This is a human failure. FTX didn't collapse because of the technology. It collapsed because of human error.
The fix is rather simple. If an organization looks like a bank and quacks like a bank; it should be regulated like a bank.
> How long do we have to wait to see crypto working?
BTC (on chain) is still working as intended, after all these years.
Crypto generally means digital currency, does it not? I think leaving them out would be actually misleading.
> BTC (on chain) is still working as intended, after all these years.
Working in what sense?
That you can securely and cheaply transact value without a third party being involved?
That governments can’t directly block your account the way Trudeau blocked protestors bank accounts?
Probably a few other ways as well ...
Just a week ago someone got cought and the fbi took his 3 billion dollar worth of BTC.
Sending crypto to someone in Iran or Russia is against the law independent of how you do it.
And just because you can send BTC to Iran someone in Iran also needs to exchange it to something real again.
While banking is more restrictive, when you go to your bank with your passport, you actually can recover your account. I know someone who lost 10k because he lost his key.
For most people it's saver and easier and they are not affected and don't care about all those BTC/crypto benefits at all
Here's some actual data you can look at: https://mempool.space/graphs/mining/block-fee-rates#all
Look at the "Min" fee rate; regularly very close to 1. That's $0.02 at current prices.
Of course you can even pay 0 but you know it's not the normal someone would wait days for the transaction going through.
You clearly did not use Bitcoin often enough otherwise you could just looked the spikes up yourself. That first corona year was even worse with the fees.
I literally posted a source showing you it's very cheap. The minimum fee is the lowest fee you'll pay to get into the next block.
I used Bitcoin way back in 2010. Though I don't understand why that makes a difference since you can look up the prices in hindsight.
One thing to keep in mind: laws are not always just.
I believe it's okay to sometimes not follow the law, if the law is unjust. One example: in WW2 Germany there were many laws against minorities that were unjust [0]. Most law obedient people would follow these laws regardless.
Perhaps a person want to support his family in Iran or Russia that's going through difficult times. And perhaps crypto is the only way to help. In such cases I think it's okay to oppose the law.
---
[0]: https://encyclopedia.ushmm.org/content/en/article/the-nuremb...
Whether it's accurate or not, I imagine non-experts would regard the difference between BTC and FFT as pretty negligible, perhaps akin to the difference between "social media" and IG vs. Reddit.
https://mobile.twitter.com/whale_alert/status/15916165982801...
This doesn’t happen with BTC because it wasn’t created out of thin air.
It's certainly working on destroying the planet with its obscene energy requirements.
Destroying the planet = Can't question it, can't argue about it, it is the end all of all arguments. How could you ever oppose something that destroys the planet?
They all sound the same: https://en.wikipedia.org/wiki/Greenwashing
Riddled with subjectivism. You cannot do less since there are no objective limits to what is "acceptable levels of destruction of the planet" means. It has a different subjective weight to different entities arguing the position. In the limit, this would mean we erase humanity all together and leave the planet alone.
You can bully a lot of things your way before any one can speak up against it. There is a level of insidious moral superiority built into it which makes it prime for exploitation. Corporations are doing exactly that.
"Based on the estimated average growth rate of bitcoin mining operators using vented methane of 6.9 MW/month, the Bitcoin network will become Carbon Negative in Dec ’24."
Oh and increasing the power usage of this fire pile will, as you say, “improve the current situation”?
Your point is that the only way we can avoid burning methane is to use that to power bitcoin mining rigs???
Burning methane (flaring) is most definitely an improvement over not doing it. That's just a fact. It accounts for about 20% of global emissions and is 25 times as potent as CO2. https://www.epa.gov/gmi/importance-methane
You would use Bitcoin mining as a monetary incentive to flare methane. You could do other things but it requires more infrastructure investment and might not even be possible in certain locations that are far from where the electricity would be used.
Bitcoin mining results in a profit.
Why would you pick the first one?
Transporting miners is not the hard part, you just keep them in containers. What is hard is building the necessary stuff to actually flare the gas properly.
We could also use this energy for better things than Bitcoin.
And while BTC doesn't make any value besides moving money from one person to another, it also produces hardware garbage like ASIC chips and power supply.
It also steals demand from others too.
There is only downside for most of us than benefit of allowing Bitcoin mining independent of it's source.
If there are landfills out there that are just spewing methane gas (20x worse than CO2, btw) into the atmosphere, why not make sure that is burned and used more efficiently? Please show me a realistic plan to do this. Bitcoin does it without forcing anyone and without taxes directed towards it.
Where are landfills too remote to transport electricity away from?
In the US 70% of the methane from landfills is vented, rather than flared. That means that for some reason, either it's too expensive to do or something else is blocking this. And that's just the US.
You can also imagine that landfills in the developing world are better targets. Infrastructure is not as good there as it is in the US or in Europe.
Easy to solve with laws. Shouldn't be allowed anyway to just pick the good things from a gas field...
It's not a gas field, it's a land fill.
I mean… Cyberpunk 2077 could run acceptably on an integrated 65W APU but instead I chose to crank everything on max with ray tracing through a 4090 just to see some dumb frames on a screen that are discarded at a hundred per second.
And I don’t ever remember having to ask permission to use the kW h I’m paying for.
And its beside the point because again its none of your business.
Yes, of course, I am absolutely suggesting that overspecced gaming PCs played by a minority of gamers in their spare time don't use more electricity than a medium sized developed country (or indeed the 24/7 running of industrial scale server farms deploying chips designed because even the most powerful gaming chips weren't anywhere near energy intensive enough to win the energy-burning competition). Why would you possibly consider the small number of people using high spec gaming PCs a few hours a day use more electricity than a developed world country?
Why don’t you go for power companies instead and demand clean energy investments? Might be a better use of your activism instead of just going for people using their own stuff in a way you don’t like. It’s not going to end well. I’m pretty sure the insane degrowth narrative will target gaming or other power intensive recreative uses sooner or later but that’s another discussion.
If these frames were really discarded (that is, not shown on your screen), then yes, it would be a waste. But my understanding of your example is that these frames were displayed, and their light reached your eyeballs.
Free markets are great for a lot of things, but pricing in externalities isn’t one of them.
https://www.politico.com/newsletters/morning-money/2022/10/2...
If many people in this space are advocating for decentralized exchanges, how come everyone uses centralized ones?
If there's ever a time and place for voting with your wallet, this seems to be it, and the wallets are speaking loudly and clearly.
A lot of people put money on CEX because they are ignorant, or willing to take on some risk for slightly cheaper and faster trades. Those people probably regret their decision now. If they used Uniswap and Aave they could not have withdrawals paused because of one company’s insolvency.
Convenience.
For a cryptocurrency owner taken at random, I think it's likelier that they make a mistake with their private key than they lose tokens held in a Coinbase (or another CEX among the less dodgy, regulated, etc.) account.
Exactly. I've long wondered if there's any way to overcome this without essentially going back to a 'trusted broker/custodian' model
I had someone try to tell me blockchain voting would fix Russian democracy, because it would ensure transparent, accountable elections. OK, so how are you getting it in there? Just going to stroll into the Kremlin and make the current leadership implement it? You’ll be laughed at shortly before your arrest. No, fixing Russian politics is primarily a social issue. Transparent, accountable voting could be part of a possible future effort at reform, but first you need to somehow gain the power to implement reform at all.
Coming up with a software solution alone does nothing. And this is what is often missed.
“I can imagine a better future in which my amazing software solution plays a pivotal role, therefore if I create that software, things are sure to turn out that way”
Here are other examples:
- promising self driving cars (driving is more than a technical activity, it's a social activity. AI is nowhere close to driving the easier technical aspects, much less the more complex social aspects)
- AI is already better than or will replace doctors. As of all doctors do is look at symptoms and up with diagnosis. The social part of medicine is the larger job by far, not diagnosis.
- algorithms can't biased. My AI predicts some function that has some real life impact. That the input data is biased, and therefore the output data is just as biased or even more biased. Well that's not my problem. I only build models, and lines of codes are not biased. But the result of your work is being used in the society to perpetuate bias. It's not okay to remain wilfully oblivious to that.
And with a lot of people storing their money in these major crypto banks , what we now have is a fairly centralised structure which kind of defeats the purpose of crypto. Worse, these banks also hold each other’s tokens similar to what your normal banks do. And if that’s not enough some of them even do fractional reserves and use the real money they get for investing.
This kind of comment is the epitome of the Western privilege -- your governments cut off entire countries from the banking system, deny their own citizens access to banks because of their political beliefs, and then tout the alleged superiority of your credit cards, which are now denied to truckers and Kanye West by the same companies that were happy to do business with Pornhub when they were knowingly facilitating the monetization of child sex slaves.
Credit cards and United States dollars are the tools of thieves, thugs, rapists, and warmongers. Bitcoin works for the use case of not staining your hands with the blood and tears of their victims, at the very least.
There are more countries than India, I’d suggest maybe taking a look at South America, Africa and Asia.
By the way many African countries have a robust mobile phone based banking infrastructure. Nothing to do with cryptocurrency. See https://qz.com/africa/2161960/gsma-70-percent-of-the-worlds-... for example.
> Crypto payments take much longer time than traditional credit card ones
Everyone in India can process an American credit card? Indians are magically immune from political censorship on the basis of the payment card associations?
Is there any crypto out there without humans ?
Is there an undo button to reverse the transaction?
All financial systems involve humans
What OP is referring to is that you don't need to trust people if the dex is on-chain and verifiable. FTX was a non-transparent and insolvent centralized exchange which wouldn't be possible if it was on-chain because anyone can see the funds that are available and the protocol would not allow leverage backed by non-existing collateral.
> Is there an undo button to reverse the transaction?
No there isn't. This is a double edge sword.
> All financial systems involve humans
To a degree, but centralized exchanges have more knobs controlled by humans while an on-chain dex and just be deployed once and require no human intervention. A dex can be audited fully on-chain and anyone can see if the contract has any master holder keys. The FTX fiasco is because they own all your crypto because they have the master keys. The future of finance is people being in charge of their own money and where no unexpected entity can arbitrarily inflate the supply, which is only possible with crypto.
The blockchain is perfect when everyone acts in good faith and makes no mistakes.
In the real world, that's not the case. Unfortunately, you need centralized institutions to regulate financial transactions, control the supply of money and enforce laws when they're broken, reverse mistakes when they happen.
> The future of finance is people being in charge of their own money and where no unexpected entity can arbitrarily inflate the supply, which is only possible with crypto.
This is not the future, and it'll almost certainly never happen with crypto.
I think this says it all.
What do you mean? Are you saying FTX wasn't hacked by an anonymous hacker?
Banks reverse transactions sometimes. It sounds like in many cases the reason they can't be reversed is because the money got converted into cryptocurrency.
>Wire Fraud Recovery is Difficult, but Possible[1]
>When the stolen funds arrive in the fraudster’s bank account, they engage a network of money launderers who immediately withdraw funds in cash, wire the money to a number of different accounts and/or convert it to cryptocurrency.[1]
>A full recovery of lost funds was only possible in 29% of cases. In 40% of the cases, less than 10% of the funds were recovered.[2]
That means that 60% of the time at least 10% of the money is recovered.
>Cyber perpetrators are moving stolen funds between bank accounts and cryptocurrency wallets at a rapid rate.[2]
[1] https://www.certifid.com/article/how-to-recover-from-wire-fr...
[2] https://blog.alta.org/2021/04/survey-title-professionals-tar...
* I think it's the same for banks. I think banks also mainly operate on abstractions built upon cash.
* An attacker who wants to steal physical cash needs to be physically present. That means there's a more limited set of people who could attempt the attack. With hacking, people across the entire world can attempt the attack. With physical attacks, you're at risk of being physically apprehended and caught through physical investigations. With hacking you can be behind proxies and avoid getting caught. Additional, with hacking you can do the hack from a jurisdiction that won't care, so even if the victim and the victim's government know you did it, you won't face any consequences. You might even be on your own government's payroll.
The thing is that "not being regulated like a bank" is exactly what many people like / liked about it. (Yield farming, using DeFi for mortgages, etc.)
What I'm saying is that Crypto seems to be headed to being taught alongside, if not the Therac-25, then the Mars Climate Orbiter (which was lost to some people working in metric vs standard.)
It's one of the reasons the classic financial system works so well because it has the flexibility of manual fail-safes in cases where mistakes have been made. Smart Contracts will never really work unless it has the same.
We've managed to get computers to do some really batshit stuff. Drive cars, make art, algorithmically trade to a level of success a human could never dream of, etc. I don't know if a solution to the problem of managing the stability of a currency is around the corner, but I'm fairly sure somewhere in the future it exists.
And then, I can't help but think of how just about every disaster we've had in the financial system was a result of the humans with their hands on the economic knobs being knobs themselves. The solutions we provide when in crisis wouldn't be necessary if we didn't have such a strong tendency to drive ourselves off cliffs - not to mention that our current financial system has gotten so complicated I'm not sure there's anyone out there who truly, thoroughly, groks it without being reductive.
Might cost $1.15 to mint a new USD-coin redeemable for $1.00, but I suspect there would be an appetite.
Massive volatility and the occasional collapse of a crypto-bank are probably hindering the appetite of many people for anything in the crypto market. That population probably would dwarf any yield-farmers.
An attestation report available 24/7 should be generated easily if you’re doing things properly, as well as frictionless burning and minting.
Note: I work for Glo, a non-profit stablecoin, so have a vested interest in this space. I do not and am not speaking on behalf of our group.
There are several. I compiled a list of them a few months ago.
I also think FTX has been violating plenty of them already from the sounds of it. They probably thought they were being clever, but wouldn't pass the "duck test".
"Guns don't kill people, people kill people."
And how would they implement KYC/AML regulations which are fundamental to banking ?
If/when the movement of cash/crypto is peer-to-peer or interacting with a machine only (a machine that gives quarters for dollar bills or a DEX, for example) KYC is entirely unnecessary.
It's physically large so you can't move it between countries with drawing attention from customs and security. You can't exchange it between currencies easily since brokers are required to implement KYC/AML. Banks have automatic triggers on their internal systems to notify regulators if you deposit/withdraw large sums.
And if it's being tracked then washing it requires you having to go through exotic means like poker machines since all simpler options have been locked down over the decades.
It's one of the reasons crypto is so popular with states like North Korea, Iran etc because it's scalable enough to allow them to move billions.
defi is rife with hacks theft and rug pulls. but a form of fraud that is built into the entire ecosystem are tokenomics that carve out allocations of tokens to early holders, so they front run every one else.
this cannot be escaped - there is no refuge from the grift built in to the entire ecosystem. decentralized is a lie propagated to support a scam on everyone who got in later than early holders.
Regulation can make things more secure, but I don't think it can realistically stop all attacks. Regulation is slower than attackers. The ability to reverse transactions is what's really needed to prevent attackers from getting away with money.
My point is that this decentralization is bringing in a risk that traditional banks don't have. So saying "regulating it like a bank will make it as secure as a bank" is incorrect.
There exist Ponzi schemes which have disguised themselves as cryptocurrencies, but the idea that all cryptocurrencies are Ponzi schemes demonstrates a complete ignorance of what a Ponzi scheme is.
Why? To me a ponzi scheme is where the earlier "investors" get paid out with the money of later "investors". That's it. By that definition it's quite the "decentralized", somewhat stochastic ponzi.
In crypto, none of that is hidden. It's widely known that dollars cashed out by earlier investors come from the coffers of later investors. Since e.g. Bitcoin doesn't deceive people about being a profitable company, it's by definition not a ponzi scheme. It's important to use this terminology correctly.
By the way, who is the "they" that your sentence refers to?
But if they're honest about something being a scam how can it be a scam? Seems like a paradox.
I've got bad news. It is still a Ponzi if people are "honest" about it being a Ponzi, it is still a Ponzi if it started out as an investment idea and it went Ponzi as losses added up. Arguing that clear Ponzis aren't really Ponzis due to some kind of semantic rules is a gigantic display of "copium".
The only real difference is the distributed and decentralized nature of the scams. And the CEO of JPMorgan has described crypto coins exactly as a "distributed Ponzi scheme" before Congress.
If you wind up paying out redemptions with new deposits as fast as you can, right before you fail hard, then it was a Ponzi all along. That's it. That's the definition.
Why do you believe it is bad news to me? It's just semantics.
It literally isn't. Please go back to the definition, which requires a specific type of deception. If you wished, perhaps you could call crypto some kind of gamble, confidence game, or other category of scam.
> Arguing that clear Ponzis aren't really Ponzis due to some kind of semantic rules is a gigantic display of "copium".
From your tone it seems like you think I'm trying to defend crypto in this thread. I'm not. I'm trying to defend the meaning of a precise and descriptive term so that it doesn't get watered down to the point of being synonymous with "scam". Because if that were to happen, we would lose a useful phrase in the English language.
It really ticks me off when people knowingly use terminology incorrectly like this out of anger. Just call crypto a scam or a con if you want. There's no need to let your anger leave a mark on the English language itself.
> And the CEO of JPMorgan has described crypto coins exactly as a "distributed Ponzi scheme" before Congress.
Well he was using the term "ponzi scheme" incorrectly then, and should have used a more general term like "scam". Really, this isn't hard. Just read the definition.
It's also worth noting that JPMorgan executed their first trade on a public ("crypto coin") blockchain last week, so maybe he ended up changing his mind? Or maybe there's some internal consistency with JPMorgan investing effort in things they believe to be ponzi schemes - I'm not one to try to make that distinction.
> If you wind up paying out redemptions with new deposits as fast as you can, right before you fail hard, then it was a Ponzi all along. That's it. That's the definition.
That's not even how cryptocurrency works. Not even beanie babies or tulips worked like that.
And that is how cryptocurrencies work. There's net inflows of currency, and net outflows of currency and there is a systemic bank balance at any one time of currency. If outflows exceed inflows for long enough then the balance is drained to zero and the music stops. That is a Ponzi. Madoff's Ponzi worked up until the 2008 recession hit him with redemptions and outflows and his bank balance got drained.
Key phrases:
* the scheme leads victims to believe that profits are coming from legitimate business activity
AND
* they remain unaware that other investors are the source of funds.
Neither of those apply to cryptocurrencies. Nobody believes that Bitcoin conducts business activity, and everyone is transparently aware that other investors are the source of cash-out funds.
> There's net inflows of currency, and net outflows of currency
Commodities (fungible property of market value, like cryptocurrencies) don't have net inflows or outflows. Commodity prices are determined by order books which are in turn determined by supply and demand, not by capital flow. When a buyer and seller meet and exchange money for a piece of property (like a bitcoin), there is no "inflow" or "outflow", property just changes hands.
> there is a systemic bank balance at any one time of currency.
There is no "systemic bank balance at any one time of currency". That's not how cryptocurrency works. Where is Bitcoin's bank account, and what is Bitcoin's bank account balance?
> If outflows exceed inflows for long enough then the balance is drained to zero and the music stops.
Cryptocurrencies have no such inflows, outflows, or "balance". They aren't like investment funds or companies - they behave like physical objects, like beanie babies if you will. The beanie baby crash wasn't caused by any kind of beanie baby "balance" being drained to zero, it was caused by people collectively deciding that beanie babies were no longer worth a premium price.
> Madoff's Ponzi worked up until the 2008 recession hit him with redemptions and outflows and his bank balance got drained.
Bitcoin does not have redemptions, outflows, or a bank account. It's a series of rocks that people trade between themselves, sometimes at a higher price, sometimes at a lower price.
You seem to be confused about the definition of cryptocurrency. Should we go over that next?
Yes I got ranted at for suggesting "fools racing towards a cliff" as a better description. These threads appear to have attracted a lot of people looking for a fight and will jump on any nuanced post as a "pro" side.
Perhaps it results from the human tendency to try to separate "good guys" from "bad guys". Whatever it is, I find it really gets in the way of productive discussion.
Communism works, it's just human failures?
The measure of whether something works is whether it prevents human failure.
Regulation works but it was just human failure:
However, socialism is not communism, which is what the GP comment mentioned.
https://www.federalreservehistory.org/essays/glass-steagall-....
Banks in other countries were affected too, despite regulations.