A second Bitcoin exchange collapses in Turkey amid crackdown on cryptocurrencies
cnbc.com
cnbc.com
Not saying BTC is that, but just because the government is against it doesn't mean it's suddenly useful
It would have been easy for Turkey to prevent this, but instead, they turn the victims into criminals.
Is there anybody of note in the Bitcoin space that has ever suggested that custodial arrangements of crypto should be completely without legal or technical means of protection for depositors?
No. But there is almost nothing that any government on earth offers for that kind of assurance to the consumer. Conversely, they have all established legal and technical means that they may confiscate deposits.
They’re not doing anything to stop this ‘ponzi scheme’. They’re just making sure they can profit from it.
One issue if bitcoin is that countries will block it because countries don't want to loose the co trol over currency.
It is also purely against btc not the idea of cryptocurrency or the thought of having one global trusty cryptocurrency.
My personal btc hatred comes from the huge energy waste though.
Something like this needs time.
Normal government does not monitor btc as closely as people on hn.
This is more about Erdogan destroying democracy and the secular state than anything else.
If bitcoin is inconsequential, why regulate / ban it? And why are institutional asset manager trying to figure out how to profit off of it? [1]
Well, is the answer not becoming overwhelmingly obvious?
[1] https://www.zerohedge.com/crypto/jp-morgan-launches-bitcoin-...
If you believe it's a speculative, ponzi scheme (not saying it actually is) where the money winds up in Singapore or wherever, do you want your population investing in it?
>[In 2018] Some estimates state at least 30 percent of South Koreans have invested in them. Simon Kim, CEO of Hashed (Korea’s leading crypto fund) told me that number could be as high as 50 percent among white-collared professionals.[0]
Would you not be worried about this?
[0]https://venturebeat.com/2018/07/14/why-south-korea-is-crypto...
Governments are probably worried about what "consequential" looks like. And they could be coming from a benevolent point of view (might be used to aid in the commission of a crime/evade taxes/etc), from a malevolent PoV (could be used to expatriate capital), or even from a position of ignorance, laziness, and/or position of weakness (we just don't want to deal with the BS, especially objections from large international trade partners).
The USA and China are powerful trading partners. If one of them says, "ban crypto," the smaller country is likely to comply.
Ah because they've agreed on so many things in the past.
What I mean is the USA and China force their laws on smaller trading partners. When the USA tells Vietnam that they need to pass certain IP laws as terms of a trade deal, VN passes those laws.
To a degree, this also happens with larger partners, such as Germany, but it's really noticeable with the smaller ones.
This is a gist of all anti-btc posts. Make up you mind people.
Or maybe BTC is a Schrödinger's new cat.
Replace "unthreatening" with "harmful" and you'll have a more accurate reason for governments to ban it, and no contradiction.
The other factor is crypto is a very easy way to launder and move money outside of the government's view so pretty much any government hates it from that perspective.
I so often here the complete opposite, that the blockchain is all public and provides no anonymity at all. No one can make up their mind on why they hate crypto.
That's the old narrative, now it's a "Store of value" and a "hedge against inflation".
- Not your keys, not your coins. Never keep in an exchange what you cannot afford to lose.
- Governments, especially tyrannical regimes that don't even need to pretend to respect human rights, will hamper your attempts at circumventing them at every step.
I wouldn't go so far as to declare the whole endeavor hopeless as some people have done here, only that you must be far more careful when covering your tracks. It's not a turnkey solution, there are few ways to get it right and a myriad ways to get it wrong, it sucks but it is how it is. If it weren't working, then they wouldn't be bothering trying to ban payments in crypto.
It's a mixed bag, because while multi signature key signing would help mitigate events in which a key is compromised or lost, it would also expand the attack surface. Some might argue that it's easier to obtain a user's login credentials (for instance, by exploiting an XSS on a site storing one of your keys, or by posing as a support agent who "verifies" your security questions) than it would be to trick someone into handing over their private key outright.
You do have a valid point though, in the long term it's unclear how well people will manage to secure their keys if they choose to take that burden entirely upon themselves. A natural disaster, for instance, could cause a lot of private keys to be lost. That being said, I would never trust a 3rd party to hold any of my private keys, because at that point they are no longer private.
I would maybe be comfortable with a 2-of-3 multisig between Switzerland, Singapore and US.
I'm already trusting 3rd party to hold my private keys though: it's a 2-of-3 multisig between 3 bank trezors (the banks have no idea what I am storing though, they probably think that it's just gold). It would be easier for a bankrobber to get the gold from the other vaults than to rob multiple specific banks in multiple countries.
Anyways you are right in that it's much better to require physical identification for retrieving large amount of money, and you get better privacy by the physical trezors.
You could never have crypto in an anarchist vacuum.
This seems like a strawman to me? You can be for replacing the world's monetary system with cryptocurrency, and still believe in having a government with police, roads, and schools.
Those people discount just how much underlying social stability matters, and how meaningless an executable contract would be in a violent environment.
>Those people discount just how much underlying social stability matters, and how meaningless an executable contract would be in a violent environment.
How did we go from "let's use smart contracts to enforce business contracts, rather than the courts", to "abolish the entire justice system"?
No one is incentivized to grease the gears of a democratic society. Nobody wants to pay taxes. But they are necessary to establish an environment of innovation, etc (to a point).
There's a reason the dark ages were called the dark ages.
That being said, I'd be curious to here pro-crypto arguments from someone “believ[ing] in having a government with police, roads, and schools”. This is especially interesting to me, because “school” appears in this list.
[1] which cannot really be qualified as anarchists IMHO, but that's another topic.
Is there something inherently contradictory between "a government should collect taxes and provide police, roads, and schools", and "the government shouldn't be entrusted with the ability to print money and/or dictate monetary policy"?
BTW, in most if not all developed economies, the government don't control the monetary policies, the central banks do (and they are independent from governments, by design because people against government intervention made it this way).
If you are rich and have 1000 BTC in various wallets, able to avoid capital controls, etc... why would you pay the 45% biden cap gains? Thus society loses out and rich whales get to hodl
Tax evasion, in the individual style you describe, can be detected in lifestyle choices and consumer habits. Generally, the burden is on you to explain how you've been able to spend more than your official tax records report.
Thus it will increase the problem of people benefitting from society but not paying back into society. Taking resources that would never be able to grow in a vacuum.
It's also unknown what the future holds in regard to effective tracing capabilities, retroactively, by law enforcement and agencies.
My view is based on crypto and society ‘as is’ today. I would have to imagine a different society, with a radical adoption of crypto, to support your argument. But I would if that was the case.
This seems a little non-obvious to me. Can you expand a bit on why?
It's not the government vs. a bunch of fringe individuals at this point.
But I'm saying that crypto is built on the stability and infrastructure that was created by fairly well-run and well-intentioned centralized govs etc.
That's a trivially true statement for anything that exists at all.
200 years ago you could have said "democracy is built on the infrastructure that was created by monarchies". Ok. So what? That doesn't ipso facto delegitimize the potential of democracy as a viable alternative to monarchy, and history would have proven you wrong.
Democracy is self-sustaining. Crypto is not self-sustaining, it requires institutions to be able to exist and provide the stability and infrastructure for it to exist.
Crypto detracts from gov/institutions because it enables individual actors to hold on to "their" wealth more easily and evade paying back into the system that allows the wealth to thrive in the beginning.
Your simplistic argument is ignoring the negatives of purely "individual actors"
Let's give a concrete example. Say it takes $10M to house the homeless in SF. One marc benioff (or, better yet, a few + tens of thousands of individuals, but not necessarily all) can step up and cover the cost and the rest of the greedy billionaires in SF can do what they want. Whereas if only the city takes care of it, then you could be hosed.
By its very nature if you want robust social services, you should build a voluntary system because that's not going to have a single point of failure.
Indeed your statement belies a serious level of projection: you're ignoring the negatives of a state run solution.
Bad times makes things reach a point they cannot be contained anymore, it doesn’t matter how big your backing seemed to be during the good times.
How do they build/maintain power/network lines between villages, cities, satellite connections, underwater fiber routes?
Thus if everybody locks in their "wealth" with crypto, none of it would go to the commmons - these commons are used to run the crypto network.
Also, crypto wealth isn't 'Locked'. I can buy synthetic assets with my crypto with a guarantee that an equal amount of stock has been purchased. I can bond or trade my tokens for different cryptos to be developed that may have fecundity in supply chain, banking, pay for compute time, store, read and write to files, etc. None of that seems 'Locked' and if you think none of that goes to the commons than AWS, all the world banks, financial software, google and pretty much every other tech companies are 'locking wealth away'.
Nearly anywhere in the Western world, one can find highly illegal drugs with no more than a few phone calls. Cryptocurrency is far easier to smuggle and conceal than cannabis. If governments have repeatedly proven hilariously incompetent at the War on Drugs, why would we possibly expect any government to be capable of stomping out cryptocurrency by its citizenry?
Even if cryptocurrencies weren't completely stomped out, shouting "Bitcoin lives!" from a prison cell wouldn't be that helpful to the person serving the sentence. The "many-headed hydra" isn't much use to the severed heads.
Moreover I don't think the failure of the "War on Drugs" provides a relevant example. The inability of the government to stamp out illegal drugs doesn't indicate that it would be a reasonable risk for many (or most) people to maintain their wealth in cryptocurrencies, if cryptocurrencies were to become illegal.
This assumes that demand is going to remain the same while supply goes down. More likely the demand goes to near-zero when the legitimate investors exit the market.
There's enough narcos, mafia and other random citizens with enough distain for the law to fight over the remaining (5% Who knows) of remaining bitcoin on the black market after a worldwide ban that maybe it will still have some sort of demand.
Also, what classifys a crypto currency? This is one of the biggest problems with a blanket ban. If it is a POA chain run by a centralized entity for use within a video-game, but also has real world value for 'Items' a crypto? What happens if no one uses that currency for items, but instead trades it on an open exchange for USD and other FIAT. Is that banned too? It's too obscure a concept at this point for a real ban to every really work.
If 95% of the value is gone, and with it probably 95% of miners, the whole system is vulnerable to attacks and could easily go into a death spiral for the remaining 5% of the value.
https://law.stanford.edu/press/is-bitcoin-protected-as-speec...
Nearly anywhere in the world one can go to prison for life for possessing enough of those highly illegal drugs.
Why would the average person risk their freedom over cryptocurrency? If you convert the digital asset into a physical asset enough times or for nice enough goods, EVENTUALLY someone is going to ask where the money came from.
You're also making a pretty bold assumption that the governments actually want drugs stamped out. I don't think that has EVER been the case, that's just been the story. It's used as a means of suppressing people of color and poor people. When was the last time you heard of a Wall Street banker going to prison for coke?
That's really trying to frame the world through a lens of racial or class bias. It's not the reality. You're the one making the unsubstantiated bold claim here.
https://harpers.org/archive/2016/04/legalize-it-all/
It is the reality.
The war on drugs was literally a war on black people and "hippies" by the admission of Nixon's domestic policy chief. So no, I'm not making unsubstantiated claims.
https://www.vox.com/2016/3/22/11278760/war-on-drugs-racism-n...
>At the time, I was writing a book about the politics of drug prohibition. I started to ask Ehrlichman a series of earnest, wonky questions that he impatiently waved away. "You want to know what this was really all about?" he asked with the bluntness of a man who, after public disgrace and a stretch in federal prison, had little left to protect. "The Nixon campaign in 1968, and the Nixon White House after that, had two enemies: the antiwar left and black people. You understand what I'm saying? We knew we couldn't make it illegal to be either against the war or black, but by getting the public to associate the hippies with marijuana and blacks with heroin, and then criminalizing both heavily, we could disrupt those communities. We could arrest their leaders, raid their homes, break up their meetings, and vilify them night after night on the evening news. Did we know we were lying about the drugs? Of course we did."
That motive just cannot explain the last fifty years of the war on drugs. The reality must be much more complex.
Yes. The incarceration rates reflect it. Blacks are DISPROPORTIANATELY penalized by drug offenses, it's not even close.
I mean I agree about the incarceration rates, but that's also a complex topic and can't be dismissed as "racism".
But it has nothing to do with what I said. I made an argument and you responded "because racism". You may as well have said "potato".
Unless you've got something more than that I'll assume you're arguing in bad faith.
Do you think they're all racist and trying to oppress people of color or do you think maybe there's something else to it?
It's pretty obvious that can't be true right? Surely we can agree on that?
I mean sure, some of the domestic American situation is like that. The disparate penalties for cocaine and crack cocaine come to mind.
Reminds me a bit of alcohol prohibition. Alcohol consumption was through the roof. It was a real social problem. The weight of the "solution" was borne on the backs of the working class persecuted by the law and people who got gunned down in mob violence. While the middle class got booze prescribed by their doctors, and the elites were of course above the law. But that wasn't exactly the intent of the temperance movement.
A lot of perfectly intelligent, worldly and moral people support some degree of drug criminalization because they believe they're more harmful than the prohibition side effects. No conspiracy there.
private keys are stored in wallets, while the utxo set is stored on thousands of full nodes all over the world.
If things are bad enough that they block your accounts I'm fairly sure you wouldn't be able to take a plane anyway.
You fly to a different country. It handles the finance side of things, nobody expects bitcoin to your bodyguard.
>If things are bad enough that they block your accounts I'm fairly sure you wouldn't be able to take a plane anyway.
While it's entirely possible that you land in a situation where your bank accounts are frozen and can't get on a plane, I can think of plenty of situations where only your accounts are frozen.
North korea? Yeah, i’m sure they’ll just let you offload your BTC and live the high life.
What type of scenario are we talking about here? It sounds like you're assuming that the person fleeing the country did some sort of Bad Thing and would be wanted in every country, but it would be easily someone getting on the bad side of the regime eg. jack ma or alexey navalny.
Re: Venezuela - Libya would be an example where the fragile relationship between economic resources and guns can go very bad for leadership. Same for France right before the revolution and Russia's tsar Nick's family.
Venezuela for sure is in a fragile state, and Maduro has the sword of Damocles over his head. Do you think Western politicians and "elites" have the stomach to handle that pressure? I don't.
I'm not sure if i entirely agree with this next sentiment eithier but it's one that i've heard and i find interesting.
The first capitalist was the caveman1 who dug a hole in a wall to protect him from the elements. The worlds first socialist was the caveman2 that demanded caveman1 share or give over the cave, since he also had a right to the products of his labor.
My general sentiment is, fix government. Serious capitalists in the US need to work on serious policy; housing market and healthcare deregulation, not figuring out how to bury their digital gold.
A happy and productive population is much less likely to care about your wealth.
So functionally the same as the rest of the world then.
[1] https://twitter.com/tufanpoyrazz/status/1386068710562181130
But because the government doesn’t really care about confiscating your bitcoins, they can just “force” exchanges to fail and “destroy” their monetary value for their citizens that way.
If you think just because you own bitcoin you are safe from government actions when shtf this should make you reconsider.
Exchanges failing is the equivalent of gold confiscation for a digital fiat currency like bitcoin.
no. just no. its absolutely not.
Why does everyone have their coins in a single place instead of their wallet? Aren't transfers in and out of wallets basically free?
I dont do cryptocurrency, so I'm not familiar with the buying and selling, but why aren't the coins you buy put directly into your wallet?
For Bitcoin, not even close. Median fee is $10 now. Several days ago it was as high as $25. The mean is much higher, roughly double the median at any given time.
You accept cash from credit cards with risk of clawback etc., transaction costs for money major cryptos (bitcoin, ethereum) are through the roof, you need lots of users to make a liquid market plus cost of infrastructure and development.
I don't see how an exchange is making money unless it charges ++% pr. transaction or does something that invites fraud and sudden collapse like keeping all crypto in a single wallet.
As far as I know, they all do. An exchange's users foot the bill (plus a premium) for on-chain transaction fees if they want to withdraw their coins to a private wallet. But not only that, the real money is in fees for trading coins on the exchange. You slap a little bitty 0.25% fee on every trade, and all of a sudden the jillions of day-traders trying to make money swapping BTC for DOGE or whatever other altcoin-of-the-day and back are a firehose of cash. Those trades are just taking place in your database, not on-chain, so your costs for servicing them are tiny.
Running an exchange should be like running a casino: a license to print money. Of course, stealing all the money on the table at once is tempting too...
Assuming their experience is primarily within a regulated banking system, they would not know about the numerous security precautions you need to take to 'be your own bank'.
So for internal transfers, you can just update the good old relational database and dodge the fees.
For transfers between exchanges, they can settle the net balance daily (or have some thresholds etc) to minimise any actual on-ledger transfers.
Of course all this makes the decentralized aspect of the currency pointless, but most people don't actually understand or care.
Not the mention the fees are prohibitive for moving small to medium amounts.
What isn't well appreciated is just how difficult it will be to ban the transaction of cryptocurrencies outside of a government monetary system. Remove the exchanges and there goes the leverage.
What also isn't well appreciated is that clamping down on exchanges is by far the best way to ensure a transition to a self-contained cryptocurrency economy that requires no on- or off-ramps.
The more governments try to exploit their leverage with exchanges, the more they drive use patterns that will ultimately render that advantage useless.
But if you can’t convert your cryptocurrency into fiat money the whole concept is pretty useless.
Yes there might be a future where these “use patterns” don’t rely on exchanges but it’s been 10+ years with Bitcoin and I haven’t seen them.
So let’s continue this conversations when crypto exchanges are replaced by “something”.
Turkey will print money until they collapse, or other countries step in and “help them”. Bitcoin will not prevent that.
Venezuela has never printed more.
Wtf what a waste