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Comment by zmaurelius | Hacker News Reader

At the end of day, this entire fiasco really drives home the point if its not your keys its not your coins. Shady exchanges/banks can always collapse and take your entire portfolio with it, but if you have a securely backed up wallet, then your coins will be untouchable no matter what kind of shady shenanigans goes down in the wider cryptocurrency landscape.

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Sure, you still have your coins, but who cares if they’re worthless?

I’m not sure “not your keys, not your wallet” is really the message to take away from ~Celcius~ ~Terra~ ~TAC~ FTX.

I think people are too hyper focused on the price aspect of cryptocurrencies. The experiment that is Bitcoin shows that people do not need to rely on a monetary system where a cabal of rich and powerful individuals can arbitrarily modify the money supply without any regard to all the participants in that monetary system.

The genie is already out of the bottle and there is no way to put it back. There will always be those especially in the younger generations that want something better than the current system. Bitcoin shows that you can have a completely transparent monetary system based on code that is available to be audited by anyone. Bitcoin may or may not survive, but the idea behind it will.

It is true that a cabal of rich people cannot arbitrarily modify the money supply. We instead get a permanently chosen system of money supply that was created by an ideologically driven software engineer who appears to have vanished into the ether. Is it not possible that Satoshi chose a less optimal system than the central banks would? The finite and logarithmic rewards make a huge huge huge difference in the eventual distribution of BTC worldwide, should it become a dominant system. In my opinion, a system where early adopters get unimaginably rich forever is simply unethical.

And if another system eventually wins... then isn't that simply an example of a cabal of people (though not necessarily rich at first in this case) modifying the rules for money supply? Doge produces a different outcome than BTC. That's important.

I don't think fair distribution of cryptocurrency in the bootstrap phase is a solved problem. We got a long way to go if we are to come up with a fair system. Satoshi went with the best that he could come up with which is a no premine solution.

A slightly better solution would be a no premine coin with a global announcement for 5 years before the mining begins so everybody gets a fair shot at participation. I am sure we can develop even more fair forms of distribution with sufficient research.

Honestly, that would give wealthy people (and possibly scammers) plenty of time to figure out how to game the rules.

Nobody is going to be rich forever, because nobody is going to live forever. You have a very hard time limit to spend your coins.

Coins don't return to the reward pool when somebody dies. A system of new aristocratic families based on who was an early adopter and held on to some BTC is not something I'm excited about.

The world was much more unequal than today back in the time. It all diffuses quickly with usage.

We might have different definitions of "quickly."

I also don't think that going backwards is a good thing. Yes, BTC is more equitable than a system of divine right of kings where the monarchy literally owns everything. Hooray.

> The experiment that is Bitcoin shows that people do not need to rely on a monetary system where a cabal of rich and powerful individuals can arbitrarily modify the money supply without any regard to all the participants in that monetary system.

I don't get it. How does this description fail to encompass the likes of SBF, CZ, or Do Kwon? And while they didn't modify the money supply (although UDT kinda did), their actions had a strong impact on the value of money. So anyone holding coins in their own wallets still got screwed by their actions.

Bitcoin only solves the problem of manipulation of the underlying money supply. It does not solve the problem of fraud and scams. Maybe one day we can also solve that problem with exchanges existing only as smart contracts, but with exchanges that are not completely transparent you always run into the risk of getting defrauded because you don't really know what's going on under the hood.

What everyone is saying and you’re missing, is that those scams and frauds affect the inherent value of your bag, and reduces your purchasing power of services/products. You can take solace in having X/N possible BTCs, but you’ll need 100X when the price falls.

Yeah. The transparency of smart contracts has ensured that there's no scams in that space.

I always see advocates for crypto bashing central exchanges, but at the same time they bemoan the slow pace of adoption. I just don’t see it ever being even remotely main stream without central organizations. It is far too much work managing it all yourself even for tech savvy people. Just the process of downloading a wallet and downloading ledger is a huge pain in the ass. And then have to do it for every crypto if you’re not using a multi-wallet!

Downloading a wallet takes a few seconds. You dont need to download a ledger to pay.

If you’re storing your own crypto you need a wallet, backups, and cold storage at the very least. Plus you need to remember your seed phrase. If I lose my bank account info or cards I have several ways of getting access to my money, crypto no so much.

It has been a while since I set up but last time I did I had to download the blockchain’s ledger aka the history of every single transaction. Is this no longer the case?

no longer)

I'd rather not have my access to my net worth be behind a six word phrase. Might be tough to pay for shit after I get hit by a car or get old or something and have trouble remembering stuff.

> people do not need to rely on a monetary system where a cabal of rich and powerful individuals can arbitrarily modify the money supply without any regard to all the participants in that monetary system.

Is this satire?

Because crypto currencies are not the gleaming example of “free of manipulation” that you think they are. There’s endless cases of whales, exchanges, NFT groups and crypto-celebrities using their capital and power in order to manipulate markets and supply in exactly their favour. The NFT space was especially bad for this. In fact, a lot of those NFT groups are exactly what I’d describe as a “cabal”.

That was my reaction but you said it better than I could so I'll let Depeche Mode say it

    The grabbing hands grab all they can
    Everything counts in large amounts

Is this really true, given that the largest currency pair of Bitcoin is with USDT, which is alleged to have been arbitrarily created at whim to pump up the price of Bitcoin?

What this has also shown is that most people (literally almost everyone) are better off relying on the traditional financial system.

> There will always be those especially in the younger generations that want something better than the current system.

Sure, this isn't it though.

Let’s not forget the frictionless enablement of spectacular ransomware enterprises, and the glorious enrichment of dangerous actors with stolen funds. It’s a small price to pay for all this… freedom?

It also enabled about $60+ million dollars to be donated to Ukraine and that's just one data point. Whether these other problems are a small price to pay will depend on who you are talking to. To the Ukrainians that benefited from these donations and to those that have food, weapons and shelter from these donations, it is most likely a small price to pay.

Perhaps a portion of these donations could have come from other sources if cryptocurrencies did not exist, but there isn't really a good way to quantify that, so I won't go into that discussion.

A quick google shows that the US government has given $16.8bn in aid to Ukraine. It seems like the centralised system is doing significantly better.

Giving my tax dollars to Ukraine without forcing Ukraine to negotiate an end to it is not "doing better".

Why should Ukraine be forced to negotiate? Russia invaded Ukraine.

Then again, a crypto bro blaming the victim makes perfect sense.

You are paying them to protect you and the entire world from unimaginable evil.

Evil was German Nazis. And the Ukraine Nazis which the USA did not pursue after WW2.

NATO pushing closer to Russia the past 30 years didn't protect anything except the paychecks of the war makers.

I see you don't speak of the literal Nazi PMC in Russia (Wanger).

I mean they are so not evil they commit war crimes on camera.

> NATO pushing closer to Russia the past 30 years didn't protect anything except the paychecks of the war makers.

NATO pushed closer to Russia over the past 30 years because of exactly what Russia is doing in Ukraine.

I was able to donate hundreds of dollars to Ukraine using the same credit card I use for everything else. What is special about crypto donations to Ukraine? I suspect that the fees of converting USD->BTC (or other crypto) and then the recipients converting back to UAH are higher than the <2% CC fee I paid. (I used a card with no foreign transaction fee.)

And with credit card, the donation recipient wouldn't be at risk of losing double digit percentages of the value donated if they didn't immediately cash out into fiat currency.

> It also enabled about $60+ million dollars to be donated to Ukraine and that's just one data point

I love how every crypto enthusiast (incl Vitalik) uses this one-off example to justify everything these days.

Maybe they finally realized they looked stupid after a decade of using Venezuela as an example of how crypto can help a country, even though crypto hasn't made anything better there.

>The experiment that is Bitcoin shows that people do not need to rely on a monetary system where a cabal of rich and powerful individuals can arbitrarily modify the money supply without any regard to all the participants in that monetary system.

if this is a stab at the federal reserve, my response would be "democracy" at least in the abstract. either way not much different from the whales that hold disproportionate amounts of influence in the system right?

Celsius = centralised, terra = centralised, FTX = centralised...

The point is stop trusting centralised wolf in sheeps clothing.. same goes for ethereum with Proof Of Stake.. ur just reinventing central banking (but private)..

The only truly decentralised coin is bitcoin..

and bitcoin has exorbitant transaction fees, slow transaction times, massive power usage for relatively little throughput, etc., etc.

time to end the crypto social experiment and go back to using the traditional banking system which has safeguards in place to prevent people from being continuously taken advantage of. oh wait, nobody was really using crypto for anything other than a FOMO investment anyways

Bitcoin transaction fees are ~5 cents right now.

Granted it's still slow...

According to this chart it is showing as still being about $1-$1.4 per transaction on average in the past month which is alot more then 5 cents?

https://www.blockchain.com/explorer/charts/fees-usd-per-tran...

Exchanges pay massive (often 10X required) fees for whatever reason.

Real transactions are much cheaper. Try https://mempool.space/

> bitcoin has exorbitant transaction fees,

Basic transaction cost at this time is est $0.05, or 54 cents for high priority.

> slow transaction times

If by slow you mean ~10 minutes, it turns out this is a strength (Solana is not scalable; Ethereum will also likely grow in an unbounded fashion making individual node-running infeasible); and layer 2 solutions such as Lightning Network enable sub-second Bitcoin transactions.

the transaction fees, the verification and throughput limitations are fundamental technical tradeoffs required for a truly decentralised store of value.

The people and technologies claiming to have "fixed" or "improved" upon bitcoin are often making different trade offs they lie about. This is why I like solana, they make no pretence of being decentralised.

btw fiat is 1000x worse. You don't see it on the news because you're forced through coercen to bail out & insure these bad actors. The current US bank reserve requirement is 10%.. the only reason there isn't a bank run is FDIC. The whole thing is an incestious mess that creates our current world of cantillionaires..

By taken advantage of, you mean like becoming a debt slave paying off mortgage on overvalued house because of a housing bubble they blew out of proportion yet nobody was held accountable for?

No- by taken advantage of I mean like putting your life savings into a 20% APR yield crypto savings account and getting rugpulled the next week. Funny how you reference being taken advantage of in standard financial institutions as having debt but it is just as easy if not easier to take out loans in the crypto space that people have no chance in hell of paying off. Regardless, that's unrelated to what I was talking about, which was about people getting conned day in and day out in the crypto space. At the very least, this is minimized in the regular financial market which has safeguards in place to protect consumers. Is this system perfect? No. Is it 100x better and safer than the current state of crypto because of lessons of the past and the laws put in place because of them? Yes.

If you believe that crypto is in any regard better than the traditional banking system (which it seems you do), please state those claims explicitly.

I definitely don't think crypto is in any way "better" as an investment (you can look at my other comments here), but I definitely think the destruction as misery caused by traditional finance was so much higher.

Crypto is extremely speculative and risky and everyone knows it.

Housing on the other hand, get extremely favorable regulation that's unjustified in my opinion. You got the Fed buying mortgage backed securities.

In my view, what is going on in traditional finance is morally wrong much more than in crypto. Unlike crypto were the bubble doesn't effect me, I need to work and pay higher rent and my freedom is restricted as a direct consequences of the evils of traditional finance wether I'm participating in their bubble directly or not.

Many of the things you call "safeguards" of traditional finance are greater evils than nothing at all. Especially safeguards of collateralization, like mortgage.

(And don't get me wrong - I'm very capitalistic in my world view. You can just hardly call capitalism the way the Fed and mortgage dealers acted, and central banking is the bane of modern capitalism).

Yeah but the collapse of those exchanges drove down the price of the coins. Even if its your keys and your coins those coins become worth less money than they were before.

If u look at the past decade, the real coins survive. Its the venture backed ponzis that die..

Basically no exchange should be holding enough to cause a collapse of the coin. With bitcoin this will never happen, there was multiple collapses at times where liquidity & ramps were non existent.. and bitcoin still survived to go up multiples.

also this is a temporarily problem technical problem. Solutions such as AUMs and DEXs are being built up asap.

The people using those exchanges largely don't care about the alleged original use case for crypto. They're just trying to get rich.

>The only truly decentralised coin is bitcoin..

And Monero IMO

decentralized is an antisocial child's fantasy

a wish against a world that doesnt make sense to them

a desire to turn away from human society

a hoarder's dream

I think it is the last item that motivates the rich folks desire for a store of value that doesn't rest on providing funds for the rest of society to borrow. The rich would keep their wealth out of circulation while the society withers due to lack of investment in the work and inventions of that society.

lol how dare you hoard all that money in your bank account

Monero is a superior currency to btc in every way.

It's not superior; it just makes different tradeoffs [1].

[1] https://phyro.github.io/grinvestigation/why_grin.html

weird how the only currency dnms use is monero, meanwhile everyone knows what grin is winkwink

So the lesson to learn from all of this is "stuff your money under your mattress otherwise it's not safe"?

What a brave new world crypto is bringing us.

> stuff your money under your mattress otherwise it's not safe

This has always been the case with crypto. It's just much harder to successfully execute with crypto than it is with cash.

Or better yet, stay away from crypto completely.

You have the coins, but the current state of affairs means they are not worth anything any more.

To be fair, I have stocks that are not far off that scenario!

It's your keys, and your coins, and most importantly your initial and continuous due diligence... and not just on the asset itself, but on the possible motivations of any asset holder with a sufficient stake to meaningfully affect the price.

Should have done you initial and continuous don't diligence.

If you store your funds in a secure wallet, you will not be able to FOMO in recklessly on shitcoins hoping for a 10-bagger, the facilitation of which is the raison d'etre for most crypto exchanges.

People don't want to buy and hodl, they want to get rich. There's no Benjamin Graham for crypto because crypto has no fundamentals, no underlying value to go long on. The best any crypto advisor can do is to warn you when to hit the ejector seat button.

The whole crypto game is dead without these exchanges.

To hold your own keys etc is just too complicated.

I dont want to put 100k onto a USB drive where I may forget the PW to.

Crypto is just not going to hit mainstream if you cant get exchanges "banks" to stop selfimploding.

Coinbase, which happen to be a Y Combinator unicorn, is saying they're totally fine. Credit where it's due: Coinbase never ever dealt with Tether/USDT. They say the $42 billion of USDC they minted are all backed and that all the clients' assets on their site (USDC/coins/EUR/USD/etc.) are all backed 1:1.

I hope Coinbase is and stays an honest (and regulated) player in that crazy space:

https://www.coinbase.com/blog/our-approach-to-transparency-r...

Coinbase supports USDT

https://www.coinbase.com/how-to-buy/tether

What good are the keys to something worthless?

creating 20,000 new currencies isnt really an economy, or rather its a purely entertainment based economy like Las Vegas or Macau. Those things I guess are valuable but is this the best use of our computing power and our Human Resources?

The thing is non-centralized cryptos never worked as a currency.

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