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Comment by ckastner | Hacker News Reader

> for one don't want government to be able to regulate / control / trace transactions.

This comes up every single time with cryptocurrencies.

Generally speaking: yes, you do. Most of the regulations surrounding financial transactions are there to protect you, and other market participants.

I wish crypto people had the chance to spend one day in a bank, working on regulatory issues. The vast majority of them are all about either protecting the clients, or the market, or society in general.

Edit: to expand a bit, most of that regulation is there to ensure that a bank doesn't screw you, or to enforce transparency for you, or to ensure that illicit money doesn't enter the system (which is also in your interest), etc.

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> Most of the regulations surrounding financial transactions are there to protect you.

Sorry but that’s not true at all. I have worked _more_ than a day on a bank environment and I can say that most regulations are weaponized by the US against their perceived enemies. Banks are dead scared of doing business with normal people from ostracized countries or activities and will not think twice before locking and banning normal people’s accounts to not provoke the ire of the US and aligned powers.

Screw your bank regulations, they are close to useless, besides maybe FDIC insurance.

A few years ago I bought a computer on eBay, paid with direct bank transfer, to the same bank by coincidence. When I didn't get my PC, and eBay told me to fuck off, I asked the bank to reverse the transaction and/or to provide me with the true person's details (it looks like ebay seller gave me the correct bank account number, but fake name). The bank told me to file a police report. I did. Sent a copy to the bank. The bank told me to fuck off.

End of story. sad_trombone.mp3

>When I didn't get my PC, and eBay told me to fuck off

I don't believe you for a second. eBay is like the most pro-buyer place in the universe. eBay would be able to reverse all of that no problem.

So if you aren't just making this up- then you must not have done anything properly to try and resolve it.

I call bullshit. Ebay ALWAYS sides with the buyer.

(Supposing you're a banker...)

If you extract a fee in exchange for protecting me from fraudulent behavior that is only possible in the first place because your institution has failed to keep pace with modern security practices, are you really helping me?

If what I want is transparency, is doing additional paperwork to create a (hopefully accurate) second source of truth for what happened really a better alternative than just letting me see it right there in the ledger?

Suppose you maintain the ability of my government to freeze my assets in cases where it decides that I'm an enemy. Is the protection I receive from its enemies adequately offset by the corrupting factor that this power will have on my government?

You maintain a system where the cumulative interest on a house purchase is often several times the cost of the house. Do you think that this amplifying factor on class stratification is going to lead to a society that's stable enough for me to plan to retire?

Whatever problems bankers solve for society, they solve them because otherwise we'll notice how superfluous the bankers are. I'm not saying that we should abandon our current system just yet, but I am quite happy that in cryptocurrency it finally has something to compete with.

> illicit money

there's something conceptually wrong about this.

currency is supposed to be fungible. 'good money' and 'bad money' are incompatible with fungible currency.

Could you elaborate a bit more on this? I see your edit where you highlight that the bank doesn't screw you and you have more transparency, but to my knowledge the nature of a decentralized cryptocurrency should have that same effect.

regulation (in the UK at least) means that in many cases, if someone steals money from my bank account, I get it back. Compare that with what's happened to many cryptocurrency exchanges where they have losses (e.g. quadriga) and the consumers who used them are largely out of the money.

If the bank overcharges me, I have some form of redress (e.g. the PPI scandal).

It's not perfect by any means, but for many consumers it's likely better than a world where, once the money's gone, it's gone.

Exchanges are not cryptocurrency.

From a financial exchange and price setting perspective, they are absolutely key to how the current cryptocurrency market works.

if Binance, Kraken, Bitfinex, Coinbase et al shut down tomorrow, what do you think would happen to the price of BTC and the rest...

On the other hand, at least in the US, we don't have much protection when banks themselves take money from our accounts. E.g. back in 2009, banks made $37 billion from overdraft fees [1], thanks to shady practices like reordering transactions to maximize overdrafts. There was a class action suit about it, but it was a token victory, with very little money going back to the victims.

This doesn't negate your point, but I would just argue that we pay a heavy price for our heavily regulated financial system, between bank fees, card processing fees, foreign transaction fees, trading fees, etc.

[1] https://www.npr.org/2012/02/28/147573947/the-fight-over-over...

If it's completely decentralized, that might be the case. However, as far as I understand it, one usually trades crypto on exchanges, so you're back to trusting one counterparty.

With regards to getting screwed, the history of exchanges getting "hacked" and all the crypto disappearing should speak for itself, and with regards to transparency, just look at Tether as an example of how you can avoid it.

Sure, it happens with banks, too. I still have no clue how Wirecard managed to do what they did, without getting caught, in face of credidble reports of malfeasance. But in general, it has become much, much harder to wrong others, or to be reckless. And that is because of the regulation everyone keeps decrying, as if somehow they were the subject of it.

"I still have no clue how Wirecard managed to do what they did"

And you still seem to have a strong stance on how great the current regulatory scheme is.

My strong stance stems from two decades of being on the pointy end of that regulation. The government audits I was involved with were all by extremely capable people; top-notch investigators.

That's a completely different matter. The operation of exchanges doesn't have anything to do with the operation of a cryptocurrency. You need exchanges only for trading, not for using a cryptocurrency.

In theory, you are right. In practise, govs are basically big robbery machines which are more interested in their own property and influence than me as a citizen (and as a human being in general).

For example it can be VERY tricky in most countries to move all your wealth crossborderly without any intervention or tax (even you if have paid all taxes from your profits) from the gov. That's because even the most capitalistic countries don't truly respect private property concept and consider individual's property as their own.

Crypto partially solves this. You can move equivalent of billions of USD through the border in a minute for negligible cost. However, it won't worth much if you still will be imprisoned for that. So, basically, potential anonymity and privacy researches in crypto as well as non-regulation are good things.

Because even democratic countries show themselves as pretty barbarian ones, when there is something against their interests (Julian Assange is a good fresh example).

LOL, when I meet some people working for banks they usually complain about all the regulatory compliance they have to do and how pointless it is. Doesn't seem to me like working at a bank helps to see how necessary all that is.

A lot of people complain about having to maintain secure passwords and other IT security measures, too, but that doesn't invalidate the measures.

I'm first to agree that the regulatory burden on banks has gone too far, but all too often, people not seeing the point behind compliance frequently do so for the reasons as above (they don't understand it), and jump to conclusions.

If your friends substantiated why they believe so, please do follow up.

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