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Fun fact but the gov basically stole gold from ppl b4 in the good ole USA. They made it illegal to hold - if you were caught having gold it was a 10k fine. PPL were forced to go to their banks and sell their gold at a loss.

https://en.wikipedia.org/wiki/Executive_Order_6102#:~:text=E....

That article uses the term hoarding but don't be fooled they made holding any relevant amount of gold for investment illegal. You were still allowed to have gold necklaces and the like though

Is this comment somehow related to the one you replied to?

Yes, it's pointing out that regulation doesn't protect one from theft, it just formalizes it.

Yes. Root comment states that government regulation protects wealth by giving examples of several situations in which a government regulation protects wealth. Root-1 comment gives an example of government regulation destroying wealth, by giving a concrete example involving an asset class referenced in root comment.

I would say that the two comments together point towards a complex relationship between governments and the wealth of it’s citizens.

I have heard mixed things about the historical event you're mentioning. I've heard it was a law that wasn't strongly enforced. Of course just having the law in the books probably served its purpose of reducing gold transactions. But that's different than the government actively fining people $10K. Which would be like $200K today by the way.

Also, I'm not sure if it is an apples-to-apples comparison. Back then the main money of the society was associated to gold. There is no such link today. I.e. the value of USD isn't associated to BTC. The government had a existential need to reduce gold transactions. You can argue the government is threatened by crypto etc. but like I said it's not apples-to-apples.

No strongly enforced means it will be selectively enforced. And there are many such opportunities to do so for a government if they need some leverage on certain individuals. And these days, a Jury can be bypassed making Jury nullifications immaterial. Essentially it is government or more like unelected bureaucrats becoming overloads over private individuals.

> ppl b4

Please do not abbreviate words like this. It makes the text harder to read.

These same folks allow regular people to do options trading, invest in any individual stock and other forms of wild gambling all from the convenience of their phones (complete with fun animations!)

It's also rather difficult to actually recover losses in court in a civil case unless you're rich enough/the amount at stake is large enough to eat the losses in court fees/collections measures and still make a profit (winning a judgement does nothing if the losing party simply refuses to pay, at which point you have to engage the Sherrif/place liens on property/hire collections agencies/etc). Whether it should be that way or not, that's the reality. These same folks allow that system as well.

I'm more inclined to think the regulators will go the way of rich/those who make campaign contributions/those who can lobby. I wish we didn't live in that world, but we do. The evidence that we do has been unmistakable since 2008. So some of the scammier micro-cap coins might get regulated out of existence, but with Wall St taking an interest and plenty of wealthy people on board, crypto as a whole is going to stick around IMO.

While I agree that crypto is not compatible with financial legislation as written, in the sense of having a third party (the state) back up your assets, it's not necessarily incompatible with law itself. It wouldn't be shocking to me if a government explicitly circumscribed parts of crypto as an unregulated space, where they legally provide no guarantees about asset protection. But I doubt the US government would do something a little risky like this.

FWIW, I'm pretty sure banks loose in the hundreds of billions per year to fraud... and it's all heavily regulated.

And customers who experience a loss are made whole through EFTA [2] and Reg. E [1] (if transfer related), with banks eating any costs unrecoverable after pursuing those who perpetrated the theft. Does Coinbase reimburse you if lose your crypto due to fraud [3] [4]? If not, clearly regulation is warranted if they put themselves forth as a custodian and exchange. This doesn't happen in centralized finance, and everyone has some semblance of recourse (depending on fraudulent loss experienced; either your securities or commodities are returned, or investment insurance pays out).

[1] https://www.federalreserve.gov/supervisionreg/regecg.htm

[2] https://www.federalreserve.gov/boarddocs/supmanual/cch/efta....

[3] https://www.businessinsider.com/huobi-global-warrant-seeks-1... (A Coinbase user lost $11.6 million in under 10 minutes after falling for a fake-notification scam, the US attorney's office said)

[4] https://www.google.com/search?q=coinbase+theft

Those are only certain types of fraud. There are others that are not covered. For instance, someone stole my wife's credit card information and bought nearly $3k worth of stuff from various stores. The company refused to cover it. Apparently once your loss exceeds a certain amount, they suddenly become much less willing.

If someone somehow lost 11.6M due to credit card fraud, I seriously doubt they'd get their money back.

You are not liable for credit card fraud in your name in the us. You should have been able to refuse to pay. That sounds shady that the company tricked you into making them whole for something you aren't liable for.

You do realize that using credit cards is completely irrelevant to trading in a regulated marketplace? The closest connection is that both are parts of the financial system, but that’s about it.

So you respond with the user experience and say its a limitation of the whole concept

Fascinating…

Confidence in the banking system via state insurance was added retroactively

Don’t pretend that came organically, the banks thought it would be fun too

The vast majority of the value proposition of crypto is that it operates outside of legal and regulatory frameworks. It doesn't settle faster than instant payments (which, in many countries, are usually much cheaper or free and have settlement targets of <60 seconds), and it's a store of value because of technological controls (vs monetary policy).

I want to be open minded and am really trying hard to "stay curious" in this technology domain. Please share any points I would've missed about the benefits of crypto, besides the ability to evade government controls around value transfer or storage and that there is no ability to reverse fraudulent transfers (to the benefit of billions of dollars in theft). I will readily admit it has benefits for folks in places like Venezuela, Turkey, or anywhere else with bad faith fiscal and monetary policy, but not the world as a whole. I know of people in Venezuela who are attempting to operate outside of the dysfunctional financial system, and they use Zelle [1]!

[1] https://www.google.com/search?q=Venezuela+zelle

Lets focus on one topic instead of a hodgepodge of unrelated reasons why you dont have confidence in this system

Banks state backed insurance came retroactively and it took decades for people to feel confidence in that system and is one of several factors in why the customer experience has things you like. You can still find a sliver of society that doesn't trust banks. That confidence and transaction reversibility isnt inherent to banks, and the lack of these redundancies isnt inherent to crypto.

Can you respond to that specifically?

> You can still find a sliver of society that doesn't trust banks.

I don’t believe it’s necessary to pander to fringe groups, just as I wouldn’t entertain the concerns of sovereign citizens and similar folks “off the reservation.” Financial and banking regulations in developed countries (including the US) are robust, and arguably are sufficient to provide a firm safety net for participants in the system.

No need to address my other points.

Your other points also assume crypto asset users even care about it as a replacement financial system as opposed to a merely parallel one

I just use it and it works for what I want, and yeah for me it is faster and cheaper and better due to the lack of transaction size limits

To some extent, yes the major exchanges are insured:

https://help.coinbase.com/en/coinbase/other-topics/legal-pol...

However, most losses in crypto are not happening from custodial exchanges, but dAPPs that get hacked... or phishing targeting folks that have custody of their own private keys.

> If you steal my gold or other metal store of value, I can pursue you in court and recover my loss

Stolen property is stolen property. Not all stolen property is recoverable. Even stolen property with a paper trail may not be recoverable (ask Bernie Madoff fraud victims who have expensive lawyers) or may not be compensate-able. Cars, bikes, phones, etc. get stolen every day. If I meet someone to buy something for $1000 cash and they just run off with it, I've little recourse.

I'm a crypto proponent, and I'm pretty pro regulation.

The reason is because integrating current legal systems with crypto actually makes it more powerful and valuable. Existing legal frameworks can be used to link a purely digital world to the physical world; ex. for us to reliably trade tokens in physical assets (house, painting), we need courts and systems we can leverage for confidence and rule of law.

Therein lies a tradeoff and irony, by mixing such systems. You might say "just build it on a centralized system", and in an ideal world that would be great. The problem is that bureaucracy and politicization of systems make it impossible for innovation to occur: simply look at the friction facing car sharing (Uber), online betting/gambling, housing sharing (Airbnb), etc. Those things can't be the wild west, but society is clearly better off and wants those services.

I suspect some jurisdictions will be friendlier to crypto and more willing to explore those spaces. Innovation will flock there, and eventually everyone else will just follow.

> That is incompatible with the law.

who says? that premise seems to operate on the idea that justice only works on stuff that can be returned to its previous state.

if anything crypto has proven that big heists don't pay off because naughty wallets get immediately blacklisted by exchanges.

How much value has been lost to inflation this year? Why is that acceptable but coding errors are not? I am not a crypto-currency enthusiast but I remember the Bitcoin whitepaper arguing against centralized currency. So it was critical of the Federal Reserve.

I think people should be allowed to choose. If they don't want regulation then fine.

Value != price

I believe value is transferred to the government by inflation similar to a tax, not actually lost.

This depends on the cause of the inflation. If an asset loses value because it becomes less scarce then no value is lost. Inflation can happen for other reasons to.

I don't think that's how the western world works. If someone or something doesn't want regulation then we look the other way. Crypto became so big that we now have to protect investors that doesn't know what they're doing. Overall we have to reduce scams, increase trust and liability

> Why is that acceptable but coding errors are not?

People voted for and happily accepted the policies that created the inflation. Inflation is a consequence of Congress allocates trillions of dollars in spending that can only be funded by debt. Whether the Federal Reserve converting that debt into money is merely the only way the elected government can receive the money it desires without collapsing the economy.

Who's being protected if I'm fully aware of the risks? I feel like education is much more valuable than dictating what is "too risky" for an individual investor.

But agreed, what you've described is the most-likely outcome.

The rest of the population is protected. It's problematic to have both the disillusioned scammed and scammers running around with freshly acquired capital to do more harm to other people.

The rest of the population should be made aware of the risks before participating

I am talking about people who won't participate like me. It's in my interest to regulate crypto. It's not because I care about people who lose money investing in some nonsense. It's all good, stupidity should have consequences. I do care however about scammers having more capital to conduct more scams in other areas of life or worse yet using it to buy politicians. I also care about the danger of having some % of the population (mainly young men) who just lost everything and won't find a place in society pushing them to crime or marginalized life.

I mean those are the same reasons we have to ban pyramid schemes for example - we don't want to have a lot of losers (even if they are dumb losers who entered the scheme on purpose) and unethical now wealthy winners.

Perhaps some kind of centralization could help with that.