" — yes, of course. But moving a million dollars in physical cash is much harder. Crypto companies like Binance have built their entire business models around evading the systems that exist to prevent money laundering and terrorist funding. And the criminals have certainly been paying attention. The entire crypto ecosystem is severely tainted by this association.
This doesn't stop with kicking Binance out of the US, though, right? It's a step in the right direction for making it harder for criminals to access US dollars, but the liquidity of moving crypto around is still there and the ability to cash out into other fiat currencies is still present.
I have no idea how difficult it is to turn varying fiat currencies into dollars, though. Presumably challenging when dealing with large sums and trivial with small sums?
The key question for me now is: once you subtract all the plainly unethical transfers, securities-laws-runarounds, pump and dumps, and wash trading, how much of a business is left? Secondarily, is that ‘total remaining market cap’ larger or smaller than the total value of VC funding in the ecosystem?
I could generate $4.17 trillion in trading volume with myself if the cost of a transaction is updating a row in a database. This statistic doesn't mean anything in isolation
What if you own both entities? And you also own an exchange where the trading happens, so you give them both special Black Friday deal: 0 transaction cost for the next 12 months.
I don’t really mess with crypto anymore, but back when I did, literally every transaction I ever made was with myself. I literally never spent any on a good or service.
You can see other pairs on Binance that are clearly more. For example, GAS is the 9th "most traded" token on Binance. It claims ~$100M in daily volume, but there's not even $1M in liquidity between +/- 2% of spot. That is almost certainly all wash trading.
> ... once you subtract all the plainly unethical transfers, securities-laws-runarounds, pump and dumps, and wash trading, how much of a business is left?
Coinbase, a HN unicorn, probably knows? Their KYC/AML is top notch (which is a PITA for honest people btw). They know how many USD actually entered and whom send them. They may have had insiders accused of pump and dumping but AFAIK Coinbase hasn't been accused of pump and dump.
Coinbase has now been chosen by BlackRock to keep the Bitcoin backing the BlackRock ETF in custody: I take it if Bitcoin ETFs are accepted, and if BlackRock and Amundi and I don't now who else start launching Bitcoin ETF, we may begin to see what's left?
Someone else who may know: that weird dude who is behind MSTR: he basically bought 158 000 Bitcoins at an average price of $29 K USD and he plans to buy much more. (if you want to long or short Bitcoin, you can do so on the MSTR stock for it basically follows the ups and downs of Bitcoin).
What's left, for all we know, could be much more than what's already in (I've got no crystall ball though).
The one thing that I'm sure of is that it's not all fraudulent.
For example an estimated 25% of all people in argentina have cryptocurrencies: I doubt one person out of every four there is a criminal!?
Switzerland: if there's one country where its citizens really don't strike me as criminals it's Switzerland. 20%+ people owning cryptocurrencies there.
I can understand the "there are no use cases besides speculation" argument.
But I cannot understand the "all the people using cryptocurrencies are criminal" one.
When you've got several countries in the world where at least one out of every five person did at least try cryptocurrencies, there is something.
Everyone has been paying attention: the world of capital controls has been gone for 10 years and we let public figures play with themselves proclaiming the opposite. While they already knew that transaction whitelisting was a waste of taxpayer dollars and an impossible waste of private sector resources to do.
What you’re actually seeing is that everyone is using crypto as a public utility. Everyone as in all types of parties.
Crypto exchanges are not actually capable of pretending to play this game. Third party software has been created to attempt to flag transactions with an obvious sanctioned source, but the user unlinking that source is very easy. Binance reduced friction so much that users didn't bother doing that apparently either. Binance’s aspirations grew so big that they couldnt be just a website and server not incorporated anywhere. But basically every other centralized custodial exchange is the same.
It is simply not possible to play along with the state’s deprecated path of policing transactions. The most compliant exchanges will simply automate mountains of paperwork to FinCEN, the suspicious activity reports that the GAO points out are not read at all. Binance is in trouble for simply not doing that because the government doesnt really have a tool to police this either.
Many people have made this observation. Many people that made this observation are 10 years older now, have seen their own state fall apart and provided a convenience to the governance organization and people in that area. That’s how crypto propagates. The concept just waits until the human discovers a friction, and then flips them and all the nearest humans like nodes in a graph.
This understanding increases confidence in crypto from people that matter more than the pearl clutching people worried about “but criminals!” that don't matter, as it is predictable how more capital enters crypto from all sources around the world over time.
Its all quite relative, are we supposed to care that a Chinese citizen circumvented China’s capital control using crypto. Is a Chinese citizen supposed to care that someone on the US OFAC list can access international finance? in each country’s sphere both are “criminals”, but are they? Don't we value the freedom of the Chinese person escaping oppressive capital controls of their administration? Crypto supersedes this concept and debate, deprecating the need to debate it at all, capital flows.
These kind of court cases are instruction manuals to everyone that was on the fence. People that didn't have an example of anyone using crypto for goods and services or converting it to local currency now do. All they see is the exchange getting in trouble, nothing changing, and everyone including people on the OFAC list not getting in trouble or their assets frozen. More nodes flipped.
+ the SEC pretty much acting like a mob engaging in grand scale extorsion. The claim and demand for its chairman to step down was recently made by a congressman, not some crypto fanatic.
It has seemed like a crackdown on the competing with traditional banking that is crypto as a whole given the tone and tactics of the attacks. Comments made about stablecoins being in a problem in essence, not just the shoddy cases. Exchanges that have been going on for over half a decade (coinbase, kraken) even with an IPO (coinbase) that must have been reviewed by the SEC back then, being treated like mismanaged entities infringing the regulations (which do not exist yet) with the same basic claim they are selling securities (which most crypto tokens are not).
As to the aggregate, there are more representative running a vendetta against than in the defence of crypto businesses. It's slowly, slowly, slowly changing.
Any ideas why Binance didn't file a single SAR? Especially because they were hiring all these compliance people, ex prosecutors, ex FBI agents, etc so surely it would've come up. I'm surprised they didn't just game the system and file a bunch of useless ones.
why? they operate in many countries and the US wanted special treatment and to be paid attention to. its a hubris that is ingrained in US culture that isn’t prioritized by people that dont think about it.
they tried to firewall off the US with the Binance.us entity but that wasnt good enough
so now they see the best way to operate in the US without an impending problem is to kickback $4bn and sentencing the front man, this removes ongoing uncertainty in that market and improved access to all that capital
many other countries have random paperwork nuances too, they just matter even less
binance tried to stack the deck with connected people, but it wasnt taking advice from them, they were just there and isolated with fat paychecks and BNB token grants. I think they just didnt think about SARs. They werent worried about self incrimination, they just didnt do it
1. Ordinary banks are not sued for absolutely the same thing, which probably occurs to much bigger extent in major banks which pass many times more transactions than Binance
2. Forget about Russian darknets, Russian mafia lives in London, and New York in the open to complete disregard of the same financial regulators.
3. It's practically impossible to catch people who can fake, or buy a passport to do small scale money laundering, but forget about the small fish.
BILLIONS of Russian money gets laundered through biggest US banks every day completely legally, through schemes known to all big banks, and financial regulators for decades.
> Ordinary banks are not sued for absolutely the same thing, which probably occurs to much bigger extent in major banks which pass many times more transactions than Binance
The big question is if these things would be possible without crypto existing. History suggests they are, so I’m not sure if crypto really makes anything possible on that front that wasn’t before. Some of the largest terrorist attacks and most entrenched armed resistance movements took place pre crypto. I don’t think access to cryptocurrency would have made the vietcong significantly more effective for example.
No, the big question is what the overall percentage of dollar volume is being used for these crimes. Comparing to history is silly.
I would also assume that cryptocurrency makes moving money for crimes vastly easier. And I would also suspect a large amount of volume of transactions are illegal or gray in nature.
Say you have crypto sent to your little radical sect. Now what? You still need to figure out how to get weapons to where you are. These are tightly controlled of course and have to be smuggled or supplied in some way. That’s the real limiting factor. Money is hardly a factor, states can support whoever they want with an arbitrary amount of funding as we’ve seen between the various US/Iran/Russia proxy conflicts. Put it this way, a pile of crypto wouldn’t change the outcome of the syrian civil war. Might and muscle would, and that ultimately comes from states after a long chain of trying to obfuscate associations along the way.
It's not about a binary possibility of yes/no, it's about ease and frequency.
Crypto can mean an attack can be funded with 50x more money than had been possible previously, or 20 organizations can be funded where previously only 2 could have worked out the logistics.
Trying to frame this as a binary possible/impossible is the wrong lens.
Money doesn’t transmute into things like weapons. The issue is probably just getting arms to these groups at all. You could front them on debt or “foreign aid” all you want if you can get them arms and supplies. Crypto doesn’t solve that hard part of getting arms or people where they need to be to have a big effect.
*Much easier to stop, much harder to track. A bank doesn't have a publicly auditable ledger the way crypto does, it can only be traced with the assent of the bank and their policies vary.
Yes because we see so much value from a public auditable log. It’s much easier to send crypto to a mixer and conceal origin/destination and much easier for the average Joe to do it.
You imply they migrated to use crypto and stopped using traditional banking. No evidence that it is the case.
Some criminals may have easier access to crypto facilities than banks hence activity, or cost is lower that way for the initiated, yes. It doesn't mean volumes of teinted activities is anywhere as big via crypto than it is via fiat.
Common sense could take a guess, but there can't be much certainty as illegal activities happen aren't made in plain sight in either route.
> The entire crypto ecosystem is severely tainted by this association.
I don't understand the impetus to view it as a taint.
The fact that crypto can be used for things that the state wishes to prohibit is strong evidence that it is effective and politically neutral - and those are exactly the features it is striving for.
The desire to stamp out war and terrorism and violence is laudable, and I certainly agree on the importance of decreasing the influence of the groups you suggest. But attempting this by creating a complex, closed-source, global, locked down monetary and economic system has collateral damage - in the form of easy money available for imperial ambition - that is worse than the problem it is purporting to solve.
Surely if we all believe in the basic decency of people, and of our universal desire for peace and understanding, we can deprecate institutions of terror by means other than handing over limitless economic power to the state?
In a democracy, those limitless powers are limited by voters. The government can only pass laws and implement regulations that are acceptable to a democratic public. To the extent that voters want to move their money freely around the world, they also want policies that prevent the transfer of money to terrorists or child molesters. These powers are not limitless at all. They are limited through democracy.
Crypto is therefore a way to work around the wishes of the majority of others. That’s anti-democratic. It’s not freedom so much as it is tyranny.
Everything that involves privacy could potentially go around the wishes of the majority, yet everyone has the right to it (so they say) which is guaranteed by democratic laws nowadays.
We all know, for example, that terrorist groups plan their attacks on platforms that use e2e encryption, are you suggesting to end privacy for all to be able to catch a bunch of terrorists? Because there is no gray area in all of this, you either have it or you don’t.
So it all boils down to the sole franchise of the vote as the only way to bring societal change.
That's not something that the information age is going to afford, and I thought that - pause given by threads like this notwithstanding - the foundations of hacking and cyperspace independence were meant as a surface on which to build something better.
I don't think that the world's poor and disenfranchised can afford to wait around for generation after generation while we try to figure out how to inspire change in international finance by using only the debilitated and purely symbolic tactic of voting.
> In a democracy, those limitless powers are limited by voters
I just want to point out that, empirically speaking - if you hold the US and Europe states to be democratic institutions - this is observably false. Voting has not achieved limitations unto halting empire, predation, and extraction.
What an obscenely naive view of how politics works in even democratic countries (and this is not to speak of the majority of the world's countries that are either not democratic, partly democratic or "democratic" but heavily corrupted by insider money and special back scratching.) Yet because it's ostensibly and sometimes partly genuine, you think it should brook no resistance? You really think that all permitted activity should simply follow expressions of voter will as if they weren't regularly misled by emotional manipulation, corruption, bribery and idiotic popular beliefs?
Imagine for example how noble voter will felt about homosexuality in most of the western world 40 years ago. Should all those lgbt people have just neatly folded away their sexual needs and preferences until one day they became legal? No. They found private ways of sometimes, Oh gosh, breaking laws. This can apply in many contexts without being immoral by default.
Somehow however in your curious worldview, crypto having its bad uses means it should all be banned and is somehow an expression of "tyranny" (truly, wtf?) but democratic will despite its numerous flaws, holes and opportunities for corruption should be inviolable?
Somebody moving their funds from some dysfunctional "democracy" to a safer place, or protecting their assets from disintegration because of X new government being riddled with corruption and state-level theft doesn't negatively affect my freedom. A worldwide state effort by both formally transparent countries and deeply corrupt countries painting themselves as participants in "transparency", to crush all forms of private financial transactions and personal financial security outside their controlled lines most definitely might affect my freedom, and yours one day maybe.
To entirely rely on this deeply mixed, highly dubious range of systems for handling votes and public will as a means of protecting a basic right to privacy and free use of one's person and property (yes even the economic kind) is ridiculous.
To tell people who right now have need of something like crypto at least as a concept that they're the ones threatening global freedom and causing tyranny is laughable. It's blinkered, narrow-minded and deeply privileged nonsense passing as a rational argument. Just because your life doesn't make you need economic privacy doesn't mean that the majority of the world living in far from ideal economic conditions can be ignored for needing that very option.
And enough already with the smearing of things with arguments around child abusers, terrorists and blah blah. Just about everything people use to do something private in any way could be used to promote some abuse. Should for example privacy of communications also thus be banned as "tyranny"? How many disgusting cynics keep using these same tired garbage arguments for any intrusion they care to covet?
I always wondered why the US didn't crack harder on these exchanges (and crypto in general) and my conclusion is that the government has a second agenda for these.
Either because they can trace the money path more easily (than physical money) or that they are using it for their own covert ops.
The only problem is the right hands aren't getting paid off.
The Reinsurance Industry doesn't work in Lloyds, Macau, basically a PO Box in the Caribbean because they're moving millions and billions of dollars FOR CHARITY.
So Binance didn't commit the crimes? The were just a conduit for funds between criminals? Kind of like the bank branches in Miami FLA that used to bank for drug dealers?
Regular Russian credit and debit cards‡ now work there, thanks to the magic of NSPK. I don't think Crypto had any significant market share there.
‡ Including the ones which were previously branded MasterCard and Visa, these no longer work internationally obviously, but domestically they didn't skip a beat thanks to aforementioned NSPK
> The most heinous crimes and atrocities in today's world are being funded with cryptocurrency.
Just for kicks: according to several sources (IMF, CIA world factbook, UN, ...), the percentage of the world's GDP tied to criminal activities is 2% to 5%.
2% to 5% of the entire world's GDP. We're in a $100 trillion+ world GDP.
So 2 to 5 trillion USD are tied to criminal activities.
The most heinous crimes and atrocities in today's world are, sadly, not very different from the most heinous crimes and atrocities from 15 years ago.
And 15 years ago they had nothing to do with cryptocurrencies.
There's no way to launder 2 to 5 trillion using cryptocurrencies. These amount are just way too big.
> But moving a million dollars in physical cash is much harder.
A million? Criminals have to move 2 to 5 trillion USD yearly. Cryptocurrencies are insignificant and helpless here: the amounts are way too big.
Moreover most cryptocurrencies uses aren't fraudulent (you have to be dumb to leave tracks in Bitcoin or Ethereum public ledgers, as shown by TFA once again) and most crimes do not involve cryptocurrencies.
What about priorities? As in: going after the actual crimes instead of a totally insignificant source of funding of said criminals?
2 to 5 trillions, yearly, tied to criminal activities. Ponder that.
If 90% of those trillions go through cryptocurrency platforms, wildly justifies closing them down. Or at least implement drastic Know-Your-Customer rules. But at the same time, if those platforms are also only used by people who bypass taxes, then there is no legit usage left for those platforms. Might as well leave them open and investigate each customer.
A lot of crime is obviously very local. The 2-5% of GDP number is irrelevant in this context.
> “What about priorities?”
Yeah, whataboutism is the primary line of defense for crypto.
It’s possible to do multiple things at once. If we shut down this environmental disaster of a virtual casino that’s used primarily by the criminals, it won’t take away anything from all the other efforts to fight crime.
It sounds like typical propaganda against cryptocurrency.
To be clear I'm 100% for cash, but also it is impossible to ignore all those fabricated narratives against crypto about financing everything currently wrong.
Crypto is real threat for banks and states and they'll do everything to hold their monopoly in financial system.
Exchanges and lending/borrowing markets have already moved to be decentralized.
I think what you're thinking is the ability to convert fiat to crypto. If you got rid of that, it would just move more underground and into the black money markets.
Yes, but in majority of cases you still need some legal entity that can convert crypto to fiat so you can actually buy stuff with real money. Would be enough to forbid that and crypto is pretty much done.
You're right, it's ALL fiat money. All money that has ever existed was fiat money, from shells and dollars to bitcoins and xbox points. IF it doesn't have INHERENT value as food, fuel, etc, then it's a fiat currency, it has value because we declare it to be so. Cryptocoins are the ultimate fiat because they don't even really exist.
No those currencies are called representative currencies - the electronic digits you receive represent entitlement to some commodity stored somewhere. With physical commodities that are difficult to audit, this system was abused which led us to where we are today with "money" that banks print/type out of thin air and charge interest on as if they'd worked for it.
We can use anything as money, but some things work better than others. Unfortunately fiat currency works terribly as can be seen in the downfall of the modern society in the west. It enables a massive transfer of wealth to the people closest to the money printer from the general population. Look up "Cantillon effect"
They're still fiat because we agree on the idea that the gold itself is valuable. I cannot eat gold, plant it, power my home with it, or marry it. A gallon of water will keep me alive longer than an ounce of gold.
I understand that in dictionaries and textbooks we've defined that gold has value, but I'm pointing out that it has value because we AGREE it does because it's semi-rare and hard to get. Palladium is rarer, but cheaper, it's not as fun or pretty as gold.
Agreeing on the economic value of something does not make it fiat.
There's a big difference between something having ”economic value” and being something you value.
For example you probably value air - you'd die within minutes without it. But it's worthless - it has no economic value, because supply vastly outweighs demand.
I'd argue that Palladium is not as valuable as gold because there is not the same demand, because it's not as useful as money (harder to confidently recognise compared to gold)
In one sense, but scarcity does not equate value. Many things can be currency, but those with no inherent value, regardless of scarcity, when used as currency are fiat currency, literally valued only because we say so. Paper is a commodity, paper money is not. Oranges are a commodity, but are not a currency or particularly scarce. Computer bits are not scarce at all, and literally billions of copies of any bitcoin could be made, but it has no value that way, only if we all agree that the only person who owns a bitcoin is Jim over there. What's the difference between a bitcoin and a dogecoin? Virtually none, except people say bitcoin has a value.
Go ahead and copy bitcoin and see if it gets you anywhere (thousands have already tried).
What makes bitcoin valuable, other than having by far the best fundamental monetary qualities mankind has ever seen (and almost certainly will ever see), is its network effect. In order compete with bitcoin, an alternative would need to be significantly better.
> Go ahead and copy bitcoin and see if it gets you anywhere (thousands have already tried).
You seem to have missed the point of that paragraph. The second half of the statement was "but it has no value that way, only if we all agree that the only person who owns a bitcoin is Jim over there." The bitcoin itself is just a pointer to an entry in a ledger, and we all agree the abide by the ledger. Literally nothing is stopping anyone from forking BTC, copying the ledger, and assigning all the coins to themselves. I'm only prevented from SPENDING those BTC now because no one is going to just take my word for it, because no one has agreed to use my new ledger instead of the shared one. There's nothing that stops North Korea from printing lots of USD $100 bills, and they do it too. When we determine that a certain bill isn't printed by the US Gov't, we call it "counterfeit" and assign no value to it. My private ledger also is counterfeit and is deemed to have no value. Fake bills are harder to make, fake bits are trivial, it's the provenance of the blockchain that says they're real or fake, and human faith in the blockchain that allows us to assign value to BTC.
> What makes bitcoin valuable, other than having by far the best fundamental monetary qualities mankind has ever seen
Could you list what these are for me? I don't see cryptotokens have ANY value as actual money. I can't deny people feel they have thousands of dollars of value, but so do shares of Berkshire Hathaway, and that's not money, so I see them as more of a security crossed with a casino chip. As long as the casino is around I can cash it in, but I'm depending on that small group of people to make it have value. I can't take it to Walmart and spend it. How is a cryptotoken better than, for example, the US dollar?
> (and almost certainly will ever see),
I think claiming anything invented today will never be surpassed is unlikely to be true.
> is its network effect. In order compete with bitcoin, an alternative would need to be significantly better.
I would argue cash and gold are far better, and have effectively universal acceptance, far beyond the reach of cryptotokens. BTW has mindshare/name recognition among casino currencies, and is the easiest to convert between real currencies and back, but I can spend dollars and euros and gold at far more places than I can spend all the cryptotokens combined.
But the whole point of bitcoin is that it solves the digital double spend problem you mention.
Let's zoom out and talk about the basics of money (some of which you maybe already know). Okay, so in theory we could use anything as money. In some ways, everything is money, but in a range from terrible money (e.g. air, TVs, food) to excellent money (TBC). The laws of nature ensure that we end up using the things that work best at money as money.
Money needs to perform the following three functions:
- medium of exchange
- unit of account
- store of value
and in order to perform those functions, the thing we're using as money needs certain fundamental qualities which are:
- good divisibility
- good portability
- fungibility (equivalence/interchangeability across all units)
- robustness
- easily verified/assayed
- scarcity
These properties are well recognised, and if you take a look at gold, and compare it to predecessors such as shells, beads, Rai stones you can see why it was a stronger money, and why it became economically valuable - the world chose it as the best money and to store it's economic value in it.
But gold wasn't perfect, it still wasn't particularly portable, or divisible. As technology improved, it's not so easy to verify (e.g. tungsten wrapped gold?). It's also fairly easily stolen from us and so we naturally moved to store our gold with banks who could not only provide a secure location, but would give us paper receipts in return that evolved to become an excellent form of money whose value was bootstrapped into existence because it simply took on the value of the gold it represented.
This paper money was better at being money than gold in many ways - more portable, divisible and arguably more fungible and easily verified. However, over time it failed in one particular area: _scarcity_. The banks realised they could get away with printing more and more of it without people realising or being able to stop them. Ultimately it resulted in central banks like the Bank of England, the Fed etc who are almost freely printing infinite amounts (and charging interest on it). It continues to survive as the best money because a) most people don't realise the scarcity issue and simply see prices going up as some natural phenomenon b) even with the lack of scarcity, it still makes better money than gold especially now it's almost all digital.
The breakthrough that Bitcoin made is that it actually solved the digital double spend problem you mentioned - a previously unsolved problem in computer science. Here's an simple explanation how: https://youtu.be/CoGxakp1_3I?si=wvCxUZtUtS-jC9DX&t=694
Sure you can fork bitcoin, but no one is going to care about your new money/blockchain. If you stick a picture of a dog on it, there might be some fun/novelty value, but Bitcoin has massive network effect, and anything that wants to beat it will need to be substantially better and in a way that bitcoin won't simply adopt itself.
This means that for the first time in human history, we have a digital money that has better fundamental monetary qualities than gold and quite likely fiat too (depending on how higher-level networks such as Lightning scale). We've got perfect digital scarcity in a liquid asset and this is something that mankind has never seen before and most people aren't ready for.
> "I think claiming anything invented today will never be surpassed is unlikely to be true."
It's so good that it's very difficult to see how it will be bettered (in the physical and digital realms at least). It can of course also evolve as time goes on.
Based on its fundamental qualities compare to gold and fiat (and real estate, and bonds, and cRyPtO etc), it's very likely that it will suck in all the stored economic value in the world over the coming decades&...
except for that damned ledger. cash has the advantage of being much harder to trace. (I won't go as far as to say traceless, as the bills serial numbers could be recorded at scale.) A digital record of every transaction made is the DEA and IRS' wet dream. Mixers exist but don't address the underlying issue.
The base layer of bitcoin (the bitcoin network) needs to be at least pseudo-anonymous in order to validate the supply issuance.
But there's nothing stopping higher level networks implementing privacy. Lightning does a good job already.
A network based on something like Monero could also be used, with bitcoin as the token.
I don't see this as an issue.
Bitcoin can be an anonymous as we need it to be in order to gain acceptance.
> But the whole point of bitcoin is that it solves the digital double spend problem you mention.
You're still missing the point, you're focused on the fact there's a technical measure to prevent double spending. Great. That has literally zero relevance to what I'm saying, which is that bitcoin is made of bits, and bits aren't scarce, so scarcity isn't what creates bitcoin's value. We all have agreed that a specific number of bits arranged in a specific pattern belong to Jim, and another set belong to Sally, and on and on.
> and in order to perform those functions, the thing we're using as money needs certain fundamental qualities which are:
> - good divisibility
Not even remotely, divisibility of a currency is based on math, not the currency. There was no 12.5 cent coin in the USA but for decades stock prices were priced in eighths. No one has a 9/10 cent coin, but gas in the USA always has that extra 0.9 cents on the price. Frequently money is tracking down to the fraction of a cent, but there is no official declaration from the US Gov't that sub-cents exist. In Japan the yen cannot be subdivided since 1953 with respect to minted coins.
> - robustness
This has no meaning.
> - scarcity
Not even a little. There are over 21 trillion USD in the world. Scarcity isn't part of a currency, you actually want ubiquity with a currency, not scarcity. It's CONTROLLED supply you want, not mere scarcity.
Other things that makes for good currencies are acceptability, which BTC fails in because so few people actually use it, and reliability, which BTC fails with it's extreme volatility.
BTC is a security, not a currency.
> It's so good that it's very difficult to see how it will be bettered (in the physical and digital realms at least).
Better alternatives were created VERY soon after BTC, and have much better utility as currencies than BTC, although they are also casino money, rather than actual currencies. BTC itself has been improved many times since it's launch, so it's actually really easy to see that it was not only not unsurpassable, and unavoidable that better versions would come about. Your comment is the same as saying "everything that can be invented has been invented," which as we can see, was not a true statement even when uttered in 1899.
> "what I'm saying, which is that bitcoin is made of bits, and bits aren't scarce, so scarcity isn't what creates bitcoin's value"
I've chatted about bitcoin to a lot of people and this time I've come across this argument, so kudos for not spouting the normal rubbish.
So I can agree that there's a certain pattern of bits that assign some bitcoin in the block chain to me (but only because they're associated with an address for which I have the private key).
If I try and copy that pattern of bits, the bitcoin network will reject my blockchain because I've double spent: each entry in the ledger is a transaction that moves bitcoin from one address to another. If I simply copy the transaction that says Jim gave 0.02 BTC to Sally, the network will detect it. If I try to add a new transaction that says the same thing, I'll need to sign it with Sally's private key, which is simply impossible for me to guess.
Am I getting closer to answering your point?
Regarding fundamental qualities of good money, "robustness" means how easily it can be destroyed. Gold can't be destroyed - it's a chemical element. Glass money however would be terrible. The digits in your bank account are robust, they can't be changed very easily at all without actually adding or removing money.
Scarcity does actually mean a controlled/limited supply when it comes to money. Technically it means "in short supply", which when it comes to money is the same thing - everyone would like more money. The quantity of monetary units makes no difference provided that it's divisible enough. If everyone in the world suddenly had 10x more dollars than they currently have, no one would be richer or poorer than they were before. Your wages would end up being 10x as much and everything would cost 10x as much.
Regarding acceptability, we talking about fundamental properties of the money rather than how people see it right now. For example, the first person to dig up gold would have found no one would accept it as payment because they didn't recognise it as having any value. It's value arose from the fundamental qualities I mentioned, the closest to acceptability being that it's fungible and relatively easy to recognise as gold. Its combination of colour, shininess softness and weight are quite unique and (were) hard to counterfeit.
Nakamoto went to very careful lengths to ensure that bitcoin is a commodity and not a security. Even the SEC agree that it's not a security (they'd love to class is as a security if they could).
If you think better alternatives to bitcoin exist, then it's because you see bitcoin and the alternatives in a different light to me (as evidenced by the earlier points). From my perspective, I agree that someone could always throw a curve ball and come up with a way to improve it, but after studying it carefully for years, I can't see any way that the problem bitcoin solves could be implemented significantly more efficiently. I envisage it being the best store of value for the next 1000 years or more (or at least until we advance from the digital realm)
No, because you keep focusing on the technical aspects of bitcoin when I'm talking about the philosophical argument that crypto securities are not currency and that in the end, any medium of exchange that is a proxy is fiat money. My entire goal is to prove that "fiat money" is like saying "ATM machine" or "pin number."
All money is fiat, none of it has intrinsic value, it's all valuable because enough people agree. Commercial paper is not a gov't currency, but traded on it's face value. Rewards points and game tokens and gift cards aren't gov't issued, but they're tradable like money. Zimbabwean dollars WERE gov't issued, and when people lost faith it lost value. Hell, Brazil used fake money to generate faith in real money (1)!
The best currency we ever invented were bank notes and digital credit (card payments). It's the king, and BTC will never overtake it. A form of distributed ledger might become the ledger of the future, but it won't be BTC and it's extremely energy-hostile paradigm.
Okay, I think we're getting somewhere. I agree that we the people decide the value of money. The people collectively choose what they want to use as money and they will naturally choose the best money for the job. I also can agree that just because the government says the dollar is worth something doesn't make it so.
We originally chose gold because of its fundamental properties I mentioned earlier, and then we chose paper notes because they worked better than gold.
However, this is where I think we see things differently.
Originally the paper notes represented gold and so had the same limited supply. So it had all the improvements in portability, divisibility etc but also had the (illusory) strength of gold's scarcity. It seems perfect. In digital form even better! But over time bankers began to print more notes than there were gold and the notes rapidly lost their limited supply.
For around the last century, the bankers have roughly doubled the number every decade. Make sure you've understood that - each decade since at least 1971, they've taken all the dollars in existence and printed the same quantity again out of thin air (as loans), and charged interest on every single one every year to date!
This dilutes the wealth in the dollar system across twice as many dollar units, resulting in it causing a halving of the wealth in each dollar unit, every 10 years (this leaking value goes into the freshly created dollars). It's the main factor behind price inflation. It's why houses seem to go up in value for ever. They're not, they are just being priced in units which are going down and down in value. Houses still cost roughly the same today in gold as they did in the 70s.
This money printing causes enormous hidden problems to the world. The people who are close to the money printer get greatly discounted money, and the value of that money is sucked out of the dollars held by the people furthest away - your savings, your wages, your pension, granny's savings under the mattress, and all without you realising! It's called the Cantillon effect. The bankers get more and more powerful (they're collecting interest on every single dollar in existence even though they just printed them out of thin air!) and the population get weaker and weaker. What makes it worse is the people direct their anger at "greedy" businesses for the price increases rather than the banksters! You have to hand it to them - what a beautiful scam.
Bitcoin solves the problem of having a few select people in control of creating the money tokens, which throughout history always results in them abusing their power and inflating the supply into hyperinflation. It's the initial form of the URV described in the article you mentioned!
As expected the URV ("Brazilian Real") was inflated away over time once the central bank got its hands on control of the issuance as can be seen in this graph:
https://tradingeconomics.com/brazil/money-supply-m2
Because bitcoin's supply is hard limited - the decentralised nature ensures no one has the power to change the issuance curve, it's the initial form of the URV you mentioned, but the decentralised, proof-of-work paradigm means that it will stay like that _forever_. The more they print money, the more the price of bitcoin goes up.
Its energy paradigm is no different to gold's - having to put in work to dig up gold is what makes gold the hardest money we ever had (today gold mining still uses more energy than the bitcoin network). It's the most natural thing in the world that money tokens we use as "proof of work" require equivalent work to create. Any system that breaks that rule will ultimately be corrupted and fail. History has shown this over and over again.
Now I understand your perspective better, I think I can clarify one of your earlier comments:
--------
> "You're right, it's ALL fiat money. All money that has ever existed was fiat money, from shells and dollars to bitcoins and xbox points. IF it doesn't have INHERENT value as food, fuel, etc, then it's a fiat currency, it has value because we declare it to be so. Cryptocoins are the ultimate fiat because they don't even really exist."
--------
Okay so just as oats has inherent value as food, and oil as fuel etc... gold has inherent value as money. It has properties that make it useful as money.
There are certain properties of oats which lead it have economic value.
* tasty + nutritious + etc => demand (as food)
* human effort it takes to grow => supply/scarcity
There are certain properties of gold which lead it to have economic value:
* human effort it takes to find and mine => supply/scarcity
For banks notes:
* the same (but improved) properties as gold => demand (as money)
* as much as bankers can get away with effortlessly creating (controlled by the interest rates they set) => supply/scarcity
This is how bankers decide it's value and where I think the term fiat comes from - they can control the value by creating/destroying the monetary units.
For bitcoin:
* the same (but improved) properties as large (currently) amounts of digital/paper fiat currencies => demand (as money)
* _fixed_ issuance curve => supply/scarcity
This is an an enormous difference - an asset with an absolute hard limit on issuance rate. No amount of corruption or even work can create more than is hard-coded into the algorithm. It doesn't matter how powerful you are, you cannot change the bitcoin issuance curve, and it doesn't matter how powerful you are, you can't create bitcoin with less effort than the bitcoin is worth. The world has no idea of the magnitude of what has been invented here.
No fiat means by decree. Its used to differentiate money that takes equal or more work to create/issue (e.g. gold), from money whose issuance is controlled by the central banks who can create it out of thin air with little to no work.
Crypto turned exactly opposite of what Satoshi wanted....he or they wanted transparent, mathematically (cryptographically) proven, decentralized open ledger transactions, not this sh*t show of fraud and anarchy.
Just read white paper....Satoshi was legit; Satoshi was most probably an academic and a business man (I would say gambling industry) who wanted to eliminate fraud and double spending in the digital world. No drugs, no this wild anarchy. He wanted decentralized digital cash, that's all.
And that’s exactly what Bitcoin is. I don’t think someone with his mental faculties would have been naive enough to not realize how it could and would be used.
You been following OpenAI drama? Details are still coming out, but so far it sounds like the textbook case for very smart but naive idealists not having a clue as to how people or power work.
For example, Ilya Sutskever was apparently at the helm of the now-aborted coup. Look at any picture of him. The guy fancies himself a leader of a corporate coup but lacks the social awareness to shave the ugly scraggly remains of hair off the front of his balding head. Nothing wrong with being bald, but you can at least tidy up your hairline and not be intentionally ugly. Appearances matter, particularly in a public-facing leadership role. Even SBF was smart enough to turn his dishevelment into part of his marketing. Ilya lacks the personality to pull such a thing off, and strikes me as the kind of guy who just doesn't expect to be judged for his appearance, and if someone did he would probably make some moral statement about judging books by their cover. He would be technically correct and completely ineffective, just like his coup attempt.
There's nothing stopping an asset of increasing scarcity becoming a currency, providing the government isn't able to suppress it.
In fact, it would have an extremely strong chance of doing so due to it's better store-of-value qualities that would cause weaker currencies to flood the market and go to zero as people transferred their wealth into the harder money.
What, and trust the people who have been doing QE for half my life with the soundness of my medium of exchange? The same people who froze the bank accounts of peaceful protestors in my capitol city last year?
I'll abandon crypto when it becomes the second-best alternative to a state-controlled money supply. The shenanigans of the Davos crowd are becoming too weird to do otherwise.
I recall having a conversation in about 2016 with a lawyer who was looking into crypto for potential opportunities. After a thorough analysis, he said, “In a few years, all these people will be in jail.”
Except it's 2023, and almost no people who've dealt with cryptocurrency is in jail. A few notable exceptions exists, but you don't exactly go to jail for sending 0.1 Bitcoin around.
Note what has not really got attention yet, except in a Jason Calacanis podcast. Several VC firms in one specific US state were passing around instructions on how to do pump and dump schemes on these exchanges...the exchange mention was FTX.
This is the tip of what is coming as far as US govt investigations and court cases.
Investor wise what are the compliant safe exchanges? Anyone? Exactly, no one has any idea as of yet and that should scare all of us who want to use crypto.
They already pleaded guilty? $4bn fine? and CEO will be let free?! At least Binance is not allowed to operate in US as far as I remember. I told years ago that DOJ is coming for them because they are unregistered bucket shop. And Binance thought US is gonna stop at FTX.
Is not they crypto is bad itself, but it creates incentive for people to be bad. Anonymous transfers? Issuing tokens like they are stock assets? Buy and sell the token to bid up prices and volume? These are clear and easy use cases.
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[ 2.5 ms ] story [ 299 ms ] threadBut it’s also kind of the opposite, if you’re poor you can’t access your rights and privileges. The government expects rich people to, so decides to save taxpayer resources and skipping the whole charade with deferred prosecution agreements
A defendant will get even softer treatment if they willingly surrender themselves and plead guilty, saving law enforcement the effort of a manhunt and prosecutors the stress of an extradition and criminal trial.
Zhao already knew he was going to be indicted because of the subpoenas from the U.S. Justice Department. He retained lawyers to negotiate a deal before finally arriving in the US to plead guilty.
It's just the way it is.
So I figure the "softer" treatment really only applies to those with wealth.
I've seen folks mention that it's about "the future" in a hand-wavy, abstract, nebulous sense. But their actions demonstrate profiteering, opportunism, and the greater-fool theory in action. Basically, for me, it seemed like all the ideology was intellectual cover (aka rationalizing) for plain ole greed, so they don't have to admit to themselves and others that it has nothing to do with the betterment of humanity and the future, and they just want to get rich quickly. To call it greed would be somewhat unbecoming, and the ideological arguments sounded good enough to assuage any psychological conflicts in oneself.
Might not be a generous interpretation, but if the ideology were indeed at the core of it, I feel like other areas of their lives would reflect said ideologies.
For the record, greed was at the core of my own interest in crypto when I was looking into it, so I could be projecting. Or it could be that said people and myself both experienced this as the driving force behind our interest in crypto as laymen.
https://news.ycombinator.com/item?id=26238410
There is many tech communities buzzing with blockchain related tech and some serious innovation, a lot of interesting new projects from lower cost faster international transactions through to distributed GPU rendering, identity systems, and the possibilities with NFT's have barely got started.
It's also a new asset class for investors with ETF's from BlackRock etc round the corner its evident it's a now a rapidly maturing space, what's happened with Binance is evident that regulation is starting to catch up, but its regulation being so slow and indecisive that has made it easy pickings for illegal activity to occur.
When I first heard about Bitcoin the price had just hit $5 and everyone was either a hardcore libertarian or they thought the idea of a digital currency was very scifi and exciting. I fell into the latter camp and became increasingly disinterested as the years progressed despite making really good money off a brief mining stint.
Wikipedia has a quote ostensibly from Marco Polo where he discusses this peculiarity of people accepting paper as if it was a golden coin.
Every ethereum event is filled with the most tolerant, peaceful, healthy, hopeful, lovely, hard-working people.
I love playing these events, because the crowds are always so warm and enthusiastic and so apt so break into sing-along. :-)
Where are all these scumbags?
Bloomberg at least bothered to get the details:
https://www.bloomberg.com/news/articles/2023-11-22/binance-l...
Binance admitted that they enabled funds to be sent to Hamas, ISIS and Al-Qaeda, in addition to Russian-occupied Ukrainian territories, Russian darknets, tens of millions of dollars in ransomware, North Korean hackers, and more than 1,000 child porn transactions.
The most heinous crimes and atrocities in today's world are being funded with cryptocurrency.
At this point, somebody will jump in with: "So what, cash dollars are being used by Hamas too!" — yes, of course. But moving a million dollars in physical cash is much harder. Crypto companies like Binance have built their entire business models around evading the systems that exist to prevent money laundering and terrorist funding. And the criminals have certainly been paying attention. The entire crypto ecosystem is severely tainted by this association.
I have no idea how difficult it is to turn varying fiat currencies into dollars, though. Presumably challenging when dealing with large sums and trivial with small sums?
Apparently sometimes this goes very wrong [0].
[0] https://news.ycombinator.com/item?id=36610006
Using statistical methods, for BTC, ETH, LTC, and XRP, Binance wash trading was estimated at >50%.
https://www.nber.org/papers/w30783
You can see other pairs on Binance that are clearly more. For example, GAS is the 9th "most traded" token on Binance. It claims ~$100M in daily volume, but there's not even $1M in liquidity between +/- 2% of spot. That is almost certainly all wash trading.
https://www.coingecko.com/en/exchanges/binance
Binance volume numbers are not believable.
Coinbase, a HN unicorn, probably knows? Their KYC/AML is top notch (which is a PITA for honest people btw). They know how many USD actually entered and whom send them. They may have had insiders accused of pump and dumping but AFAIK Coinbase hasn't been accused of pump and dump.
Coinbase has now been chosen by BlackRock to keep the Bitcoin backing the BlackRock ETF in custody: I take it if Bitcoin ETFs are accepted, and if BlackRock and Amundi and I don't now who else start launching Bitcoin ETF, we may begin to see what's left?
Someone else who may know: that weird dude who is behind MSTR: he basically bought 158 000 Bitcoins at an average price of $29 K USD and he plans to buy much more. (if you want to long or short Bitcoin, you can do so on the MSTR stock for it basically follows the ups and downs of Bitcoin).
What's left, for all we know, could be much more than what's already in (I've got no crystall ball though).
The one thing that I'm sure of is that it's not all fraudulent.
For example an estimated 25% of all people in argentina have cryptocurrencies: I doubt one person out of every four there is a criminal!?
Switzerland: if there's one country where its citizens really don't strike me as criminals it's Switzerland. 20%+ people owning cryptocurrencies there.
I can understand the "there are no use cases besides speculation" argument.
But I cannot understand the "all the people using cryptocurrencies are criminal" one.
When you've got several countries in the world where at least one out of every five person did at least try cryptocurrencies, there is something.
What you’re actually seeing is that everyone is using crypto as a public utility. Everyone as in all types of parties.
Crypto exchanges are not actually capable of pretending to play this game. Third party software has been created to attempt to flag transactions with an obvious sanctioned source, but the user unlinking that source is very easy. Binance reduced friction so much that users didn't bother doing that apparently either. Binance’s aspirations grew so big that they couldnt be just a website and server not incorporated anywhere. But basically every other centralized custodial exchange is the same.
It is simply not possible to play along with the state’s deprecated path of policing transactions. The most compliant exchanges will simply automate mountains of paperwork to FinCEN, the suspicious activity reports that the GAO points out are not read at all. Binance is in trouble for simply not doing that because the government doesnt really have a tool to police this either.
Many people have made this observation. Many people that made this observation are 10 years older now, have seen their own state fall apart and provided a convenience to the governance organization and people in that area. That’s how crypto propagates. The concept just waits until the human discovers a friction, and then flips them and all the nearest humans like nodes in a graph.
This understanding increases confidence in crypto from people that matter more than the pearl clutching people worried about “but criminals!” that don't matter, as it is predictable how more capital enters crypto from all sources around the world over time.
Its all quite relative, are we supposed to care that a Chinese citizen circumvented China’s capital control using crypto. Is a Chinese citizen supposed to care that someone on the US OFAC list can access international finance? in each country’s sphere both are “criminals”, but are they? Don't we value the freedom of the Chinese person escaping oppressive capital controls of their administration? Crypto supersedes this concept and debate, deprecating the need to debate it at all, capital flows.
These kind of court cases are instruction manuals to everyone that was on the fence. People that didn't have an example of anyone using crypto for goods and services or converting it to local currency now do. All they see is the exchange getting in trouble, nothing changing, and everyone including people on the OFAC list not getting in trouble or their assets frozen. More nodes flipped.
You're in a social bubble.
https://www.cnbc.com/amp/2022/03/31/cryptocurrency-news-21pe...
they’ve been doing this poll of 1000 people for years and the number goes up really high especially in slices of demographics, up to 50%
so love to see Congress trying to excise these unproductive elements of the government out while harmonizing business practices
As to the aggregate, there are more representative running a vendetta against than in the defence of crypto businesses. It's slowly, slowly, slowly changing.
!Remind me in 5 years
they tried to firewall off the US with the Binance.us entity but that wasnt good enough
so now they see the best way to operate in the US without an impending problem is to kickback $4bn and sentencing the front man, this removes ongoing uncertainty in that market and improved access to all that capital
many other countries have random paperwork nuances too, they just matter even less
binance tried to stack the deck with connected people, but it wasnt taking advice from them, they were just there and isolated with fat paychecks and BNB token grants. I think they just didnt think about SARs. They werent worried about self incrimination, they just didnt do it
What good are sanctions if you can easily get around them?
Why are there sanctions? What’s the objective of sanctions? … What happens if sanctions fail? Whats the worst thing to happen? …
At this point you need to jump up and point to:
1. Ordinary banks are not sued for absolutely the same thing, which probably occurs to much bigger extent in major banks which pass many times more transactions than Binance
2. Forget about Russian darknets, Russian mafia lives in London, and New York in the open to complete disregard of the same financial regulators.
3. It's practically impossible to catch people who can fake, or buy a passport to do small scale money laundering, but forget about the small fish.
BILLIONS of Russian money gets laundered through biggest US banks every day completely legally, through schemes known to all big banks, and financial regulators for decades.
No? https://www.investopedia.com/stock-analysis/2013/investing-n...
https://www.justice.gov/opa/pr/jpmorgan-chase-co-agrees-pay-...
https://www.theguardian.com/world/2011/apr/03/us-bank-mexico...
who says it's physical?
I would also assume that cryptocurrency makes moving money for crimes vastly easier. And I would also suspect a large amount of volume of transactions are illegal or gray in nature.
Crypto can mean an attack can be funded with 50x more money than had been possible previously, or 20 organizations can be funded where previously only 2 could have worked out the logistics.
Trying to frame this as a binary possible/impossible is the wrong lens.
Moving a million dollars by wiring it from your HSBC account is actually much easier than doing it with crypto.
edit: and in the HSBC case the CEO didn't even lose his job!
Why is this true?
The distinction matters.
Some criminals may have easier access to crypto facilities than banks hence activity, or cost is lower that way for the initiated, yes. It doesn't mean volumes of teinted activities is anywhere as big via crypto than it is via fiat.
Common sense could take a guess, but there can't be much certainty as illegal activities happen aren't made in plain sight in either route.
I don't understand the impetus to view it as a taint.
The fact that crypto can be used for things that the state wishes to prohibit is strong evidence that it is effective and politically neutral - and those are exactly the features it is striving for.
The desire to stamp out war and terrorism and violence is laudable, and I certainly agree on the importance of decreasing the influence of the groups you suggest. But attempting this by creating a complex, closed-source, global, locked down monetary and economic system has collateral damage - in the form of easy money available for imperial ambition - that is worse than the problem it is purporting to solve.
Surely if we all believe in the basic decency of people, and of our universal desire for peace and understanding, we can deprecate institutions of terror by means other than handing over limitless economic power to the state?
Crypto is therefore a way to work around the wishes of the majority of others. That’s anti-democratic. It’s not freedom so much as it is tyranny.
We all know, for example, that terrorist groups plan their attacks on platforms that use e2e encryption, are you suggesting to end privacy for all to be able to catch a bunch of terrorists? Because there is no gray area in all of this, you either have it or you don’t.
That's not something that the information age is going to afford, and I thought that - pause given by threads like this notwithstanding - the foundations of hacking and cyperspace independence were meant as a surface on which to build something better.
I don't think that the world's poor and disenfranchised can afford to wait around for generation after generation while we try to figure out how to inspire change in international finance by using only the debilitated and purely symbolic tactic of voting.
> In a democracy, those limitless powers are limited by voters
I just want to point out that, empirically speaking - if you hold the US and Europe states to be democratic institutions - this is observably false. Voting has not achieved limitations unto halting empire, predation, and extraction.
Imagine for example how noble voter will felt about homosexuality in most of the western world 40 years ago. Should all those lgbt people have just neatly folded away their sexual needs and preferences until one day they became legal? No. They found private ways of sometimes, Oh gosh, breaking laws. This can apply in many contexts without being immoral by default.
Somehow however in your curious worldview, crypto having its bad uses means it should all be banned and is somehow an expression of "tyranny" (truly, wtf?) but democratic will despite its numerous flaws, holes and opportunities for corruption should be inviolable?
Somebody moving their funds from some dysfunctional "democracy" to a safer place, or protecting their assets from disintegration because of X new government being riddled with corruption and state-level theft doesn't negatively affect my freedom. A worldwide state effort by both formally transparent countries and deeply corrupt countries painting themselves as participants in "transparency", to crush all forms of private financial transactions and personal financial security outside their controlled lines most definitely might affect my freedom, and yours one day maybe.
To entirely rely on this deeply mixed, highly dubious range of systems for handling votes and public will as a means of protecting a basic right to privacy and free use of one's person and property (yes even the economic kind) is ridiculous.
To tell people who right now have need of something like crypto at least as a concept that they're the ones threatening global freedom and causing tyranny is laughable. It's blinkered, narrow-minded and deeply privileged nonsense passing as a rational argument. Just because your life doesn't make you need economic privacy doesn't mean that the majority of the world living in far from ideal economic conditions can be ignored for needing that very option.
And enough already with the smearing of things with arguments around child abusers, terrorists and blah blah. Just about everything people use to do something private in any way could be used to promote some abuse. Should for example privacy of communications also thus be banned as "tyranny"? How many disgusting cynics keep using these same tired garbage arguments for any intrusion they care to covet?
Either because they can trace the money path more easily (than physical money) or that they are using it for their own covert ops.
The Reinsurance Industry doesn't work in Lloyds, Macau, basically a PO Box in the Caribbean because they're moving millions and billions of dollars FOR CHARITY.
Regular Russian credit and debit cards‡ now work there, thanks to the magic of NSPK. I don't think Crypto had any significant market share there.
‡ Including the ones which were previously branded MasterCard and Visa, these no longer work internationally obviously, but domestically they didn't skip a beat thanks to aforementioned NSPK
Just for kicks: according to several sources (IMF, CIA world factbook, UN, ...), the percentage of the world's GDP tied to criminal activities is 2% to 5%.
2% to 5% of the entire world's GDP. We're in a $100 trillion+ world GDP.
So 2 to 5 trillion USD are tied to criminal activities.
The most heinous crimes and atrocities in today's world are, sadly, not very different from the most heinous crimes and atrocities from 15 years ago.
And 15 years ago they had nothing to do with cryptocurrencies.
There's no way to launder 2 to 5 trillion using cryptocurrencies. These amount are just way too big.
> But moving a million dollars in physical cash is much harder.
A million? Criminals have to move 2 to 5 trillion USD yearly. Cryptocurrencies are insignificant and helpless here: the amounts are way too big.
Moreover most cryptocurrencies uses aren't fraudulent (you have to be dumb to leave tracks in Bitcoin or Ethereum public ledgers, as shown by TFA once again) and most crimes do not involve cryptocurrencies.
What about priorities? As in: going after the actual crimes instead of a totally insignificant source of funding of said criminals?
2 to 5 trillions, yearly, tied to criminal activities. Ponder that.
> “What about priorities?”
Yeah, whataboutism is the primary line of defense for crypto.
It’s possible to do multiple things at once. If we shut down this environmental disaster of a virtual casino that’s used primarily by the criminals, it won’t take away anything from all the other efforts to fight crime.
I mean, Tzahal moved 40 millions a month from Qatar directly to Hamas-controlled checkpoints for years, so i guess it depends.
Cash App
https://hindenburgresearch.com/block/
To be clear I'm 100% for cash, but also it is impossible to ignore all those fabricated narratives against crypto about financing everything currently wrong.
Crypto is real threat for banks and states and they'll do everything to hold their monopoly in financial system.
I think what you're thinking is the ability to convert fiat to crypto. If you got rid of that, it would just move more underground and into the black money markets.
To be clear, we don't get to choose which parts of math we ban and which parts we don't.
Banning or preventing people from using math only empowers other countries that develop it on their own.
https://www.csis.org/analysis/end-export-controls
I’m pretty sure there are still gold or oil backed currencies around
We can use anything as money, but some things work better than others. Unfortunately fiat currency works terribly as can be seen in the downfall of the modern society in the west. It enables a massive transfer of wealth to the people closest to the money printer from the general population. Look up "Cantillon effect"
I understand that in dictionaries and textbooks we've defined that gold has value, but I'm pointing out that it has value because we AGREE it does because it's semi-rare and hard to get. Palladium is rarer, but cheaper, it's not as fun or pretty as gold.
There's a big difference between something having ”economic value” and being something you value. For example you probably value air - you'd die within minutes without it. But it's worthless - it has no economic value, because supply vastly outweighs demand.
I'd argue that Palladium is not as valuable as gold because there is not the same demand, because it's not as useful as money (harder to confidently recognise compared to gold)
What makes bitcoin valuable, other than having by far the best fundamental monetary qualities mankind has ever seen (and almost certainly will ever see), is its network effect. In order compete with bitcoin, an alternative would need to be significantly better.
You seem to have missed the point of that paragraph. The second half of the statement was "but it has no value that way, only if we all agree that the only person who owns a bitcoin is Jim over there." The bitcoin itself is just a pointer to an entry in a ledger, and we all agree the abide by the ledger. Literally nothing is stopping anyone from forking BTC, copying the ledger, and assigning all the coins to themselves. I'm only prevented from SPENDING those BTC now because no one is going to just take my word for it, because no one has agreed to use my new ledger instead of the shared one. There's nothing that stops North Korea from printing lots of USD $100 bills, and they do it too. When we determine that a certain bill isn't printed by the US Gov't, we call it "counterfeit" and assign no value to it. My private ledger also is counterfeit and is deemed to have no value. Fake bills are harder to make, fake bits are trivial, it's the provenance of the blockchain that says they're real or fake, and human faith in the blockchain that allows us to assign value to BTC.
> What makes bitcoin valuable, other than having by far the best fundamental monetary qualities mankind has ever seen
Could you list what these are for me? I don't see cryptotokens have ANY value as actual money. I can't deny people feel they have thousands of dollars of value, but so do shares of Berkshire Hathaway, and that's not money, so I see them as more of a security crossed with a casino chip. As long as the casino is around I can cash it in, but I'm depending on that small group of people to make it have value. I can't take it to Walmart and spend it. How is a cryptotoken better than, for example, the US dollar?
> (and almost certainly will ever see),
I think claiming anything invented today will never be surpassed is unlikely to be true.
> is its network effect. In order compete with bitcoin, an alternative would need to be significantly better.
I would argue cash and gold are far better, and have effectively universal acceptance, far beyond the reach of cryptotokens. BTW has mindshare/name recognition among casino currencies, and is the easiest to convert between real currencies and back, but I can spend dollars and euros and gold at far more places than I can spend all the cryptotokens combined.
Let's zoom out and talk about the basics of money (some of which you maybe already know). Okay, so in theory we could use anything as money. In some ways, everything is money, but in a range from terrible money (e.g. air, TVs, food) to excellent money (TBC). The laws of nature ensure that we end up using the things that work best at money as money.
Money needs to perform the following three functions:
- medium of exchange
- unit of account
- store of value
and in order to perform those functions, the thing we're using as money needs certain fundamental qualities which are:
- good divisibility
- good portability
- fungibility (equivalence/interchangeability across all units)
- robustness
- easily verified/assayed
- scarcity
These properties are well recognised, and if you take a look at gold, and compare it to predecessors such as shells, beads, Rai stones you can see why it was a stronger money, and why it became economically valuable - the world chose it as the best money and to store it's economic value in it.
But gold wasn't perfect, it still wasn't particularly portable, or divisible. As technology improved, it's not so easy to verify (e.g. tungsten wrapped gold?). It's also fairly easily stolen from us and so we naturally moved to store our gold with banks who could not only provide a secure location, but would give us paper receipts in return that evolved to become an excellent form of money whose value was bootstrapped into existence because it simply took on the value of the gold it represented.
This paper money was better at being money than gold in many ways - more portable, divisible and arguably more fungible and easily verified. However, over time it failed in one particular area: _scarcity_. The banks realised they could get away with printing more and more of it without people realising or being able to stop them. Ultimately it resulted in central banks like the Bank of England, the Fed etc who are almost freely printing infinite amounts (and charging interest on it). It continues to survive as the best money because a) most people don't realise the scarcity issue and simply see prices going up as some natural phenomenon b) even with the lack of scarcity, it still makes better money than gold especially now it's almost all digital.
The breakthrough that Bitcoin made is that it actually solved the digital double spend problem you mentioned - a previously unsolved problem in computer science. Here's an simple explanation how: https://youtu.be/CoGxakp1_3I?si=wvCxUZtUtS-jC9DX&t=694
Sure you can fork bitcoin, but no one is going to care about your new money/blockchain. If you stick a picture of a dog on it, there might be some fun/novelty value, but Bitcoin has massive network effect, and anything that wants to beat it will need to be substantially better and in a way that bitcoin won't simply adopt itself.
This means that for the first time in human history, we have a digital money that has better fundamental monetary qualities than gold and quite likely fiat too (depending on how higher-level networks such as Lightning scale). We've got perfect digital scarcity in a liquid asset and this is something that mankind has never seen before and most people aren't ready for.
> "I think claiming anything invented today will never be surpassed is unlikely to be true."
It's so good that it's very difficult to see how it will be bettered (in the physical and digital realms at least). It can of course also evolve as time goes on. Based on its fundamental qualities compare to gold and fiat (and real estate, and bonds, and cRyPtO etc), it's very likely that it will suck in all the stored economic value in the world over the coming decades&...
You're still missing the point, you're focused on the fact there's a technical measure to prevent double spending. Great. That has literally zero relevance to what I'm saying, which is that bitcoin is made of bits, and bits aren't scarce, so scarcity isn't what creates bitcoin's value. We all have agreed that a specific number of bits arranged in a specific pattern belong to Jim, and another set belong to Sally, and on and on.
> and in order to perform those functions, the thing we're using as money needs certain fundamental qualities which are: > - good divisibility
Not even remotely, divisibility of a currency is based on math, not the currency. There was no 12.5 cent coin in the USA but for decades stock prices were priced in eighths. No one has a 9/10 cent coin, but gas in the USA always has that extra 0.9 cents on the price. Frequently money is tracking down to the fraction of a cent, but there is no official declaration from the US Gov't that sub-cents exist. In Japan the yen cannot be subdivided since 1953 with respect to minted coins.
> - robustness
This has no meaning.
> - scarcity
Not even a little. There are over 21 trillion USD in the world. Scarcity isn't part of a currency, you actually want ubiquity with a currency, not scarcity. It's CONTROLLED supply you want, not mere scarcity.
Other things that makes for good currencies are acceptability, which BTC fails in because so few people actually use it, and reliability, which BTC fails with it's extreme volatility.
BTC is a security, not a currency.
> It's so good that it's very difficult to see how it will be bettered (in the physical and digital realms at least).
Better alternatives were created VERY soon after BTC, and have much better utility as currencies than BTC, although they are also casino money, rather than actual currencies. BTC itself has been improved many times since it's launch, so it's actually really easy to see that it was not only not unsurpassable, and unavoidable that better versions would come about. Your comment is the same as saying "everything that can be invented has been invented," which as we can see, was not a true statement even when uttered in 1899.
I've chatted about bitcoin to a lot of people and this time I've come across this argument, so kudos for not spouting the normal rubbish.
So I can agree that there's a certain pattern of bits that assign some bitcoin in the block chain to me (but only because they're associated with an address for which I have the private key). If I try and copy that pattern of bits, the bitcoin network will reject my blockchain because I've double spent: each entry in the ledger is a transaction that moves bitcoin from one address to another. If I simply copy the transaction that says Jim gave 0.02 BTC to Sally, the network will detect it. If I try to add a new transaction that says the same thing, I'll need to sign it with Sally's private key, which is simply impossible for me to guess.
Am I getting closer to answering your point?
Regarding fundamental qualities of good money, "robustness" means how easily it can be destroyed. Gold can't be destroyed - it's a chemical element. Glass money however would be terrible. The digits in your bank account are robust, they can't be changed very easily at all without actually adding or removing money.
Scarcity does actually mean a controlled/limited supply when it comes to money. Technically it means "in short supply", which when it comes to money is the same thing - everyone would like more money. The quantity of monetary units makes no difference provided that it's divisible enough. If everyone in the world suddenly had 10x more dollars than they currently have, no one would be richer or poorer than they were before. Your wages would end up being 10x as much and everything would cost 10x as much.
Regarding acceptability, we talking about fundamental properties of the money rather than how people see it right now. For example, the first person to dig up gold would have found no one would accept it as payment because they didn't recognise it as having any value. It's value arose from the fundamental qualities I mentioned, the closest to acceptability being that it's fungible and relatively easy to recognise as gold. Its combination of colour, shininess softness and weight are quite unique and (were) hard to counterfeit.
Nakamoto went to very careful lengths to ensure that bitcoin is a commodity and not a security. Even the SEC agree that it's not a security (they'd love to class is as a security if they could).
If you think better alternatives to bitcoin exist, then it's because you see bitcoin and the alternatives in a different light to me (as evidenced by the earlier points). From my perspective, I agree that someone could always throw a curve ball and come up with a way to improve it, but after studying it carefully for years, I can't see any way that the problem bitcoin solves could be implemented significantly more efficiently. I envisage it being the best store of value for the next 1000 years or more (or at least until we advance from the digital realm)
No, because you keep focusing on the technical aspects of bitcoin when I'm talking about the philosophical argument that crypto securities are not currency and that in the end, any medium of exchange that is a proxy is fiat money. My entire goal is to prove that "fiat money" is like saying "ATM machine" or "pin number."
All money is fiat, none of it has intrinsic value, it's all valuable because enough people agree. Commercial paper is not a gov't currency, but traded on it's face value. Rewards points and game tokens and gift cards aren't gov't issued, but they're tradable like money. Zimbabwean dollars WERE gov't issued, and when people lost faith it lost value. Hell, Brazil used fake money to generate faith in real money (1)!
The best currency we ever invented were bank notes and digital credit (card payments). It's the king, and BTC will never overtake it. A form of distributed ledger might become the ledger of the future, but it won't be BTC and it's extremely energy-hostile paradigm.
1 [https://www.npr.org/sections/money/2010/10/04/130329523/how-...]
We originally chose gold because of its fundamental properties I mentioned earlier, and then we chose paper notes because they worked better than gold.
However, this is where I think we see things differently. Originally the paper notes represented gold and so had the same limited supply. So it had all the improvements in portability, divisibility etc but also had the (illusory) strength of gold's scarcity. It seems perfect. In digital form even better! But over time bankers began to print more notes than there were gold and the notes rapidly lost their limited supply. For around the last century, the bankers have roughly doubled the number every decade. Make sure you've understood that - each decade since at least 1971, they've taken all the dollars in existence and printed the same quantity again out of thin air (as loans), and charged interest on every single one every year to date! This dilutes the wealth in the dollar system across twice as many dollar units, resulting in it causing a halving of the wealth in each dollar unit, every 10 years (this leaking value goes into the freshly created dollars). It's the main factor behind price inflation. It's why houses seem to go up in value for ever. They're not, they are just being priced in units which are going down and down in value. Houses still cost roughly the same today in gold as they did in the 70s.
This money printing causes enormous hidden problems to the world. The people who are close to the money printer get greatly discounted money, and the value of that money is sucked out of the dollars held by the people furthest away - your savings, your wages, your pension, granny's savings under the mattress, and all without you realising! It's called the Cantillon effect. The bankers get more and more powerful (they're collecting interest on every single dollar in existence even though they just printed them out of thin air!) and the population get weaker and weaker. What makes it worse is the people direct their anger at "greedy" businesses for the price increases rather than the banksters! You have to hand it to them - what a beautiful scam.
Bitcoin solves the problem of having a few select people in control of creating the money tokens, which throughout history always results in them abusing their power and inflating the supply into hyperinflation. It's the initial form of the URV described in the article you mentioned!
As expected the URV ("Brazilian Real") was inflated away over time once the central bank got its hands on control of the issuance as can be seen in this graph: https://tradingeconomics.com/brazil/money-supply-m2
Because bitcoin's supply is hard limited - the decentralised nature ensures no one has the power to change the issuance curve, it's the initial form of the URV you mentioned, but the decentralised, proof-of-work paradigm means that it will stay like that _forever_. The more they print money, the more the price of bitcoin goes up.
Its energy paradigm is no different to gold's - having to put in work to dig up gold is what makes gold the hardest money we ever had (today gold mining still uses more energy than the bitcoin network). It's the most natural thing in the world that money tokens we use as "proof of work" require equivalent work to create. Any system that breaks that rule will ultimately be corrupted and fail. History has shown this over and over again.
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> "You're right, it's ALL fiat money. All money that has ever existed was fiat money, from shells and dollars to bitcoins and xbox points. IF it doesn't have INHERENT value as food, fuel, etc, then it's a fiat currency, it has value because we declare it to be so. Cryptocoins are the ultimate fiat because they don't even really exist."
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Okay so just as oats has inherent value as food, and oil as fuel etc... gold has inherent value as money. It has properties that make it useful as money.
There are certain properties of oats which lead it have economic value.
* tasty + nutritious + etc => demand (as food)
* human effort it takes to grow => supply/scarcity
There are certain properties of gold which lead it to have economic value:
* divisible + portable + fungible + recognisable + etc => demand (as money)
* human effort it takes to find and mine => supply/scarcity
For banks notes:
* the same (but improved) properties as gold => demand (as money)
* as much as bankers can get away with effortlessly creating (controlled by the interest rates they set) => supply/scarcity
This is how bankers decide it's value and where I think the term fiat comes from - they can control the value by creating/destroying the monetary units.
For bitcoin:
* the same (but improved) properties as large (currently) amounts of digital/paper fiat currencies => demand (as money)
* _fixed_ issuance curve => supply/scarcity
This is an an enormous difference - an asset with an absolute hard limit on issuance rate. No amount of corruption or even work can create more than is hard-coded into the algorithm. It doesn't matter how powerful you are, you cannot change the bitcoin issuance curve, and it doesn't matter how powerful you are, you can't create bitcoin with less effort than the bitcoin is worth. The world has no idea of the magnitude of what has been invented here.
For example, Ilya Sutskever was apparently at the helm of the now-aborted coup. Look at any picture of him. The guy fancies himself a leader of a corporate coup but lacks the social awareness to shave the ugly scraggly remains of hair off the front of his balding head. Nothing wrong with being bald, but you can at least tidy up your hairline and not be intentionally ugly. Appearances matter, particularly in a public-facing leadership role. Even SBF was smart enough to turn his dishevelment into part of his marketing. Ilya lacks the personality to pull such a thing off, and strikes me as the kind of guy who just doesn't expect to be judged for his appearance, and if someone did he would probably make some moral statement about judging books by their cover. He would be technically correct and completely ineffective, just like his coup attempt.
In fact, it would have an extremely strong chance of doing so due to it's better store-of-value qualities that would cause weaker currencies to flood the market and go to zero as people transferred their wealth into the harder money.
I'll abandon crypto when it becomes the second-best alternative to a state-controlled money supply. The shenanigans of the Davos crowd are becoming too weird to do otherwise.
He was right.
There is no longer such thing in 2023.
Try to do anything "globally" and get ridiculed out by China and Russia. Rest of the team being AFK.
That's especially significant in light of pretending there's a "global" climate change fight going on.
This is the tip of what is coming as far as US govt investigations and court cases. Investor wise what are the compliant safe exchanges? Anyone? Exactly, no one has any idea as of yet and that should scare all of us who want to use crypto.
Zhao’s worth 10bn and is asked to pay 150m?
Binance pays 10bn while it is still worth 36bn?
I am shocked. This clearly sends the message that if you make money fast enough, you’ll get away with anything…