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Comment by parkingrift | Hacker News Reader

Crypto fans want deregulated finance. Crypto fans get mad when deregulated finance is comically unfair.

You really can’t make this up.

Embrace this. It’s exactly what crypto is all about.

A lot of the rah-rah boosterism of "decentralization" is coming from VCs that saw how much money there is to be made by ignoring laws and regulations for long enough. Airbnb and Uber are the most brazen examples of this.

What's left unsaid of course is that the only interest deep-pocketed investors have in dismantling elements of the financial system (MC/Visa dominance, KYC/AML checks, suspicious transactions disclosure rules), is so they can replace it with a system that they personally have an equity stake in.

> they can replace it with a system that they personally have an equity stake in.

Isn't this a fact about capitalism and not at all specific to the financial sector?

I think this is the expected cycle of business long term.

1. Entrepreneur notices an opportunity to avoid overzealous regulations and provide better value to customers

2. Everyone wants a piece of the action, bad actors start to move in and updated regulation is required

3. New regulations get out of hand and start to become extremely costly to comply with (see banks)

4. New entrepreneur comes along with a novel way of avoiding said regulations, providing better value to customers again. Repeat.

At any given point in time the industry is either in cowboy crypto mode, or crusty overregulated bank mode. Both have drawbacks, and it’s just a pendulum that swings back and forth.

“Overzealous regulation” = regulation they prevents me as an “entrepreneur” from profiting off of unsophisticated people, in this example.

Who determines what qualifies as “unsophisticated”. This is where the overzealousness creeps in. Regulators always push for more regulations.

Regulators discover and patch regulatory gaps. One might say that’s doing their job, versus overzealousness.

So a “poor” but highly knowledgeable financial planner making “only” $180k a year can’t invest in their friend’s startup because the regulators deem it too risky. But some random dentist can?

https://www.bloomberg.com/opinion/articles/2018-09-24/earnin...

The dentist can weather the poor investment. Knowledge does not make you financially solvent. It just improves your gambling odds as it relates to equity investment.

From my perspective, only letting people who are well off enough to 'weather the loss' seems like something that only exacerbates the wealth gap.

Super off topic, but the wealth gap is exacerbated by not taxing the wealthiest at a high enough rate, not regulations against capital market participation in highly speculative ventures. To argue that accredited investor regulations are the problem is no different than arguing for lottery tickets or penny stocks as an investment strategy for low income citizens.

Lotteries are super regulated though, it's (no matter the country) an utter nightmare, even stuff like a school's trinket raffle. The reason is a shitload of people making "easy profits" by frauding people.

The wealth gap isn't going to shrink by making it easy for startups (or "startups") that can't convince rich strangers (or friends and family, or crowdfunding platforms) they're worth investing in to convince larger numbers of less rich strangers to do it instead.

Most companies funded by professionals go bust and the risk adjusted returns to VC as an asset class aren't that great: the funds that have spectacular returns being balanced out by those that lose their LPs money. And few unicorns are going to be spending their effort pitching average earners for $2k cheques. Why would we expect the average joe to invest better than the pros with less capital to diversify, no board seats and substantially worse dealflow?

You're not going to find a welcoming crowd here criticizing startups on Y-Combinator news, a site written by Paul Graham and a site catering to a startup accelator's usual audience.

There are financial criteria, or professional criteria to reach accredited investor status. In particular, any investment professional that has passed the Series 7 exam (or a few others) is an accredited investor.

That regulation seems sensible to me, and not overzealous.

https://www.sec.gov/education/capitalraising/building-blocks...

I work in fintech. I'm not sure what bank regulations you think are overzealous. To give an example, banks can legally keep you from accessing your data. Whether by blocking your screen scraping or providing an API with poor coverage.

You understand I imagine that the regulations don't use the word "unsophisticated" and as such it's a red herring. We have these (few) regulations because banks and their consumers are not entering into a business arrangement on similar footing. I'm not "too big to fail". I don't get a bailout.

Banks love to collude with one another or engage in predatory behavior, and when we repealed the Glass-Steagall act in 1999 it took less than a decade for the subprime mortgage crisis to rear its ugly head. Allowing banks to also act as securities firms will continue to show us these "once in a lifetime" economic recessions every decade or so. And would you look at that? It's been over a decade since the subprime mortgage crisis, yet here we are back in the same glut.

Crypto doesn't solve any of that. It solved double spending. Most of the "exchanges" that people are using are mixing banking and securities, and when crypto blows out there is nothing left to catch most of the retail investors that shoulder that cost. There already are so many examples that listing them is prohibitive, but I'll remind everyone that Mt Gox handled 70% of all Bitcoin transactions at the time and lost 6% of the entire Bitcoin circulation at the time to hacks. No FDIC insurance, do not pass go, do not collect $200. Laissez faire becomes laissez tomber.

I wish people were honest about why they like crypto -- it's a speculative asset in a time when most people can't afford appreciating assets, and it doesn't require an ID if you avoid exchanges so you can buy contraband. The drawbacks are someone can code a button that is difficult to inspect and if you press it your entire wallet is drained with no recourse. Haven't even touched on the energy or silicon expenditures for a system with laughably tiny adoption

Could you share a citation for your claim of "laughably tiny adoption"? What data are you looking at to reach this perspective?

A definition of "adoption" would also help here. Are we counting the zero-sum game speculators as "adopters", or are we counting something like flows enabling the legally compliant exchange of goods and services in the real world?

You're missing the point entirely. It's not as if the regulatory landscape is only decided by regulators. The fact that we have balance in regulations is because other people push back on regulators (legislators, lobbyists, etc). This is a good balancing act, that should result in reasonably optimal regulations.

But it doesn't mean the moral hazard doesn't exist.

I cannot think of a single previous business cycle that was driven by this dynamic. Can you give some historical examples? This strategy seems unique to the most recent generation of capitalists (sharing economy, crypto stuff, etc).

The 2008 bubble was largely driven by the deregulation of financial instruments (and non-regulation of new instruments) in the late 1990 and early 2000.

It was also driven by easy fed dollars and banks that knew they'd be bailed out.

Lehman Brothers didn't know, Barclay's acquired them for pennies. Same with Bear Sterns (JP Morgan acquired) and Merrill Lynch (BofA acquired).

Also quantitative easing began as a result of the massive loss of trust between banks as a result of the crisis. Every central bank in countries with big financial centers had to follow a similar playbook.

Banks didn't expect to be bailed out. That question has been studied

Bank upper management just didn't care that they'd be bailed out or not because their incentives were on fairly short term horizons.

This isn't necessarily a bad thing. It's probably good to stop strangling the economy for a bit once bad actors disappear. Moreover, in many cases the regulators themselves are corrupt (e.g., regulators exempting lenders from regulation leading up to the 2008 housing crash), so the regulation may not be delivering the intended value and taking another swing at it in a decade may not be the worst thing. Further still, in a few cases, the regulation may actually not make sense any more due to some change in the landscape--it might be similarly good to back off the regulation, see what problems arise, and address them accordingly (i.e., control loop).

> e.g., regulators exempting lenders from regulation leading up to the 2008 housing crash

Congress changed the regulations, not the regulators.

I really have no idea what examples you're thinking of.

The concept of visa/mastercard was also largely unregulated at the time they launched. Take a look at the history of visa article on wikipeida https://en.wikipedia.org/wiki/Visa_Inc.#History

Visa was not the first, and other tries to do a credit/charge before them were much worse or limited in scope. This is similar today to what is happening in web3/crypto. If you don't think the ingenuity of humans will get us somewhere productive with these technologies, then I don't know what to say to you.

Quotes from the article about the launch of visa:

> In the weeks leading up to the launch of BankAmericard, BofA had saturated Fresno mailboxes with an initial mass mailing (or "drop", as they came to be called) of 65,000 unsolicited credit cards

> By March 1959, drops began in San Francisco and Sacramento; by June, BofA was dropping cards in Los Angeles; by October, the entire state of California had been saturated with over 2 million credit cards and BankAmericard was being accepted by 20,000 merchants.[18] However, the program was riddled with problems, as Williams (who had never worked in a bank's loan department) had been too earnest and trusting in his belief in the basic goodness of the bank's customers, and he resigned in December 1959. Twenty-two percent of accounts were delinquent, not the 4% expected, and police departments around the state were confronted by numerous incidents of the brand new crime of credit card fraud.[19] Both politicians and journalists joined the general uproar against Bank of America and its newfangled credit card, especially when it was pointed out that the cardholder agreement held customers liable for all charges, even those resulting from fraud.

The Cold Start Problem, by Andrew Chen, devotes a chapter to this as a case study. I don’t recall it covering these negative aspects, which are obviously important to consider. Still a great book for startup growth ideas though.

> This is similar today to what is happening in web3/crypto. If you don't think the ingenuity of humans will get us somewhere productive with these technologies, then I don't know what to say to you.

They won't, because they achieve nothing that can't already be accomplished with proven technologies. Axie Infinity could easily be built using regular plain old databases, but they built in on the blockchain using a terrible bridge architecture and as a result had $600 million stole. Such innovation.

What can't be achieved otherwise is digitally transferrable value without government intervention.

It's true. AirBnB and Uber/Lyft exist almost entirely as tools to weaponize regulatory loopholes. True of a lot of analytics tools as well.

"As all tech industry observers are aware, the twin pillars of a successful startup are cost shifting (i.e. user generated labor) and regulatory arbitrage (i.e. tax avoidance)."

This is so on point.

To me, and many others active somewhere on the "regulated finance" spectrum, the way crypto kept going on and on how awesome "deregulation" is from a consumer standpoint was tragically ironic. The vast majority of regulation is there to protect market participants.

>The vast majority of regulation is there to protect market participants.

Anyone involved with GME knows this isn’t true.

The vast majority of the nasty stuff that happened around GME was not the work of regulators trying to hurt ordinary investors.

The vast majority of regulation is there to protect CERTAIN market participants.

I actually think the opposite. Causing a short squeeze is market manipulation. Regulatory agencies let it happen anyway because it was done by random nobodies.

If a short squeeze happens that by definition means the shorts were over zealous.

If a market allows shorts it should allow a squeeze as a mechanism of balance.

The market allows short squeezes. SEC too. What the SEC doesn't allow is the deliberate triggering of short squeezes.

I'll believe their not allowing it when their soft gums and limp regulations have teeth again. Fines are a cost of doing business in many cases, unfortunately.

> Anyone involved with GME knows this isn’t true.

People involved with GME used to refer themselves as the "Apes", and reading their main forum on /r/wallstreetbets back then, that would be a pretty accurate characterization of what they "know".

I think crypto fans want transparency and an equal playing field, and are more afraid of things like regulatory corruption and markets that are not open to them. It is not clear that "regulated finance" prevents comically unfair outcomes either. You still have insider trading that is legally protected, discriminatory rules like accredited investor qualifications, and abuse of the legal system by the rich to avoid regulations with loopholes or lobbying.

Um, being an accredited investor gives you exposure to investments that aren’t transparent. You don’t get the same access to financial statements as with public companies.

If you want more transparent investments then you should be advocating for reforms that will encourage companies to go public sooner. This would be reversing the trend in recent years where companies stay private longer, which allows them to not disclose how they’re doing.

Accredited investor rules was an example of not having a even playing field. The market is not open to everyone which contributes to unfair outcomes. I'd welcome reforms to transparency as well there, as lack of transparency also contributes to unfair outcomes (the company can exploit investors).

The accredited investor rules are in place to protect people who can’t bear the losses from an extremely adversarial financial system. I promise you that even if you get rid of the rules, people with a few thousand dollars to spend still would not have access to the best investments.

I believe that every financial transaction has the potential to be adversarial, there are many ways outside of investing that the poor are disproportionately exploited (lotteries, debt interest). I think the libertarian perspective is that we shouldn't have protections that prevent people from making personal choices that result in harm to themselves, but only from harming others. I think that transparency for the companies seeking investment, or education of the investors themselves are better ways to restrict investment. Net worth/Income is not a fair criteria.

> I think the libertarian perspective is that we shouldn't have protections that prevent people from making personal choices that result in harm to themselves, but only from harming others.

There are a few ways that someone bankrupting themselves via bad investments does hurt others:

Dependents will be significantly harmed

They are more likely to end up homeless or in jail on the dime of society

They are less likely to be a productive member of society.

I suppose the libertarian response would be that if someone bankrupts themselves, let them die homeless on the street - but I don't think you'll get agreement from any significant portion of society on that approach and even then someone has to pay to clean up their body.

Could you be clearer about what you mean by transparency? Do you think private companies should make their financial statements public? Do they need to be audited?

I think trading on the basis of private information at the expense of other shareholders without the same information is the problem. I'm less concerned about the specifics of filing requirements, and more concerned about information asymmetry regardless of auditing/reporting obligations. I'm not sure I know enough to recommend a specific policy here, my original comment was just what I believe to be some of the flaws that 'crypto fans' see in traditional systems.

Okay, fair enough!

However, reporting requirements and auditing are all about making sure everyone has access to the same, accurate information about a company's financial situation. Insiders will learn about changes in a company's finances before outsiders. If they can disclose this to some investors but not others, or even disclose it to some investors first, then that increases information asymmetry.

But this doesn't seem to be something that crypto fans are interested in, because they're not really investing in companies?

I think if the investment story of companies was better, maybe there would be less demand for crypto in the first place? Another big appeal is that in crypto the rules (governing the crypto itself) are not changeable by humans. This eliminates a large category of manipulation by insiders (while opening the door to other problems).

As I see it, insider trading rules are less about "information asymmetry" and more about avoiding conflicts of interest between the decision-makers in a company and the investors they are supposed to be working for. It is a given that not everyone will have exactly the same information—combining all those separate viewpoints to arrive at a single market price is why the market exists. However, the insiders have a duty to their employers—the shareholders—and insider trading puts the insiders' personal profit at odds with the decisions which will best benefit the company. They weren't given access to that information and a position where they can guide the direction of the company for the purpose of enriching themselves at their principals' expense.

The difference being: Under this interpretation insider trading is purely a dispute between the shareholders and their hired employees / agents. No one else has any standing.

One could argue that companies ought to go public sooner, with the concomitant obligations and transparency on one hand, and the investment opportunities for unaccredited investors on the other. Rules with criteria such as revenue, employees, or something could achieve that.

Accredited investing requirements are to keep non-experts or people without money to lose from being swindled by companies which aren't required to be transparent with their financials.

Public companies swindle quite often, and usually with more catastrophic results.

When are we going to admit that the current rules are no longer working?

So then you agree that accredited investing requirements aren't the problem?

So, given that companies swindle with catastrophic results, you're suggesting to have fewer rules and regulations? Less enforcement and oversight?

> Accredited investor rules was an example of not having a even playing field.

1. Having an income that qualifies you as an accredited investor doesn't mean that you will have access to higher quality investments.

2. Even if you don't qualify as an accredited investor, you probably still have access to the same set of investments that a capital-poor accredited investor has access to. As an accredited investor, I've never had access to an investment opportunity which I couldn't have also accessed without being an accredited investor. No one checks, and the "opportunities" are mostly not great anyways unless you have a lot of capital and connections.

The operative things that unlock unfair investment opportunities are 1. one's professional network (or family), and 2. access to large amounts of capital.

You can counter this assertion by providing a list of investments which are open to all accredited investors, do not require significant amounts of capital, and which have higher expected return with lower risk than investments that are available to non-accredited investors.

The common misconception that becoming an accredited investor suddenly gives you access to high quality investments with super high returns for low risk is one of the best justifications I've ever seen for keeping the rule in place... which is particularly funny because I'm not even an avid fan of the accredited investor rule.

You are basically saying that accredited investor rules are not successful in excluding people from making certain types of more desirable investments, because there are other barriers that are in place anyway. I think this is true, but beside the point. If you want to have an even playing field for investing, every barrier is an obstacle.

> I think this is true, but beside the point.

I think you missed my point. To reiterate: the fact that people believe that it's not true is, ironically, a convincing justification for the accredited investor rule.

I'm pointing out the irony, not defending the rule per se.

> If you want to have an even playing field for investing, every barrier is an obstacle.

This clearly isn't true.

First, it's sort of prime facie false. Investments usually happen in markets. Markets are human inventions comprised of collections of barriers on behavior and enforcement mechanisms for those barriers. (Investments that happen outside of markets do exist, but they usually involve violence and/or coercion under threat of violence, so probably not what you mean when you say investment.)

Second, there are many ready examples. E.g., SEC filings and public exchanges are clear barriers to entry in fund raising, but also clearly level the playing field. The alternative is that the only way to know about a company's finances is to know the right people.

I agree that markets are not natural and don't happen magically without human oversight and rules. But generally we want those systems to increase participation in the market. The criteria of net worth as a obstacle to market participation seems pretty indefensible here. It is hard for someone to commit to changing their net worth in the same way that a company can decide to become public, or that a wealthy person can sign a contract saying they are aware of investment risk. I would support some rule like "you must have either this net worth or prove that you are knowledgeable about investment in some way". The criteria has to be something that people are able to overcome.

At the risk of sounding like an incredibly broken record:

>> I think you missed my point. To reiterate: the fact that people believe that it's not true is, ironically, a convincing justification for the accredited investor rule. I'm pointing out the irony, not defending the rule per se.

and

>>> I'm not even an avid fan of the accredited investor rule.

So, as I've stated in every single post in this thread, I'm not defending the accredited investor rule. Cool?

The justification for the accredited investor rule is "people are idiots". Again, not even that rich = less of an idiot. The premise of the rule is that rich people can afford to be bamboozled by scams and shitty investments... er, I mean, take on "higher risk investment opportunities".

I find that justification uncompelling on face.

But then people come along and complain "I can't use prosper.com to make unsecured personal loans to randos for an expected return of 5.7% per annum on loans with 15%-20% APY during a time when every other asset class out-performed and with the front end of that window overlapping with a time when unfathomably higher quality debt products were offering similar returns on 3 year timeframes". And just listening to them makes me second-guess myself.

My point? It is ironic and humorous that the most compelling justification for the accredited investor rule is listening to people talk about how they would invest if the accredited investor rule didn't exist.

For the record, since people keep completely losing the plot: I think something like an educational requirement makes a lot more sense.

>> I would support some rule like “you must have either this net worth or prove that you are knowledgeable about investment in some way”

This is the accredited investor rule. You qualify as an accredited investor through income, net worth, or having a current Series 7/65/82 license.

Thank you for pointing this out, I had no idea!

neither you nor parent post are absolutely right, of course. In the USA in the 2000 era, a lot of people with the ability to place large betting stakes on the table, using access to market-makers and leveraged buys of all kinds, were able to push around a LOT of money, mostly profitable, for quite a while. The party ended, except it didn't. The same over-leveraged tactics by players with access, except this time against one of the most protected asset classes, homes, almost collapsed the entire system with their excess. There are tomes written about this now, fifteen years later. Its not clean, fair or balanced.

Prosper.com and similar lending platforms do not require a lot of capital but users are required to be accredited investors.

On the customer side, this website offers high APY personal loans (my credit card is literally a better deal). On the investor side, the advertised rate of return is 5.7% between 2019 and 2022.

1. An effective return of 5.7% on unsecured loans with 15%-20% APY is... not a good deal. This signals either exceptionally high origination fees or extraordinary risk. Except it looks like you are investing in individual loans? So you don't even get this amortized 5.7%, but actually something that looks closer to "either 15% return or you lose your principal".

2. The rate of return is lower than every other broad asset class over that time period except for investment grade bonds, which weren't that far behind in 2019 and were probably a better deal given the enormous difference in risk profiles. Certainly high yield corporate debt was a way better deal on a risk-adjusted basis than given randos high-yield unsecured personal loans.

3. Most importantly, to my original point, you can get much higher quality exposure to high yield consumer debt via any brokerage account.

This is sort of exactly what I mean. Most of the "opportunities" widely available to accredited investors are really shit deals.

> Prosper.com and similar lending platforms do not require a lot of capital but users are required to be accredited investors.

Last I checked to be an accredited investor, in the EU at least, you had to have 1 million EUR available for investments. So an organism (like a bank), where you have that amount, will certify that you have it and then you can get labelled "accredited investor".

As a sidenote I don't see it as proving you're savvy or anything: it's more like a club where they don't want "plebs" to pollute their members.

The whole concept stinks.

In the US $200K income suffices.

Also, if prosper.com is the "club", then it's a pretty shit club. VISA provides exposure to the high yield consumer credit market and had returns that were modestly higher than prosper over the same time frame. By which I mean ~100% appreciation over 3 years vs. 5.7% per annum. And the risk profile of the equity play might even be lower; we don't know, since the distribution of defaults is not published by prosper.

These days there are a number of platforms like Globevestor that show the kind of deals available to accredited investors. They don't get you access to the same deals that you get by working Sequoia, but that's still better than what non-accredited investors get access to.

(WeFunder, specifically, tries to skirt the accredited investor regulation and offers tiny (they advertise "as little as $100") investments to non-accredited investors. It's not clear to me how they're doing that legally other than handwaving "crowdfunding platform" around.)

Accredited investor status itself doesn't give you access to higher quality investments, but it keeps the poors out from being able to angel invest in their professional network. If I'm not an accredited investor and I have $10k that I've saved up and want to plow into my kid's friend's uncle's big thing that they're working on? It might turn out that the uncle's a total scam artist or the next Elon Musk, but it's my $10k. I'm allowed to go to vegas and put it all on black if I wanted to, so why aren't I allowed to invest same as an accredited investor?

Equating public financial statements with "transparency" is a fallacy. It creates moral hazard and over-emphasizes private audit facilities.

Is it objectively better than non-public financial statements? Maybe. Is it worth saying this alone should draw the line on what is considered a "safe" investment? No.

Again, the OP is asking about access, not what you believe about "transparent investments"

"Crypto fans" never wanted centralized exchanges dominating the entire space. Cryptocurrency was invented to put an end to banks, not to create new unregulated pseudo-banks that are even worse than the previous system. You think we're not aware of the fact that exchanges have access to vast amounts of market information? They can literally bet against their own users on futures if they want.

We want deregulation when it comes to our money. We want the ability to transact with absolute unconditional freedom and privacy. These exchanges? Hell yes, go ahead and regulate the crap out of them. They are not our friends. They're banks. The biggest failure of crypto is the need for exchanges. We were supposed to mine our own coins and use them in everyday transactions.

Exchanges create the use case for virtually every transaction. Strict P2P is closer to the original vision, but the world of using crypto as a fiat proxy, the potential for profit, and the entire industry of mining equipment, etc, is made possible by the fiat-crypto bridge enabled by exchanges.

From my experience in cryptoverse, you and all the idealists who still think like this are in the minority, completely swamped by all the people who don't care which way it goes so long as they get filthy rich

Count me part of the minority then

I don’t think it’s a minority position, but we haven’t figured out how to make it work yet.

Another “minority” checking in.

>Crypto fans get mad when deregulated finance is comically unfair.

I’m curious as to where you’ve seen this sentiment from crypto fans? It seems most of the people getting angry about this are people who already disliked crypto and are using this event to add more fuel to the flames.

I doubt non crypto fans are doing investigatory research into Coinbase insider crypto purchases and complaining about it on Twitter, Reddit, and HN. Just a hunch.

Do you think cobie is mad here? Or implying he wants more regulation?

Is that a joke? That group is always looking for things they can point to and say "see I told you crypto was bad". This is typical of any industry or topic to actively look for confirmation bias, it's just human nature.

> I’m curious as to where you’ve seen this sentiment from crypto fans?

I mean, Ethereum itself forked over "hey that's no fair" when the DAO got compromised.

Are you saying the fork was a bad thing? Or are you critiquing crypto people for not living up to their values?

For both points, I'd like to mention that there is no universal value set or profile.

Neither; I'm answering the question about "where you’ve seen this sentiment from crypto fans", and this is a solid example of it.

That's not a general observation about all, or even most, "crypto fans" as the earlier comment implied but rather just part of the Ethereum community. And it was still decentralized, as a majority of the users of Ethereum had to agree to the fork before it could take place. The DAO fork was a bad decision and set a poor precedent but it's unlikely to be repeated—a fork in the chain at this point would have too much impact on too many other tokens to be a viable solution to a single buggy smart contract.

This is a strawman. It also paints “crypto fans”, as some monolithic group that all think the same way.

I am a crypto fan and do not “want deregulated finance”. It is not “exactly what crypto is all about”. I think most in the space would actually like to see more sensible regulation.

> It also paints “crypto fans”, as some monolithic group that all think the same way.

This is unfortunate. However, in my experience of crypto fans it seems like a large - probably very large - majority of them are fans of deregulation and consider this one of the main positive points of crypto. Would you say that's incorrect?

I would say what you think that means is incorrect.

Even Cobie's tweet is absent any specific stance, and features a funny gif of Nancy Pelosi who is also a beneficiary of some really awesome trades.

Many people are fine just watching addresses and filings and copying their trades. Now we know one address that loads up before Coinbase announces.

I think "crypto people" are tired of things being a constant state of flux and just want governing bodies to make some kind of decisions. People really want to know what the rules are so they can make more informed decisions.

This is quite true. Many of the calls for regulation by "crypto people" which I've seen are really just a reaction against an uncertain regulatory environment. In short, they just want the regulators to make up their minds already. The biggest wildcard and source of volatility in the crypto space, IMHO, lies in the inconsistent and unpredictable responses we've seen from politicians and bureaucrats, not the tech, the state of the market, or the possibility of falling for some kind of scam.

However, one should keep in mind that certainty is not necessarily better—it depends on what the rules are. Operating in a grey area is better than being banned outright, and overly strict regulation can nullify all the advantages of a new system by forcing it into the mold of the old system it's meant to replace. The ideal outcome is that they explicitly adopt a hands-off approach so that the threat of adverse regulation is removed without being replaced by known adverse regulation in the present.

Very true. The assignment of values to the "group" has been a problem since the beginning (for instance, anonymity wasn't even in the white-paper, but is a common perceived value of crypto)

I don't understand. If you have regulation, you need people that interpret and enforce that regulation. In other words, you need trust. If your system is predicated on trust, you can dispense with the blockchain that does a lot of unnecessary busy work, and replace it by a few guys with an Excel spreadsheet or two, and regulate them. The environment will thank you.

This is such a nonsensical argument. Crypto is a huge space with myriad benefits, which are not negated by having some elements regulated.

For example, perhaps you are in favor of crypto because it is (i) harder for a state to seize or (ii) impossible for a single state to inflate. Those are in part possible because of the distributed decentralized nature of cryptocurrency. Being in favor of those two things does not mean you cannot also be in favor of regulating people that manipulate crypto market by wash trading, in favor of arresting thieves and hackers, in favor of banning insider trading, etc. You can have a system with trustless elements and that still relies on the laws and regulations to enforce certain aspects.

So, you're saying, the government can arrest thieves and hackers, ban wash trading, ban insider trading (and, presumably, enforce that), but cannot ban or seize crypto itself?

I think this is the "have cake and eat it" scenario. Crypto fans want a fresh supply of dumb money into the system to keep their line going up. But also want the more complex scams that might catch them out regulated away.

Do they though? Are you certain these are the same people or are you just lumping them all together as crypto fans because it allows you to shit on then? Crypto fans aren't all the same, it's a bit like saying all HN users hate crypto. They dont, it's a crass generalisation used to score some useless internet points.

You’re conflating everyone in a massive group.

Americans want abortion rights then they pass laws against abortion. Can’t make this up!

Developers want open source then they make closed source products. Can’t make this up!

> Americans want abortion rights then they pass laws against abortion. Can’t make this up!

Literally only 32% of Americans are completely pro-choice: https://news.gallup.com/poll/1576/abortion.aspx

And, actually, most Americans support limitations on abortion.

I'm not sure how you came to the idea that the vast majority of Americans are pro-choice.

Your link shows 81% in favour of abortion, with or without some restrictions, with 19% against abortion. Wanting abortion rights is not synonymous with being pro-choice, which carries implications of no restrictions at all.

I hope I didn't misunderstand what you wrote, but where did you get the idea that being pro-choice means the ability to get an abortion from 0 months to 9 months pregnant?

There is obviously a spectrum to being pro-choice, but if I had to bet I'd put the majority of pro-choice folks follow: that woman has the right to choose to have an abortion while the fetus is generally considered pre-viability by the medical profession and under extreme circumstances where the life of the mother is at risk and/or the baby is now non-viable or will suffer a short and traumatic life.

Thanks, it seems that I have been interpreting the term pro-choice incorrectly.

Eh, I think half the problem is that I've met a lot of people who spout the "Pro-life is not anti-choice!" line. They're in favor of legal abortions, yet call themselves pro-life.

It gets muddy when you start to talk about wanting it "legal only under certain circumstances". How the people in that group identify is essentially a coin flip.

> And, actually, most Americans support limitations on abortion.

Yes. Like, I think it should only be legal during the first trimester. I still call myself pro-choice.

I think the post you're responding to is correct according to the survey you shared.

First, a quick note. The gallup poll posted by onlyrealcuzzo seems ripe for "lying with statistics" on either side of the issue. For example, we could say "only 32% of people are totally pro-choice" but could also say "open 19% of people are totally pro-life". We could say "60% of people support Roe vs Wade" or we could say "most Americans do not support third trimester abortions without special reason".

Interpreting the poll with respect to a specific claim therefore requires care.

As a reminder, GP stated:

>> Americans want abortion rights then they pass laws against abortion.

First, do Americans want abortion rights?

The only question on the poll that directly asks about "rights" is the question about Roe v Wade, and nearly 60% of respondents do not want Roe-Wade overturned.

Second, do Americans oppose laws being passed against abortion?

Only 22% of respondents are dissatisfied with current laws and also want stricter abortion laws. More importantly, GP's characterization is STARKLY true if we look at how laws have changed recently. E.g., the new Oklahoma and Idaho laws ban abortion in cases of rape/incest. The gallup poll indicates that a whopping 83% of Americans support support first trimester abortions in cases of rape/incest, and that number is still over 50% in the third trimester. This is a clear and unambiguous case of GP being correct according to onlyrealcuzzo's source.

I think it takes a lot of mental gymnastics to interpret the gallup poll as stating that Americans don't oppose the types of abortion laws being passed now, sometimes in strikingly huge majorities.

The whole point of crypto is that it was a form of currency that's unregulated, so a more accurate comparison would be "open source advocates complain when other people use their code without their knowledge. Can't make this up!"

Coinbase is an SEC “compliant” company. What specifically about this company is “deregulated”?

There are very few compliance rules to begin with for this space. I'd imagine that the compliance department at Coinbase is just a dead goldfish

This is the kind of snarky, evasive answer that flippantly dismisses any counter argument and is so typical on this particular site when it comes to anything involving crypto. Never mind that the comment it replies to asked a perfeclty valid, serious question and mentioned exactly the heap of SEC regulations Coinbase is governed by. Absurd.

There are SEC rules against insider trading, yet here appear to be instances of insider trading at Coinbase. So, either they don't apply to these transactions at Coinbase, and insofar this company is deregulated; or the company flouts the rules.

I think us zealots have been clear on this from the start: centralized, custodial exchanges are not crypto. Please come down on them HARD.

What does this even mean? I’m a crypto fan but I dont want to deregulate finance completely. So maybe i’m not a crypto fan. Or maybe the crypto fan online isn’t really representative of reality like most online communities that are largely based off what reddit is spouting.

Im not close to being alone on this. I don’t know anyone in my life who is a “crypto fan” and doesn’t think rules should exist around exchanges.

It’s easy to fight the boogeyman and the HN boogeyman is one of the silliest ones I have seen.

Just like any other group of people, crypto fans are not a monolith.

There certainly are some extreme libertarians that think nothing in the financial world should be illegal and that the Free Market(tm) will sort everything out on its own. To them, insider trading isn't unethical, quite the opposite. People should be using every advantage at their disposal. To them, getting a job at Coinbase to get the inside scoop on upcoming coin listings would be a genius move.

> To them, insider trading isn't unethical, quite the opposite.

This does not follow. Even under the most "extreme libertarian" position insider trading, narrowly construed, would still be an unethical violation of the agent/principal relationship which exists between the employee and the company's owners (the shareholders). Abusing confidential information you have access to as a result of your position for personal gain at the expense of the shareholders would be violation of trust—and most likely a direct breach of your employment contract.

> Crypto fans want deregulated finance. Crypto fans get mad when deregulated finance is comically unfair.

I don't think this is a fair characterization. Most crypto fans I know want regulations, they just want them clearly defined and enforced with software and distributed consensus rather than through corrupt and ineffective organizations like the SEC.

nope not me.

Trading (around crypto) made me realize that systems will always get twisted in all possible ways as long as some group can find a way to benefit. The finance world is filled with subsystems with different information sources and interest. This led to recurrent patterns and more subtle ideas. You cannot know this unless you are in these groups, or pay to be taught a few or wait years to discover it. It's always a blend of opposing forces of various nature. It's probably a very general principle (society works like that too)

Umm, I am a crypto fan and I still don't want regulation. You have to be an idiot to buy something on listing. Embrace this.

Indeed, it's just shifting a regulatory/systems capture situation to the wild west.

There is a difference between ‘unregulated’ and ‘poorly-regulated’. The more defensible position is that regulation never works as intended; it just benefits those that can hire the most lawyers, and state power is used against their weaker competitors.

I’d prefer Coinbase insider trading over Nancy Pelosi insider trading. So this isn’t the end of the world.

There’s no universe where there’s no insider trading and you’re asking me to switch the Coinbase situation for the Pelosi situation. And I prefer the Coinbase situation.

So I can accept the lesser of two evils and kick up a fuss when I don’t like it. After all, if switching to regulated finance is what you recommend, the cure is worse than the disease.

Coinbase would be frontrunning every trade you make. This would be a direct tangible loss to you. Think of it like a GME level fiasco but carried out every few weeks or so. Compared to that any insider trading Nancy does would be diffuse and unlikely to affect you personally.

This is a fair point. I don't trade on Coinbase, but this is what happens at other exchanges too. It is rational to prefer the Nancy-style situation over the Coinbase situation.

Frontrunning gets you a worse price for your trade, so traders would naturally avoid exchanges which practice it in favor of others which offer a deal. There is no natural monopoly on crypto exchange services, though regulation does tend to raise artificial barriers to entry and promote centralization.

The "GME level fiasco" was only possible as a one-time event. You don't get situations like that on a recurring basis because the market adapts.

And yet Coinbase is one of the top exchanges in the world and routinely goes down for "unplanned maintenance" everytime a dip happens. Others are worse!

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