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Comment by lightedman | Hacker News Reader

I've been in prison and my first thought here is "Absolute Fraud."

My first thought for cryptocurrency when it first came out was "Oh, look, easy money if I felt like throwing my scruples and morals aside and actively participate in this!"

I'm still broke, so obviously I didn't sell myself out. Meanwhile many others I know who got involved in this are now facing IRS Audits and in one case criminal charges.

I'm somewhat glad my foresight saved me from ever making more than like fifteen cents and a couple 'free' pizzas off of this stuff years and years ago and getting potential charges. Knowing the disasters of a distributed database that works without explicit human permissions and checks like what we did in the late 70s, I dodged a big bullet, IMHO.

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I’ve never been to prison and cryptocurrency and blockchain have been my career for the past 4 years. Not sure we should be taking advice from your anecdotes. There is nothing illegal about cryptocurrency - New York even issues a Bit License specifically to allow it. Maybe you should read more about the industry?

Crypto reminds me so much of the dot-com boom in the late 1990s. Massive amounts of interest, amazing and potentially life-changing innovation, overrun with fraud they completely obliterates public confidence.

I’m not a big crypto guy, but a lot of the problems of it seem to be baked in: the decentralization of it attracts a slew of Libertarian types who believe that if someone gets scammed, it’s their fault. There has to be what, thousands of coins? How many are legitimate operations?

It sucks because the promise of the technology is held back so much by all of this fraud, and from what I see, people are so reticent to call it what it is because they’re financially tied to the sector. But there is really zero public confidence in this space - and even less in terms of realistic use cases for everyday people - that stories like this feel like another nail in the coffin.

Even the legitimate operations are overrun with incompetence. The lack of accountability and easy fundraising is a recipe for charlatans who have no business running a business.

Would love to see how much fundraising has covered fraud on the deposit side.

I guess we need to see one go public to find out.

You need to pay less attention to the ones that are running it like a business and more attention to the ones that operate as a decentralized organization building an open protocol.

Those projects tend to be fine until they get a marketing team, at which point they're a business no matter what they call themselves. I agree in principle though.

Blockchain provides the building blocks for a financial system that is independent of any legacy cruft - it's pure computation and math. Each feature added, such as stablecoins that always match $1 (google USDC), is another lego in the system that can be used by any other participant. Just as the dotcom boom crashed and wiped out many of the frauds, so too the crypto bust is removing a lot of the garbage from the industry.

I'm very optimistic on the future, and you continue to see companies and governments engage with crypto because it's simply better, whether they want it to be or not. More efficient, less expensive, faster, less red tape. Many wish it would just disappear, but it doesn't because it continues to be useful, and spider out to ever more industries and use cases.

It might take decade(s), but I work with individuals and companies that move tens of millions every day around the world without any bank interference. It's very clearly the future, the only question in my mind is how long it will take to overcome existing systems.

"stablecoins that always match $1 (google USDC), is another lego in the system"

That's not a building block coming out of crypto, it's the application of traditional finance to make it useful. And when you've solved all of the problems, the core technology ends up being pointless. But I'm convinced it will have an effect in the long run, because it will infect traditional banking and eventually in some unforseen way destabilize it. Just because it's so irrationally attractive.

I can't make heads or tails of anything you wrote.

Crypto is cash 2.0. It has many flaws, but it also does certain things cash can not. Some examples are high value transfers, long distance transfers, and easy accessibility across borders. You can go ahead and tell me this is only useful for criminals, but you'd be wrong.

"Blockchain provides the building blocks for a financial system that is independent of any legacy cruft "

A technology that is almost 40+ years old, free of legacy cruft. That's absolutely hilarious.

the dot com bubble at least had some good ideas and with it some of the foundation of what the internet would become. crypto has started with a set of ideals and promises but has been completely usurped by con men and bad ideas. you have to look really, really hard to find the good ideas.

This is a ridiculous comparison. I was around for the first dot com bubble as well and they aren’t similar at all.

In the late 90’s all of a sudden you were able to do incredible things for the first time, like search for and buy plane tickets without a travel agent, send messages to friends instantly without long distance charges, research academic subjects, order out of print books, sell and buy collectibles, share music instantly with anyone in the country. It was obvious that the web was solving tons of problems for people and delivering value.

It was obviously amazing. It was also over hyped and a magnet for fraudsters too.

When the dust clears it’s going to be obvious that outside of the nifty and genuinely value-creating use case of e-commerce for illegal drugs, the entire crypto “industry” will have proven to be completely composed of either naive speculators or outright criminals, with the latter having completely consumed the former.

"I’ve never been to prison and cryptocurrency and blockchain have been my career for the past 4 years."

I've been involved with 'blockchain' since the 70s when it was called Permissionless Distributed Database.

You're just perpetuating what we knew to be an untenable and unsustainable idea roughly 40 years ago. That in and of itself is dishonest to anyone with actual knowledge of the subject.

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