Similarly, most public blockchain-based financial products are a disaster for financial privacy; the exceptions are a handful of emerging privacy-focused blockchain finance alternatives, and these are a gift to money-launderers.
Damned if you do and damned if you don't.
The existing, centralized electronic payment systems are a disaster for financial privacy, and it'll only get worse with CBDCs.
If you try to make something private, then you're helping money launderers, criminals and pedophiles.
Therefore, the message from the incumbents:
Shut up and embrace the unfolding panopticon, otherwise you're a bad person.
Also, we reserve the right to dictate what you spend your money on and if you want to donate to causes (e.g. Wikileaks or truckers) that we don't approve of, we'll block your bank account and cut you off from the system.
Lastly, we reserve the right to manipulate the money supply. It's enough for you to know that we are experts and have your best interests in mind. You don't need to concern yourself with how much money there is, how its supply is managed or the potential negative effects of our manipulation, you wouldn't understand the implications anyway.
Surely there is a middle ground between "every single transaction that has ever occurred in the history of the blockchain is public and visible to all" and "no transactions are ever visible to anyone including governments investigating crimes that have exercised due process in obtaining warrants and subpoenas".
That's the status quo. A handful of entrenched banks consume all the data and share with state officials when asked (and increasingly advertisers). In return, every 10 years or so, there is a big bank bailout. If they get in trouble trillions in newly created dollars are used to buy assets the banks hold on their balance sheet to avoid a panic.
Yes, and that middle ground is the public blockchain. The transactions are visible but the identities of the endpoints are not. That leaves discovery of those identities up to the investigatory bodies following due process, whether through forensic blockchain or other methods. The blockchain is public but anonymous.
Unfortunately this is a problem of electronic money. Physical money is hard to track in small quantities, but as the quantities get larger it becomes more obvious and harder to hide the suitcases full of cash. (Or, in the Iraq invasion, C130s full of cash: https://www.theguardian.com/world/2007/feb/08/usa.iraq1 )
Electronic money of whatever form is equally trackable regardless of the value of the transaction. That forces a world where either you can drop country-destabilising quantities of money anywhere without any law enforcement or every microtransaction ends up in the security services database.
Anonymous billions are all fun and games until the second plane hits the tower.
>If you try to make something private, then you're helping money launderers, criminals and pedophiles.
But you can't just hand wave concerns regarding money laundering and other criminality away. If you want to, you should just say "these things don't matter that much", but don't just avoid them entirely.
>Lastly, we reserve the right to manipulate the money supply. It's enough for you to know that we are experts and have your best interests in mind. You don't need to concern yourself with how much money there is, how its supply is managed or the potential negative effects of our manipulation, you wouldn't understand the implications anyway.
You mean to say that we live in a democracy. We elect our representatives, and they pick who runs these institutions. They are relatively "undemocratic" because when politicians are able to manipulate the interest rates directly, well things are perhaps even worse.
But you can't just hand wave concerns regarding money laundering and other criminality away.
I'm not, I'm pointing out the rhetorical techniques being used to delegitimize people who try to create privacy tools.
You mean to say that we live in a democracy. We elect our representatives, and they pick who runs these institutions.
It's a pernicious myth that there is some meaningful democratic oversight over monetary policy. Central banks are privately owned and/or structured in such a way as to not be beholden to political pressure (for the somewhat justifiable reason that politicians are even worse at managing monetary policy).
> It's a pernicious myth that there is some meaningful democratic oversight over monetary policy
Latinate words are not a useful cover when you're lying. All Western central banks are effectively a branch of government and are directly responsible to Congress/euparl/$local_variant, and are run by a bunch of politicians (the chair of the Fed is Powell and the president of the ECB is Lagarde, ffs).
The notion that they aren't beholden to the popular will is just ridicolous.
The paper linked in the Wikipedia citation for that line has the following in its abstract:
"The governance of central banks has two dimensions: corporate governance and public governance. Public governance is an institutional framework whereby the general public governs a central bank by and through the legislative and executive bodies in a country (...)".
"Independence of the central bank" means independence from direct intrusion by the executive branch, in the same sense the judiciary is independent from political interference.
The Federal Reserve (by far the most important one) is privately owned, as are Belgium, Greece, Japan, South Africa, Switzerland, Turkey and the Bank of Italy.
The ECB is owned by central banks of member states, some of which are privately owned.
Private ownership is any case one issue, the other is the fact the CBs are structured in such a way to be resistant to political pressure and (meaningful) oversight.
MMT requires the government to raise taxes once inflation starts rising due to previous money printing.
What are governments doing now? They are actually thinking of handing out more money to people to offset the effects of inflation (thereby making the inflation worse).
In other words, MMT requires governments to always do the right thing, which they don't.
That's ignoring the theoretical underpinnings of MMT which are by no means unassailable.
> MMT requires the government to raise taxes once inflation starts rising due to previous money printing.
That’s a common misconception. Have you seen any MMT economist advocate a tax increase recently?
Here is an excellent podcast with one of the most eminent MMT scholars Randall Wray discussing his recent publication on how to deal with inflation in the US currently:
MMT is widely regarded as not in agreement with the few things we’re pretty sure we know about economics, and furthermore its proponents generally refuse to publish actual models of the system they propose. Here’s a good examination of an MMT model that finds it somewhat lacking:
Do you have a PhD in Economics? The author does, so I’m going to take his understanding of it over yours for now. He is fundamentally right that MMT proponents are reluctant to publish models, while proponents of other economic theories aren't. If you won't publish a model because you're afraid it won't stand up to scrutiny, you don't get to be taken seriously.
> But you can't just hand wave concerns regarding money laundering and other criminality away. If you want to, you should just say "these things don't matter that much", but don't just avoid them entirely.
Actually you can. The war on "money laundering" is a total failure. Those laws costs billions of dollars in compliance, stifle competition, harm innocent people by excluding them from the financial system (estimated 1.7 billion worldwide) and don't actually stop criminals. There's a serious case to be made for putting an end to that war and diverting those resources to old school crime fighting.
In the UK, spending by financial services firms on AML compliance [1] exceeds all police spending [2] (£28.7 Bn vs £21.47Bn).
This represents a massive misallocation of resources. Public safety would almost certainly be improved if we doubled police spending by slashing AML burdens by 2/3rds.
Unfortunately it's hard for politicians address crime by raising taxes to fund real police but easy for them to attempt to address crime by increasing AML regulation, even if the latter is barely effective.
Trustworthy source you have: "The Cato Institute is a public policy research organization—or think tank—that creates a presence for and promotes libertarian ideas in policy debates."
I'm totally against money laundering. It takes the money away from us people for streets, school and healthy care.
And crypto is not providing any solution to this at all. So why not fixing that issue inside the crypto bro fan club first and than trying to replace our current fiat with it?
I think it's important to expand on the above because the above terms are tame. They give an impression of individual small time criminals.
It's North Korea, Russia, dictators and despots across the world, the cartels, organized criminals. Large scale Tax avoiders, human traffickers, drug traffickers, weapon smugglers. It's the organized big money criminals, both high and low class that fund the worst aspects of humanity.
Funnily enough, the people who live under dictators, despots, cartels and organized criminals often more easily realise the benefits of money that cannot be censored, cannot have its issuance be manipulated, is permissionless and very difficult to confiscate.
(Talking about Bitcoin here. Not all crypto applies)
Uhuh... and if the state, with its monopoly on violence, wishes to ban these currencies?
D'you think an "ordinary person" is going to risk being thrown in a gulag?
The problem with all these tech utopians is they think the relevant problems are technical: we've solved trust! (Between machines negotiating over a network). We've solved currency manipulation (oh its not a currency, it's an asset; and oh it can be manipulated by the 3 people who own 50% of it).
All the problems are social, not technological. And crypto makes all of them worse! By an order of magnitude worse.
Right, but you realise that a system in which the handful of early-stakers have all of the power; and in which no change or revision is possible; and in which blackmail & abuse of key-holders is necessitated to obtain their funds; and in which there is no economy of the currency to provide a grounding in value; and in which therefore it is the late-stakers who provide liquidiy to the early feudal lords... and in which ...
Is a worse situation, right?
Crypto is just fedualism with land=coin. Really. That's what it is.
It's about as anti-freedom as one can imagine. It's "freedom in form" and not in content. It's the freedom of the colonizer on new land, and the oppression of all else who live there. A necessary oppression, not open to revision, and executed by machine.
The issuance of Bitcoin is about as fair as one could hope for, for a non-state currency.
Satoshi advertised the currency and the start of mining beforehand, to give other people a chance to participate. There was no pre-mine.
In the early days there were faucets that handed out bitcoins for free.
Due to the boom and bust cycle of Bitcoin, many of the early holders cashed out instead of holding all the way to untold wealth. This is actually a nice side-effect of the early stages of Bitcoin adoption.
Very early holders of Bitcoin had to take the risk that the currency was somehow flawed and would go to zero, in some sense, the gains they made are a function of the risk they took.
The solution to wealth inequality is not to force everything to be equal, it's to allow both upward and downward mobility. The wealthy must be allowed to fail and not be bailed out.
Interestingly, bailouts are a common feature of the fiat monetary system.
I believe it's estimated c. 10 individuals own c. 50% of Ethereum.
A deflationary asset, like land for example, is not a good currency. As a powerbase, it's called feudalism. And that's not a good politics.
Power in crypto is radically centralised to the owners, not the users (unlike democracies).
One has to imagine people like you know this, or feel it, in the lust for the value increases to your own stake: that is, a lust that you are the one in control. Either way, you're playing the role of a daemon here, whether you realise it or not.
And the devil you are putting on the thrown are a handful of billionaires with power and control executed by a machine.
Thankfully bitcoin has no army, and all of this will fade into the obvious malicious stupidity it already is.
I believe it's estimated c. 10 individuals own c. 50% of Ethereum.
I wrote about Bitcoin, not Ethereum. There are lots of Bitcoiners that think Ethereum is a scam due to the large premine and larping as a decentralized project.
Either way, you're playing the role of a daemon here, whether you realise it or not.
And the devil you are putting on the thrown are a handful of billionaires with power and control executed by a machine.
The fact that you have to start using flowery religious language of condemnation appears to me an indication that you're running out of logical arguments.
Thankfully bitcoin has no army
That's one of its features, which proponents value.
> Lastly, we reserve the right to manipulate the money supply.
You may dislike the way central banks control and manipulate the money supply, but the reality is that an unmanaged currency is generally a disaster for everyone. To fulfill its role as a stable store of value, a currency has to be managed. The notion that an inherently deflationary unit of accounting (such as Bitcoin), or a completely unmanaged one, or one subject to "management" only through crowd action (as in true Defi) can achieve this is delusional.
The hard money standard (e.g. precious metals) is older and has outlived nearly all fiat currencies and will likely outlive the existing currencies.
What do you think will be worth more in 100 years from now? 1 US dollar or the equivalent of gold? How about 500 years? 1000 years? My money is on the gold.
Every fiat will be stable until it blows up. It will necessarily be mismanaged in a long enough time line, and based on history it really isn't that long.
I really don't get this line of thought. There's nothing "special" about precious metals in this regard and they only have value as long as people agree they have value. If we found an asteroid rich in gold and managed to capture it, would gold still hold its value? How is gold different than other rare earth metals with a (currently) limited exploitable supply like neodymium?
The only limits on the gold supply are technological ones. If one takes an optimistic view of the future where we become a space-faring species the future supply of gold is effectively unlimited.
Edit: As much as I'm a huge crypto detractor, at least Bitcoin's supply is limited mathematically, not just circumstantially. I would argue this is a bad thing, but if you're looking for something that will hold its value due to scarcity a durable commodity we dig out of the ground seems like a bad long-term bet. What if we discover a massive gold deposit?
> The only limits on the gold supply are technological ones
Right, there's nothing special about it besides the technical limitations. But what's the alternative? With fiat you still have those technical limitations (someone could create indistinguishable counterfeit money and dump it on the market). But there's also the political risk. Someone can get power at the Fed and decide to double the money supply over night. In fact, this has happened time and time again with many fiat currencies so its not exactly an unfounded risk. That's why the precious metal standard is lower risk for arbitrary manipulation
> With fiat you still have those technical limitations (someone could create indistinguishable counterfeit money and dump it on the market).
I think there is more than technological limitations to making this happen. Not only is counterfeiting considered a major crime by the state (who has a monopoly on violence), but the amount of "money" in circulation that has a physical representation is dwarfed by "money" that does not. Even if you doubled the physical currency in circulation you'd only increase the "monetary supply" by 10% or so. Plus there are huge logistics issues with moving that much weight/volume without getting caught.
> Someone can get power at the Fed and decide to double the money supply over night.
I think that if the function of government breaks down to this extent, I will have bigger problems than currency devaluation.
Currencies are not for hodling. You're supposed to spend them in the same year you get them, not compare their values to assets after 100 years. Their job is not to appreciate but to facilitate efficient commerce in civil societies.
Not sure why I should care what Gold, or anything, will be worth in 100 years, let alone 500 years. Economies turn over money supplies on time scales of a year or two, not centuries. Individuals and business need stability over planning cycles that run from years to a few decades at most.
And it's not like precious metal based currencies were stable over long periods anyway. There is nothing in the working of economies that guarantees that precious metals will accumulate in sync with economic growth and contraction. Trying to tie one to the other is every bit as much "fiat" economics as an untethered currency, like the dollar.
> To fulfill its role as a stable store of value, a currency has to be managed.
But they don’t optimize for “stable store of value” over “full employment” or “hidden taxation through monetary inflation”.
In fact, they have the opposite goal because “the velocity of money” is negatively influenced by people using money as a store of value. Keeping money in a savings account and collecting interest is bad for society because reasons.
Managing to a limited inflation that is close to the actual growth in the economy supporting a fiat currency, is managing the currency so that it represents a stable store of value. Managing for full employment is probably a cofactor in stability, although a less direct corollary than managing inflation.
I recall looking into plans from the 1970s to peg all central bank currencies into a 'basket of currencies' to avoid things like currency collapse. It would require international goodwill and cooperation, and would eliminate a lot of currency speculation games, so it was kiboshed. Basically it was a mechanism to eliminate volatility and to stabilize the global monetary system. Maybe someone else knows more about it.
This was called Bancor and was proposed by John Maynard Keynes at Breton Woods. It was the major idea competing against the US pushing the dollar as the core of the monetary system and the US had all of the power at the time so that's why we're stuck with the USD now. It's actually a pretty interesting story and Planet Money covered it.
In the least Bitcoin provides an option to opt-out, an alternative that puts some pressure on central banks to have sane monetary policy.
It allows people in Lebanon (~200% inflation), Zimbabwe (~700% inflation) and Turkey (70% inflation) to maintain the purchasing power of their wealth and to protect it from confiscation.
There are many other advantages of Bitcoin, but these are already significant.
> And yes sanctions against north Korea or Russia are more important than the inflation of Lebanon, Zimbabwe or Turkey.
Impoverishing entire nations by making sure they can't buy necessary goods and thereby putting them at risk of starvation is more important than other nations who are impoverished and at risk of starvation due to their currencies collapsing.
They are not collapsing just for fun without a reason.
The normal people of that country are btw not able to just buy crypto. After all someone still needs to take their money to exchange it and they need hardware and knowledge.
You sound like crypto would just solve those issues just because it's there.
However it can't protect against real falls in the purchasing power of bitcoin vs the currency it's commonly transacted against, the dollar.
I'm starting to think there's a good argument for the US treasury trying to export financial stability by making USD holdable globally. Except that runs into the policy problems relating to who's using it.
I agree with the other poster. However, the assertion that modern central banks have been a failure and disaster for the societies they serve is independent from any conclusions about Bitcoin.
So you also believe that a crypto system is inherently better than what we have?
Just because you believe money is printed as much as the dark secret super elite group wants it be printed?
Ah yes the sseg.
But yes we are still living in a democracy (a lot on hn at least) and the solution to all of these problems definitely are not getting solved by crypto.
You as an avg joe you are much better off with our current fiat system. The money they collect is used for a lot of things you depend on.
You might be totally ignorant to this but just switching to crypto doesn't solve a single problem.
“Trust a democratically elected government to act in the interests of its citizens” isn’t ideal, but I’m not sure “trust a combination of tech-bros and anarchy” is an improvement?
I’m working in a legal-but-taboo industry, where mastercard and visa don’t want to deal with us, which is a huge pain in the ass - but every time I’ve looked at crypto, it seems to fix one or two problems and introduce 10 more...
You're making a mistake in thinking that monetary policy is somehow democratic and that there is some kind of meaningful oversight over it.
Central Banks are privately owned and by design are meant to be "independent" of politics (otherwise politicians would use the money printer to continuously to buy votes, destroying the currency in the process).
There is no real oversight over central banks and nobody (outside of the peanut gallery) has meaningfully questioned the extreme central bank policies of the last 10 years or asked the central bankers any uncomfortable questions.
Beyond the Fed, which other large central banks are privately owned?
The Bank of England has only been independent for a pretty short time, for example, so central bank independence is a fairly new concept that could change again - because it is a political decision, not a law of nature.
EDIT: The ECB is owned by member-states's banks, some of which are privately owned.
In any case, private ownership is only one issue, the other is that central banks are designed to have very little oversight.
Saying that "we can change the laws" doesn't change that. It's not always easy or possible to change laws. When is the USA going to repeal the 2nd amendment?
So, outside of the Fed, there are maybe two more that have some relevance that are privately owned (Japan, Switzerland). The second most important one (ECB) is not.
And, of course, the ownership of the Fed (or the ECB) could be changed by changing laws (the Bank of England is an example here of how central banks might enjoy changing degrees of freedom).
Addendum: to say that it is not easy to change the law is ok, maybe it should not be. But to use some technology to get around laws where there is not enough social capital for change is a very tricky position. If that holds for law X, why not law Y? What if there is never enough social capital for change? Would it then imply a break-up of that society into multiple ones?
Conventional banking combines a moderate level of privacy with effective measures against money laundering. Why shouldn't we ask that crypto be judged against this baseline?
It's not clear that AML regulation actually is all that effective. It also makes it a lot harder for competitors to start in the banking and finance industry.
"Based on 2009 data, the UN, with US State Department assistance, calculated the global success rate of money laundering controls at just 0.2 percent (UNODC 2011, 14, 119, 131), but, as noted above, the confiscation rate might be 0.07 percent. In other words, despite ubiquitous money laundering controls, criminals retain up to 99.93 percent of criminal proceeds."
As long as banks can just pretend to protect my privacy, while they sell my data, I feel more comfortable about the type of privacy that cryptos like monero provide.
> Why shouldn't we ask that crypto be judged against this baseline?
Why shouldn't we ask for a reasonable baseline that really protects people's privacy and not just some corporate version of "privacy™"?
> effective measures against money laundering
Just yesterday, Deutsche Bank's HQ was searched over possible money laundering.
Usually yes, but some technologies are so powerful they do reshape what is possible for society. Things like birth control, the internet, military technologies like cavalry or guns, the development of limited liability corporations. These things are more powerful than mere laws in what they accomplished.
Privacy-coins could be the next big one. It switches accounting from being a tool of coercion (c.f. the famous case of the Canadian truckers) to something like air which just cannot practically be denied.
If politicians banded together and behaved like civilised adults then crypto would be worthless. But they aren't about to try that sort of radical change, so this tech might actually solve a lot of problems. With something like Monero I really do not see, at any level, how they could stop me doing stuff like donating to political causes I agree with. That is scary in some ways, but there is also reason to be optimistic.
I'd would say none of the technologies listed even closely approach the impact of social technologies such as rule of law, democracy, etc.
If your fellow citizens in aggregate really don't like what you do and want to stop you, the will eventually find a way. You want a society that does not police where money flows - which is a big change and there is no evidence that broadly people like to open the taps on things like terrorist financing, slave trading etc. So there will likely be some limits that societies like to enforce.
And of course they could attack crypto by taking over mining, policing any sale of hardware, making touching any crypto a felony, clamp down harder on any cause you want to donate to, etc. They might not win completely, but they might make things pretty uncomfortable for most that would want to use it.
Nobody likes homelessness. How is democracy going at putting an end to it? The list of similar examples is endless; democracies are forced to put up with a lot of stuff that nobody likes when everything that is tried turns out not to work.
Democracy is a very powerful technology, no argument there. But it can't overcome technical realities. It is better at adjusting to them and giving up when the cost gets too high.
Nobody likes homelessness, but do people care about it enough to vote for people with an agenda for it or pay for it to change?
And no, technologies do not freely diffuse through societies, some stuff remains pretty firmly in highly policed boxes when the cost of letting it run free is deemed to high (can you just go buy nuclear weapons, for example?). Who is to say that the cost of banning crypto would be too high - I have not seen the evidence for that (also not really for a ban, either)? That is a political decision, not a technical one. And, yes, there can be bad decisions with really high costs, no doubt.
> ...do people care about it enough to vote for people with an agenda for it...
Yep. Happens regularly.
> ...or pay for it to change?
And nope, certainly not. But crypto will fall into the same category - stamping out the ability to do the - rather simple - necessary maths would require horrific compromises that are simply not supportable. This technology has radically altered the power balance of moving funds around. Sure that isn't sunshine and roses, but at least we don't have to worry about so much about asset freezes.
I don't think asset freezes are high on most people's agenda in first world countries. And the developing world does not have the GDP to move how things are done in the large economies for now.
Sure it is. Every so often the government rolls in and reallocates wealth to the wealthy - eg, as happened in '08 and is famously memorialised in the Bitcoin genesis block. Dealing with asset shenanigans like freezes is exactly why the crypto project started. If you've got no assets then sure, ignore that. Otherwise it makes sense to start tallying the risks against government seizures.
Plus asset freezes are on the cards for shutting down protesting truckers. If we're living in a world where the Canadian government can attack truckers (of all people) with asset freezes why can't it happen to you or me? I don't see the much difference between myself and a Canadian trucker. I suppose I couldn't handle working hard for more than about 6 hours at a time.
Do you have any data backing up that asset freezes are high on most people's agenda? Where I live certainly it is not, doesn't even show up in any surveys etc. and the asset freezes at Canadian truckers are/were not really much of a news item (living in large European country). I can see that trust in banks has eroded a bit (still surprisingly high) but asset freezes or seizures are not a thing in the public eye where I live.
I can believe that for some people the topic is high on the agenda, but really "most"?
I think every time the subject comes up we find that people (not themselves homeless) do like homelessness, and regard it as a suitable punishment for failing to contribute to society, being mentally ill, or using hard drugs.
> the development of limited liability corporations
I generally agree with you but don't understand this example: the concept of an LLC is not a technology that stands against law in a way that forces the law to adapt but is a construct that only exists by the grace of law... like, what would it mean to illegally form an LLC in a world that didn't agree with such actions?
Ah yes, sorry. I may have left out a few steps in the thinking.
A country that doesn't adopt LLCs or some similar method of pooling risk will tend to get overrun by a country that does. So people can try to stand against the tide by not allowing pooled risk and capitalism, then 50-100 years later the capitalists role over them because the wealth gap has gotten so large there isn't room for meaningful resistance.
Kind of like what happened between the USSR and the US, or Europe v. All Other Civilisations. You can technically choose not to use the legal ideas, but that is really just choosing to be overwhelmed by more organised groups of people. Much like how a military that refused to use guns would get overwhelmed by one that does.
> how they could stop me doing stuff like donating to political causes I agree with
Like I said upthread, this lasts until the second plane strikes the tower.
The invasion of Ukraine by Russia brought a huge, unprecedented wave of financial sanctions. If cryptocurrency actually worked for private, uncensorable transactions, they would have shrugged this off and moved to Monero. Perhaps we shouldn't rule this out. But remember the level of law changes to privacy and surveillance rolled out after 9/11 as well. We've not yet seen the first terrorist attack that would not have been possible without uncensorable cryptocurrency funding; the response to that will be something to behold.
> move to a society that operates closer to what you want
This doesn't work. All countries are pressured to adopt the same compliance and framework. OECD, IMF, WEF, and other world organizations will successfully force same reforms everywhere.
What is your evidence that in aggregate citizens want what you want/dislike the current state? If that is not the case, you cannot claim that "countries are pressured".
It's undeniable that countries are pressured. Look at El Salvador and the unrelenting salvo of bad press they get over starting to accept Bitcoin as legal tender.
The IMF immediately told them that they would no longer be elligible for any IMF loans or financial transactions until they sold all Bitcoin they owned and rolled back the Bitcoin legislation. And the kicker, El Salvador bought and held XX million dollars worth of Bitcoin (last I checked), while their GDP was XX,XXX million dollars, and the loans that they roll were for X,XXX dollars.
There aren't many other players at nation state level like the IMF... so they can exert a lot of pressure on monetary policy. If you want another example, look at how the IMF dealt with Greece.
Yes, organizations do (and should exert) pressure when they give something, but is it done against the will of the citizens (i.e., government agreeing to things the citizens don't want. A vocal opposition is not enough to claim that)? A country is free to isolate itself etc. if the people there are happy with it.
You are not aware at all how Cyprus went down, are you?
The banking holiday was declared in Cyprus, banks and ATMs shutodnw, everyone local is locked out completely, meanwhile deposits were drained by the rich international depositors thru oversease branches that remained open.
Why do you love defending the indefensible so much? Take the L and move on.
How would you know what I know about what happened in Cyprus?
Was what happened the best possible result - probably not. But I would say that goes for all European responses to the financial crisis then - but that is not the same as being totally indefensible. The question has to be: what outcome could we have now that would be better and what should we have done then and could that have been done? And with Cyprus one issue is the smallness of the economy, which meant what a US might be able to do might not be possible for them on their own.
EDIT: and one of the issues in Europe certainly seems to be that broad, untailored measures are not very popular even though ex-post they appear to perform better - so popular opinion does matter
I can imagine that only a tiny minority of citizens was fine with it when Cyprus' government closed the banks in 2013 for a couple of days and took some additional percents of already taxed balances.
Who really would be fine with giving the government 10% of their money, so they can pay their gambling debts?
That has nothing to do with whether countries are pressured or not. The fact is, the standards from those groups are huge pressure on countries to conform.
They offer money, but with strings attached. Either the country conforms or it doesn’t get the money.
But do the citizens of those countries using those rules mostly object to those rules? Do Germans or Italians want different anti-money laundering standards, for example?
> Do Germans or Italians want different anti-money laundering standards, for example?
Yes. Germany is the highest user of cash in G-7 and has radically different views on privacy from other G-7/G-20 country, doesn't even have a centralized citizen register.
They have very little in common with Italy on many aspects, and certainly standards would vary as well.
But what does it matter? You think supra-national organizations actually care what some little people think?
Edit: German citizens are all properly in registers, more local, but very registered nonetheless. You need to have government ID by law. Plus there is a national tax ID.
Do tell: how do you think these standards are established? By performing surveys or some other democratic/rule of law/other ritual?
FATF is an unelected, undemocratic body, where you have absolute monarchies like Saudi Arabia and authoritarian states like Russia audit the free/democratic/morebuzzwords West.
Also, we reserve the right to dictate what you spend your money on and if you want to donate to causes (e.g. Wikileaks or truckers) that we don't approve of, we'll block your bank account and cut you off from the system.
There are some things that are plain illegal. If you’re laundering money, selling illegal drugs, running guns, funding terrorist groups, etc you run the risk of getting caught and having your accounts shut down.
We’re not living in a dictatorship (yet). There’s still due process and the justice system.
Lastly, we reserve the right to manipulate the money supply.
“In our time, the curse is monetary illiteracy, just as inability to read plain print was the curse of earlier centuries.” — Ezra Pound
If you’re interested in how money works you should read a book or two about it. It’s pretty interesting. “The government,” isn’t “printing money.”
Absolutely concern yourself with it.
The problem right now is that government regulators aren’t technically savvy enough to understand cryptocrap and it’s implications. They read what briefs they can but they face endless technobabble from lobbyists and “industry representatives.” The hearings with the US congress were something else.
Funny how people here assume we all live in the same country. There are lots of people on HN who live in dictatorships.
If you’re interested in how money works you should read a book or two about it. It’s pretty interesting.
Thanks for the condescension. Money printing is a colloquial term used to describe various ways in which the money supply is manipulated by Central Banks, they like to use terms such as Quantitative Easing (creation of new bank reserves that didn't before exist) and open market operations (buying assets with money that didn't before exist).
It's certainly increasing the maximum potential supply in ways divorced from any market mechanism. They are central planners and they're failing hard like central planners did before.
You bet I think those people act with my interests in mind, since I elected the people who appointed them (unlike random scammers in croin space).
The panopticon you refer to is called "human society", by the way. You cannot participate in one and maintain unlimited freedom. If you are an evil jerk who kidnaps my child or steals life savings from my mom I want to be sure your assets can be seized. If you want to build anarchy, go ahead somewhere else but I think you'll find yourself tired of it rather quickly (and likely get eaten by ruthless command economies).
If you don't think the system works, fix it. It is actually possible in a democracy, thankfully. Techno solutions do not solve the underlying human factor problems.
Reply that next time I ask "make up an entirely new system with the same human factor problems but now rogue actors acting with impunity, no oversight and fewer avenues to democratically influence them" rather than "fix it"
If you live in a democratic country, you actually have ways of fixing it. And no, you don't need to give up your freedom for blockchain panopticon in the process.
No, I live in a democratic country, where politicians make empty promises and either accomplish nothing or just line up their pockets. Like most democratic countries.
I know that's cynical, but welcome to reality.
I have long been disillusioned by the fact that people can have an impact on their society by simply electing someone that will totally be fixing the issues that have been plaguing society for decades, for real this time, pinky swear.
But hey, again, if you live somewhere that actually happens let me know and I'll board the next rocket.
It's not magic, it takes time but crucially this is not like authoritative regimes that censor all media, you have access to information and you can vote.
If there is no one suitable to vote for, maybe you can be that guy. And on flip side, if you think no one will vote for you, maybe your opinion is not aligned with the majority in your country.
My ego doesn’t, but I generally find it very valuable.
This letter is honestly not thoughtful criticism.
It reads like a group of academics and specialists annoyed they were too early to profit from a technology they spent a lot of time thinking about esoterically and avoids specificity in…well… any meaningful way.
It also makes no effort to segment the space.
If a critical letter created by supposedly credible experts in a field can’t spare a paragraph to delineate between DeFi, NFTs, L1’s, smart contracts, stablecoins, and whatever else is bothering them then I think it’s fair to assume they don’t know the difference.
And if they don’t know the difference then why are we even reading this letter?
It’s a waste of our time (and theirs) to try and unpack what is pretty clearly frustration at the fact that the effective application of basic research is all that matters for adoption.
I think (at its core) everything crypto is a novel economic incentive layer wrapped in a technology package.
This creates the opportunity for blazingly fast user feedback loops and incentive alignment that wasn’t possible before (for better or worse).
Taken from that perspective, this letter misses basically everything interesting about the potential of Crypto.
So.
Read it. Form your own opinion. And move on with your day.
> If a critical letter created by supposedly credible experts in a field can’t spare a paragraph to delineate between DeFi, NFTs, L1’s, smart contracts, stablecoins, and whatever else is bothering them then I think it’s fair to assume they don’t know the difference.
DeFi is a scam to let crypto gamblers avoid taxes on their gains by taking profits as a "loan". The space is filled with unrealistic interest rates, and in general is a scam. See stablegains as a good example of this fraud.
NFTs are essentially a way to do money laundering with "art". The market, as a whole, is predatory, and is dominated by artwork stolen from legitimate artists who didn't mint the NFTs. It's mostly already collapsed, and essentially no one is making money on secondary sales. The space is filled with wash trading, often by the trading platforms or their employees directly.
I don't see what L1s have to do with the conversation. No matter the layer, the same criticisms apply, because ultimately, they roll back to the L1.
Smart contracts don't actually fulfill their basic premise. They don't replace normal legal contracts, and they can't stay in sync with real world assets. Nearly every day one of these contracts is owned and everyone loses their money. They're also incredibly inefficient and expensive.
Stablecoins have proven to need very strict regulation, and in reality a bank charter should be required to run one. Tether alone shows that they're a very serious problem, though the recent issues with Terra/Luna also show their general problem.
The entire stack, from top to bottom, is built on unfulfilled promises, and their very existence introduces new, horrible problems for us to deal with. For example, ransomware is simply not possible at its current scale without cryptocurrency.
One does have to wonder if the level of vitriol around crypto would be quite so high if it was merely popular and had not made some people a lot of money.
Does one? Because that's a line straight out of the MLM playbook.
One might also "wonder" why the only people with positive things to say about cryptocurrency are those with a vested interest in its success. That's not true of any other technology.
I guess my speculation stems from a lack of substance to poke holes in?
Even going line by line beginning with the first real paragraph we find they launch into a classic straw man of rejecting the "industry claims that crypto-assets an innovative technology that is unreservedly good". Nobody with a whiff of tech acumen in crypto thinks or says this. Additionally, anyone not thoroughly anarcho-Libertarian also gets the need for guardrails to squash scams.
A scattershot of the other tangible claims in the paper feel pretty similar.
"Append-only digital ledgers are not a new innovation. They have been known and used since 1980 for rather limited functions." <- true, but the also can be said for the evolution of AI models and we see where we're finally at with those today.
"Blockchain technology cannot, and will not, have transaction reversal mechanisms because they are antithetical to its base design." <- quasi true depending on the chain, but also we can approximate reversibility with clever escrow-like transactions (I'm actually building this full disclosure)
"Financial technologies that serve the public must always have mechanisms for fraud mitigation and allow a human-in-the-loop to reverse transactions; blockchain permits neither." <- unequivocally stating blockchain tech can't mitigate fraud in ANY way is silly and reductionist. Deciding human-in-the-loop reversibility is the pinnacle of fraud mitigation is also pretty wild considered how much effort and resources developers just on HN put into removing humans from their process execution loops.
"Finally, blockchain technologies facilitate few, if any, real-economy uses." <- partially true in the present tense (similar to how everything has to be adopted before it reaches mass adoption), but glaringly narrow minded if considering potential uses. Anywhere there is asymmetric trust and power between transacting parties one can imagine the possibility of an application! Not to say its necessarily the best use case, but the lack of effort of consideration seems intentional.
There's more, but I hope this provides some context to my initial post
Today the global community of technologists sent a letter to Congress urging them to resist the crypto industry’s lobbying influence. The letter was signed by some of the most respected scholars and technologists in our field. And now we need your help.
Crypto fraud is spiraling out of control. So-called "web3" is not going great. Regulators are paralyzed and people are getting hurt left and right. It's on us as citizens and responsible engineers to help fix the problem we created by our inaction.
Crypto lobby is spending millions to tell leaders that crypto-assets are "innovation" and all fintech innovation is unqualifiedly good, no matter the human cost. Today we set the record straight on what computer scientists really think about blockchain.
"The claims that the blockchain advocates make are not true," said Bruce Schneier. "It's not secure, it's not decentralised. Any system where you forget your password and you lose your life savings is not a safe system," he added.
"The computational power is equivalent to what you could do in a centralised way with a $100 computer," said Miguel de Icaza. "We’re essentially wasting millions of dollars’ worth of equipment because we’ve decided that we don’t trust the banking system."
The externalities related to crypto investments are neither isolated nor are they growing pains of a nascent tech. They are the inevitable outcomes of a technology that is not built for purpose and will remain forever unsuitable as a foundation for large-scale economic activity.
Our call to action is simple. If you are a computer scientist or developer concerned about this issue, we're opening the letter to the wider tech community to sign and tell our policymakers that enough is enough, the status quo has to change.
> Today the global community of technologists sent a letter to Congress
Bullshit. As a member of the "global community of technologists", I sent no such letter to Congress nor did I appoint anyone to send a letter on my behalf.
I don't even see a point in addressing the same old anti-crypto arguments contained in the letter. The real story here is the presumption of these self-appointed "respected scholars and technologists".
> It's on us as citizens and responsible engineers to help fix the problem we created by our inaction.
Engineers don't fix problems by begging the government to create laws that will throw people in jail for using a given technology in a way they don't like.
I think, Because startup investment is regulated and not accessible to any average joe. Else, we'd be overrun with conmen trying to make a quick buck. Not that we have less of them now.
There's a reason random startups aren't allowed to make IPOs directly to the public, and attempts to circumvent this with ICOs got the hammer brought down on them.
Seems to be going great for Stripe [0] and Moneygram [1] and FIDE Online Arena [2], but obviously crypto-skeptics and crypto-maximalists will not tell you that. Perhaps these companies waited for this executive order: [3] to go through before getting back into using cryptocurrencies.
The reality is that both the hard crypto-skeptics and the crypto-maximalists will be disappointed in achieving their utopian goals of fully stopping crypto and also gaining full adoption of it.
Only a few of them will survive the test of time and further regulations.
> Seems to be going great for Stripe [0] and Moneygram [1] and FIDE Online Arena [2], but obviously crypto-skeptics and crypto-maximalists will not tell you that.
It must be going disastrously when your 3 examples of things going grate are a start of a pilot project, an announcement of a project and what seems to amount to a sponsorship deal. And you wonder why people don't speak more widely about it.
So those 3 projects I linked to have all been scrapped, abandoned or cancelled?, which would qualify your claim as what you described as 'going disastrously' assuming you have read the whole article and its links then?
Can you at least backup your claims on them 'going disastrously' and being cancelled, scrapped or abandoned rather than making very unsubstantiated and baseless claims? Since I have already backed up my claims with links that these projects are still alive?
> And you wonder why people don't speak more widely about it.
Or is it because these companies know that the ones they selected are suitable for their use cases and are compliant with regulations and are not part of this extreme 'all cryptocurrencies is scam, ponzi, planet incinerating' narrative that these 'technologists' are pushing?
> Since I have already backed up my claims with links that these projects are still alive?
No you did not. You provided a link to a closed pilot project that started a month ago, technically not alive and no way for you to know if it is going great. A link to an announcement of starting a project in the future, so not alive and no way for you to know that it is going great. Finally you provided a link to a "project" that amounts to nothing more than a sponsorship deal.
Yes I have. There is a problem with your goal-post moving, dodging questions and continuous denial as an attempt to escape my questions.
> You provided a link to a closed pilot project that started a month ago, technically not alive and no way for you to know if it is going great.
So "technically" it is not cancelled, scrapped or abandoned then and the project is still alive. Yes or No? Where is this 'disaster' you are speaking of since they are still launching it?
It seems you have admitted that it is still alive and going great by attempting to deny and shift the goal posts!
> A link to an announcement of starting a project in the future, so not alive and no way for you to know that it is going great.
In that link as of today, who is the partner that is using this crypto payouts product right now? Has that one been cancelled too?
> Finally you provided a link to a "project" that amounts to nothing more than a sponsorship deal.
And since then somehow they didn't use it and it was cancelled or abandoned, therefore a 'disaster' and they are not using it? My suspicions suggest that you read as far as the headline.
So not only you have just admitted that you're yet to read them, none of your responses are a refutation to my claims as you continue to dodge the fact that these projects are still alive and once again unable to give a single link to backup your own so-called claims of all of them going 'disastrously'.
This is the very definition of a shallow dismissal. You are trying to insinuate that people who believe crypto is bad technology and bad for society, are doing the equivalent of arguing that the web is bad technology and bad for society.
But 1) the arguments against crypto are specific to crypto; 2) the very people who are arguing against crypto are the same people who have been the most vocal advocates of an open web; 3) this is a dismissal from a technologist perspective of the finance industry's self-interested pro-crypto lobbying - there's no obvious parallel of an industry lobbying for 'pro-web' policy over technologists' objections that you can analogize this to. If anything, web-related regulatory discussions in the 1990s were the opposite - entrenched industries lobbying against technological arguments.
> This is the very definition of a shallow dismissal
Short and succinct is not the same as shallow.
> You are trying to insinuate that people who believe crypto is bad technology and bad for society, are doing the equivalent of arguing that the web is bad technology and bad for society.
I’m not insinuating anything, I’m explicitly saying that is the case.
> 1) the arguments against crypto are specific to crypto
“Crypto” is so broad, there’s no such thing as an argument specific to crypto. Are you saying all crypto-related data structures, protocols, and algorithms are de-facto bad for society (and thereby anything that stems from them)?
If so, that argument sounds blatantly absurd to me. And if not, then your argument is so non-specific it’s meaningless.
Who are you trying to fool with this? All web3 and cryptocurrency projects trace their lineage back to the Bitcoin paper, and they include or interface with some permutation on a blockchain modelled totally or substantially on Bitcoin's blockchain. Projects of that nature fall under the term crypto. Pretty sure you could figure that out just from the Super Bowl commercials.
Critics of crypto are almost always objecting to its use as a financial instrument, or as a way to technologically convert social relations into markets (as in the case of "play-to-earn" games turning MMO guilds into a peasant-lord economic relation, fun fun fun). There are already substantial, standing arguments against all of the meaningful permutations/additions to the blockchain technology (NFTs, DAOs, stablecoins, proof of stake...).
These arguments are not necessary because in practice every crypto project to date has been a scam, an inefficient implementation of something that already exists (either slower, more wasteful, or not fixing any of the problems that it points out in its traditional equivalent), or is just an unregulated security. The self-proclaimed geniuses that develop crypto projects have spent the last decade rediscovering all of the pitfalls that led to the present-day financial system they so badly want to disrupt, and losing gullible people's money doing it.
The core of crypto, in my opinion and explicitly in Bitcoin, is "trustless money" but crypto is only trustless in the abstract. We have to have trust that the developers of our coin didn't make any mistakes. We have to trust that the coin will not just fork if a rich guy loses money (like Ethereum did in the 2016 DAO attack).
If we want to build something complicated we have to trust that the smart contract developers are not malicious and made no mistakes. Obvious counter to this is that they are open source, but we're not talking about trustless money for programmers. Some will say that "the market" will figure out who to trust through adoption but in empirical reality this has not been the case.
I am not an economist, but basic observation also tells us that an asset that fluctuates as wildly as Bitcoin and other cryptocurrencies is also not good as a currency. Transaction are also slow and expensive, and any crypto project that purports to solve this problem may want to check out a similar little technology called "Visa".
We can hate the way central banking is done, but developers really need to come to terms with the fact that we have had far too many technological fixes for social problems. Many crypto projects promise many things, but I ultimately trust a central, predictable authority (even if it's corrupt) more than some guy operating in a field that, time and time again, just takes peoples money and runs.
I want to see crypto remain 100% legal but get taxed fairly, because everyone who is pretending it's the future will immediately liquidate their assets and leave.
Variable interest rate loans are very tightly regulated. You could argue 'not tightly enough', but personal loans in general are probably one of the most tightly regulated industries there is.
If they're legal at all they're probably not tightly regulated enough. They're certainly not well regulated enough now, you have morons on YouTube telling each other to buy investment properties with HELOC loans. IMO that's a far larger issue than people blowing money on worthless crypto tokens.
Regulators should take a look at crypto firms pushing 20x leverages derivative products on retail investors.
Regulators should pay attention to MEV and order flows on decentralized exchanges. Some blockchains are not permissionless to write to (proof of stake). As such, they are ripe for front running and forced liquidations of retail users.
Increased regulation around leveraged products would be nice!
The regulators are already asleep at the wheel in terms of oversight on traditional exchanges (or more specifically what is happening outside of them). Sure, additional oversight would be nice in crypto-land, but increasing the regulator's scope seems like wishful thinking to me.
With decentralized exchanges at least, all of the data necessary to audit what is happening is all public and instantly available... so maybe things will flip and the additional oversight for decentralized crypto exchanges will be trivial?
> Similarly, most public blockchain-based financial products are a disaster for financial privacy; the exceptions are a handful of emerging privacy-focused blockchain finance alternatives, and these are a gift to money-launderers.
Is this arguing both for and against the need for financial privacy at the same time?
No. Like all things connected to real power, the subtext is that the sovereign alone can setup "privacy-focused" banking for 'special' interests. Anyone else who attempts it is a rebel and may be drawn and quartered. Long live the lizard queen.
Does it have to be either? State the facts and let the reader decide what's more relevant for them. Only a totalitarian nightmare of absolute control could, in theory, avoid the risks that come with any kind of freedom, by taking away that freedom. It's up to you to decide to what degree your freedom is worth the risks that come with it.
> Is this arguing both for and against the need for financial privacy at the same time?
No.
It's a perfectly reasonable position to take. I want my transactions to be private to the world but it's reasonable that law enforcement has a method to investigate criminal behavior.
> I want my transactions to be private to the world but it's reasonable that law enforcement has a method to investigate criminal behavior.
If law enforcement has a method to investigate your behavior, its not private. You want to have your cake and eat it too. Either you enjoy privacy (and so do criminals) or criminals do not (and neither do you).
> If law enforcement has a method to investigate your behavior, its not private.
That doesn't seem to reflect how the world has worked up until now.
There are plenty of things that are private except with a legal warrant. There's an entire legal history of wiretap laws and circumstances under which law enforcement can open mail I'd invite you to look at.
It seems like you're making a sweeping argument against the legitimacy of the subpoena and investigatory power of governments. If a government cannot compel private entities to hand over evidence in criminal investigations, their ability to enforce laws falls apart.
I signed. I have worked in computational finance for 25 years--building mathematical models and managing their implementation. I have spent the past year anti-fraud modeling. I don't know if this qualifies me as a technologist. The leadership can decide.
Even if I didn't already have well-formed opinions on this topic, reading the comments here would be enough to convince me that "tech" does not speak with any sort of unified voice on this topic.
I wonder if we will start identifying factions of tech by the political orientations expressed by the technology in question.
One of the (many) problems with cryptocurrency is that it’s holders are financially incentivized to generate hype and get people to buy in to it to drive the value of their coins up.
Thus I am extremely skeptical of people with pro-cryptocurrency views on this website.
If I had significant holdings in crypto, you can bet I would also be on hacker news trying to legitimize and defend anything to do with crypto to get people to buy in.
This is also amplified by the sunken cost fallacy, and not wanting to admit someone convinced you to spend thousands of dollars on fake coins and an ape jpeg for your twitter profile.
I consider myself a centrist in this debate. I don't think "crypto" technology is one giant scam (though there is a lot of scamming taking place), and I don't think it has delivered on most of its promises either (I suspect this will change in time).
In your comment I read rhetoric that attempts to de-legitimize the other side by questioning if they are even authentic members of your community. Your comment is not "wrong" but it paints with a very broad brush (something I see a lot of crypto fans doing all the time). It certainly places you in one of two sincere-but-polarized political groups.
I wish more people would foster nuanced attitudes about topics such as this. It makes for more interesting discussion.
I agree that I am definitely on one side of the fence regarding cryptocurrency. And perhaps my comment was a little too inflammatory.
However, how do you approach a nuanced debate on this issue when one side has a financial incentive to promote their views and is liable to act in bad faith because of it?
Not to mention the proliferation of bots online making it extremely hard to trust that any online discourse is genuine anymore.
Not suggesting that half
of hacker news is bots, but it only takes a few to seed an idea in a community.
In this case you have a finance industry trying to get congress to give them free rein to experiment with crypto. They're asking for latitude around things like securities law, financial disclosure requirements, anti-money-laundering, consumer finance protection, etc. - with the excuse being 'we have to be allowed to explore innovative technologies!'
And what this letter represents is technologists trying to say, there's nothing sufficiently interesting here technologically speaking to justify granting that license.
There's simply no equivalent to this in 'internet' regulation terms. ARPAnet wasn't opened up to commercial use based on finance industry lobbying over the objections of technologists.
It's the other way around actually: Crypto is currently NOT covered by most of the things you list (securities laws, regulation etc). Coinbase etc just want to keep it (mostly) that way.
This is an important difference because really you should be able to explore tech without having to show up-front (to the satisfaction of a government agency or a self appointed group) that it is sufficiently interesting technically to be permitted.
Also, I don't entirely buy that Coinbase (specifically) want to prevent regulation. They've worked hard to position themselves as the regulated, above board, professional option in the space. More or Tighter regulation (but not an outright bad) would likely help them as they would likely already be compliant and other providers would either fold or close to US users or scramble to catchup...
The fintech industry is trying to frame the Overton window around crypto with various claims - including the claim that they are outside existing regulation, as well as that they don’t need additional regulation, and anyway they can’t be regulated.
They are and they do and it is; even in the US there are intelligence services in the routers and the FBI "seizing" websites. Truly unregulated anything lasts only until it starts causing large enough problems.
I feel like half of HN has taken crazy pills with crypto.
Cryptocurrency has been a energy wasting, grift enabling nightmare. It will (and already has) go in the history books as an example of the biggest Ponzi scheme amplified in the social media era.
I can’t wait until the world moves on. Until then I hope you all enjoy expensive ape jpegs.
I know that Monero or any other crypto won't be accepted as a "legitimate" digital asset by governing agencies, so this doesn't really impact crypto.
If bitcoin became a legal tender then Monero would have that bridge though, so I'm routing for it, but it doesn't effect crypto all that much either way.
So many of these "cryptocurrencies" everyone and they're dog loves are just scams. If they get legal support then governments will just have a new set of rich incompetents to bail out...
Not that they can't afford it.
Total US money supply ~21 Trillion
Total monopoly money supply (the boardgame) 20,580 x 250,000,000 = 5.145 Trillion
They have some to spare.
Real crypto will always be underground. That's where it's ment to be.
There's a lot of comments here and do far one thing which is missing to me the fact that we are seeing a classical libertarian playbook at play here: rail against the state while at the same time relying on regulatory capture. All state power and regulation is repugnant, except for the bits that benefit me.
It's especially ironic because of the ongoing rhetoric of the value of bitcoin &co being independence from the store of trust that is centralised government and regulations. If they are truly that unstoppable, I'd expect them to not waste their time lobbying the old system and simply build the glorious new crypto economy that's been around the corner for the last 13+ years. But no, instead we are making sure that the money inflow and cash out options stay secure, and keep trying to worm a redundant at best and useless at worst technology into as many use cases as possible in order to show potential and keep the line going up. I'm sure, once there is a decentralised Blockchain Startup talking some municipality of doing their barbers license applications or municipal bonds via NFTs both the value and the democratising effects will kick in.
Financial technologies that serve the public must always have mechanisms for fraud mitigation and allow a human-in-the-loop to reverse transactions; blockchain permits neither.
Human-in-the-loop is costly. Twitter, Youtube and card payments can't manage fraud mitigation well with all-kinds-of-humans-in-the-loop. Can't hurt to give the blockchain folk some space and time to innovate on cheaper, irreversible transactions.
If Washington can't resist oil money and gun money why would they resist crypto money?
Besides, tech experts aren't really the ones we should be asking about crypto. The ramifications of the technology blockchain has allowed us to build actually creates new paradigms in finance and human coordination, As a result, economists, sociologists and political scientists who are educated on web 3 technology are probably best placed to evaluate what crypto has to offer society.
This is fundamentally embarrassing to all involved, and will one day feel similar to if a professional software engineer signing a letter condemning Linux as "communist" and demanding the government stop it during the Microsoft heyday. If I had my name on such a letter today it would be something I'd cringe anytime I thought about it.
No amount of currency is going to work unless we acknowledge that every human life deserves certain basic rights, like a house, food, health, education, etc. If a job cannot provide these, then they are being exploited and we should stop the exploitation. No one is worth more than any other, and modern society letting this notion not be held first and foremost is a detriment and directly responsible for measuring people in terms of dollars and not inalienable rights.
Almost every single one of those things can be applied to both the internet and the traditional finance system. The biggest money launderers are banks. Bitcoin uses less electricity than the global finance sector (let it be known I do think it is wasteful, Proof of Stake is better). More scams still happen through banking and web 2. Crypto is an extremely small market for money laundering compared to other methods. While not pump and dump scams, the financial gatekeeping done by traditional finance to only give access to high yielding investment opportunities to accredited investors is just another way of keeping the rich rich.
As far as I can tell, crypto is no more cancerous than existing systems. It's just that all you see out of crypto as an outsider is all the bad stuff because anything creating real value is too heads down building to make a fuss or too complex for the average joe to comprehend yet.
I don't think the software industry has quite got its head around the idea yet that it is possible for our field to produce a technology that is as harmful as tetraethyl lead.
We kid ourselves that the worst thing software can do is a Therac-25-style bug. So long as it's 'just software', though, with no hardware interfaces plugged into actual living people, how badly can we possibly screw up?
That sense that 'well, at least we're not the tobacco or petroleum industry', puts a real limit on the degree to which software people are willing to engage with the ethics of what they do.
Once again, why are companies like Stripe [0], Moneygram [1], still using cryptocurrencies then? Perhaps they recognise that not all of them are like what you just described, and they waited for further regulations to be clearer and chose mature cryptocurrencies to use for what they needed?
Also why haven't the law makers in congress, the SEC and the White House totally banned all of them yet but are instead writing down regulations to determine complaint and non-compliant cryptocurrencies like in ISO 20022?
I know people skeptical of crypto are going to hate this and people who are in favour of all cryptos taking over the financial system will also hate this but I have to say it:
Not all of them are going to go away and only a few of cryptos will survive past regulations. That is the hard truth I'm afraid.
>Once again, why are companies like Stripe [0], Moneygram [1], still using cryptocurrencies then?
Because they want to be part of the current buzzword, just like every company throwing around "AI" and "machine learning". For the most part those companies are also fairly quickly converting any crypto into hard fiat, their risk is entirely minimal, yet the fees they are charging are quite profitable.
They're mostly acting as moneychangers, not crypto fanatics. And their adoption doesn't change the fact that you can go on dozens (hundreds?) of DNMs and buy child pornography and drugs from the privacy of your living room.
The vast majority of crypto is currently speculation/pump and dump and illegal commerce. Period. It is cancer, electricity-hungry cancer.
> Because they want to be part of the current buzzword, just like every company throwing around "AI" and "machine learning".
So 'But current buzzword'. Just like 'open-source', 'privacy', 'internet of things', etc and your point is? You still have not given a valid reason for those companies to drop the ones mentioned in the article I linked in my previous comment and instead did a very bold sweeping statement (and dodged my other questions). By now they should have drop those cryptocurrencies or technologies mentioned in the articles given what you have described is happening on other blockchains, and they still haven't.
Maybe they know and recognise that not all of them are like that. But nice try at generalizing all of them.
> For the most part those companies are also fairly quickly converting any crypto into hard fiat, their risk is entirely minimal, yet the fees they are charging are quite profitable.
Assuming you read both of the links in my previous comment are you sure it is fiat or was it a stablecoin? And why do you the risk is minimal? It plays into my point on why they both waited for regulations to become clearer. They will both co-exist under regulations, especially a few stablecoins; but not all of them.
> The vast majority of crypto is currently speculation/pump and dump and illegal commerce. Period. It is cancer, electricity-hungry cancer.
So from an absolutist statement of 'crypto is cancer', 'electricity-hungry cancer' and sweeping all of them under the same brush to now back-peddling to 'vast majority of crypto'?
I wonder if you have realised that the 'vast majority of crypto' is not anonymous but pseudonymous since anyone can trace where the money or illegal activity is going. If such criminals tried to cash out that money to fiat, the exchanges will disallow it with KYC / AML checks. I'm not even defending privacy coins that will also be subject to tighter regulations [0] [1] than cryptocurrencies that use a transparent ledger and the exchanges are already de-listing many privacy coins to comply with incoming regulations. [0] [1]
Once again, crypto and some projects are not totally going away 100%, but non-compliant cryptocurrencies and projects will wither away.
Damned if you do and damned if you don't.
The existing, centralized electronic payment systems are a disaster for financial privacy, and it'll only get worse with CBDCs.
If you try to make something private, then you're helping money launderers, criminals and pedophiles.
Therefore, the message from the incumbents:
Shut up and embrace the unfolding panopticon, otherwise you're a bad person.
Also, we reserve the right to dictate what you spend your money on and if you want to donate to causes (e.g. Wikileaks or truckers) that we don't approve of, we'll block your bank account and cut you off from the system.
Lastly, we reserve the right to manipulate the money supply. It's enough for you to know that we are experts and have your best interests in mind. You don't need to concern yourself with how much money there is, how its supply is managed or the potential negative effects of our manipulation, you wouldn't understand the implications anyway.