As Taleb said on Balaji Srinivasan's comment on Fed not communicating about the rate increases earlier. If crypto people feel that the losses are because of Fed's actions, then they should also agree that the profits are because of Fed'a actions.
I think a lot of people would agree with that statement. FED is responsible for a lot of profits, both in the equity market and definitely in the crypto asset market.
This argument format - "if X is responsible for a decrease in Y, then not X is responsible for any increase in Y" - is plainly false and silly in any case it is applied, including this one.
Isn't it obvious? If the fire was responsible for burning down the house, then the fire must have also built it.
Feels close to the theory behind homeopathy. If something can trigger some symptom in a healthy person, then the same something can revert it in a sick person. They just remove any trace of it from the medicine to increase the effect.
English isn't my first language either, and I know how confusing it can be, so let me help here.
Here is the quote from the post: "If crypto people feel that the losses are because of Fed's actions, then they should also agree that the profits are because of Fed's actions". As we know, Fed's actions have changed: from providing "cheap" or almost free money (rate was something like 0.08%) to much more expensive ~4.5% now. It wouldn't be a huge leap of reason to assume that at least some of the impressive growth of crypto was driven by insanely low interest rates. But that's just my opinion, feel free to keep comparing monetary policy to homeopathy.
I understand the point, and obviously interest rates influence pretty much everything and anything. Stocks, tech salaries, housing prices, infrastructure projects, unemployment etc, they are all affected by central banks.
But that's not all, otherwise they'd perfectly align with interest rates, and stagflation would've been impossible, just as whatever it is that we have now.
If you look closely, it's the idea that "if X caused Y, it must have also caused !Y" that I compared to homeopathy, not the idea that monetary policy exists.
The crypto industry has basically done a speed run of the history of banking and finance over the last decade or so.
But the safeguards and regulations that governments put in place for money are mostly absent for crypto. It should remain this way. I want to see how far crypto can go without government regulations and protections.
You're not making any real argument here, so I can't exactly refute it.
Proof of Work is a means of preventing any one actor from controlling bitcoin. Proof of Work is energy intensive, but the currency exists in a government resistant manner without the use of guns because of Proof of Work.
> Proof of Work is a means of preventing any one actor from controlling bitcoin.
No. It does not prevent majority attacks.
It has also been very effective as a mean to enforce an oligarchy of those who have the hardware and made billions, compared to those who did not and who were at the mercy of fluctuations. It makes sense from a perverse right-wing libertarian point of view, but it has nothing to do with democratisation or taking the power away from the government.
> those who have the hardware and made billions, compared to those who did not and who were at the mercy of fluctuations.
I don't know what you could even mean. Having hardware just means you can mine BTC. Miners still deal with price fluctuations, and in no way have they been able to control or print BTC.
> ...it has nothing to do with democratisation or taking the power away from the government.
If the government couldn't take limitless loans from the Fed which creates debt from nothing -- a fancy way of saying print money -- if the government couldn't print money it would have to tax for it's expenditure and would be naturally constrained in it's power.
I honestly can't understand any of your positions and can only believe you're incredibly uniformed about the reality of money, power, and the genisis of and technology behind many crypto currencies.
Yes, it's a funny joke and all, but really it is made to resist that as well. And what I mean by that is that it's a currency you can use without a bank and is not controllable by those with wrenches.
Effectively every transaction done today is done without guns or laws. I've certainly haven't had to threaten anyone with litigation to purchase a cup of coffee. To believe that there is chaos without both is a sad myth.
> The crypto industry has basically done a speed run of the history of banking and finance over the last decade or so.
Does that mean it'll eventually eclipse and live in front of the current timeline of banking, so we'll see banking and finance following the crypto industry at one point, repeating the same mistake that happens in cryptocurrencies?
This is a really bad comparison: ransomeware restricts your data involuntarily. DRM restricts the creator’s data at their request with your voluntary agreement.
Not really: that incident got a huge amount of backlash and cost them a lot of money because it wasn’t informed or voluntary. Outside of Sony BMG’s senior management, nobody thought that was acceptable.
Ah, it seems you're one of many who confuses "crypto" with cryptography and cryptocurrency. Cryptography is used for encrypting your files, not cryptocurrency. But it's a easy mistake to make so don't feel bad over it.
Literally the only reason ransomware is a thing is because of cryptocurrency.
Every oil pipeline, school, hospital, farm, old age home that's ransomed is 100% thanks to Bitcoin and its progeny. But hey, at least it's found a use case.
> One of the first ransomware attacks ever documented was the AIDS trojan (PC Cyborg Virus) that was released via floppy disk in 1989. Victims needed to send $189 to a P.O. box in Panama to restore access to their systems, even though it was a simple virus that utilized symmetric cryptography.
Attackers who encrypt files and demand payment famously demanded cryptocurrency, in part because of the "transactions cannot be reversed" property and the (pseudo-)anonymity.
As banking transactions can be reversed and are as opposite of anonymous as is practically possible, it would be (darkly) amusing if a traditional bank did that, precisely because the damage would be undone and the guilty parties trivially identified.
They're referencing the fact that crypto is famously used as a payment mechanism by entities that hold people/companies to ransom by encrypting their data against their will.
I suspect it means that central banks will issue their own digital currencies to enforce negative interest rates. That will break the lower bound and allow economic stimulation from deflationary conditions.
Crypto exchanges seem likely to persist in some form for the foreseeable future. After all, it only takes 1, as "mtgox" was showing many years ago, and Binance shows today, in the sense that it dominates.
And if we look sideways to other 'nefarious online activities' - even after literally decades of concerted efforts, jailings, etc etc, thepir^tebay dotorg is still perfectly present, exactly as pir^tebay-ish as it ever was, along with it's endless host of similars. The only way commercial business ameliorated their effect was, ultimately, to adopt the tech and approach, and be better at it - in the process, displacing the nefarious.
Binance is a centralized service which allows people to buy cryptocurrencies, but which is not strictly necessary to use in order to use cryptocurrencies.
People can use decentralized exchanges like Bisq if they want to avoid these issues.
EDIT: Remember how Hackernews was supposed to be a community which has a focus on software development, and thus finding technical solutions to problems of users?
Now it seems we're more about bashing people for using the wrong technology? Advocating for a technical solution to their problems is disapproved of?
Grocery stores aren’t necessary - you can grow your own food, dentists aren’t necessary - you can pull your own teeth, etc. It just seems like many people use exchanges and that’s what (at least partially) crypto is now.
Cryptocurrencies were meant as a "grow your own food" thing in the first place, they are supposed to be decentralized.
Hence it does not seem logical to go to a "grow your own food" subthread and wonder why it makes a point about store-bought food not being grown at home.
As with all things in life, a golden rule applies:
If you don't like it then don't use it, that's ok!
It seems more like a case of someone inventing tomatoes and getting mad that industrial farms starts planting them. That’s not tomatoes! It’s supposed to be decentralized!
Often the thing that’s envisioned by the creators is not the final say on market fit
Worse than that. It's like people whose fortune is tied up in tomato plants insisting that none of the people eating tomatoes or exporting them or making sauces with them should be considered anything to do with the tomato industry
If there were no exchanges to provide a friction-free way for speculators and suckers to buy Bitcoins and Bitcoin recipients to turn them into spendable cash, there would be virtually no demand to buy or accept goods for Bitcoins, and the supply of Bitcoins exceeding the demand for them would obviously render them useless as a "store of value"
The golden rule doesn't apply here. Criminals are actively using cryptocurrencies to commit many crimes including tax fraud, money laundering, and ransomware. That harms everyone, at least indirectly, even if we don't use cryptocurrencies ourselves. So tight legal controls are appropriate here.
To draw an analogy, I support the individual right to keep and bear arms. But I don't want criminals to have access to weapons, and we can impose some reasonable rules to prevent that.
At this point "Cryptocurrencies" are only a small, even substantial part of the "Crypto Industry".
The moment general population became aware of "bitcoin" as "something you can buy that'll get more expensive", the whole technology and ideals behind it were overshadowed by speculative investors.
Umm, you do realize that the purveyors of decentralized Ponzi schemes co-opted the word "crypto" from us serious minded folks concerned with cryptography?
Just because it is centralized, and thus does not follow one of the purported principles of some cryptocurrency enthusiasts, does not mean that it is not both correct and useful to call it part of that industry.
Also: A lot of cryptocurrency enthusiasts (although not all) want and have wanted cryptocurrency to get broader adoption and acceptance. Exchanges are how that is going to happen. If it does happen.
Looking for hard drives in the trash does not scale.
Most definitely. SVB had $3B+ of Circle’s deposits for USDC. Just covered dollar for dollar by the US Taxpayers. Can sell all those underwater bonds at face value while the taxpayers issue new bonds at 5%. Crypto just unbanked the banked with the help of the US Gov.
> No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer... Any losses to the Deposit Insurance Fund to support uninsured depositors will be recovered by a special assessment on banks, as required by law.
So "consumers" are always said to "pay" as companies "pass through" increased costs due to goods, regulations, etc., but that doesn't apply here to all the taxpayers who use banking and are subject to increased FDIC insurance costs? And taking underwater, low-interest debt on the books at face value costs taxpayers overtime through inflation even if we get "paid back with interest". Why don't private buyers want this debt? Because they'd rather have dollars to buy better paying debt which the taxpayers currently provide. The BTFP will rapidly grow over $25B and be used to recapitalize the banks at taxpayers expense.[1]. Someones got to pay for the unrealized losses if depositors won't take a haircut. [2]
So personally, I fundamentally disagree with the statement "no losses borne by the taxpayer," believe this is used to obfuscate the issue, and am sad to see our treasury play this game. But it is standard fare these days, especially when people think they are protecting us from a banking run and the next great depression. But my concern is these measures lead to more economic inequality, populism, and eventual political turmoil.
> So "consumers" are always said to "pay" as companies "pass through" increased costs due to goods, regulations, etc.
It isn’t always said, because it isn’t always true. If the business you’re looking at has profits, then it has pricing power, and the conditions for 100% pass-through don’t exist.
It is inescapable that tax payers will bear the cost of the insurance, if not directly through taxes than indirectly through increased banking fees and reduced rates.
