Letter in Support of Responsible Fintech Policy
concerned.tech
concerned.tech
Good because it advocates for more regulation and consumer protection, and points out some obvious concerns with crypto like energy expenditure in proof of work.
Bad because the letter misrepresents the technology and paints privacy as a purely criminal behavior, and suggests the entire technology sector is useless.
> Similarly, most public blockchain-based financial products are a disaster for financial privacy; the exceptions are a handful of emerging privacy-focused blockchain finance alternatives, and these are a gift to money-launderers.
Imagine this argument being applied to End-to-End Encryption. "Most chat messaging apps are a disaster for user privacy; except the ones that are privacy-focused and use E2EE, and those are a gift to terrorists and criminals."
There's lots of privacy preserving crypto tech: Monero, ZCash, TornadoCash, and soon Aztec. zk-SNARK and zk-STARK are recent advances here that dramatically change the future landscape. You can also use CEX as a mixer to provide soft anonymity, allowing regulators and IRS to track your finances, without revealing your accounts to the whole world.
> Blockchain technology cannot, and will not, have transaction reversal mechanisms because they are antithetical to its base design.
This is false. There is a lot of blockchain technology that has transaction reversal mechanisms. USDC and other centralized stablecoins can freeze and mint tokens. Optimistic rollups are built around the very design of transaction reversal. Many NFT projects give the contract owner ability to mint, burn, change metadata, and so on. The original DAO itself was drained and funds reverted by a hard fork, and yet ETH and ETC still continue to exist just fine.
> By its very design, blockchain technology, specifically so-called "public blockchains", are poorly suited for just about every purpose currently touted as a present or potential source of public benefit.
Bah! Perhaps some of the authors would like to shill their own private blockchain companies (Adjoint Inc).
There's a stark line between encrypted communication and encrypted money. If someone can't see the difference between those bits they shouldn't be handling other peoples' money.
Political spending has been equated with political speech by the Supreme Court. That doesn't mean the government can't e.g. freeze a criminal's assets.
Fair enough. I think it's time for those who do to make their case. We've run the experiment. The downsides are documented and tangible. There should be a way to thread the needle whereby the downsides can be limited without strangling all of the upside.
Certainly dragnet surveillance of speech could prevent a fair amount of terrorism, mass shootings, child pornography, etc. Dragnet surveillance of money flows accomplishes that too.
We just as a society decided it was worth it in the case of speech, but for some reason have decided the opposite in the case of money, except when that money is physical cash. None of this seems particularly well grounded in any kind of principled argument for one vs the other.
The benefits to anonymity and privacy are always highly diffuse and hard to observe, particularly in the moment. In another comment you ask for someone to enumerate the upsides, but i'd ask you the same question for speech privacy. What are the upsides to you being able to talk to your friends without the government listening in?
Speech is more primitive, and far less dependent on community efforts, than money. We can theorise working societies without money. I don't think we can do similarly without speech, at least not without changing what it means to be human.
Really? At scales larger than a few hundred people?
Secondly, even if we accept that speech is "more primitive", i'm not sure why that implies anything about how they ought to be regulated.
Crypto has none.
It’s just an enabler and hotbed of a variety of scams.
Any use it may have can only possibly reveal itself after the crypto asset bubble/scams die.
So even if you’re a crypto enthusiast, you should be in favor of this whole disastrous phase for crypto ending so you can try again and actually make it useful this time.
Since crypto has become a completely speculation driven asset it’s become useless for anything other than buying and stuffing under the mattress.
Any value crypto may add to the world will only happen once that dynamic is eliminated.
Crypto has its uses. Crypto also has lots of scams. Crypto bubble popping will not destroy the scams; these are endemic to any semi decentralized system, see email spam and robocalls. We can do much more to regulate, moderate, and improve the tech for better consumer protection and usability, which is one thing the letter calls for.
No, this is wrong. By itself it has no uses besides speculative gambling. The technology fundamentally doesn't enable anything else, if you take that out it's just a really niche and inefficient distributed database. You may be suggesting that some companies have been able to build useful things on top of a blockchain. That might be true but out of all the examples you gave, they're useful in spite of cryptocurrency, not because of it. The exercise for crypto builders now becomes how to separate the useful parts from the ponzi tokens and build just those.
And the earth is flat, and I refuse to accept any evidence to the contrary.
A simple example of crypto being useful is as a timestamped, censorship-resistant and tamper-proof ledger of cryptographically signed messages. That is one use case for it besides gambling, ergo your statement is easily refuted. I presume you will move the goalposts, though.
Of course, humans have been around a long time and had to manage before the bitcoin white paper, so most problems where the best solution involved arbitrary, mutually unknown individuals making transactions about things of value have either been ignored and are considered 'not that important' or have been solved 'better' through the creation of trusted third parties (which doesn't solve the problem for truly arbitrary participants, just moves it), or just forcing the risk onto others who previously had no choice but to accept it. This point of view is mainly just because society has had thousands of years being built around a constraint that the publication of the bitcoin whitepaper removed, and it takes a certain amount of imagination to see the possibilities.
When you think about blockchains, you should be imagining what they enable: nonpermissioned (so even foreigners in war zones, or the homeless can take part), access to an international network that allows cross-party transactions dealing in hetrogenous kinds of goods. The network is by default API enabled and compatible (so I can write a smart contract that uses other smart contracts). It uses modern cryptography (unlike many Banks). Because it allows transactions across organisations and assets, things like flash loans where a loan can be made at zero risk to the lender (because the capital must be returned in the same transaction) are possible, something that is entirely impossible in traditional finance. They enable immediate transactional settlement, which is also hard in traditional finance (how do we swap something so that at no point one party has to take on the risk of the other party not delivering?). They enable groups of people that don't know each other to pool their money. This was impossible in the past without a trusted governing body that would incur costs and therefore need to take a cut.
In finance, the main strategy up to now has been to register a corporation with multiple governments, spend lots of money on large marble buildings and conservative (i.e. non-innovative) smartly dressed staff for hundreds of years in order to give a sense of solidity and trustworthiness. Sure, it works, but that's what's really inefficient.
Second of all, you can easily build a timestamped and tamper-proof ledger without making people pay to access it using speculative tokens. The aspect of trying to assign money value to these tokens is the problem, not the tamper-proof part. Conflating all these concepts together under the roof of "blockchain" is one of the many sins of web3 companies, but it's not true. Another sin is this constant attempt by people to "refute" critics. You don't need to do that, the fact that it happens so often should tip you off that the technology is not the focus of the discussion here. If you ever find yourself getting hostile about this, you're falling for the trap that the marketers are setting.
re: timestamp, prove to us how easy it is to build a distributed and tamper-proof append-only ledger without a BFT consensus mechanism?
The technology is absolutely the focus of this discussion here.
Very simple, throw the wallet holder in jail. I don't know why you're asking this question, you should be able to answer the same question about Tor or Freenet and extrapolate from there.
>re: timestamp, prove to us how easy it is to build a distributed and tamper-proof append-only ledger without a BFT consensus mechanism?
I also don't know why you're asking this question or what it has to do with cryptocurrency or what I said at all. There are BFT consensus mechanisms that don't require the use of speculative tokens. BFT algorithms are by and large, good and useful; the problem comes in when people try to solve this by handing out tokens and convincing people to use them as money. In that way web3 is actually very intellectually lazy to me, the only proposed solutions it appears that most of them have for this is to simply mint more and more tokens.
This has no effect on the on-chain transaction, message, or application, which remains widely distributed across all nodes in the network. Tor is great but has different design goals, such as consensus of the entire network secured by about 10 nodes.
> There are BFT consensus mechanisms that don't require the use of speculative tokens.
What BFT mechanism do you propose to secure consensus of this "easy to build" tamper-proof ledger for a widely distributed network of untrusted nodes? Common choices are PoW or PoS, or PoA with a small number of trusted authorities as it is used in Tor.
Sure, but you can't make those when you're locked in jail with no access to the internet. I believe this was made obvious all the way back in 2013 with the Silk Road bust.
>What BFT mechanism do you propose to secure consensus of this "easy to build" tamper-proof ledger for a widely distributed network of untrusted nodes?
Out of what you said, PoA is the only one that has any chance at being fair over a long period of time because it's a lot easier to eject bad actors from the network. If you use PoA there's not much point to using a blockchain, but this is good actually; it gives you the freedom to choose between any number of more efficient datastructures. PoS is mostly just a loose approximation of another form of PoA (whomever stakes the most is the authority) and it's wholly unnecessary if you get rid of the speculative tokens; PoW (and some PoS algorithms too) are quite literally based around consensus-by-lottery, in my view that's another reason why it will never be useful for anything beyond gambling on speculative tokens. I've seen a lot of variations on the algorithms but none of them can get away from that basic problem without morphing back into another form of PoA.
PoW and PoS may rely on speculative valuation of the token but they aren’t really like PoA at all. The whole concept is that they are permissionless, as opposed to permissioned.
But anyways we have three options: PoW, PoS, PoA. And there are crypto currencies and blockchains for each of those. PoA tends to secure the least amount of value as it’s generally seen as less secure, less censorship-resistant, and less distributed.
> timestamped, censorship-resistant and tamper-proof ledger of cryptographically signed messages.
solve? _That_ is the question that people aren't answering.
The chain’s use is to provide a secure layer for signed messages. It might be a dissident writing a message that cannot be revoked by their government; it might be a transfer of value from user A to B that is not reliant on a central clearing house to allow it; it may be a state change that represents the transfer of ownership of a digital asset like a ENS domain name alias; it might be a more complex application like USDC that enables a stable dollar-like currency to compose with the rest of the blockchain ecosystem. These are some use cases already occurring; there are other ways to achieve similar (like using PayPal instead of USDC) but all have different considerations and costs/benefits.
I'm genuinely beginning to think you're trolling here.
> It might be a dissident writing a message that cannot be revoked by their government; it might be a transfer of value from user A to B that is not reliant on a central clearing house to allow it; it may be a state change that represents the transfer of ownership of a digital asset like a ENS domain name alias; it might be a more complex application like USDC that enables a stable dollar-like currency to compose with the rest of the blockchain ecosystem.
We're over a decade into cryptocurrencies, and years into the web3 world, and we're still talking about "might"? For comparison, kubernetes is a year younger than the term web3, and it is widely used across the world, with well documented solutions to problems.
Further, none of the use cases you mentioned actually work, or if they do they worked without a blockchain underneath them.
> It might be a dissident writing a message that cannot be revoked by their government
We've had that for over 30 years [0]. Putting that on a blockchain doesn't actually help.
> it might be a transfer of value from user A to B that is not reliant on a central clearing house to allow it
I do like this one because it's pretty much the textbook example of what's wrong with web3. This should be it's big selling point except 1) I can trade cash/gold/share certs with someone in person/via mail, 2) it's _way_ too expensive to use for normal transactions meaning that 3) People rely on services like coinbase (for coins) or OpenSEA (for NFTs), which are central clearing houses that you have to trust and abide by the rules of. The first link I found states that Coinbase holds over 11% [1] of the crypto market cap, you're _way_ past the point of "you're holding it wrong" here. If the usage of the solution requires throwing away the primary benefit of the solution, it's not a solution to the problem.
[0] https://en.wikipedia.org/wiki/Pretty_Good_Privacy
[1]
PGP does not achieve timestamped and censorship-resistant record on a distributed network. A closer analogy is Tor which is secured by about 10 authorized nodes worldwide; so a different design space than crypto which is permissionless and secured by thousands.
All of your complaints are just that: complaints. X crypto thing works but not well enough for your needs and expectations. But your supposed solution Y, like PGP or physical USD cash, only achieves some facets of what people are using X crypto thing for.
The suggestion that sending wads of cash in the mail is somehow better, safer, and less reliant on central intermediaries compared to a crypto transfer is a hilarious statement though.
PGP is timestampted and censorship resistant, and of course it isn't on a distributed network. Yet again I'm asking what is the use case for it being on a distributed network. That's also not what you said in your last comment
> All of your complaints are just that: complaints. X crypto thing works but not well enough for your needs and expectations.
That's not true, my complaints are that if you remove crypto from the X crypto thing, it still solves the problem in the same way, meaning there's no use case for the crypto part of crypto X.
If you remove crypto from this equation you are left with a permissioned solution. Which is fine for many uses, but not the same thing.
A practical example would be removing crypto from a USDC or DAI transfer between two people across the globe who wish to send USD-like asset, despite neither of them having access to a US bank account. The proposed solutions are to send cash in the mail, or PayPal, or whatever, and none are the same as a USDC or DAI transfer.
Posts on HN about some payment provider robbing somebody blind and destroying their life's work are a common occurrence here.
We're not too far gone from wrong-think protesters in Canada having their bank accounts seized by the government.
But crypto has no use case. Gotcha.
>It’s just an enabler and hotbed of a variety of scams. T his just keeps getting trotted out again and again on HN as if it were a dying circus horse, but with no real merit. Even analysis by companies that spend all day, every day tracking cryptocurrency use and transactions estimate that only something like 2% of them are criminal. Even if we add in fraudulent/criminal funds that were laundered well enough to hide their origin and purpose from these tracking services, the percentage is still almost certainly a small minority.
Add to that a couple things: First, that not all "criminal" transactions are morally wrong just because they're illegal. No doubt there are anti-Putin Russians right now trying to get their money out of country with crypto and breaking a law or two. Are they scum?
Secondly, yes, there are many, many normal people using crypto for many things. I personally know many who do this, for work payments, difficult transactions because of some regulatory bullshit, remittances and even in one case as payment for contemporary dance services while living overseas. Anecdotes, but I have no doubt that they're extremely widespread, because my friend circle isn't one of crypto bros and money launderers. It's of ordinary people.
How fucking tedious to see so many on a so-called hacker site shit so repetitively and with so much categorically dismissive ignorance on something many of its readers emotionally dislike. It's not hard to verify how exaggerated or just worng some of these dismissive claims are.
Bitcoin <-> some chat system where anyone can see all the messages but not necessarily who sent them
Regular banking <-> private chatting but the government, those in chats, and the chat service provider can get detailed access to logs. A bit like email but with more government access.
Privacy coins <-> a bit like E2E but maybe chat participants don’t know whom they are chatting to. (I’m not super sure on the details).
So I think the first half of your analogy is pretty broken and there are middle grounds (eg government being able to subpoena chat records from companies) in the chat space.
The second issue is that I don’t really buy the analogy between private speech and money. Some people have many orders of magnitude more money than others but that isn’t really the case with private speech (obviously some people may have much more reach when speaking publicly, but this doesn’t go through E2E encryption; attempting to maintain large conspiracies is a social challenge rather than a technical challenge of overcoming group size limits on your favourite messenger). So in some sense the benefits of private chat are reasonably fairly shared across people whereas the benefits of private money disproportionately go to the people with much more money.
I don’t agree with your other point. Whether somebody spends $1 or $1000 on an abortion in the US, they deserve the same degree of privacy, or at least the option to achieve privacy. Replace this scenario with any other that might like to take advantage of E2EE, like a dissident or political activist.
What do you propose to do with those of us who, despite your attestations of its uselessness, have deemed it useful and purchased it with our hard earned money? For example, MSTR has ~$4 billion in Bitcoin on its balance sheet. It purchased it on the free market for reasons that were valid to it. However, you disagree and want to step in and do something about it. What do you propose to do about entities like MSTR?
If cryptocurrency is actually confiscated I'm sure that the US government at least will be obliged to pay out. Given the volatility of bitcoin (and the extent to which it will likely drop if governments come out full square against it) I'm sure there will be legal arguments about what the compensation for the taking should be. But if the use-case is largely either (1) speculation or (2) hiding things from governments and governments limit the upside of (1) with tax or structural changes and crack down on (2) I don't think anyone's going to make the bag-holders whole in case of regulation rather than confiscation. Bigger companies than ~$4bn have gone bankrupt by misreading their market risks before.
To be clear, nobody is proposing confiscation. Once regulated, the value of these assets will presumably fall. People invested in casino bonds don't have a magic claim to restitution when gambling laws are updated.
Penalize you for the collateral damage you caused. Bitcoin has consumed a lot of energy and greatly contributed to global warming. In addition, it has led to a bunch of fraud. In addition, it has made ransomware much more common.
The world is worse off because of Bitcoin and because people like you invested in it.
Bitcoin is the unleaded gas of financial schemes.
Today companies at least have bankruptcy protection and corporate structures that should shield individuals.
That said, I think Bitcoin should face most of the same regulations that other securities face and in the end I think this will help Bitcoin and other cryptocurrencies. I don't think they should be regulated out of business.
The difference is that the tulip craze died of its own accord. This question was posed to those who would like to regulate Bitcoin out of existence.
What about the people seated at the tables in the middle of a hand?
That said, regulations would probably come into effect after some short period of time and likely in stages.
“What about this obscure enterprise software company that took billions of loans to buy Bitcoin? The company’s shareholders would be very sad if they had a margin call on those loans.”
MSTR would presumably have to go back to selling software instead of speculating on unrelated assets. And everybody else can keep their Bitcoins too, it might just not be as easy to convert them to cash.
He answered the question.
Not my problem. It's your life and your money. And of course you know that not everyone who has purchased it has deemed it "useful" beyond the use of hodling until you sell to someone else for more money. I've used BTC myself, to buy drugs 10 years ago. Sadly, it seemed more useful then than it is now.
Anyway, I don't think anything should be done to dramatically affect Bitcoin directly, but there probably should be something done about people taking advantage of the shitcoin market. It's far too easy to make your own crypto and rugpull a bunch of people. I'm quite disgusted with it and with American society's slow cultural procession toward becoming gambling addicts, which is most likely not a coincidence (although, I won't blame crypto for it entirely).
(And no, it's not now nor ever was the same with trading public securities, which have financial statements whose format and structure are regulated by the government.)
I assume you understood the landscape, and the risks, and took the gamble as an informed, consenting adult, and are willing to stand by it as an adult if gamble doesn't work out.
If NOT, well that's exactly what regulations are meant to prevent - make it a little bit harder for uninformed or unconsenting people to make a foolish or unaware gamble. Mostly, about treating it the same as everything else under the sun ("cry me a river", as they say:)
If it helps understand my seemingly heartless position: I have exactly as much sympathy and empathy for somebody spending $4bil on crypto, as for investing $4bil in Phillip Morris or another tobacco company a couple of decades ago.
Just because you "deemed it useful" (i.e. hoped to profit massively), doesn't mean we as society cannot decide otherwise and attempt to limit, regulate, inform, or otherwise stop the madness. And we owe you nada.
This did help, thank you.
Your gambling metaphor is useful, but incomplete. Consider this instead: You come across your fellow citizens gambling in a casino. You decide they must stop what they are doing for reasons. My original question was basically how do you shutdown the casino in a fair and orderly way?
You seem to be saying that when people lose money playing casino games, that is their problem, they signed up for it when they entered the casino. I agree.
However, suppose gambling were made illegal today. Do you think everyone currently seated at a table, people who entered the casino legally, should lose the money they brought into the casino with them?
"Confiscate money from all people in Casino" / "Confiscate all Bitcoin" are, I believe, extremes.both
"Issue licenses for gambling, provide oversight, age restrict, run information campaigns about dangers of gambling, create support and help programs", is, I think, reasonable (and we can further discuss details, and we do; "Are loot boxes gambling"; "should state / group X run casinos"; who and how should be able to gamble, what is the right amount if disclosure, what is an informed responsible consenting adult, etc. All good things for us as society to honestly discuss).
"Ensure bitcoin income is taxed (like every other investment), that it follows disclosure rules (like every other investment), that it is open and transparent and licensed, etc cetera", is I think reasonable and merely catches up the playing field and closes off loopholes that EVERYbody knew were temporary loopholes (and smarter people than me can discuss details). "Government should not spend gazillion dollars blindly investing into this technology hoping to find problem to solve" is also, I think, a statement I'd stand behind. And not unique - there are MILLION fads or technologies or endevours I don't want government to invest in, so don't feel picked on :)
IF that latter option still somehow causes everybody involved to lose money... well ain't that just food for thought though, right? It means people were literally banking/hoping/assuming they can do things without oversight and through magical loopholes forever. I don't want to say "illegally" because there may or may not have been a law in time with new technology. But crypto and bitcoin are almost as much fun to discuss as religion with a Christian apologetic - it gets all shifty very quickly; it is and isn't investment, or a transactional system, or currency, or stable, or volatile, or private or public,or efficient, or safe, reversible or fixed, etc etc depending on needs of the moment and which point we're trying to make.
I don't see anything synonymous with "Confiscate" in that letter. I see it as a small attempt to counterpoint the massive over-enthusiasm, bluster, lobbying, and tall tales that abound around crypto (there may or may not be a nugget of useful technology, use case, future approaches in blockchain; willing to discuss that; but anybody that rejects the observable amount of scam and dishonesty in today's actual crypto implementations, investments, sales pitches and pushes and frankly disinformation campaigns, is not having an honest conversation with me and/or is trying to sell me something and/or has been sold/swindled themselves).
My 100 Croatian Lipa :)
I don't think there's a need or way to "shut down all blockchain / crypto / bitcoin". I don't think anybody seriously proposes that. The letter certainly does not. So the analogy of somebody coming in and taking the gamblers' money doesn't apply - not sure how that would even work in terms of confiscation (though the value of any given chain or crypto currency certainly can, and usually should approach zero, but that's empathically not "somebody else stealing my money":).
But I've been in any number of conferences / meetings / governing bodies where a blockchain / crypto evangelist comes in, flashes couple of dozen slides of essentially nothing, and the non-technically astute leaders get hyper excited about something and get all "Shut up and take my money!" ("In the morning, you'll be picked up in a self-driving car powered by blockchain!" is literally the sentence that was uttered - to wide applause. I felt in a Twilight zone of unquestioning zombies). This TERRIFIES me. Governments adopting bitcoin for alternative currency or inserting crypto where it doesn't belong TERRIFIES me. Because yes, eventually it'll be "too big to fail" and we'll now start propping up stupid-ass systems because "Companies invested $4bil into them and we can't let it evaporate into smoke that it should". And now I and mine will be stuck with stupid-ass stuff.
I'm happy to let blockchain and bitcoin and crypto exist. Let them exist in the same regulated ecosystem and world that all of us exist in. Let the enthusiasts enthuse and investors invest and gamblers gamble. But for the love of all that is holly, let's temper that enthusiasm and counter the immense lobbying and hype before it all gets too far down the black rabbit hole of no return and no sanity.
1 BTC is always equal to 1 BTC.
Venezuelan emigrants have been using cryptocurrencies to get cash back to their families: https://www.reuters.com/technology/venezuelas-economy-regres...
Navalny's Foundation takes BTC and ETH donations and recommends them as the safest option: https://donate.fbk.world/?utm_campaign=10MAR22_fundraising_a...
Several Ukrainian humanitarian and military fundraisers are using crypto: https://nitter.net/kamilkazani/status/1533471887958986758#m
These are just the first three examples that come to my mind. When I see Americans crow about the uselessness of cryptocurrencies, I think of Marie Antoinette.
Crypto proponents trot out these edge suboptimal use cases as excuses to allow an entire global Ponzi scheme to continue, when the discussion should be “what mechanisms can be provided to support refugee value protection and transferring value to friendly nations under attack using existing fiat rails and the laws that protect users of them?” That’s not hard to do using existing systems, but crypto proponents are so wrapped up in the thought of their digital assets rapidly declining in value that it isn’t an option to them. “Crypto must be the way.” when the evidence is clear it is not.
https://www.coindesk.com/markets/2020/06/16/venezuela-is-a-t...
And yes, I've donated to the Ukrainian military through https://uahelp.monobank.ua/ , with a normal credit card donation. But these are slightly different things. One is a catch-all army account, which will probably take its time to percolate the money to whomever the higher-ups think needs it most. The other are grassroots initiatives supporting small divisions or local ter-oboronas (and yes, some of them are probably fake, but I don't think the majority is; it's a risk you take when you're funding anything). Neither replaces the other; in a war, there are things that the central government can do that a local volunteer bataillon can't, and vice versa.
Support from activists and people in corrupt, poor, and developing countries.
Speaking purely from a political perspective, this is a terrible argument. You're addressing the U.S. Congress. The letter this comment thread attaches to lists harms crypto brings on Americans. Your letter lists benefits accruing to non-Americans.
If I were a lobbyist for the original letter's writers, I'd line these two up and end my case. Benevolence has its place. But it's a strange bedfellow to financial deregulation.
This is the literal reading, yes.
Do I know everything about these topic? No, but I'm not writing a public letter soliciting signatures.
Am I a crypto shill? No, I think current crypto is a rip off, but this letter isn't a good argument for that. It's too light on details and doesn't acknowledge the areas where it could be valuable.
Last week the global tech community engaged the democratic process to start a discussion with American lawmakers about responsible innovation and financial regulation concerning crypto-assets. The letter was covered widely by the global press, read by over 25,000 people and signed by over 1,400 new signatories.
https://www.washingtonpost.com/business/2022/06/03/crypto-sk...
Signatories now include folks such James Gosling, Mat Velosso, Martin Fowler, Simon Willison, David SH Rosenthal, Dave Andersen, 25 computer science professors and engineers from Amazon, ACM, Adobe, AMD, Apple, Box, Block, CMU, Cornell, Disney, Dropbox, eBay, Google, GitHub, IEEE, IBM, Microsoft, MIT, Meta, Mozilla, Pixar, Shopify, Netflix, Oracle, Stanford, Shopify, Salesforce, Thoughtworks, VMWare.
Signatories are not only programming language creators, professors, and titans of industry but normal working software engineers who feel strongly about this issue and have the courage to speak up to help inform policy.
https://www.ft.com/content/f4b2fa1a-4057-4b10-9f3b-efa57e6bc...
The thesis is very simple: the status quo needs to change.
The most vulnerable in our communities are getting hurt because of regulatory inaction. And moving forward we need to proceed from a place of informed skepticism rather than reckless positivity.
https://www.vice.com/en/article/jgmyzk/the-pivot-to-web3-is-...
This is all at the same time that the crypto lobby is spending more money than the entire defense sector put together to influence senators and push their corporate interests on the public.
https://www.bloomberg.com/news/articles/2022-06-02/crypto-in...
A grassroots coalition of scientists, think tanks, finreg experts, and legal scholars are organizing to assist the legislative process and ensure that fintech innovation serves financial inclusion and that investors, markets, and consumers are protected.
https://twitter.com/RealBankReform/status/153382048602256998...
The window to sign closes this Friday, and the letter is sent to Congress thereafter. Join the 1500+ other fellow programmers, scientists and engineers in the technology community in making your voice heard on this important issue.
Read the letter at https://concerned.tech
This is a little bit unfair. When I became convinced that cryptocurrencies represented a positive financial innovation I immediately went out and bought some. Obviously the more potential someone sees the more they will be involved. This is a legitimate never-before-in-history situation. It was impossible to get an asset with the mix of properties crypto has before around 2010. This is an exciting era.
This sentence summarizes why crypto is so peculiar. It’s all about belief in some potential, not utility or returns. And you’re supposed to get “involved”.
When you buy a stock or a bond or a derivative or a currency hedge, it doesn’t usually become a way of life. But crypto isn’t a practical financial product so much as a club membership. Bored Apes figured this out and took out the financial pretense completely.
The next real question is how to value it. That'll take a recession to figure out by clearing out the scams, but it'll become clear in time.
Notably less asset-like than e.g. MTG cards, with which you can at least play a game.
Governments, worldwide, have clear goals: to become more powerful, omniscient and perpetual in power, and the basis for this is the money they hold. Crypto currencies attack precisely the money part and consequently affect the other objectives.
The currency digitization movement is global (e-dollar being proposed by the FED, e-Real in Brazil, the digitization of money in India, as well as the banning of cryptocurrencies mining in several countries, claiming: * put your ecological/anti-terrorist argument here *.
The truth is that governments do not tolerate the loss of control and the possibility of currency evasion that cryptocurrencies potentially allow. They also don't tolerate the possibility that when they do shit, they can't print money at will to try to cover it up. Neither do they tolerate not having control over all circulating money, especially with regard to taxation.
Laws like this will continue to be passed easily, worldwide, as it maintains the status quo that governments will do everything to maintain.
PS: I am PRAYING to be wrong on ALL of the above statements....
Plenty of countries have given up their currencies. Presently and throughout history [1][2]. In particular, your toy model of governance isn't terribly predictive of American politics.
> not having control over all circulating money, especially with regard to taxation
Non sequitur. I can invoice from New York in euros or Bitcoin and still pay my taxes on those earnings in dollars.
[1] https://en.wikipedia.org/wiki/Currency_board#Examples_in_rec...
I think it's a mistake to treat governments (especially the elected government(s) like this letter targets) as a singular, rational entity. Instead they are a collection of individual (let's generously assume) rational actors whose career goals are often at odds with each other. These career goals depend on the support of the electorate, which is why petitions can work.
So they have no real demands, just "listen to us about crypto, and not anyone else". I'm all for responsible regulation to protect people from scams, but this is ridiculous.
Signatories include every single mega tech corporation, which is an obvious development; they want to control this too.
The signatures from FAANG companies are mostly rank and file engineers. I doubt their companies asked them to sign, but I think it’s representative of how widespread crypto skepticism is in tech.
My pointed questions are: 1) What are their specific concerns/demands? 2) Who specifically are politicians supposed to be listening to? 3) Why aren't the government appointed CBDC research groups already informing politicians? 4) If they are, then what is this letter about?
This is about on the same level as the "Please stop people from talking about the Wuhan lab leak" letter.
Why does it concern those 1500 people how I decide to store my money? What's next, regulating where I can spend my money and where I can't?
There is nothing responsible about the government interfering in things it should not be interfering with.
This is already a thing. See drugs, slaves etc.
As for the same letter [1] being pushed by critics like Grady Booch, ghuntley, Molly White etc al. who many here know in the industry, we would like to also know the ones who are left blank like 'Darren W. Seng' and 'Stephen Diehl' who are the most extreme and prominent names arguing against crypto. But it turns out that they seem to be connected as C-level executives and co-founders of a private blockchain startup named 'Adjoint' [2] that appears to be in direct competition with public blockchains like Bitcoin, and especially Ethereum.
Again it's very strange to see why that wasn't mentioned in the first place and why it's only specifically 'public blockchains' and not all blockchains both 'public' AND 'private'? This critic [3] seems to attack both of them and doesn't see any difference to them at all. Any idea why all of that including something called 'nanocoin' was deleted and scrubbed off of the internet?
Maybe cryptocurrencies like Ethereum (which has smart-contract capabilities) are the reason why the folks at Adjoint are eternally at odds with the crypto industry and are dedicated every single day to totally getting rid of all cryptocurrencies? I'm sure many have tried going down this path and Seng, and Diehl seem to have already deleted their repositories and associations [3] with the whole of Adjoint to pursuing this long utopian conquest and bringing others on board.
These crypto-assets for sure will be regulated, but once again the goal of getting rid of all of them is a similar path that has been trodden by the free-software activists, anti-IoT activists, privacy activists, anti-AI activists and anti surveillance-capitalism activists etc before them and it has resulted in co-existence rather than a complete and total removal or outright total ban on what they were against. Cryptocurrencies are no different and will co-exist rather than wither away. In this latest push, at least they learnt their lesson with this failed petition in the UK [4].
[0] https://www.nysenate.gov/legislation/bills/2021/A7389
[2] https://www.crunchbase.com/organization/adjoint-inc
[3] https://medium.com/@johny.codes/private-blockchains-even-wor...
There is nothing objectionable with private blockchains (except maybe the hype). They are permissioned, and don't need PoW. As such they're just another data structure: an append-only distributed database that certain people can append to (like git).
It is neither wasting energy, nor a scam, nor an unregulated mechanism to move/launder money.
Is that why companies like Adjoint closed down their products and removed services like 'Uplink' and even basic projects like nanocoin, because maybe they also think that blockchains 'including private blockchains' in their case didn't work for them?
So when a company partners with Adjoint and shut downs their solution, the whole chain is abandoned and rendered useless for these clients; assuming you have read the article [3] mentioned by another critic of all blockchains.
> It is neither wasting energy, nor a scam, nor an unregulated mechanism to move/launder money.
And Adjoint and others still shutdown their private blockchain offerings. Not all blockchains 'waste energy' or neither is the technology a 'scam' (some are but not all of them are) and some of them are compliant with standards like ISO 20020. Otherwise they all would have been destroyed a long time ago.
Why does he not talk about the fact that most of the tools he has built upon, like Bulletproofs, Groth16 provers, Sonic, is research that is funded and driven by the crypto and blockchain space? [a] Why does he seem to hide the competing interest: that the goals of Adjoint Inc, the company he is a director of [b], are to drive more users away from public permissionless blockchains, and toward private permissioned blockchains?
Most crypto proponents will admit they hold crypto and use blockchains, rather than scrubbing it from their timelines and blocking anybody who points out their ties to blockchains. If Diehl were more transparent about his use of blockchain-funded technology and the goals of his own private-blockchain-based company, it would probably give his arguments more credibility.
[a] - https://github.com/orgs/adjoint-io/repositories
[b] - https://find-and-update.company-information.service.gov.uk/c...
EDIT: lol I am getting downvoted for posting these questions, and due to my limited karma its likely that my comment will soon be hidden. the irony.
Nope. And not what I said. Not all projects and blockchain startups will survive either. Hence why some of them end up shutting down or becoming dormant and inactive like Adjoint.
From what I see, the successful ones seem to be partnering up and co-existing with companies like Moneygram, Stripe, Namecheap, Checkout.com, etc. Some cryptocurrency projects and their technologies are more useful than others and some of them comply with standards like ISO 20020 whilst others do not and some of them are more inefficient than others and work better for a use case than others.
> There’s no winning in this space. All critique is off limits because people are concerned that it will devalue their magic beans.
One thing that's certain is there is only one absolute here: There are no absolutes. Which is why both the pro-crypto and the anti-crypto camps will both be disappointed in achieving their very absolute goals, as mentioned in the letter.
Almost everything the open letter says about blockchains is neutral on public versus private. There are two exceptions. (1) They say that public blockchains specifically are a privacy disaster, which seems fair enough since this genuinely is a difference between public and private blockchains. (2) One paragraph refers to "blockchain technology, specifically so-called "public blockchains". (The paragraph suggests that advocates of such technology have "latched onto concepts such as financial inclusion and data transparency", which so far as I know is in fact true of public blockchains and not true of private ones.)
You keep talking about "the folks at Adjoint" etc., but it looks to me as if Adjoint have simply gone out of business. E.g., their website no longer exists. This seems to me like sufficient explanation for why Seng and Diehl are no longer describing themselves as associated with Adjoint. Do you have evidence for whatever more sinister "long utopian conquest" scheme you're suggesting they're engaged in?
Seems false? I don't think you are even sure yourself.
> Almost everything the open letter says about blockchains is neutral on public versus private.
And is that why they didn't 'mention' stopping all 'blockchains' and they knowingly hid their ties to Adjoint Inc.? At least the Bitcoin maximalists are a bit honest at disclosing their associations and holdings when discussing such topics despite their delusional view of a cryptocurrency replacing the whole financial system.
> They say that public blockchains specifically are a privacy disaster, which seems fair enough since this genuinely is a difference between public and private blockchains.
Ah yes, A 'privacy disaster' especially when no-one knows who the pseudonymous creator of Bitcoin really is (unless you do somehow?) or how one can't easily figure out which address belongs to another random address or even when users can generate and have multiple addresses tied to them which makes it harder to trace. No different to tracing someone's IP addresses.
As with having 'privacy', it is also a double-edged sword as it is no different to why E2EE messengers like Signal is also a favourite and safe-haven for terrorists, extremists and scammers to hide and encrypt their communications. Does that mean we need to ban E2EE messengers?
> You keep talking about "the folks at Adjoint" etc...
So they are not at Adjoint? Is that what Crunchbase [0] and Companies House [1] says? Why is Stephen Diehl still CTO of Adjoint? [0] Their services of their private blockchain offering has shutdown but the company has not.
> Do you have evidence for whatever more sinister "long utopian conquest" scheme you're suggesting they're engaged in?
Evidence of what? Trying to ban all cryptocurrencies and projects just like those wanting to get rid of all non-free software completely? Have they all 100% fully gone yet? It's been like 37 years for the free-software movement to remove all non-free software and 13 years for cryptocurrencies to be totally stopped.
A very long utopian conquest indeed attempting to stop all of them.
[0] https://www.crunchbase.com/organization/adjoint-inc
[1] https://find-and-update.company-information.service.gov.uk/c...
I do not know what you mean by asking (I assume mostly rhetorically) "is that why they didn't 'mention' stopping all 'blockchains'?". Why the quotation marks and italics on "mention" and "blockchains"? Why should they have "mentioned stopping all blockchains"? So far as I can tell, they are not in fact arguing that all blockchains should be stopped.
I didn't mean to (and do not intend to) get into a debate about whether in fact public blockchains are as bad for privacy as the open letter claims, or whether it's a bad thing if they are. My only point was: whatever you make of that issue, it is definitely one that doesn't apply to private blockchains, so it is not surprising that when bringing it up they did so specifically with reference to public blockchains, so the fact that they did that is not evidence of any sort of sinister motivation.
How do you know that Adjoint-the-company has not shut down? (To be more precise, it looks to me as if the company is no longer functional even if it still exists as a legal entity. Note that your link [1] shows that the CEO has resigned (and shows no sign that another CEO has been appointed) and that Diehl is no longer a "person with significant control" (i.e., he no longer holds >= 25% of shares or voting rights) and in fact there are now no such people. This looks to me like a failed company in the process of being taken apart for scrap.
If they are no longer offering a private blockchain product, how does that fit with your insinuations that their executives are trying to shut down public blockchains in order to give the private blockchain company they're associated with an advantage?
My question about the "long utopian conquest" stuff was: what evidence do you have that these people are in fact aiming at any sort of "long utopian conquest"? So, indeed, if you think they want to ban all cryptocurrencies and projects, do you have actual evidence that they want that? Again, this open letter doesn't seem to offer any such evidence.
His tweet. He clearly identifies the problem as “lost password” implies disaster. This line of thinking is what the government uses to argue for back doors in cryptography software. The position he is taking leads to the argument that we need our cryptographic keys backed up by the state/corporations so that we don’t lose our life savings.
If you ask the government to prevent the use of cryptography in cryptocurrencies then you undermine the argument that the government should not tap or intermediate all communications.
At the end of the day, a financial transaction IS a message. It’s a command to a ledger to make an adjustment.
I am just arguing against public blockchains, resulting in a very specific, wasteful, and unregulated form of digital money.
I'm specifically asking for a legal theory, not a political framing, because your explicit mention of the Supreme Court implies a scenario where politics will ban/regulate one of both things, and then courts will employ the "money is speech" argument to map the ban/regulation of that one thing onto the other thing.
This is my line of reasoning. Whether he dislikes cryptocurrency or not is irrelevant, but the argument that you cannot have a safe system with private credentials was what I found objectionable.
EDIT: Re legal theory: The idea that cryptographic systems are unsafe is likely to result in a weakening of protections for such systems. Cryptocurrency is an easy target because it’s essentially 100% cryptography and because it has no patron. The banning on cryptocurrencies can be extended to a ban on private keys via the safety argument.
Closest analogue might be gun control (Encryption is legally considered a munition).
Last edit, I promise: this creates a situation where a cryptocurrency wallet is simultaneously a munition (2nd amendment), speech (1st amendment), and secure papers (4th). Legislators could use this nexus to move between domains to expand the scope of any bans.
e2e encryption is in danger as is, and the strongest arguments against both are rooted in the same ideological substrate (criminals vs those needing protection); as are the arguments in favor.
https://news.ycombinator.com/newsguidelines.html
>Please respond to the strongest plausible interpretation of what someone says, not a weaker one that's easier to criticize. Assume good faith.
Edit:
politician> Without the man coming on HN and explaining his apparently incongruous position, though, who can say?
Bruce Schneier explains why he's not coming on HN and explaining his apparently incongruous position to you:
Bruce> Honestly, I can't care very much about random conversations that misrepresent me. Life is too short.
Don> Am I right to presume you don't directly or indirectly advocate for backdoors, and your position on cryptocurrencies is not incongruous with that? ;)
Bruce> Of course not. I don't even understand how "blockchain is useless" has anything to do with backdoors.
Don> If so, could I share that fact, and have you written any articles about your position on backdoors that I could link to please?
Bruce> This might be my latest:
https://www.schneier.com/blog/archives/2019/12/scaring_peopl...
Don, sometimes people can find themselves advocating for policies that accidentally undermine their long held positions in other areas.
Without the man coming on HN and explaining his apparently incongruous position, though, who can say?
He’s saying systems where you could lose your life savings to a forgotten password are unsafe. This is clearly true. He hasn’t proposed a specific solution but I think it’s far more likely he believes in “use other systems” than inserting a back door into the system he’s identified as fatally flawed.
1) Bruce says systems that result in catastrophic loss from loss of a password are unsafe. 2) Reading at face value, Bruce's idea of a safe system is one where your passwords are recoverable. 3) Bruce knows that wallets are secured by asymmetric cryptography, not "passwords". Therefore, he must be simplifying for a general audience. 4) Reconciling the previous two points results in an argument for mandatory private key escrow.
It does not make sense that Bruce would advocate for mandatory key escrow, and yet, that is the logical endpoint of the argument he made in his tweet for supporting this letter.
I am relieved that that is not his position.
By your argument anyone who is in favor or reducing child molestation is indirectly advocating Orwellian levels of state surveillance because some people that want such surveillance might use reducing child molestation as one of their arguments for it.
Similarly anyone that argues for reduction in net greenhouse gas emissions to fight climate change is indirectly advocating for a dystopian future where the government monitors everything we do at a fine grained level because people who do want such a dystopian future might use reducing greenhouse gas emissions as one of their justifications.
And what about building bike paths and walkable neighborhoods and public transit? Also indirectly promoting the surveillance state. They make it easier for people to live in dense car-free neighborhoods, and the denser the population the easier it is to surveil them. Dense housing means you neighbors hear more, and those neighbors might be informing the State. Public transit like buses and trains will have cameras (for safety they claim) but really just make it easier for them to track the movements of many people at once.
https://www.wired.com/story/theres-no-good-reason-to-trust-b...
Other than that, I just want to point out that I didn't say he was advocating for backdoors; I said he was indirectly doing that by way of the argument he had offered in the tweet supporting his post. Perhaps a better way of raising this concern would have been to ask the question, "Does Bruce believe that unrecoverable credentials prohibit the creation of 'safe' systems?"
Crypto is the next cancer from cigarettes, lead in fuel, climate change etc.
The thing linking them is that even after it was widely acknowledged these were a net negative, they continued for a long, long time. Harming a wide group of people uneccesarily and massively profiting a select few.
If I'm correct, the key indicator will be right wing governments around the globe being paid off to allow the abuse to continue and their media going on the attack.
Communist computer scientists, what do they know? They just want to keep the poor white men from getting rich because of political correctness etc. etc. Anyone seen any signs of that yet?
Hope I'm wrong, worried I'm correct.
Here's a prediction: Over the next decade or two, scalable proof of stake crypto currency networks and blockchain-based systems will probably be used as base settlement layers for a growing portion of digital payments, disrupting VISA and PayPal and enabling new ways of sending and coordinating value online.
Not all consumers need or want transaction reversibility, especially if they trust the contracts they are using, like depositing tokens into a DEX contract address that has not changed for several years - this has an extremely low counterparty risk.
A VISA- or PayPal-like reversible payment system is definitely possible to build on ETH as a rollup that takes a 1-5% fee of all transactions in order to cover cost of chargebacks. Many applications already support various forms of transaction reversal in their contracts, look at USDC.
In truth, we may not see VISA-like protocols on the blockchain for some time, as most users are finding the counterparty risk small enough with the base layer that there is little demand for chargebacks and transaction disputes.
This is very different from individual transaction disputes on a VISA-like protocol, and the DAO fork doesn’t suggest that transaction level disputes are in particularly high demand (in 7 years this happened one time on the network, and you call that demand? lol).
I don't think politics work like you think they do. If the opposition could just "fork the law" when they don't like what the government is doing, there'd be millions of sovereign countries by now.
>Communist computer scientists, what do they know? They just want to keep the poor white men from getting rich because of political correctness etc. etc. Anyone seen any signs of that yet?
This strikes me as a rather wrong-headed take. What I've actually seen happen is several statist types propose creating a centralized (government controlled and monitored) digital currency in response to the rise of cryptocurrencies. China's e-CNY is the most obvious example, but there have been similar proposals from politicians and bureaucrats in the US, EU, and elsewhere, with the idea being that the governments can track financial activity even more closely than they already can.
FWIW, I'm pretty anti-crypto and think there are better alternatives for 99% of the things I see crypto proposed as a solution for.