Amazing that it’s impossible to tell whether you are a real crypto booster or joking at their expense.
Amazing that it’s impossible to tell whether you are a real crypto booster or joking at their expense.
"True crypto has never been tried"
XMR and BCH have been working great for a decade and in my mind are the ONLY Cryptocurrency projects that are not outright scams or digital ponzi schemes.
It's odd how clear the picture is but how many people have been fooled by fakes. What other industry is 99% scams and only 1% legitimate?
Why are you downvoted? XMR is among the greatest cryptocurrencies. It's everything bitcoin was supposed to have been. The fact it's not in the top charts is proof of the irrationality of the market.
Not exactly. It is just pricing in the risk of the government making the on/off ramps impossible to access.
There should not be any on-off ramps to begin with. People should just transact in XMR directly. That's what crypto was supposed to have been like.
That won't happen and would actually be much worse for Monero because it means everything becomes a giant target for thieves and scammers, even more than it already is. The reason it's failed is because the idea of cryptocurrency is fundamentally bad. Monero isn't even trying to hide it. The developers openly say that criminals should use it to commit crimes.
What crimes?
For starters, any of the money laundering crimes that CZ just pleaded guilty to. That's what any of these cryptocurrencies mean when they say transactions can't be tracked.
This does have the network effect disavantage of requiring everything to move to XMR immediately.
Also, except maybe for purely digital there will be "on-off ramps" anyway, except it will be for real goods instead of fiat currency. The government can ban you from paying the gardener or buying milk with XMR.
Or, perhaps, it's proof that the purpose of crypto in 2023[1] is not utility, it's line-goes-up.
[1] And 2022, 2021, 2020, 2019, 2018, ...
Utility? It already works. I've gotten paid for services via monero.
I'd be very happy if Monero somehow turned into the stable coin of crypto. It could just hover around $150-$200 forever.
You can feed your dog dinner off a golden plate, but that doesn't mean the price of gold is driven by its utility.
The purpose of a thing is not the driver of its price. It's unfortunate that crypto's turned into speculative stocks but to say it has no purpose or utility is just wrong. It actually works.
The problem with XMR is that it works too well, so people are worried governments will ban it (thus the low price).
Let them ban it. That's the perfect test for the technology.
It's nice to see level-headed crypto optimism here. It's disheartening seeing bulls who have long since stopped pretending their favorite coin has any utility beyond being a speculative asset and a get-rich-quick scheme given its poor transaction rate, or that the features they've bolted on will make it valuable, none of which make it viable as a currency.
Why would anyone bother with Bitcoin?
If you want to avoid financial regulations in transmitting value across borders or purchase black market goods and services, you're going to be caught since all/most Bitcoin is KYCd and impossible to keep private, unlike Monero.
If you want to avoid transaction fees, you're SOL since it's at $10 right now versus $0.06 for Monero.
If you want a store of value, it's poor because it's volatile, not backed, and theft is not reversible, unlike virtually any other regulated security.
If you want to make legal purchases with it, any transaction costs $10 and can take hours or days, and is not reversible if you are defrauded, unlike USD.
Bitcoin has no value proposition beyond being a speculative asset and a Ponzi scheme for early buyers.
Be mindful of potential biases. Monero is rightfully highly regarded for its privacy, but you may be overlooking certain aspects:
- Unlike Bitcoin, Monero's monetary issuance is not auditable, which could prove a major problem in case of an attack, potentially leading to inflation.
- Monero faces blockchain bloat issues due to its ring signatures. It cannot scale gracefully.
- Privacy and transaction cost concerns with Bitcoin have largely been addressed by Lightning and potentially other upcoming layer 2 solutions. A lot of work is being done here. If you are technologically inclined, you can also participate: https://lists.linuxfoundation.org/pipermail/lightning-dev/20...
- KYC happens on exchanges. Buy your BTC on decentralized platforms like Bisq or RoboSats and be done with KYC.
- A private-only ledger can pose challenges when transaction notarization is necessary. Bitcoin lets you choose between a private L2 transaction or a public blockchain transaction.
That said, I love Monero and am glad it exists.
Has there been any Bitcoin "L2" that is actually functional. Last I checked the inventor of the most popular L2 said it was a failure.
Lightning has grown beyond its two original creators and now has a healthy community behind it. Worth mentioning are Rusty Russel (iptables, netfilter, some network layers of the Linux kernel) and the fine folks at Acinq (acinq.co).
Yes, it still has some rough edges but it's now mostly usable. https://medium.com/coinmonks/lightning-network-2018-to-2023-...
Besides, about 80% of transactions within exchanges are actually off-chain, so this is nothing new.
"Usable" is a massive stretch. The only way most people will ever be able to use it is through a custodial wallet, so it's right back to bank accounts and centralized exchanges.
But the whole thing is a distraction anyway. The majority of transactions happening off-chain means that Bitcoin is an utter failure at everything it ever set out to accomplish.
Lightning does work if you're using a large provider but it undermines the utility of BTC not requiring a middle-man. Running a lightning node with personal funds is simply not likely or safe for your average hodler.
I'm not sure you've used Bisq or RoboSats if you think they're good replacements for exchanges. Barely anyone is online at a given time.
all i can say that, is you better have everything in stocks, housing and gold, otherwise you're going to have one sad retirement.
There are hundreds of coins some copied from bitcoin and slightly changed like litecoin.
The press has tricked you into believing every coin aside from a few popular ones are scams. Dig deeper.
Ah, the classic 'do your own research.'
If I dig deeper, and determine that <some shit coin> is a scam, well, I am just looking at the wrong one.
If I dig deeper, and decide that it's not, and then get burned later, I should have done more due diligence.
'Digging deeper' in a minefield is, generally speaking, not great advice.
Instead of holding forever you could sell earlier. Buying coins with the intent on it going up to make money can be done with 'good' or 'shit' coins. If you have ever purchased penny stocks it's similiar in terms of risk/reward. Buying coins with a larger capitalization reduces risk/rewards.
If you believe everything is a 'shitcoin' and you want to hold them forever then on your death bed you can look at the value and determine if it really was a shitcoin or if the media made me think everything was a shitcoin.
zcash seems to be going in an interesting direction, though whether they'll actually get anywhere remains to be seen.
Why BCH and not NANO? You like to wait and pay fees?
I'm curious as to why BCH is not a ponzi vs BTC given the former is a fork of the latter - so they pretty much work the same way apart from a larger block size.
It’s funny how true believers in communism and true believers in crypto talk exactly the same way nowadays.
“FTX and Binance are not examples of true crypto!”
“Soviet Union and Venezuela are not examples of true communism!”
I mean has Venezuela ever claimed it was communist? I always thought it was socialist. Also its oldest standing communist party technically sits in opposition to Maduro.
FWIW The Soviet Union never stated that it was communist. They were officially socialist with the constitutional goal of establishing communism. for that matter the Mensheviks predate the Bolshaviks and always opposed Lenin.
Saying that the Mensheviks predate the Bolsheviks is kind of odd- there was one political party, then they had a big fight and split in two. Menshevik literally means "minority" and Bolshevik "majority", that's how intertwined the two are.
By the time of the October Revolution, the Mensheviks were actually a majority, and were a significant faction in the Russian Provisional government. The Bolsheviks were not.
The Bolsheviks were a minority, but controlled key elements of the army. After months of civil unrest and violence, they staged an armed coup.
Khrushchev, enjoying a short-lived post-Stalin economic boom in the early 1960s, did proclaim that the Soviet Union would achieve communism by 1980:
https://en.wikipedia.org/wiki/Communism_in_20_years
So for a while there was an actual date attached to the constitutional goal.
I believe the deadline was quietly buried by his stagnation-oriented successors, but I’m not sure.
They were ruled by the communist party, so they were communist by ideology.
huh. both of those quotes are true for easily quantifiable reasons?
you don't have be a believer in either to understand that objectively
It's a tautology, as no implementation of a concept will ever be equivalent to the pure concept. The real existing examples of implementations of concepts will still tell you something about the viability of the concept.
standing committees are necessary parts of communism that always result in permanent authoritarian control of all people and all resources. humans don't have a way around that and that necessary phase is a prerequisite to the ideological phase. there is no evidence that it is worth pursuing given that irreconcilable implementation flaw.
consumers choosing mismanaged companies are consumer discernment problems that have nothing to do with the sector they're involved in. specifically with crypto, centralized exchanges and brokerage experiences are not necessary parts of the crypto ecosystem and exist in parallel to other ways of getting fiat in and out of crypto, and other ways of getting exposure to the crypto ecosystem. many proponents of the crypto asset ecosystem have always sounded the alarm on those kinds of companies and actively track how much crypto is held by the companies or in self custody.
analogies compare dissimilar things with common attributes, what is the common attribute between observers of these two concepts?
no implementation of a concept will ever be equivalent to the pure concept.
True crypto does exist.
Bitcoin is true crypto.
When I mine Bitcoin, and I use that Bitcoin to buy something from someone else, that is true crypto.
When I sell something for Bitcoin, that is true crypto.
When I exchange fiat for Bitcoin at a centralized exchange, and I successfully withdraw it to a self-custody wallet. That is acceptably close to true crypto.
Same goes for Monero.
FTX and Binance are exchanges, not cryptos. It's like confusing NYSE and NASDAQ with the stocks that they exchange.
The reason why people were investing in crypto was 'legimit' infrastructure providers like FTX and binance.
I’ve been using Bitcoin for a solid decade and I never made an FTX or a Binance account- too many red flags: leverage, derivatives, lending, etc.
Cryptocurrencies are cryptocurrencies. Binance is an exchange, essentially a bank in disguise. They are not even in the same category.
I too enjoy the no true Scotsman fallacy
No true ScotsCoin.
Surely it's BitScoin
BitScone
That branding may be rough, if ScotsCoin enthusiasts harbor deep grudges against BritCoin.
Now I wonder, is https://scotcoinproject.com/ a joke or not?
I dunno, people always invoke it in situations that are similar, but not quite applicable.
No true "No true Scotsman fallacy"
Eh... Folks are just butthurt that they didn't get in on the original Scotsman like I did.
They poured scorn then, but I'm up to my eyeballs in bagpipes now
https://en.wikipedia.org/wiki/No_true_Scotsman - I've been meaning to look it up for a while.
Poe's Law and all.
How will the BTC ETF even work?
I'm not super savvy with money but why would anybody buy an ETF and pay their fees when the assets in the ETF don't grow or give dividends? How will they secure those assets? Cold wallet in a vault? What happens if they do their audit and the backing coins aren't there (stolen) or there's a hardware failure on the cold wallet?
Like gold ETFs, they can do BTC synthetically via futures or have a custodian take custody.
The interesting ETF will be for Ethereum because a custodian can possibly stake it and earn yield. ETH can earn within the basic protocol.
Right but gold isn't easy to steal. Bitcoin can disappear from a cosmic ray, hardware failure, remote theft, software glitch, etc.
Gold isn’t easy to steal because there are centuries worth of physical security demands that have evolved to protect it. Its relatively easy to take a chunk of metal from someone otherwise.
Nothing you listed applies to bitcoin besides remote theft. The whole point of a blockchain is be fault tolerant in the face of those real failures. Remote theft occurs from a failure to secure your private keys. That’s human error and will be resolved in the same way as gold with… custodians aka a bank.
You can get your coins back if your cold wallet is destroyed?
If you have stored your seed securely (in a safe, preferably engraved on stainless steel), then no problem, you can re-generate your private key on a new wallet from it.
If you haven't written down your seed before generating your private key and also lost your private key, your money is lost. Thank you for this sacrifice for the common good, but you will want to educate yourself better next time.
Yes, if only one of a 2 of 3 account was lost. A person having a single seed phrase on a single cold wallet would lose coins and would probably benefit from using a service to educate them.
Gold isn't easy to steal because it's heavy, and the more you steal, the more it weighs. There's a big difference between stealing an ounce of gold and stealing five tons of gold. But there's no difference in "weight" between stealing 0.1 BTC and 10,000 BTC.
Also, securing physical assets is much easier than securing digital assets.
You don't have to put all 10,000 BTC in a single wallet.
Oh where there's a will (and a profit) there's a way. See this story about bags of nickels stored turned out to be filled with rocks.
https://www.businessinsider.com/jpmorgans-nickel-bags-turned...
You can laser engrave a Bitcoin wallet seed (24 words) on titanium, store it in multiple locations and never enter your seed on a networked computer to prevent remote theft. You can also use a passphrase on top of your seed, and store it separately, so that even if the seed is physically stolen, the wallet won't be recoverable without the passphrase.
And when everyone becomes super paranoid and keeps their money from participating in the economy then we will transcend.
That's for the holding account, that is, the long term savings.
For the everyday purchases, a Lightning wallet on a smartphone is enough.
I know how people claim it works yes.
For further protection, store those titanium blocks in a “portable Hole” so they exist only in the Astral plane:
Your coins aren't stored on a computer but on a distributed ledger around the globe, secured with strong crypto, Merkle trees and proofs of work. Your (hopefully cold) wallet only stores your private key.
Gold is hard to transport, easy to confiscate and hard to divide, thus difficult to use as a currency. None of those apply to Bitcoin. Well, unless someone is dumb enough to leave his money on an exchange.
Sounds like digital assets are not for you. Gold and silver coin in your pocket are a time-tested approach.
I believe the fee = the ETF holds bitcoin securely for you instead of you having to deal with wallets.
Yes, how does the ETF hold and secure the coins is what I'm asking.
Most likely some sort of cold wallet. With some in hot wallets for liquidity. There are many crypto custodians who do this.
Now they do have to design redundancies for the keys. eg. they should not lose access to the assets because say they made it too safe and cant find the keys anymore :p
It's funny because it happened with Prime Trust a crypto custodian. But I'm sure a company like BlackRock can and will do better.
I have no idea, but I assume that if they get hacked they are liable for that. If the ETF is run by Bob's Bitcoin ETF incorporated in the Virgin Islands then that's not worth anything because there are no other assets to cover losses. But if it's BlackRock (or some other large US money manager) then they have plenty of other assets to pay out.
Blackrock will be using Coinbase as their custodian: https://www.coinbase.com/prime/custody
It's the institutional version of their Vault feature: https://www.coinbase.com/vault
98% of digital currency is stored totally offline, in geographically distributed safe deposit boxes and physical vaults.
They use a custodian like Coinbase or Gemini.
The ETF then takes out an insurance policy incase the custodian loses they BTC they hold on the ETF's behalf.
Coinbase would be the custodian
The big guys/gals/peoples at Fidelity and BlackRock also want a piece of the crypto action.
https://decrypt.co/97795/blackrock-handle-circle-usdc-cash-r...
'BlackRock will become "a primary asset manager of USDC cash reserves"—the fiat currency backing the Circle-issued USDC stablecoin.'
Well, BTC isn't some asset that doesn't have a track record of growth. Take a look at the rate of growth in last decade. Yes if you look in specific timeframes it will look like a wreck. but looking at a bigger picture it makes sense. And it is given that it will keep growing similarly in the long term (Why?, thats a separate lengthy conversation the answer to which also answers why some of largest finance players are rushing to put out an ETF of BTC)
Coming to the security and safety part. In theory, BTC was made with a intension to be easily usable and accessible. Once you understand it, its pretty simple and straightforward (even easier than using a bank's service). No level of hardware wallet failure will compromise the funds because the funds are not in the wallet rather the record of the funds are in 100s of thousands of BTC nodes that is being run by miners and other enthusiasts. The real threat may be letting people that share OTPs to scammer handle their private key and seed phrase. Thats where custodians like coinbase comes in.
And to the point of how to make sure the fund held by ETF/Custodian is actually there or not, This can be easily verified. Tt is a public ledger and anyone with the public key can see how much funds are held in the wallet. This aspect of transparency is one of the key selling point of BTC.
I would recommend a short and interesting read - "Inventing Bitcoin".
If BTC would always increase in value than it's doomed from the start as it means people starting late have to pay much more than an early person.
This means rich late people will never migrate or buy BTC ETF ever.
It's like always buying at the increase
While I can see how it helps clear the bad image of the industry, the two are not directly related. The ETF was/is going to get approved regardless.
How does it help clear the bad image? There are seemingly no large crypto orgs left that are untouched by criminal convictions.
No large crypto orgs left? Tether has a market cap of $88bn alone.
Tether has been convicted of fraud.
If that meant anything the USDT to USD peg would collapse as it could no longer be redeemed for fiat.
Most people can't redeem USDT from Tether... Read their terms. You can only redeem USDT for USD if you bought directly from them, and even then it needs to be more than $100k. If you fulfill those two requirements, they'll let you redeem if they want to. They state in their terms that redemption is entirely at their discretion, and they can just say no if they gambled the reserves away.
It means something, and tether will collapse.
So you tell me someone has 88bn us dollar or real assets somewhere stored away safely?
Somehow I doubt that. That would mean someone invested this in a save and independent way with enough return to keep it inflation save and apparently has no other idea on how to invest that even more magical.
How is tether really pegged safely?
I think you are preaching to the choir here, maybe I misread the intent of the OP above me.
That's why the ETFs are coming from non-crypto orgs - Blackrock, Fidelity, etc.
Where do you think they get their BTC to fund the ETFs?
There are no criminal charges involving Coinbase or Kraken. Litigation by SEC yes, criminal charges no. There’s a very meaningful difference there. The first type can ruin your business, the second put you behind bars too.
Not your keys, not your crypto. Never use exchanges.
There are seemingly no large tradfi bank or organization left that are untouched by criminal convictions. So then what?
Traditional banks aren't trying to prove that people should trust them. People already trust them, and even if they don't, they're already regulated enough that consumers know the government will step in to bail them out.
Why does BTC need an ETF at all, doesn’t that defeat the purpose of owning one’s own wallets? Also… exchanges defeating the purpose of decentralization…
The simplest answer is that alot of people would like to hold BTC in a tax advantaged account and an ETF wrapper is the easiest way to do this.
Others would like to buy it via retirement plans and having an ETF makes this doable.
Those that want to hold BTC incase the US dollar collapses will hodl their own BTC.
Those that want to hold BTC incase it really appreciates will hold it via an ETF in a tax advantaged account so they don't have to pay taxes on their gains, depending on the account type.
and those few.. who still expect to use it for payments..? =) LOL.
Just say exit liquidity. It's faster.
Ah, nice! Applies regardless of what the underlying asset is ~ some good ole’ tax engineering.
The purpose of decentralization was defeated a long time ago, I'm afraid.
<sarcasm>I guess people trust Blackrock and CZ on setting BTC prices more than they trust the greenback</sarcasm>
Also, CZ (pleads guilty to money laundering charges): https://news.ycombinator.com/item?id=38366729
Many foreign-currency ETFs exist. Euros, or yen, or dollars can function as currencies even though some people also view them as investments.
Commodities are similar. People might invest in pork bellies even if they don't personally eat bacon.
Your question is absolutely appropriate, as the original vision was not to have care about dollar values and instead use BTC as money.
But now the speculators have taken over, and all that really matters is what BTC is worth in dollars.
Why does BTC need an ETF at all, doesn’t that defeat the purpose of owning one’s own wallets? Also… exchanges defeating the purpose of decentralization…
Many financial institutions do not care about decentralization, but they do care about investing in an asset where they do not have to worry about managing the asset (in that regard, similar to REITs). Having the asset insured against various types of malfeasance is also a requirement for investments by many institutional funds.
I don't think experience shows most people should or want to own their own wallets. And transactions are much easier without owning one. If you just want BTC exposure as an investment an ETF is much better.
Total US retirement assets were $36.7 trillion as of June 30, 2023, up 3.1 percent from March 31, 2023. Retirement assets accounted for 31 percent of all household financial assets in the United States at the end of June 2023.
Not before Tether has been taken down
yup Tether is the biggest fake money printing machine that keeps BTC afloat
I think so too however it looks like they may have printed their (counterfeited) way into solvency.
Basically: buy cheap BTCs, print shitload of tethers, sell BTCs for real USD to the tune of tens of billions and now store these real USD in short term US treasuries (they don't own chinese treasuries anymore) bringing in 5% and more.
They're claiming they now have excess money (!) to back their tether due to the fact that they collect 5% or more of interest on the short-term treasuries they have.
Put it this way: even if they printed $40bn out of their arses out of $80bn of tether, the $40bn of actual USD they'd have would still net them $2bn a year in interest. That'd still be a big hole but...
What if they printed "only" 10 bn out of thin air out of 80 bn: they'd have near 70 bn bringing in 3.5 bn yearly at the moment.
They don't give any of the interest back to USDT (tether) holders.
So if they printed "only" 10 bn out of their arses, in less than three years they'd have these 10 bn for real on interest alone.
It's still criminal (I guess) but it may not be "0% of tether are backed".
People have tried to run the maths on how much money entered the cryptocurrency world (with Coinbase giving a huge hint).
Centre (Circle+Coinbase) has really $24 bn backing their USDC coin (they publish the individual US short term treasuries bill number).
USDT (tether) is much older than USDC.
Did they cheat? Most certainly.
Did they "fake it 'till they made it", helped, by sheer luck, by interest rates going like crazy?
I think it's possible.
I think the fraudulent route to solvency is even simpler than that:
1. Make Tethers out of thin air and sell for BTC
2. BTC price goes up because crypto boom
3. Sell enough BTC for USD to back the fake Tethers you made up in step 1
4. Balance sheet now looks legit, and you even have BTC to spare to buy yachts for everyone.
Tether absolutely had the chance to become solvent in the weekend of the SVB collapse. In that time, everyone was rushing out of USDC and DAI into Tether (USDT). Liquidity pools were drained of all their USDT and smartcontracts showed all available units being borrowed at 100+% APR. Tether was trading for $1.01-$1.10 that entire weekend, with demand insatiable. They could have repeatedly issued new Tethers and sold them for more than a dollar[1], while only incurring a dollar of liabilities.
Coinmarket cap shows the USDT market cap going up by about $2 billion during that weekend, but it's not clear if they were using this strategy. (which would have profited ~1-10% of that figure).
[1] or, depending on how much risk they wanted to take, traded them for USDC and DAI! Those were trading for as little as $0.90.
The ETF will have to be approved BEFORE Tether is brought down. The powers that be need a way to control the price, an ETF is the easiest but until then they have Tether.
Why else would the US allow the largest counterfeit money printer to continue for long?
Why else would the US allow the largest counterfeit money printer to continue for long?
Incompetence.
The US' incompetency usually doesn't extend to protecting the primacy of the dollar.
Why else would the US allow the largest counterfeit money printer to continue for long?
Are you taking about tether or the fed?
Good.
May the entire of crypto be brought down with it.
And why would that be?
Because he's salty about it, the comment doesn't point at anything else
Name any positive valid use case that crypto does better than the current financial system.
Uncensorable money across borders
This is a perfect use case for criminals and ransomware gangs which is certainly why crypto is popular for these groups.
Especially for funding the North Korean regime.
https://www.abc.net.au/news/2023-11-18/how-north-korea-makes...
Cool, but that’s not what you asked, and you’re moving the goalposts. I suggest you slow down and think about the pros/cons/tradeoffs instead of automatically going down the decision tree of this argument.
What you've suggested is not a positive use case at all but sure it's perfect for criminals.
Great job.
Any authoritarian state will label dissidents as "criminals". If you want to flee Russia or Venezuela today without forfeiting all your property, crypto can come in handy.
This is very much a positive use case if you value individual freedom. Remember that any wall and border has 2 sides.
Hmmm. Interesting.
I can only name 1 person who is in this position you describe yet they are not fleeing Russia any time soon.
So according to your logic the North Korean hackers who borrowed $2BN in crypto are not criminals in North Korea's eyes despite the US government calling them criminals?
You might want to come with real world examples with a larger impact instead of tiny selective scenarios where almost nobody other than that 1 person would get themselves into.
The fact that it is useful to criminals does not mean it is not useful to non-criminals. You asked for examples of utility; it was provided.
Firearms and cryptography are two additional examples of things that provide a lot of utility to their users, both innocent and criminal.
"Name any positive valid use case that crypto does better than the current financial system."
This isn't a positive use case. It is a negative one.
So unless you are a criminal or you're sending ransomware to Joan from Nebraska for 0.5 BTC...
Nope.
You so realise that cash and gold are used by those groups as first choice?
Except crypto is way easier for criminals to move funds around better than what you've suggested.
Visa are using it for cross-border settlements between issuer and merchant banks: https://usa.visa.com/about-visa/newsroom/press-releases.rele...
This is surprising.
But it might not be as pro-crypto as crypto-boosters think. Crypto was supposed to replace orgs like Visa. Now Visa is co-opting crypto.
This feels like moving the goal posts a bit.
>Name one thing good about crypto
names it
“Welllll that doesn’t count.”
Crypto bros harp on about that they don't need the legacy financial system or it needs to be decentralised away from the big banks and duopolies.
It turns out that these entities are only getting into crypto for hiking up fees and centralisation, defeating the point of crypto in the first place.
Projects such as UPI in India doesn't use Visa or Mastercard and is rolling out worldwide, the exact solution crypto was supposed to solve, yet 15 years later no progress whatsoever has been made on the crypto front.
So crypto proponents have just been screeching for nothing but price speculation which isn't a use case at all.
Domestic and international settlement speed
Wrong. Wise does this better than crypto.
Ironically the only way Wise would be faster to withdraw money to my (foreign) account is via crypto, for which they quote three digits (yikes!)
Even Wise's own website says it can take days.
Bitcoin and others can be officially settled in minutes to hours
https://wise.com/help/articles/2977951/why-is-my-transfer-ta...
Ethereum has negative inflation, unlike many fiat currencies.
I have used Bitcoin to donate money to organizations the state would prefer me not to, such as Ukrainian defense, or Wikileaks (famously blockaded by banks without/before criminal charges).
There are lots of truly amazing cross-border use cases; permissionless internet money has huge utility.
NFTs allow fans to financially support visual artists via collectibles (potentially with resale value) in exchange for donations. (I say donations because buying an NFT does not purchase the art the NFT represents.)
Usually when I offer these use cases, people move the goalposts, saying how these things are somehow already possible (they aren’t, at least in the same way, or same speed, or same cost, or same level of privacy-preservation).
It’s nice to be able to transact without identity attached to every transaction.
I have used Bitcoin to donate money to organizations the state would prefer me not to, such as Ukrainian defense, or Wikileaks (famously blockaded by banks without/before criminal charges).
So?
You can do all of this without crypto, there is nothing new or novel that crypto has done here.
There are lots of truly amazing cross-border use cases; permissionless internet money has huge utility.
Same again, and in fact we have PayPal, Xoom, Wise, etc.,
Instead, you are asking normal people to rely on crypto exchanges to convert their crypto into fiat (with extra costly fees) through a complicated process in order to receive money.
This is neither innovative or novel, it just adds more needless complexity and is a regression from what already exists in the current financial system.
NFTs allow fans to financially support visual artists via collectibles (potentially with resale value) in exchange for donations. (I say donations because buying an NFT does not purchase the art the NFT represents.)
This highly wash traded 'market' is down big, so by using NFTs you're not really supporting artists at all, you are driving down the 'value' of the collectible down to 0.
Usually when I offer these use cases, people move the goalposts, saying how these things are somehow already possible (they aren’t, at least in the same way, or same speed, or same cost, or same level of privacy-preservation).
The reason why we have the current system is to reduce the amount of bad actors trying to defraud people, crypto just blows this right open to create a wild west of fraud.
How would the privacy preservation work with businesses, It wouldn't as no business would want to touch crypto and it is not worth the accounting hell for them.
It’s nice to be able to transact without identity attached to every transaction.
This is called cash.
You can't send cash over the internet, but anyone who thinks you get privacy on blockchain transactions (other than Monero) has been mislead.
Your comment presupposes every human exists in your current, healthy, financial system.
lol that's not an answer.
It isn’t? Seems like one to me.
I don’t understand why they care so much. If crypto is so bad, just leave it alone and let it die.
Anyone in the variety of South American countries experiencing massive inflation would have been worlds better if they had just parked their money in BTC. Crypto is full of scams but there is also a world of positives and opportunity there.
They would've also been worlds better if they had parked their money in Gamestop, or honestly even in a casino, but that doesn't make it a sound investment
why does orange reddit always have comments like this whenever coins get mentioned
“Orange reddit” was one of the first places that Bitcoin was discussed. Consequently there’s an awful lot of people here who know exactly how much they missed out, and express this by being saltier than dead sea whenever the topic comes up. The accepted wisdom on HN, when the bitcoin price was in the single digits, was that it was a “tulip bubble” and you should absolutely not buy it under any circumstances.
The accepted wisdom is still that it's a bubble and you should not buy it, the price going up does not necessarily mean that the price isn't higher than it should be. Projecting everybody who disagrees with your viewpoint as somebody who is angry they missed out is simply a quick way to hand-wave away people who disagree with your crypto-is-the-future dogma. I wasn't in the early adopters per-say but I did do some crapcoin trading back in the day and made a decent sum at the time, and yet I still hold crypto and blockchain technology as a whole as almost entirely pointless. I have still yet to hear any real valid use of the technology that is better than existing/alternative solutions. It speaks volumes that the people who would know the most about the technology (software engineers, who are prevalent here), are the ones who (outside of the general public) believe that the technology is largely pointless, if not downright idiotic.
I find it really hard to reconcile this viewpoint with reality. I personally know businesses who use stablecoins for international money transfers because it’s just faster and cheaper.
Also, every month or so an article pops up here where either some business is rekt because their payment processor’s automated process kicked them off, or someone’s bank account got closed in a similar way screwing them.
Yet the only way to self custody electronic money and transact without intermediaries is somehow ‘pointless and idiotic’.
The key differentiating factor in your hypothetical reasons why traditional finance is inferior to defi is that there are systems to remediate the exact issues you mentioned, whereas if you send your crypto to the wrong address- it's gone. If you lose your seed words to your wallet and can't access it, or someone else gets access to them- it's gone. If you get scammed- it's gone. Literally all of these things (which are a /feature/ of the tech!) make it essentially unusable for any business that isn't looking for an adrenaline rush. What I love most about all of these shortcomings of the technology is how much people who push it minimize all of these issues by saying that it's user error, and people who utilize good practices won't have these issues. It's almost as if all of these people have literally never talked to a real person. No regular person cares or would ever want to care about hard wallets versus alternatives, seed words, verifying addresses, and avoiding phishing scams. All of these issues which can be mitigated by being technically inclined fall flat on their face with any person who just wants to send money to their grandson or pay a friend for dinner.
To be fair, people get scammed over wire transfers in traditional finance all the time
The reasons are really not hypothetical. That being said though, I don’t personally believe that crypto will or necessarily needs to totally replace all fiat usage. It’s more along the lines of the realization that the possibility to have electronic money kept and transmitted outside of the fractionally reserved banking system is immediately useful.
Given the state of crypto adoption now, I can’t imagine a non-dystopian future a century from now where what we now call crypto or digital assets haven’t become a very boring and non-remarkable part of the civilizational fabric.
I can imagine dystopian futures where that’s the case though. One would be where the infrastructure we use to run crypto on (the internet, telecommunications) doesn’t exist. Another is where all the regulatory environments for digital assets that currently exist (UK, EU, Canada, etc) have been totally rolled back, and self-custody has been made a criminal offense. Probably some type of society straight out of hunger games.
What kind of businesses?
One is a run of the mill software engineering consultancy, the other a startup making a development as a service platform where they link companies needing work with engineers in the developing world.
And many people were scammed and lost their savings to BTC and other crypto schemes. It's funny how the Ponzi promoters always forget that part when touting whatever cooked-up reason they promote crypto for.
But sure, in a sector where most of the biggest names are fraudsters, some people still manage to be adherents.
The nigerian prince scam has been running on fiat for decades
These people were scammed by humans, not by bitcoin.
I first read about Bitcoin on Slashdot. I thought it was a stupid idea back then, and I think it's a stupid idea now. Buying bitcoin in 2008 would have been a terrible investment decision regardless of whatever result it might have produced. If you don't understand that an investment decision can't be evaluated after the fact on the basis of the outcome of single random event you know nothing about investing.
If you would have looked at the geopolitical landscape and what they've been doing to our money for 100 years it would have been an easy investment to make. Geopolitics and monetary policy is your due diligence.
downvoting just makes everyone on orange reddit seem saltier
but keep commenting the same dialogue prompt the salt is pretty entertaining
May the entire of crypto be brought down with it
Pretty hard to get rid of decentralized systems.
Crypto is pretty centralised thanks to these exchanges and many blockchains running solely on AWS such as Ethereum.
Crypto being ‘decentralised’ is a well known myth.
Ethereum running “solely” on AWS is a myth. If AWS were shut down, the chain would continue as usual.
Even Vitalik knows that Ethereum is centralised.
If AWS were shut down, the chain would continue as usual.
Continue laundering money for foreign state actors and narcotics businesses, sounds about right as this is is what crypto is good for.
https://www.justice.gov/usao-nj/pr/united-states-seized-and-...
Do you think it would continue or not? Your comments seem to hold conflicting points.
We both know that crypto is only used for and that the main use case is criminal activities, so it's only right that the whole thing should be shut down by law.
It's already impossible for crypto to become part of the current financial system so the only way to stop this scourge is to make crypto illegal starting with the exchanges down to the blockchains.
Blockchains have absolutely no use case at all.
You're free to hold whatever opinions you want, but I don't see how they're relevant to this conversation.
It's not productive to spread falsehoods about how blockchains are hosted.
I don't see any sources for any of your claims so I've completely ignored it as you have no hard sources.
Okay, then it should be just as fair for everyone to ignore your claim that Ethereum runs "solely on AWS".
No, since there are clearly cited sources on the centrality of Ethereum on AWS and everyone from Vitalik and others knows it.
https://cointelegraph.com/news/3-cloud-providers-accounting-...
https://www.coindesk.com/business/2022/10/12/morgan-stanley-...
Both your sources show that only 30-35% of nodes run on AWS. They seem to support my point that Ethereum would continue running during an AWS outage, not your point that Ethereum runs "solely" on AWS.
Furthermore, the cointelegraph article misquotes a Messari report as if it's discussing the current state of Ethereum as having central points of failure, when it's really discussing a hypothetical upgrade to Ethereum that was never considered nor built.
Finally, node percentages don't actually matter in terms of chain uptime. What really matters are staking validator percentages, since they are what determine chain building and finality.
You seem to be confusing would with should?
You're right, it must be shut down by law.
That should be much better.
You don't need exchanges for cryptocurrencies to work, they just make onboarding easier.
Do you mean that, once on-boarded, crypto holders would only need to trade with fellow crypto holders?
Reflecting on how crypto once fit with the HN ethos. Hard to say where the community is now, partly because I don't spend as much time here. But it definitely seems to not be the darling it once was.
Don't know if this is because it's mainstreamed in a way that makes it less "hacker"-appealing (quotes intentional), the HN community has changed, or because crypto went full crypto-bro so hard.
May be some combination.
Probably because the brave new world of cryptopunk anonymity and liberation has turned into this mess of fraud and in-your-face centralisation and crime.
I have to admit I do find it pretty funny when the people who have touted blockchain and cryptocurrency as great because of its decentralization have discovered /why/ a central authority is incredibly important in finance. All of the crypto pumpers start crying for government support when they're the ones who get fleeced, when that's literally built into the technology as a feature.
I imagine HN in particular is also quite dominated by traditional US finance.
I honestly don't remember the time you are describing. As far as I can remember, the most prevalent voices about crypto from HN have been from the naysayers by far. The craze just simply isn't there anymore, which is a very good thing. People who refuse to try and understand cryptocurrencies but tout fanciful things about them shouldn't be the ones representing them.
If you could please elaborate, for the free curious spirits of HN.
Crypto has brought good in underdeveloped countries like Venezuela and Argentina. Venezuelans use USDT to purchase real, physical goods. Sometimes groceries.
Have any numbers on this? The only numbers I could find are very modest[1]. IIRC Zeke Faux, the author of "Number Go Up" also noted that adoption is very illusory - like the "Accepts Bitcoin" stickers you see all over the place Canada when there's no functioning bitcoin payment processing inside.
But besides all that, I think it's criminal to leave people in underdeveloped countries at the whims of unaccountable central-bank-style institutions like USDT. What will proponents of this crap say if/when USDT collapses? "They knew the risks"? Is the "crypto community" going to bail out people who invested their life savings in this garbage[2]?
[1] https://www.chainalysis.com/blog/latin-america-cryptocurrenc...
[2] https://old.reddit.com/r/AxieInfinity/comments/10ovcoo/lost_...
I think it's criminal to leave people in underdeveloped countries at the whims of unaccountable central-bank-style institutions like Federal Reserve.
It's criminal to leave people in underdeveloped countries at the whims of criminals.
central bankers are indeed criminals!
How does this in any way deter crypto, if anything it strengthened it. Binance continues to operate, Zhao won't face any actual penalty and continues to be a billionaire.
Seems to me like Binance and crypto is the winner here.
"This is good for Bitcoin"
It won't though
SBF decided to testify against CZ to try to save his own ass, giving justice dept and sec something to fine CZ with.
Govt collects a big crypto fine, fine makes the big losers in FTX whole, problem solved.
CZ should have just bought FTX and closed the deal and made people whole, woulda saved himself some drama.
Pretty great example of Hacker News when the top comment is "They should have done more crime but in a different way."
As long as those who are affected by some kind of loss are (reasonably) made whole, most legal systems won't give a flying f..k about anything.
Martin Shkreli did that, and the feds still arrested him.
He annoyed politicians. Free country, huh?
If by "annoyed politicians" you mean "bait and switched AIDS patients".
He upset the democratic establishment when he chose to stalk Clinton’s daughter on YouTube
This is why Ross Ulbricht was doomed from the second he did that Forbes interview as “Dread Pirate Roberts” and dared the US government to come get him.
You can do a lot of illegal things and get away with it, but questioning the US government’s ability is just asking to be made an example of.
There are limited law enforcement resources and no doubt Silk Road would have gotten a bit longer reprieve, but once he poked the bear, you damn well know they said “I don’t care what it costs, I want this guy in prison for the rest of his life”.
So much for freedom and rule of law
He wasn't arrested for raising the price of his drugs, though. He was arrested for financial fraud, but none of his victims actually lost money. Very odd case.
https://web.archive.org/web/20170710014221/https://www.washi...
Securities fraud is a criminal charge. It's not about someone receiving relief from some injury like a civil case. You can be charged criminally even everyone ends up better off; it's a crime against the state.
Think about this: I hijack an airplane full of people but all I do is get them to their destination faster. Everyone is better off (i.e., no material injury occurred) but I assume you'd still think I should be charged, no?
FWIW- Madoff used the same excuse that "nobody actually lost money." According to him, none of the principal was lost, it was just unrealized gains. Most people still think he should have been charged with fraud.
He said the price increase would not affect patients directly- just insurance (can’t verify).
But he would do livestreams where he said anyone without insurance or that had insurance that wouldn’t cover it could DM him and he would take care of it for them. One of my online friends was able to get the medication this way.
Tort/civil lawsuits are about being "made whole." Criminal lawsuits are not because they represent crimes against the state/society.
The state also brings civil actions that are not about damages or being made whole. See the ongoing business fraud case in NY against Trump.
That one is because Trump didn't make whole anyone across his career. Not the IRS, not his creditors, not the countless people he and his various enterprises stiffed (e.g. the tradespeople who worked on the casinos [1][2]).
There's so many people who Trump and his various enterprises left stuck with sometimes very huge bills that it's a miracle he didn't get dinged years ago. And that is why Trump is being on the receiving end of the stick at the moment... he forgot one crucial point: never make too many enemies in life because eventually they will team up to get their revenge on you.
[1] https://eu.northjersey.com/story/news/columnists/mike-kelly/...
[2] https://eu.usatoday.com/story/news/politics/elections/2016/0...
The big question is whether he will plead guilty and/or the judge will convict him.
In US, you can be rich and get away with a lot of crime and crookedness.
If Trump does go to prison, that will make quite the news.
Putin and Xinping will be laughing because they have such a strong hold on their countries, them going to jail is unthinkable.
Putin and Xinping will be laughing because they have such a strong hold on their countries, them going to jail is unthinkable.
That’s one way to look at it. Another way is to note that they’ve done a real good job of limiting their potential future options. They get to remain in power, or be exiled and live in hiding, or be dead? They’re unlikely to resign and get to live a quiet retirement, just as they’re unlikely to be jailed by their opponents?
Thing is, prosecutors don't want to waste their time. Someone who made whole those who lost money or other assets (or at least made a credible effort to do so) gets lower priority and lower sentencing over someone who just sharts on laws.
Tort/civil lawsuits are about being "made whole."
Only at the “modelling a cow as a perfectly thermoconducting sphere” level of analysis.
Actual damages and preliminary injunctions to preserve a situation remediable by damages are about that, other parts of what happens in civil cases are often not. E.g., punitive damages are, as the name suggests, punitive, not compensatory.
I believe Martin Shkrelli would disagree
I think that (sadly) the key distinction in the American justice system has to do with how easily it is to justify your prosecution to the public. If you're wildly popular, you're probably able to get away with quite a lot. If you're wildly unpopular, it's probably pretty easy to get a conviction on any number of things.
define justice...
Justice, in its broadest sense, is the concept that individuals are to be treated in a manner that is equitable and fair. A society in which justice has been achieved would be one in which individuals receive what they "deserve"
So, what do they deserve? It's up to a panel of peers to determine. Peers, mind you, that are representative of the society you live in.
So in a sense, public outcry and court of public opinion can sway personal opinions on what is just and fair and determine what people deserve. I find the entire system malleable and ripe for corruption.
What system, in your world, is not malleable and ripe for corruption? In your world democracy would be the most malleable and corrupt while autocracy would be the least given the boundaries you laid out.
In autocratic regimes justice is usually perverted from the top (comrade district secretary calls district judge to affect proceedings - in USSR it was informally known as "phone law"), in democracies you usually need to involve wider public pressure to achieve similar results. It's definitely makes democracy better, because to sway public opinion is costlier, more visible and at least partially deliberative endeavor. But legal justice is not moral justice in any political system, and there are always ways to at least nudge legal system in a way that is more convenient for some forces.
That's why juries suck. For some reason we pretend that even a random group of people can't have shared biases. Especially when there's a lack of evidence, it opens a jury up to judging someone based on their race, gender, appearance etc and I've seen it happen.
Considering an idea without agreeing with it might be one of the better modern definitions of curiosity.
Considering an idea is about taking everything into account. The part where it’s illegal or morally reprehensible is essential to the discussion. Also if not communicated like here it can be understood as an opinion.
I do not assume ill-intent of the other curious people here, and I think if you do, you're not following the guidelines (take the most charitable interpretation of what someone writes).
I’m not assuming ill-intent, I’m talking about the idea. Stating something is wrong or illegal seems essential to the discussion. It’s like if someone said “I should rob a bank”, I sure hope saying it’s illegal will be taken into account in their curiosity.
Free and unrestrained insight into the ruthless and the sociopath minds is half the reason I come here.
Ah, thank you for putting words to describe why my gut feeling of morbid curiousity applies to HN like it does for air crash investigations.
I don't think doing less crime was ever on the table for these guys.
It would have failed eventually. FTX was fundamentally unstable.
Rumor is that FTX is not that awful financially right now, because of their Anthropic investment.
... I mean right now maybe, OTOH that space is as volatile as Crypto was 13ish months ago.
If I was a bag holder in FTX I'd be absolutely on my knees praying for a piece of Anthropic as a substitute.
The Anthropic investment is completely illiquid. It was liquidity issues that crashed FTX originally.
TL;DR: they might have assets but they were and are still "awful financially"
I think they're also fundamentally insolvent even with the anthropic investment
Everything fails eventually.
FTX has a ~$8B hole.
It was far cheaper for CZ to pay the $4.3B fine.
Depends if buying FTX would have stabilized the price of their FTT coin. That would have filled in some of the hole. And then CZ wouldn't have had to step down
So FTX would still be in the hole, and CZ is likely in the hole.
Sounds like kicking the can down the road to me. That won't end well.
SBF commits fraud and loses $8b, CZ pleads guilty and pays $4.3B fine and loses access to US market. I don't know why so many people think the crypto space is legit and this is just a temporary setback.
Kicking the can down the road is the name of the game in ponzi schemes
CZ is the one who pretty much orchestrated the FTX collapse. Chickens, home to roost, etc.
I've seen analyses showing even without CZ it was just a matter of time before the house of cards collapsed.
"It's only when the tide goes out that you see who's swimming naked". The tide was going out even without CZ's actions. And FTX was swimming naked to the bone.
Oh FTX was definitely a house of cards, but maybe they could have played funny money games, got more investement, and otherwise stayed solvent until their Antropic bets paid off mayyyybe. But CZ definitely swept their legs out, purely out of spite.
Agreed, it's maybe-maybe not. This is like playing what-if. There's no A/B testing with history.
What is not the case is that it would have clearly gone one way or the other.
Why would these fines go to debtors of a private institution? I believe DOJ fines typically get deposited into the US Treasury.
Correct, I don't know why this is the top comment when it's so wrong.
There is a restitution process for victims of Federal crimes. One may make a case that the victims of SBF & CZ's malfeasance may be eligible for restitution. IANAL.
Check the Reuters investigative pieces on CZ and Binance from 2022. They had plenty to fine him with before SBF's testimony.
I actually can't believe he didn't get jail time given the severity of what was uncovered.
Probably the information that they (Binance) will share is really valuable to US.
Could we make a connection about Binance, and now Kraken prosecution with what happened after 9/11 where US pressed countries such as Switzerland to remove bank secrets? [1]
[1] https://www.cnbc.com/2023/03/24/swiss-claim-the-us-banking-c....
Lim also acknowledged in February 2020 that some of Binance’s customers, including those from Russia, were involved in illegal activities, according to the complaint. Lim wrote in a chat message about those trades: “Like come on. They are here for crime.” Money Laundering Reporting Officer at Binance responded at the time, “we see the bad, but we close 2 eyes.”
SBF decided to testify against CZ to try to save his own ass, giving justice dept and sec something to fine CZ with.
Is this conjecture?
Looks like it, and also seems like BS.
SBF was convicted ~2 weeks ago and a Section 35B (federal cooperation and substantial assistance) doesn't go through that quickly, unless SBF started cooperating against CZ before his conviction.
And it sure didn't seem like SBF was interested in cooperating in any way pre-conviction.
he has infinite supply of money to pay any fine, i dont really understand the fine amount, whats the porpouse of it, u either force them to destroy the whole exchange or just try to make their complete reputation go down but this looks like the govt getting some pocket money and letting them keep doing nasty things overseas and thats it?
that's what fines are for.
most people criticize fines as a mere check for the offender belonging to some moneyed elite and nothing else.
fines are not replacement for civil law. if anyone think they were wronged, that's the only way. not a magically proactive government becoming their patents.
Or nobody should have ever bought unsecured crypto on sketchy new exchanges... That would have saved the entire loss perhaps?
Pretty much every major marketing push and normalized on social media (Including NFTs and influencer Culture) ends up being a massive scam.
It worries me that no one sees the trend and holds social companies & people involved properly accountable for this form of crowdsourced theft.
What the government agencies and police do with money they collect will surprise many, and in many cases might be considered corrupt. I can assure you that the very last possible thing that will happen is that the money will be used to make anyone whole.
Isn't it better to just go after the scammers and fraudsters as soon as possible?
Otherwise somebody else will be left "holding the bag" eventually (and it will be a larger bag).
I might be old-fashioned but these fines and charges, to be clear, are for ACTUAL wrong-doing, you know, MONEY LAUNDERING. That's greedy-bad-guy stuff. It's not arbitrary or simply a matter of "avoiding drama".
The government wouldn’t give that fine to FTX investors and customers. They keep it for themselves. Making FTX investors and customers whole is FTX’s job, not the govt.
Happy to see this whole thing finally coming to an end, its a nice wrap to the dead market we've had for the past 2 years. I'm excited for 2024 in crypto!
What makes you think this is the end of anything?
The rumour about Binance indictment by DoJ has been going around for 1-2 years now. Its one of the last remaining pieces of major news that could have potentially negatively affected the industry. After two years of prosecutions, regulatory uncertainty and general poor market conditions, its only now starting to feel like there's light at the end of the tunnel.
Light to final blow against crypto the horrible CO2 production and the annoying get rich apps.
Let's hope it dies sooner than later.
There are now lots of efficient cryptos and some that can run on a single wind turbine. But I am with you, hoping the energyvore ones die as fast as possible.
The efficient ones are still outright scams if not blatantly illegal. All cryptocurrencies should die. After more than a decade it's clear by now that blockchains are a useless technology and the investors are getting more and more desperate to pass the bag.
Yes, it's so nice how the traditional finance system has no CO2 emissions
The classical financial system has much less CO2 per transaction and more features.
It's the perfect finetuned and still optimized PoS system.
do the recent Kraken charges change this sentiment at all?
Not really. SEC investigations are civil, not criminal. They might end up paying a fine, but there is no risk of jail time or anything similar. Also, while I like Kraken as an exchange, its market share is not significant enough for it to matter in the big picture.
SEC investigations are civil, not criminal.
SEC investigations address both aspects, when it gets past investigation to litigation, they do civil litigation themselves and refer to DOJ for potential criminal prosecution.
Coinbase has been charged with more or less the same thing since this summer. The SEC is grasping at straws at this point.
Its one of the last remaining pieces of major news that could have potentially negatively affected the industry
Lol. Tether imploding anyone?
That’s pretty unlikely to happen at the moment though. I’m far from a Tether fanboy, but in this interest rate environment they are likely making boatloads of money just by sitting on a nice chunk of T-bills.
Its one of the last remaining pieces of major news that could have potentially negatively affected the industry.
What, is the giant ticking timebomb of the USDT money printer not likely to 'negatively affect the industry'?
Your optimism is fascinating & inspiring. Perhaps one day it would mature enough for GNU Taler and the like.
Pay no attention to those stablecoins over in the corner.
The name implies they are stable, what more could anyone want?
The current crypto market activity has nothing to do with crypto news. The macro-economic state of the world is one where everything is going up.
More specifically now you can get actual real money by putting your savings in a bank account (and most people are struggling to pay the increased cost of living), there's less incentive to throw it away in a casino.
I suggest spending some time understanding why the cost of living went up. Clearly you live in a place with a relatively stable currency (for now).
A lot of the inflation seen in the U.S. is corporate profit-taking such as when the automakers used the chip shortages to steer buyers towards the highest-end models they prioritized for production while less profitable models were back ordered.
That matters because cryptocurrencies don’t help at all with the inflation consumers are seeing, while adding more personal risk and an exchange rate to arbitrage.
That's not how inflation works.
That's _part_ of how inflation works. The current inflation cycles is numerous different issues compounded (corporate profit seeking, money printing, supply chain issues, extremely high employment rate, pay increases). I know crypto bros like to say it's only money printing, so they can point to their fake money and say "you can't print money here", but the world isn't so simplistic.
It is. If you’ve never learned economic except from cryptocurrency marketing material, inflation simply refers to the prices of goods and services increasing, not any one specific cause. That can happen due to real changes in demand or supply, government policy changes, or other factors like changes in the labor market. It’s key to understand why inflation is happening because that tells you both whether it’s a problem - almost all serious economists think modest inflation is good for keeping the economy moving – and what kinds of fixes might be needed. For example, a crop failure will cause a spike in prices but if you don’t have reason to expect a late frost to happen again you probably don’t need to make structural changes; if some industrial component costs more because mines are running out, you might need a larger intervention.
In this case, prices went all over the place during the pandemic and the question is how they recover – companies are a lot quicker to raise prices than lower them and if you look at the business press there were a lot of record profits reported - the most since the 1950s when American companies were reaping the profits of uninterrupted production capacity selling to post-WWII Europe:
https://www.bloomberg.com/news/articles/2022-08-25/us-corpor...
The St. Louis Fed estimated 60% of the inflation in 2021 was profit-taking:
https://www.npr.org/2023/05/19/1177180972/economists-are-rec...
The story in Europe is similar with roughly half:
https://www.imf.org/en/Blogs/Articles/2023/06/26/europes-inf...
You have an interesting worldview. Corporations take profits to pay their employees. They do this with or without inflation and always have.
How would a crypto "help" with inflation? In the same way the Dollar "helps" with the inflation of the Euro?
Cryptos don't add to personal risk, people do that. If you think cryptos are making an impact, you should understand that the entire crypto economy is a rounding error in inflationary impact.
What's that got to do with it driving people away from speculative assets?
5% annualized on 4% inflation is a joke. I don't consider "high yield" savings to be any kind of strategy.
If you have a mortgage, it ain’t half bad
Real rates in the US are at the highest level since before the GFC, they’ve basically gone from negative to >2%.
I'm curious to see how BTC will fare. We've only seen the 4 year halving cycle play out during a secular bull market so far.
There were reward halvings in 2012, 2016, and 2020. I thought the 2012 halving was the most uncertain, as it was the first and the market had little liquidity.
https://www.fidelity.com/learning-center/trading-investing/b...
FTT to the moon! Oh wait.
Actually ... since the trial ended, FTT went from ~$1.2 to ~$3.5 and has stayed up. I have no idea how these people expect it to pay out. Even if FTX restarts, they will almost certainly cast off such liabilities with the approval of the bankruptcy court.
This is how the greater fool market continues to flourish.
Tether is the last domino
I'm absolutely astonished by this. He lives in the Middle East, which does not have any extradition treaties with America. Granted, he might transit a country that has a treaty, but I'm really shocked that he would give him. What did they have over him? Maybe it was China…
Binance is also paying many billions in fines to the US and exiting the US completely. I also don't understand why - if they're presumably headquartered outside of US jurisdiction, what are they gaining by paying exorbitant fines?
They're also further inviting every country they've ever had a customer in to levy huge fines against Binance.
I suspect that the threat of something similar to Global Magnitsky Sanctions (cutting them off from all dollar-denominated accounts everywhere) is a pretty big stick to use in negotiations. For a financial firm like Binance, access to bank accounts that can send dollars to and from US firms is pretty important, even without any US customers at all (losing access to banking in France, Cyprus, etc. would be equally difficult for them).
The US has recently (gradually over the past 20 years or so) started to really weaponize access to dollar-denominated accounts, essentially conscripting all the banks that want to do business with American banks into service of American foreign policy goals. This started in the aftermath of September 11th, for terrorism, then spread with the Magnitsky act of 2012 to include international corruption, and has slowly spread to more and more areas. So far the US has been somewhat judicious about using the tool- they seem to be aware that if they use it too often people will eventually just build ways around it- but it is a pretty big threat to wield against a company that absolutely needs to do business with somebody's banks.
Btw - I never found a good explanation why all USD transfers need to be routed trough usd banks. Google is quite silent on the subject - is it common knowledge or too obvious?
They don't.
However when you're talking about billions, it's difficult to keep them in anything but US treasuries.
not common knowledge I think.
all usd swift wires get routed through 2 of the major banks - think it was JP Morgan Chase & Wells Fargo. this allows them to check all of these transfers for aml/cft and other sanctions blacklists.
heard this from a guy who works closely with Tether so i'm sure he'd know well
How would you envision it work otherwise?
He lives in Dubai. What's the point of having money if you cannot escape that giant mall?
Dubai can offer an INSANELY AMAZING lifestyle for billionaires. Like, anything your debaucherous heart desires, forever. No consequences.
You can get an insanely amazing lifestyle in many countries as a billionaire.
But you are still in Dubai. A cool skyscraper filled with water for diving, but also bus stops with AC.
Imagine you’re a guy with many billions of dollars. Would you pay a few of them in order to not be an international fugitive for the rest of your life?
As another person pointed out, he may have seen the catastrophe that SBF created, and decided cooperation was the best way to avoid that. Perhaps I was shocked due to Zhao's general hubris.
He does face 18 months in prison with the sentencing in Feb.
Just because a government doesn't have an extradition treaty doesn't mean they won't extradite. Most countries with non-extradition policies only apply them to native-born nationals and sometimes citizens in general. For some random foreigner, it depends entirely on the geopolitical situation.
Adolf Eichmann says hi.
Eichmann wasn't extradited (because Israel knew Argentina probably wouldn't agree based on previous history, they didn't even try not to tip him off), he was kidnapped by Mossad operatives and smuggled out of Argentina while drugged.
He lives in the Middle East, which does not have any extradition treaties with America.
He lives in Dubai, within one of the US's closest allies in the region. I'd be worried.
There are so many people who do not want to show up in the US (or elsewhere) and are living in Dubai that I would not be too worried. There is a full spectrum from former businessmen to current warlords.
Dubai has a lot to lose by damaging its reputation as a safe haven for wealthy exiles. My 2c.
Dubai extradites hundreds of persons every year, including to US.
They have even more to lose by creating an image of criminal safe-haven.
https://www.bloomberg.com/news/articles/2022-06-10/uae-ramps...
Binance does a lot of business in the US. Probably in exchange for paying fines etc they will be able to keep in operation. I assume CZ himself won't suffer much. The Bitmex guy pleaded guilty of not enforcing AML properly and ended up with 6 months house arrest at home.
It seems like they got a deal where they can pay a fine and continue doing business in the US.
If you were him, why would you lose ~20% of your customers when you could just pay a fine and keep going? Sure he steps down, but he still owns the company.
He lives in the Middle East, which does not have any extradition treaties with America.
Some Middle Eastern countries have extradition treaties with the US, but, more relevantly, a number of countries have legal extradition processes not dependent on treaties, including the UAE, the country where he lives.
anybody else have issues with archive.is lately? Tried two computers multiple browsers and all I get is a never-ending security check, sometimes with a captcha to really laugh at me.
Its cloudflare dns
As in 1.1.1.1? I don't use 1.1.1.1 for my DNS provider and yet I still get the never ending validation loop.
I am on Google Fiber though, so I probably use 8.8.8.8 without explicitly meaning to. Perhaps this is a problem shared by both Cloudflare and Google's DNS proxies?
If you’re on iOS / Mac and have Apple private relay that would also use 1.1.1.1
Oh interesting, good to know. I don't use Apple private relay so that wouldn't be the problem for me.
I use a Google mesh network and get the same issue, which I assume is related to it using 8.8.8.8 by default.
It's not Cloudflare, it's the owner of archive.is intentionally messing with CF DNS so you can't access the site if you use it.
Just put the fixed IP addresses for the various archive.?? domains in your hosts file. This completely resolved the problem for me.
can you paste the relevant /etc/hosts lines
IP addresses might vary depending on geo location or time. Here is what I get from DNS currently, that you can put in your /etc/hosts
51.38.69.52 archive.is archive.today
41.77.143.21 archive.ph archive.li archive.vn archive.fo archive.md
And if all else fails, install Tor and access their site at archiveiya74codqgiixo33q62qlrqtkgmcitqx5u2oeqnmn5bpcbiyd.onion
Even easier: Switch your browser's DNS-over-HTTPS configuration to another DNS provider. NextDNS works OK for me.
Great suggestion. Have just done this now too.
For Windows users, YogaDNS is a great little app for managing DNS configuration. Can set up DNS rules depending on domain name etc.
I actually use PiHole and added Local DNS entries for the archive.* domains in my PiHole config to fix the issue across my local network.
Yes! Only happens on archive.is for me.
Has happened with various archive.* for me
To fix this in Firefox
Settings | Privacy & Security | DNS over HTTPS | Increased Protection | Choose Provider | NextDNS
Same
I think it’s more general than this, but I have a hunch that iCloud private relay sets off the security gremlins.
no problem for me on nextdns
I have a lot of trouble when I use the search on archive.is, even if I use different DNS providers.
One trick that might help: I have found if I use a bookmarked page from archive.is, I can get to that. From there I can put in the original URL in the "Saved from" bar, and hit "Search", then I can usually get to an archive of the article.
He'll pay $4.3bn in fines and likely be sentenced to probation or short home confinement instead of prison...in exchange for not being a US fugitive.
He'll step down from Binance and live the rest of his life with billions. Sounds like a good deal :)
What billions will he wind up with?
Binance did a lot of fraud and money laundering. Clawbacks are coming. There will be no fortune when the legal system is done with him.
It's obviously just speculation but someone in his position could very easily siphon off a few million in BTC/crypto at the very least, and almost impossible to detect/trace if done well
The second half of money laundering is you need a way to pretend to have income from a plausible source.
People will ask questions like "How do you pay for your groceries?" and "Where did you find the money to buy a $37M penthouse?" and your paper trail needs to convince people the answer isn't "With the billions of dollars I embezzled."
I understand your point but I feel like even a 10 year old could come up with 100 plausible excuses.
Many of them end with "Consultant", "Collector", or "Trader".
Most of those only work at a certain scale: if you launder $500, you might be able to say some people bought your comic book collection at a garage sale and get away with it. Try that with $1M and you’re going to start getting requests for evidence of your collection, how it got to have so many high value items, etc. If you’re claiming consulting revenue, then you need clients and a justification for what kind of legal work was worth paying that kind of revenue for – make the case that your advice is worth $1k/hour and you still need to be showing a year of full time work to launder a million dollars after taxes, and it’s going to be suspicious if the invoice is just “I’m awesome, pay here” with no details about such valuable work.
Every few years there will be some story about a cartel banker getting busted and one of the things which will usually stand out is that they had a bunch of people working for them, and found some legitimate businesses which had large enough volume to hide millions of dollars in criminal activity. Setting that kind of thing up isn’t usually a one man operation.
Also, it doesn't make it easier if you're a person well-known for maybe having access to billions of stolen dollars.
For whom did you consult? What collection did you sell? What trades did you make, with what starting capital?
If you can't answer those questions -- questions the tax man at least will expect you to answer, and probably other people as well -- you might as well say "I found money in the street."
Husband :)
What billions will he wind up with?
You can pretty trivially check Binance's declared funds here: https://www.binance.com/en/proof-of-reserves
By my calculations they have >$6 billion in excess of customer deposits. Since he owns Binance, he principally owns those profits.
Declared does not mean real. There have always been questions about the veracity of that "proof of reserves".
https://qz.com/binance-proof-of-reserves-solvency-1849884404
Do not forget. Binance operates in a space full of scammers and fraudsters. They've already admitted to money laundering at scale. After that, the question isn't whether they are dishonest. The question is how dishonest they are. The history of other crypto exchanges suggests that the appropriate prior we should start with should be heavily waited towards Ponzi scheme.
For a purposeful human being, that is also a miserable life.
Pretty much like you cannot eat your favorite food anymore and have to settle with "the next best" (philanthropy, maybe?)
Adam Neumann is still getting huge financing. There is always a way to keep hustling.
... for now. As interest rates stay above stupidly-low levels, he's not going to be able to pull the capital he used to.
Haha, I was actually referring to being a US fugitive as the miserable life, which Zhao obviously wants to avoid.
Zhao can do new things with his billions. He can start new companies, work in new markets if he wants. If he can escape China's clutches with his money, I assume he can travel the world.
I think he's relieved that he won't get lifetime prison, and even years in prison.
Living at the top, to having no freedom must be very, very hard to stomach. I would take the deal too if I was CZ.
Giving up some "power-grab addiction" for 100% freedom (and being a billionaire still), seems very good for him.
After all these recent shit regarding crypto currencies in the US, you don't need a full brain to figure out that there is a huge hole in the system.
It is also amazing to see that CZ managed to walk away free of any jail time, kept most of his assets gathered by his con job.
FWIW, CZ is (and was viewed as) a good actor in the industry. He did a lot of good not only for crypto adoption but for access to better fiat currencies for people in countries with hyper-inflating collapsing system. comparing him to SBF (like many do) is absolutely not fair. he fcked up on AML front for sure and he is going to be punished rightfully but he did just so much good for people that he will stay remembered is positive persona. hero for many.
So there is good con and bad con?
Not adhering to AML isn't exactly a con
It is if you expect to profit from it
He is not a con. At least there is no indication yet.
Who did he con? Binance wasn't found to be a rug and don't think it will be. He let people move money around freely and didn't obey anti money laundering laws. So maybe his service benefited "bad guys" as deemed by the state.
So yes there is a difference between gambling away deposits and allowing someone to use your service without taking their name and social security number and reporting it to government authorities
most of his assets gathered by his con job.
How did he con you?
Did someone force you to use Binance?
Do you have evidence that he conned someone?
I saw a friend being added to a Binance WhatsApp group with tens of actual Binance users, clearly violating GDPR, where bots (you could tell by the phrasing and the account name) and Binance moderators were chatting about how to invest and much money they made.
This was ~2 months ago.
That's obviously not what is meant by 'con', though. It's just composed of first gaining the trust of someone and then defrauding them. Forcing has nothing to do with it and would likely rule out the application of the term, since trust is an integral part of all cons. There has been no fraud yet proven, so it can't conclusively be called a con. On the other hand FTX can be called a con, as there was fraud. This is just running an overly unregulated exchange, which is still a crime but isn't fraud. This doesn't end the investigations though, there is an SEC probe into fraud by Binance still going on so while it currently can't be called a con, really, it's also the case that it could be in the future. Also, it can technically be said that Binance has taken commission and largely made its money from cons of other people that they simply enabled and took fees on, which wouldn't necessarily be incorrect. Whether that's illegal depends on whether there was conspiracy – you wouldn't indict BoA for wire fraud just because someone else used them to do wire fraud.
I am not aware of evidence that he conned someone, but as a side quibble:
Did someone force you to use Binance?
Do you understand what a con is? People are usually 'conned' because they are tricked into trusting someone that they shouldn't, when people are forced we typically refer to it as robbery or similar.
Should all gambling companies be jailed?
Yes
Why would you say it’s a con job? The settlement is for not enforcing money loundering restrictions, not conning or scamming people. Binance seems to be reputable and hasn’t done any shady things with customer funds, as far as I know.
Did you every track their tokens? The price of movement of the short and long coins was very dubious. Binance at points allowed up to transfer and 1 BTC without registration, therefore enabling a lot of shady characters to trade on their platform. A lot of scammers and fraudsters were using binance as their preferred platform.
His sentencing is in February. According to the plea deal, he waives his right to appeal any sentence not more than 18 months, so he might still be in jail for a short period.
I have a question why is what CZ did different from what SBF did? I mean other than SBF getting caught over-extended in downgrading market they both did the same type of fraud.
SBF lost customer funds by spending them as if they were his own. CZ isn't accused of spending customer funds, he's accused of letting people trade too freely.
Binance is also accused of commingling funds.
Commingling is not losing or spending. I don't know why you used a "also" with a word that wasn't in the comment you responded to.
If you commingle customer funds, by definition you’re spending some of them when you use that account to pay business expenses, it’s impossible to differentiate them and makes several other types of fraud more likely.
AFAIK, commingling means that customer funds went into the same account as business funds. SBF is accused of then using those customer funds for business expenses, while Binance _seems_ to have stopped at just not separating them properly.
FTX took funds from customers and used them to run a hedge fund. When the fund did poorly, the customers' funds were gone, leaving a $8B hole. And they lied to customers about it.
Binance is very different. While it hasn't complied with various securities laws, it's never lied to customers and has kept customers' assets safe. They've also done steps to build confidence and be transparent like verifying proof of reserves:
https://www.binance.com/en/proof-of-reserves
While this report isn't perfect, it does show that wallets they control have as much in assets as they're supposed to, so we know they're not doing what FTX did.
What countries they hung out in, I think. The Bahamas is not able to hold of US pressure for very long.
It's the same violation of law but it doesn't quite look like the same kind of fraud. What's illegal is co-mingling funds; but you can co-mingle funds and do at least baseline proper accounting to make sure you're not too in the hole, vs. co-mingle funds and just straight up lie about how you're doing. Y'know, you're just a regular libertarian guy looking to get rich by breaking the law and not some coked-up wunderkind thinking he gets to save or destroy the world.
CZ saw the immolation of SBF and probably decided it'd be a bad move to do anything other than whatever his lawyers told him to.
CZ is much smarter, he didn't have any number 2s that could testify against him, and had already moved to a non-extradition country years ago. SBF thought he was cleverer than everybody and testified himself straight into a 8x10 cell for the foreseeable future.
Every move SBF made after his fall seemed extremely poorly thought out.
Not a hater, just processing the dichotomy of his genius image with his ingeniously ungenius self-immolation.
Lesson: Looking like you make lots of money makes you look very smart.
PR rules the day, especially when you're VC-funded and have to maintain the charade of subject matter expertise. Although you'd think his Stanford Law professor father would have at least attempted to duct tape his son's mouth shut when it became clear he planned to testify.
Both his parents are Stanford law professors and according to Kevin O'Leary, they teach compliance law.
"Everyone is a genius in a bull market"
Non-extradition doesn't mean the US can't request an extradition. It means each request is a one-off and there's not a process agreed on in a treaty.
Yeah he played it very well.
He's essentially getting off with a slap on the wrist, 50m is nothing given his wealth. The fines against the company are also a pittance compared to Binance's annual revenue.
The moral for white collar criminals is: if you get caught, just cooperate and pay up, and live up crime another day. The cost of the fines is trivial.
What about cofounder Yi He? If she's still in place then CZ stepping down doesn't mean much. I mean they have two kids together, don't tell me he won't be involved from the sidelines.
Exactly -- and CZ was always the fall guy. Yi is the mastermind.
Can you elaborate more? I do not know anything about Yi and how she is a cofounder.
Binance intentionally downplayed her role in the company (and her relationship with CZ) for a long time. Now she's seen as the most likely successor to CZ.
Here's a recent article
https://cryptoslate.com/reclusive-binance-co-founder-yi-he-s...
Here’s an article: https://coincu.com/110838-he-yi-co-founder-binance/
Incoming: third party compliance monitor (as always, run by ex DOJ people) and a more risk averse CEO. I hope this doesn't mean they eventually stop operating in the unregulated markets like China, Vietnam, Turkey, etc. Bet365 and DraftKings do it but for gambling so it's certainly possible to run a major respected company while ignoring the laws of countries that don't have the leverage America does.
China is not unregulated.
And all countries strong enough with their own fiat do care quite a lot to not having crypto in their country
Yeah. China is weirdly regulated with no standard.
One misstep and you wish you could be prosecuted in US instead.
Sorry, I meant places where Binance is not licensed. This is most of the countries they operate in.
would crypto investors or optimists consider the recent legal woes in the space to be a much needed clearing out of bad actors or a sign of falling confidence in crypto?
I'd say mostly a needed clearing. Confidence is probably recovering a little from the FTX collapse low.
Most crypto companies and investors are now AI investors / pivots. Don't think many are left to answer your question.
plead guilty to violating criminal U.S. anti-money-laundering requirements
This has nothing to do with crypto. What forces him to comply with supposedly US dictatorship? Apparently this was a move against Iran and maybe Russia.
The DOJ literally never said it was about crypto.
Everyone else assumes this has something to do with crypto.
Anyone have a non-paywalled repost of this article?
This was the one posted on r/buttcoin https://www.wsj.com/finance/currencies/binance-ceo-changpeng...
I just saw the headlines that Binance knowingly let ISIS, Hamas, Al Qaeda and Iran use their platform to launder money. Hot take: that doesn't seem great.
Yes I cannot believe CZ avoided jail time.
Takes a thief to know one? re: CZ's campaign to expose FTX and SBF.
CZ was not accused of theft, he was accused of violating U.S. anti-money-laundering requirements.
That's the price you pay for going after SBF.
Except he made hundreds of billions, paid a small fine for him, and serves no jail time.
Crypto, AVs, and AI. Is nothing sacred this week?
When money stops being cheap, people stop being lenient.
Never should have been that cheap to begin with, really.
woah! a guilty plea on the executive!?
this will probably wind up like Arthur Hayes, where its just probation
I wouldn't put a foot on US territory if I was him. Really wonder why didn't just wait it out in UAE.
Fines always feel meaningless. Who gets the money?
good for bitcoin
SEC is a joke . Failed to stop FTX or donor scams, but then make up accusations against a working exchange
He doesn't have that kind of money. That's VIP client money and he is going to have a target on his back.
Zhao isn't getting any jail time. Wonder who he rolled over on for that deal.
In a sense, this is prisoner dilemma at play here :-) Other guy confessed and agreed to testify against CZ. The optimal path for CZ is to confess.
Someone correct me if this is false but it looks like so far an overwhelming majority of crypto firms have been utter scams. I frequently get job offers in this space, always decline stating I don't want to be associated with organised crime.
for money laundering, few use binance. Everyone uses wallet to walllet USDT transfer. If US is serious about money laundering, they should ban USDT and the like.
I'm surprised no one has brought up the famous quote from this Binance saga:
'We are operating as a fking unlicensed securities exchange in the USA bro.'
https://www.businessinsider.com/sec-complaint-against-binanc...
Like this space couldn't get more ridiculous.
Whoa, I didn't even know CZ was under investigation
Smart move to avoid jail.
https://storage.courtlistener.com/recap/gov.uscourts.wawd.32...
Looking forward to reading the Plea Agreement.
Perhaps this was the final takedown necessary to pave the way for BTC ETF approval.