Berkshire: Bitcoin is ‘contrary to the interest of civilization.’
blog.evergreengavekal.com
blog.evergreengavekal.com
> I don’t welcome a currency that’s so useful to kidnappers and extortionists and so forth... So, I think I should say modestly that the whole damn development is disgusting and contrary to the interest of civilization.
I find it strange to criticize an asset for how it gets used in extremis. I feel like the same criticism could be levied against the dollar.
That is still a significant minority compared to USD as a whole. BTC as a whole is used for just that and gambling.
And it make sense that it would be so low. Let’s say you just got $1M in Bitcoin and you have to pay your suppliers $500k in cold cash. Not going to happen. Only from other criminals that take profits in cash. But there is obviously a limit to that. I think the point is that those 2% can help a lot in fighting the 25%.
The fear is that illegal commerce could be conducted without fiat conversion. That would require that regular commerce would also be done in the same currency that the criminals use. This is fiat’s game to lose.
And by the way, this is why I love crypto. It has promise as an amazing technology for choosing financial participation according to personal and private community values. Although I’ll admit we’re not there yet, and a lot of the stuff might now be owned by people we wouldn’t want to have power over us. We’re still in the phase of speculation and fear and power struggles. I just hope that fear of the old power structures doesn’t bring good people to ally with values that we would not want in a new system.
That's why people need to call BS on the current hype train. Otherwise, when a sufficient solution surfaces, people are going to distrust it just as much as the old power structures. And I'd say we're already getting close to that point.
The problem is, with equal distrust, people will tend to choose the option that doesn't require change.
I’m kind of neutral on which financial system prevails so long as it’s the best for society. I stand to gain a lot more if it’s the cypherpunk version, but, I’m not sure that the conditions that would bring that on would be good. The rule of all aspects of society by a maniacal banking elite is pretty dystopic too though.
Ultimately I think the best monetary system will emerge through competition among societies. Obsolescence more than decision. That might take a long time, and perhaps it’s too hopeful. What evidence do I have for that?
To say that stocks are about owning a company in practice is the same as saying bitcoin is just money like the dollar. It's true in theory, but it's not the practical reality of this moment in history.
However, my point is that people are not buying stocks to own OR to benefit the company. They're buying stock so that a "bigger sucker" will come around later and buy it from them and they can make a profit.
So I guess it depends on who we're talking about when we say "primary purpose", but for anyone who is purchasing stocks, the primary purpose is NOT to be an owner of a company. The primary purpose is to speculate.
Incorrect. That's what keeps the market for the stock liquid, and that contributes to value which the company can exploit through future stock issuing. Not to mention the indirect benefits to stakeholders within the company in terms of price and liquidity.
Additionally the people who own shares own the company so what benefits the shareholders benefits the company and vice versa as their interests are the same.
And TOR is rarely used. Journalists use apps like Signal now.
Absolutely not. Internet censorship is growing rapidly - worldwide.
A lot of "legitimate" websites like newspapers get blocked around the world and can only be accessed over Tor.
Signal does not let public fund jurnalists.
I very much doubt that. Its primary uses are probably porn and researching embarrassing medical conditions.
An intended hypothetical use, or actual use in paying for goods or services now?
Overall how you feel about this in aggregate will depend on how comfortable you are with government power. Let’s even ignore the fact that Bitcoin today is being used to circumvent unquestionably oppressive governments (Venezuela, China, Iran). Even as a hardened libertarian, I’ll freely admit that Americans and Europeans live under a generally fair and just government. Bitcoin is still worth it as a fail safe against future totalitarianism.
It’s the same reason I support the Second Amendment. Having a bunch of people run around with guns probably doesn’t help much today, and may even have ongoing social costs. But it would make things a hell of a lot harder for any would be tyrants. Not that it’d be impossible, but small frictions can have big impacts on the course of history. That’s a civilizational insurance policy worth paying.
Yet, somehow the rest of the democratic world spins around just fine without millions of semi-automatic weapons sloshing about.
There’s only four independent democracies uninterrupted over the past century. Two have widespread civilian firearm ownership.
Are you suggesting that a few extra light weapons floating around in the 1930s would have stopped the Nazis and Soviets steam rolling across the Europe?
Are you suggesting civilian firearm ownership somehow prevented the Nazis from skipping over the Atlantic and taking over America? Why did America waste all that money on submarines and aircraft carriers, when they had such deep reserves of plucky gun enthusiasts at the ready?
I'm so confused by your comment.
No leader has unilateral control to unleash the full force of the military on their own citizenry. Imagine what would happen if POTUS tried to order a nuclear strike, or even aerial bombing, on an American city? The Joint Chiefs would almost certainly arrest him immediately. Ordering soldiers to fire on their fellow citizens drastically raises the probability of outright mutiny. This is true even in the most oppressive regimes. Even the Nazis were genuinely scared of average German citizens turning on them for perceived abuses.[3]
[1]https://en.wikipedia.org/wiki/Egyptian_revolution_of_2011 [2]https://en.wikipedia.org/wiki/No-go_area [3]https://en.wikipedia.org/wiki/Battle_of_the_Netherlands#The_...
None of the no-go areas sound like historical examples you would want to follow unless you like anarchy. They are messy pro-longed conflicts unlike eg Euromaidan.
Also, is it "in extremis"? It seems like the vast majority of transactions of crypto are for ransomware, contraband (guns, drugs, humans), or exchange between speculators.
Are transactions relevant though? A lot of BTC is just being held, presumably for the sake of future popularity. You could see BTC investment as a bet on the future of BTC as a normal/common currency.
Yes, I totally agree. The question is: what has to happen before it's a common currency?
See my other comment for my thoughts on this: https://news.ycombinator.com/item?id=27104956
The same thing holds for BTC and illicit transactions.
Not saying that it's true, necessarily. Just that the current balance isn't the end game and it's not totally fair to criticize a brand new tech/tool/whatever against well-established and well-optimized status quo.
The things that make cash useful for money laundering and black market purchases also make it easy for me to quickly, and without unnecessary ceremony, drop a few dollars in a tip jar, give some money to a panhandler, split the bill at a restaurant, chip in to an office gift pool, pay my kids an allowance, envelope budget, buy ice cream from an ice cream truck, etc. etc. etc.
Bitcoin in particular fails miserably at these sorts of use cases because nobody wants to sit around waiting 10 minutes for a transaction to confirm over a $2 soft serve.
Crypto in general fail because they're complicated and fiddly to work with. This creates way, way too much friction these sorts of casual transactions, and effectively shuts out people who aren't technically sophisticated enough to feel comfortable messing around with this stuff.
That isn't to say that crypto doesn't work as a store of wealth. But, as a circulating, everyday currency, it seems to be stuck in the same situation that Linux on the Desktop has been for the past couple decades: for a variety of reasons, some of them very good and no real fault of its own, per se, the community just doesn't seem to be capable of sorting out the UX.
I think it would be difficult to argue that it's useful primarily for buying your groceries.
I don't think Bitcoin advocates like following this train of thought any further than "USD is also used for crime".
My point is that this conversation is unfair:
Person A: I've just invented a new currency! I think it has better intrinsic properties than USD.
Person B: Well, I can't buy groceries with it right now, so it sucks.
Similar vein:
Person A: I've invented a new thing called the lightbulb. I think it will revolutionize lighting.
Person B: It's more expensive than oil lamps and electrifying buildings would be a massive undertaking. Lightbulbs suck.
As it was, they were primarily used for lighting rooms from the getgo.
I imagine some historian could probably dig up some sort of analog from 100+ years ago (possibly on tech that never did take off) but this isn't it.
I would like to buy groceries with it, but I don't want to hold much BTC for very long.
All the negative stuff was going to happen anyway - including energy waste. Humans waste a lot of energy. Wikileaks on the other hand would have folded like an origami in any pre-cryptocurrency era.
This is the sort of press freedom that humanity has been longing for since ... I don't know. The birth of the press. It is really hard to financially abuse the truth out of conversation now. Which is part of why the blowback is so panicked.
Edit for spite: "contrary to the interest of civilisation" is the sound of a wealthy man who is friends with wealthy men who are terrified of what an organisation like Wikileaks could uncover.
If anything the last 2 years has shown me how fragile freedom is, and how much people are willing to give up freedom for safety and security. Sadly people like you and me that see Government as something that should be controlled and feared are in the minority as most people view government as the solution to all their problems, and as their moral compass.
If you're trying to ban cash because you can buy illegal things with it, then you have a logic problem.
This is speculation with very little connection to reality. If you actually go on crime forums you will see that privacy coins are not as widely used as you might think.
If we're talking bigger fish it's speculation that they prefer cryptocurrency over traditional assets or cash in the first place. Follow the money and it often leads you to illegal activity. Banks like HSBC know all about laundering drug money and enabling scams.
https://www.icij.org/investigations/fincen-files/hsbc-moved-...
This is not true. A few big markets have switched, not “all”.
Besides drug markets, all the conventional cybercrime markets and forums still run on bitcoin.
Can you name a few of those "conventional" crime markets? I'm curious to know.
Fraud shops like unicc, ferum, slilpp move more money than darknet drug markets and primarily use BTC or LTC (I don’t think any accept XMR)
Hydra, the biggest darknet drug market still doesn’t accept monero.
Of course it would make sense for all of these people to be using monero, just like the efficient market hypothesis makes sense.
Hard to say what's the biggest shadow market of course but afaik WHM is the largest one for drugs and they only accept Monero. You're right, Bitcoin is still popular in the Russian forums, but that's at least partly because it's easier to cash it out anonymously over there. Lots of services that let you exchange your BTC for cash and my guess is the remaining coins just go through tumblers until they're clean.
https://news.bitcoin.com/darknet-giant-white-house-market-dr...
Bitcoin has many of the traceability problems as cash, while also being easier to transact. While I personally think it's a good thing that companies banned from traditional banking / merchant services are using Bitcoin to fund their operations, there is a reason for them using it.
In Bitcoin that use case is wealth transfer that is uninhibited by law.
That essentially makes it kind of like an index tracker for the underground economy.
I don't disagree that it's an underground economy, but that's only because it hasn't hit the mainstream. But being underground doesn't necessarily mean nefarious or illegal. Those bad actors definitely exist in the Bitcoin economy and all other economies. But without some data I'm having trouble coming around to the idea that the majority of Bitcoin is used for illegal purposes.
I find it hard to believe that anything beyond a small minority of transactions are the "good kind of underground transaction".
How are bitcoin transactions slow? Bank transfers and credit card payments take forever to settle.
Of course, you could say all the same things about e2e encryption, which society seems to have decided - grudgingly, and with much pushback - is ultimately a good thing. But perhaps free speech and financial exchange are different animals, McCutcheon vs. the Federal Election Commission notwithstanding.
No one consulted me wrt the existence of other nations (outside my own) and their laws either, I'm not sure democracy needs to extend globally for all things.
To some degree, I think the "more/less democratic" argument is a little "whataboutism: individual freedoms are the goal of democracy, not the other way around, and btc/e2e are a form of power and civil disobedience that might help get them.
> undermining our organized institutions
Many of those institutions are private banks - they are not "mine", even though they get bailed out by tax money on occasion. Is it antisocial to be antisocial towards antisocial institutions?
> you could say all the same things about e2e encryption
You could, and the reason is a terrible record globally wrt privacy rights. I don't consider it a matter of free speech - free speech (to me) is primarily about what you can say/promote in public, privacy (to me) is about what you can keep private.
Much like piracy prevented the most deranged attempts of the copyright industry - cyber-currency may put limits on state seizures and overtaxing.
At least for now BTC isn't anonymous (leaves a public paper trail) so it's not so perfect for crime. And an anonymous currency will still be liable at the entry/exit points.
First they ignore you. Then they laugh at you. After that, they fight you. Finally, you win.
When a significant portion of established powers start claiming that new threat to power is (insert hyperbolic word here), I’d say we are on step 3 of the above process.
Bitcoin has a lot of issues, but cryptocurrency/blockchain in general are real, useful technologies. Don’t let the prevalence of scams and duplicitous individuals distract you from this fact.
Whats the last time you bought anything (besides other coins) with cryptocurrency?
In places where this doesn’t exist, crypto is a miracle.
Beyond that, crypto has existed for about a decade now. It’s absolutely absurd to claim that it’s “not useful” because it hasn’t been widely adopted by everyday merchants. Traditional currency has a ten-thousand year head start. Perhaps we can be patient?
And that’s not even including all of the other use cases blockchain has.
The guy behind Cardano has talked a lot about crypto in Africa, so if you’re interested, I would start there.
And besides, claiming that "traditional currency has a ten-thousand year head start" lumps so many wildly different forms of currency into a single category that the category is borderline meaningless.
And again, the idea that a technology can be deemed useless a mere decade after its launch is deeply historically ignorant. Automobiles, airplanes, he printing press, the list goes on and on. None of these things replaced their competitors in a decade.
We are a decade in with cryptocoins and 98% of the things that cryptocoins have currently accomplished are a net loss for society. A net loss of which we are currently already "paying" for; Ransomware, waste of energy, people getting scammed with pump and dumps, etc.
Early automobiles killed so many people that it became a major public health issue.
The Printing Press essentially fueled the Reformation and the subsequent Wars of Religion.
Airplanes were used in bombing raids during WW1, just over a decade after the successful flight of the Wright Brothers.
All technologies have both positive and negative consequences.
Edit: here’s a nice quote illustrating this.
Serious debate was held in courtrooms and in editorials over whether the automobile was inherently evil. The state of Georgia's Court of Appeals wrote: "Automobiles are to be classed with ferocious animals and … the law relating to the duty of owners of such animals is to be applied ... . However, they are not to be classed with bad dogs, vicious bulls, evil disposed mules, and the like."
> Whats the last time you bought anything (besides other coins) with cryptocurrency?
Edit: phrasing
Crypto might be safe from the government, buts it is significantly less safe from extortion. Anyone with a will and a ballpeen hammer can steal a crypto wallet with same ease it takes to mug someone out of $20.
As a short-term store, the price fluctuation is too big. But as a long-term store... Haven't seen a better one up until this point.
In my opinion, you're betting that crypto will be useful as an exchange of value, which means the people exchanging it are either: A) criminals or B) living in a failed state.
Personally, if crypto becomes so widely used that it justifies its market caps, that means a lot of states have failed, and I don't want to live in (or bet on) that world.
It's also scary that some very rich and powerful people are betting against our society continuing to be viable.
Basically states print money anyway, and just hand it to the banks.
It's already being used as a proxy for USD in some failed states (which is exactly what every stablecoin's value proposition would be). It's certainly not widespread, but it makes sense in a society where you don't actually need/want to convert to fiat to transact.
To someone like that, the only question about bitcoin is 'can I gain something off this in some way no matter who or what it destroys in the process?'
Sounds like a natural match to me, and so I'm unsurprised that some of the richest and most powerful people are all in on bitcoin. It's just that they have no intention of bitcoin, or society, ending up viable. They see a way to game it.
Period.
If it’s total chaos, the criminals will have total control. We have seen this many times. To see why people buy it, understand their fear of what might happen to them if they don’t.
Yes, I totally understand it. My opposition to crypto speculation is as follows:
1) Investments can be a self-fulfilling prophecy if extremely powerful/wealthy people are involved. If you bet on an outcome and also have the power to create it, can we really trust you not to do that?
See also: Peter Thiel buying property in NZ to prepare for societal collapse, even as he worked for the previous presidential administration.
2) This one is just personal to me -- if crypto becomes an important alternative to USD fiat, the world has likely collapsed and I'll probably either be dead or ready to die.
It's hard to overstate the consequences of the US collapsing, considering the enormous amount of military power that our country has.
This is pretty fatalistic. Life goes on, even through war and grief. Just because you don't like the contemplations doesn't make them unrealistic or un-navigable.
Major power transitions are historically accompanied by world war, in such a war the electrical grid will be one of the first casualties. You can't use Crypto without a functional power grid. IMHO, Cryptocurrency isn't a good fit for this scenario. War is bad for cryptocurrency.
> It's hard to overstate the consequences of the US collapsing, considering the enormous amount of military power that our country has.
War has ever been unthinkable, yet it is historically common.
The US military needs an incredible amount of high tech supplies and upkeep to sustain, it would not survive as-is in a significant downturn.
We've never seen an all-out war in the nuclear era.
Next, decentralization is awesome.
You can always claim that any improvement is the proof of a failed earlier system.
If the success of crypto means the system has failed, maybe you should blame the problem and not the solution.
Crypto is not a currency, especially if it's deflationary. It's an asset.
Crypto is also not even close to useful worldwide, and it's hard to imagine why it would be come useful worldwide. USD works pretty well as a global currency at the moment. It has cheaper exchange fees than crypto.
> Next, decentralization is awesome.
Until a 51% attack takes all your money away, or your wallet gets hacked...
Your US government policies don't apply to the rest of the world. Wikipedia defines it as currency. It's also in the name: cryptocurrency.
> USD works pretty well as a global currency
Lol
Real estate takes a lot of time and research to chose a proper investment. Besides, what I want to store 100 dollars only? Or 10000? not enough for that. And REITs again require a lot of research and are not risk-free. Then you have other assets like art and so on, but again, needs research, and what are the likelyhood of findind something exactly at my price range? Besides they can be destroyed in fire or something else.
Also not stocks sorry. I don't want to risk my hard earned money. Maybe part of it, i can, and I nicely get some positive return. But not all. Also not bonds or bank interest. I don't want to have my money stuck for years. I want something where I can easily set and forget, liquid, immaterial, which is safe, and where I don't need to trust anybody but myself. It doesn't even need to appreciate, just hold its value. What do you propose besides BTC?
I don't see anything that can be potentially better.
As far as I know, I can not buy small parts of real estate. Gold supply is not fixed and it’s hard to validate. Companies can go bankrupt.
I can not transfer real estate, gold or stocks over the internet to someone else directly, without using a third party.
Of course you can[1].
> Gold supply is not fixed and it’s hard to validate.
Gold supply is more difficult to shock than crypto supply.
> Companies can go bankrupt.
Yes they can, but that doesn't mean you lose your stake in them. Large, public companies go bankrupt very slowly anyway. You usually have years of warning.
> I can not transfer real estate, gold or stocks over the internet to someone else directly, without using a third party.
How many people self-host their wallet? Very, very few.
Also, you can absolutely buy stocks without an intermediary[2]. I don't see why you'd want to, though.
1. https://www.investopedia.com/top-reits-4582128
2. https://www.investor.gov/introduction-investing/investing-ba...
Those are both theoretical, of course. Most trading activity of those assets will be from speculation (assuming they'll find a "greater fool") and not a fundamental belief in the currency or in the dividend.
These industries are legal. If you think they should be abolished, fine -- but don't go around getting angry that people are investing in legal businesses that produce popular, if harmful, products. Until these industries are illegal, someone is going to invest in them, and because these industries are extremely popular those who invest in them will see their wealth expand.
but often "contrary to the interest of civilization" means "contrary to the interest of me".
Berkshire buying bitcoin would definitely make me buy more bitcoin.
His history with silver for example:
"Warren Buffett made an unusual move in 1997 when he bought 111 million ounces, or nearly 3,500 tons, of silver. The famed investor's purchase helped make Thomas Kaplan a billionaire."
https://markets.businessinsider.com/news/stocks/warren-buffe...
https://seekingalpha.com/article/376711-evidence-that-warren...
Berkshire is not an "investment firm" (although that may have been an accurate description 40 or 50 years ago). And they operate almost solely by the dictate of Buffett, not by theroetical shareholder demand for optimizing for max profit. That means they operate by parameters that Buffett deems prudent. Berkshire for example could have been deep into the supposed sure thing of the real-estate bubble circa 2005, instead they were one of the few mega corporations on the planet almost entirely insulated from it (so much so they were the ones doing the bailing out of other large corporations). That philosophy is the same reason why Berkshire might choose to pass on a supposed sure thing in crypto today: they don't like the risk; others may see a sure thing, they're skeptical (for better or worse).
> Charlie Munger: “Those who know me well are just waving the red flag at the bull. Of course, I hate the bitcoin success. And I don’t welcome a currency that’s so useful to kidnappers and extortionists and so forth. Nor do I like shoveling out a few extra billions and billions and billions of dollars to somebody who just invented a new financial product out of thin air. So, I think I should say modestly that the whole damn development is disgusting and contrary to the interest of civilization."
That's all they have to say about this? None of this is particularly insightful (in fact I think it's disappointingly devoid of interesting insight). I don't see why this is on the frontpage.
I interpreted as "Bitcoin is bad but the cult of Bitcoin is nuts so we have to be careful about what we say."
What's more interesting is how the Bitcoin investor club is managing to delude themselves even with inputs from real proven financiers.
It's difficult to get a man to understand something if the value of his crypto stash depends on OTHER PEOPLE not understanding it.
This is what bitcoin is. It's not a mass delusion: it's a will TO delude masses. I suppose some manage to fool themselves but I consider it a lot more likely that the majority are fully aware of what they're doing.
But it depends on deluding another level of the pyramid, and there's no real way to tell how high it goes before it collapses, so people are all-in, to the point where even Warren Buffett is talking in code and messaging 'I'm not going to say what I think about this, but I am going to say outright that I'm not saying what I think'. Not terribly hard to work out the message there.
Of course they're right.
Perhaps if you don't agree, you should be listening :)
Look up any successful Y Combinator company's Show HN thread on here, and the top comment is usually something along the lines of "this will never work"
Crypto will be valuable as long as we as a society think it's so and have the infrastructure to support it. If we enter a nuclear winter, out goes the crypto market, and we'll be left exchanging copper pieces.
Sounds like Munger doesn’t like that financial innovation is coming from outside the established club. — I mean this argument has nothing to do with the safety of children and everything to do with classism.
You mean like cash?
I'm sorry, I'm sure Warren is a nice guy but that picture reminds me of the Dukes in the movie Trading Places [1] with Eddie Murphy and Dan Aykroyd.
Used to get it from my grandmother for christmas but now they send it to me digitally as well.
It was always a pain to get cash since you needed to find a place to deposit them into your account, and most banks don't even handle cash today.
Most of all I hate getting change, people look at you funny here if you say keep the change in a regular store.
[1] https://www.bielertagblatt.ch/nachrichten/wirtschaft/eine-mi...
If the banks make it harder and harder to get your money out then of course things like bitcoin are getting more popular.
Meanwhile, in other parts of the world, "Know Your Customer", "Due Diligence" and other Anti-Money-Laundering measure are important. (1)
I think your last point is better phrased as "If the banks make it harder and harder to get your money out in bulk, without proof that your transaction is legal; then of course things like bitcoin will be used for the illegal transactions. And as a result the regulators will sooner or later regulate those too".
https://en.wikipedia.org/wiki/Know_your_customer https://en.wikipedia.org/wiki/Due_diligence
The truth is while many people did get very rich getting in early on the cryptocurrency wave, less and less people these days are actually growing meaningful wealth by investing in crypto. Eventually reality will catch up and people will not be able to afford keeping a bunch of coins with questionable prospects, and when they begin liquidating all at once I guarantee some people will become very poor, poorer than they could ever imagine.
"The children now love luxury; they have bad manners, contempt for authority; they show disrespect for elders and love chatter in place of exercise. Children are now tyrants, not the servants of their households. They no longer rise when elders enter the room. They contradict their parents, chatter before company, gobble up dainties at the table, cross their legs, and tyrannize their teachers."(in case you thought it was someone ancient or famous)
it can't remain so unregulated as it is now. either corporations will take over and legitimize it but this means it will become centralized and owned by big tech. or, it will remain the wild west that it is now, for a while, and then gov will shut it down.
cryptocurrencies are the same as torrents. only popular while unregulated. but this only lasts until some big player decides to stop it
I can understand why many people don't like bitcoin. The argument against it is not stronger because of these soundbytes.
- child pornographers, - terrorists, - drug dealers, - money launderers / organized crimes
* Its use in facilitating illegal transactions.
* The fact that unlike cash it's used (as opposed to speculated with) for little else other than illegal transactions.**
This pretty much covers it ^^
** Yes, I'm aware. Not all prohibited transactions are bad. Donating to wikileaks is good.
The fact it is used for not much else other than illegal transactions would seem to me to be the biggest risk to its value. Regulatory crackdown will be coming sooner or later and when it does, there's gonna be investor tears.
Seems plausible that these particular ones would be prepared to both spot, and tell us about, another impending disaster.
Is it a wonder that so many hope that mankind abandon the USD for BTC with such force that half the billionaires become millionaires and the other half go broke?
Their investment managers probably already are.
I think it'd be a good idea for capitalism to evolve in different ways than this. Not sure if it's a foregone conclusion, but if you end up able to say 'I told you so' then I won't argue :)
When you can print make belief dollars, in volumes that were never proven to exist, and pretend trading them for Bitcoin is the same as trading dollars, then of course Bitcoin can arbitrarily rise. The scale of the scam is huge and regulators completely miss it.
The day regulators finally ban tether (because printing dollars should be illegal), you're going to see Bitcoin crash spectacularly. The reason Bitcoin defies all expectations is because it was never supported by real dollars.
What does a "manipulated" chart look like?
(I'm not being cheeky, I am just trying to get a grasp on your perspective)
says who? why is this your criteria for "manipulation"? Are you saying that it's only been manipulated for the last 8 weeks?
It was a meme in the crypto community that when you see tether being printed, you long. Maybe it was true at some point that tether was propping up the market or maybe not fully backed[0], but AFAIK they are now doing audits[1] and transparency reports[2].
> "The day regulators finally ban tether"
I'm not sure how you would go about banning a cryptocurrency (it's been tried 100's of times) but, again, people have been saying something like this about tether forever. Every time someone tries and fails, it just gains more legitimacy (and is no longer the only stablecoin).
FYI I am in no way a BTC maxi/fanboi, but this kind of narrative has been the same since the beginning of tether and everyone so far has been wrong and the chance of a "spectacular crash" has become more and more unlikely
0. https://www.cnbc.com/2021/02/23/tether-bitfinex-reach-settle...
The same way we ban heroine. Or murder. We just make trading cryptocurrencies illegal and prosecute people who are found doing it.
Many IT people are biased by their work into thinking that any solution to a problem is a failure if it does not solve 100% of the problem. But in practice, most solutions are good enough if they solve 99.9% of the problem.
Regarding cryptocurrency, making it illegal would mean that no sane company would touch it with a ten-foot pole, which would not just hamper legal usage of cryptocurrency, but also illegal usage. (For instance, ransomware would not be able to have their victims pay in bitcoin if the victims don't have a legal way of exchanging legal tender for bitcoin.)
Our attempt to ban heroin (war on drugs) has been a massive failure[1] only replaced/made worse by prescription opioids[2]. Not a good example.
Murder is not something that really needs "banning" to stop the vast majority of people from committing it. The amount of people willing to use crypto is not comparable to the amount of people willing to murder (illegal or not). Not a good example.
If you want a semi-comparable example, take the attempt to make torrenting/pirating illegal. Look how that turned out.
> We just make trading cryptocurrencies illegal and prosecute people who are found doing it
Good luck with that. No other country has made much of an impact and it would require an enormous amount of resources to persecute ordinary people.
> no sane company would touch it with a ten-foot pole
> if the victims don't have a legal way of exchanging legal tender for bitcoin
There will always be another country willing to host exchanges. VPN's exist. You will never get all governments to ban crypto. Again, you are just listing ideas that have been tried and failed.
> but also illegal usage.
You think making crypto illegal... would stop people already using it for illegal reasons? They would be ok with one illegal act, but not another less valid one?
1. https://www.samhsa.gov/data//sites/default/files/report_1943...
2. https://www.drugabuse.gov/publications/research-reports/pres...
95+% of people don't use torrenting/pirating. That worked out fine. Not great, but it's not the total failure you make it out to be.
> You think making crypto illegal... would stop people already using it for illegal reasons?
No, but it would add more friction if you did not have a choice of legal exchanges.
Have any data to back that up? I do:
"More than a third of music consumers still pirate music."
"In 2016, 57 million Americans were still pirating music in one form or another."
"Illegally uploading or downloading copyrighted materials takes up nearly 24% of the bandwidth used in North America, Europe, and the Asia-Pacific"
"57% of computer uses in the Asia Pacific and Central/Eastern Europe regions confess to having pirated software at least once."
https://dataprot.net/statistics/piracy-statistics/
> No, but it would add more friction if you did not have a choice of legal exchanges
"legal" in this sense means very little 1. because they are already doing something illegal so why would they care what interface they use? and 2. Making a site "illegal" in one country is very easy to get around - or else would you have to essentially advocate for a Great Firewall (which is still pretty easily circumvented)
I don't think it's ever been tried in a western country.
The process is fairly simple. Pass a law banning it, if necessary with certain exemptions. Arrest and charge people who purchase, sell or even possess Bitcoin.
Most demand will disappear in that country. For the rest, handle it as we already handle similar financial crimes, like tax evasion and money laundering.
Can you imagine the amount of resources required to accomplish this? The war on drugs was a massive failure and that was arguably a much easier sell than crypto. As if the US doesn't already imprison enough of it's population... talk about a victimless crime...
> Most demand will disappear in that country
Not when all you need is internet access. Supply might, but demand will not be effected much. There will also be exchanges hosted in other countries that can be easily accessed.
Crypto is made to be resilient and/or hard to trace. The normal avenues of tracking and enforcement (which already can be pretty ineffective) cannot compete. You can act like it's "fairly simple" but, as I have stated, it's been tried and continues to fail.
The current state is still that the majority of Bitcoin volume comes from tether, and these tethers aren't regulated and required to exist the same way dollars traded for stocks are required to exist. They already mixed tether reserves with other funds in the past, don't trust them to suddenly stop.
The NYAG didn't find anything substantive, and neither has anyone before them. In the crypto sphere that builds trust and proves resiliency. With every piece of FUD about tether that comes and goes, the chance of it all coming crashing down gets smaller and smaller.
Nothing you have stated is a new accusation. They have been around as long as tether and the entire ecosystem has only gained more and more legitimacy.
That's consistent with tether being "printed" (ie. issued without dollars backing them), but it's also consistent with dollar inflows to bitcoin exchanges that use tether. Without further evidence that's not indicative of anything.
But what do I know. For me this whole Coin-Thing looks like Online Poker did 20 years ago. People like to gamble and they like Robin Hood type of stories..
It used to be that humans could exchange value without third parties. The third party was introduced exactly because of mistrust, and eventually this practice grew so widespread and big that it became a new industry all on its own. Cryptocurrency cuts out that third party, and makes business a one-to-one interaction again, where contracts can even be fully automated.
Of course all third parties out there dislike this, but there might still be a silver lining for them. For the state, all Bitcoin transactions are visible on the blockchain, for instance. This makes Bitcoin inherently less useful to kidnappers and extortionists and so forth... And for the banks it makes the transfer of big amounts of value extremely safe (contrast this to what's going on in South Africa at the moment, where value transports are being violently targeted by cutthroat bandits). It also opens up a wholly new business opportunity for them if they start exchanges and on- and offramps for crypto. Already new organizations are being made that grant interest on loaning out or staking crypto, for instance.
Furthermore, systems which are manipulable by a central group that you are supposed to trust are often used not because they are trusted, but because there are not good alternatives. The trust element is only a factor if there are options. Decentralized systems are about moving control to a protocol all participants agree to rather than a small group of people.
Why would you want trust where it's not needed? Trust is a barrier, not a feature.
I would say our whole legal system is based on mistrust.
Also is it wise to advocate for a future where the richest people in the world will just be whoever hung out on the right forums in 2011? At least the current occupants of the Forbes list mainly built companies.
At the least, bitcoin is a possible way to protect against this, if you think it's a risk.
How do you deal with computers dropping in price for the last 40 years?
Have these industries had issues with deflation?
You've built a world where Bitcoin despite not being "real" is the only real store of value, there will only ever be 21 million...
Even freeholds sometimes you don't really own the land, just again renting it extremely long term.
1 bitcoin will always be worth 1 bitcoin and there will only ever be 21 million of them.
1km² of land will always be worth 1km² of land and there will only ever be 500 million km² of them. But you can use the land.
Never forget that money is largely illusory, solely a social construct, and while that's a powerful thing there is nothing here that makes Bitcoin or any other cryptocurrency any more worthy than the US dollar or the Euro.