‘It's all bullshit’: Democrats unload on the crypto industry while hearings loom
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I don't assert that some political representatives were bought, of course it can't happen in such a democracy with high moral standings, but maybe these billions of dollars had a purpose?
Tens of millions, not billions [1]. Profligacy whose purpose seems to have been to convince retail investors he had an in on the Hill.
Plenty of people spend tens of millions and buy nothing more than press and photo ops. Until we see evidence of policy pressure, I am concluding he was another rich numpty.
[1] https://www.opensecrets.org/elections-overview/biggest-donor...
How is this even possible? If political donations aren't attributed to the donor, couldn't foreign nations just donate too?
I thought this was obvious. Ever since Citizens United (and more accurately, subsequent Supreme Court rulings which strengthened aspects of Citizens United), unlimited secret donations are not just possible, they're the norm.
Bitcoin was the hottest thing on IRC in 2009 because of the 2008 recession. The USD (and all other currencies) were becoming questionable in terms of stability. Bitcoin was meant to be a world-currency not tied to one government. Simple as that.
Don't like Bitcoin? Don't believe in it? Don't use it or accept it at your business. I'll continue to use and accept it because I like the concept.
And yet the dumbest thing you could have done in 2009 is make a Bitcoin transaction. People who used their bitcoins for buying pizza ended up paying a mansion's worth of money for extra pepperoni.
If the goal of Bitcoin was to be a currency it's a terrible one at that.
That being said, I've never thought it would work well as a currency. I do like Ethereum due to its digital utility though.
It's a useful thought experiment to consider how much faith we would have in the banking industry today if it were as poorly regulated as the crypto industry.
It’s riddled with fraud. But so are other things. That it has no redeeming value makes the cost of crackdown palatable.
Finance is a loaded term in the U.S. it's a composition of a few activities and responsibilities that you must fulfill to stay in business.
You must firewall customer deposits. You must do OFAC. You must do KYC/AML. All of these responsibilities are tied to the act of money transmission. Keep in mind, money here is USD.
Most "Crypto" tries to sidestep those extra responsibilities. You still do money transmission like activities and account management, but all that squicky social responsibility like maintaining transaction records, OFAC, KYC/AML, and sane institutional controls over customer assets? Naaaaaah.
If you implemented constructs like Monero and Tornado.Cash in USD, and tried to operate, you would be shut down faster than you can say "FIN-wha?" The only reason crypto hasn't, is because the on-ramps to crypto-USD have largely been locked down/brought into compliance. The cryptocurrencies in play are treated more as commodities than currency, and the tooling to integrate financial surveillance of the public ledgers crawls forward as resources to handle it come into awareness at the institutional level.
The old one about crypto speed running the history of finance applies. Every regulation they didn't bother implementing has proved that, yes, the regulation in trad fi is still, in a sense, justified.
So whether it is useful depends on how one feels about the tradeoff between highly efficient but potentially more oppressive centralization of public capital (the incumbent position), vs. ineluctably, stupendously inefficient but notionally less corruptable decentralization of public capital (this is the crypto-blockchain position).
And notionally is pulling a heavy load here indeed, as we have seen time and again that cryptocurrency might as well be called kleptocurrency given the endless fiasco parade of rugpulls, outright fraud, concentration of the market's very thin real liquidity in a few hands (thus enabling Number Go Up chart puppetry), facilitation of rampant ransomware and extortion to the point of inflicting naked cruelty on innocent people, shutting down city services, hospitals and more.
Stop trying to legitimize it. Stop spending FBI resources trying to recover money stolen from crypto accounts.
If you want to spend law enforcement resources spend it on people who are running obvious scams like most of the exchange operators.
Sure, there would be hobbyists who conduct trivial transactions with their monopoly money. But no, this would not even be a small fraction of overall economic activity in such a scenario.
Oh, and most importantly. When the U.S. government will allow me to pay my taxes in BTC.
Until then, this is a thought experiment. I'm not holding my breath.
https://www.nyc.gov/office-of-the-mayor/news/041-22/mayor-ad...
Landlords offering payment in BTC: https://www.american-apartment-owners-association.org/proper...
U.S. government allowing you to pay taxes in BTC: you can take your btc and turn it into usd and pay taxes that way - and would need to on your capital gains.
Lots of reading for you to do!
In that instance, bitcoin would lose nearly ~100% of its current market value due to anyone with a brain dumping it.
The true utility of a cryptocurrency is the blockchain itself as way to perform escrow, saving, spending, and transaction auditing without a human intermediary.
Despite all of this, I will grant that so far it would seem that the financial and material costs of crypto are higher than the benefits lowering overall utility.
Yeah, yeah, and reality has no meaning because everything is subjective. That's great as a dorm-room topic at 4am but it's not a useful distinction here because there's a huge practical difference. Bitcoin uses random hashes which nobody cares about except to the extent that someone else will give them some tangible value in exchange for them. That's different from almost any other fiat currency because most of them are linked to a functioning economy and have some built-in demand where a government requires use for taxes, procurements, salaries, etc. Quality varies, of course, which is why some currencies are stronger than others but Bitcoin is an extreme outlier in the sense that almost nobody has any need to use it except when they think it's financially advantageous.
This is why it's so volatile: someone who has purchased a lot of Bitcoin has an incentive to get other people to buy into the system so they can make money off of it but nobody else shares that reason. Using Bitcoin could make sense if it was cheaper but there are many alternatives and unless you have an ideological commitment you're most likely to pick whatever fits your preferred balance of easiness, cost, and safety. That could some day be Bitcoin but it hasn't been for the last decade and a half except in a few cases involving unusual circumstances.
I mean, all of this literally happened with alcohol, with cannabis, etc etc. Are we just going to keep repeating this cycle forever.
This is a feature if you're the government.
The assertion was that banning things is counterproductive, just look how much it failed for alcohol/drugs/gambling.
My counterpoint is that these things are desirable in themselves, cryptocurrency isn't really.
Your comeback is that it gets used for some of these things like drugs and gambling - yes, it does, that's a fine point. I agree
My response is that OK great, but cryptocurrency is a means there, not an end. And then you've said something about enforcement and intentions. Perhaps I should have expanded on my last post. What I meant is if cryptocurrency is harder to get, I don't think we'll see the exact same demand phenomenon as we would with those others things, even though cryptocurrency is used to pay for them right now, because cryptocurrency is not the object of desire itself.
Make drugs illegal, people still want drugs, so they go to the black market, which thrives, criminals make bank etc. They take risks to get the drugs.
Make gambling illegal, people still want to gamble, so they go to the gambling black market, which thrives, criminals make bank etc. They take risks to gamble.
Make cryptocurrency illegal, people still want ... drugs and gambling, so they either go to the crypto black market or maybe they find another way to pay for the drugs and gambling? They take risks to get drugs or gamble, not specifically for the crypto.
So I don't think this is wrong -
> A buyer's intentions after the purchase of an illicit item have zero relevance to the evasion of law enforcement during the purchase itself.
However I also don't think it really addresses the point that I was making, that while I agree prohibition has a history of not doing what it's supposed to, in the case of cryptocurrency I don't think it's safe to assume the same historical pattern would play out, because (for most people who aren't ideologically wed to it) cryptocurrency is second-order desirable, rather than the object of desire itself.
Crypto is a huge risk minimizer for buying illicit goods. Unless you make the punishment for purchasing cryptocurrencies severe (on par with buying/possession of the goods in question) you won't remove the motivation for using them as an intermediate means of exchange. If you do make the punishment sufficiently severe, you'll be sending people to jail for the exchange of the equivalent of digitally encrypted beanie babies. Have you thought through the implications of that? For whom is that solution easy?
Cryptocurrencies are a second-order desirable in the same way that meeting in private, instead of public, is. Would you support criminalizing private meetings and encrypted communications to the same end?
See I don't necessarily agree with you there, it all depends what you're trying to achieve. I think in the context of the discussion - an article which says that cryptocurrency is being seen as bullshit by democrats - you just have to make it difficult for normal people to participate in order to kill the current industry, and you can do that by regulating banks rather than individuals. You could make it illegal to market these things, illegal for exchanges to operate and for banks to send money to them, and you'd strangle the majority of it.
Yes, you're right that there would probably be a residual demand for it illicit purchases, gambling, that sort of stuff, but the mainstreaming of it as an investment/speculation vehicle would likely be crushed.
If I can't buy cryptocurrency by credit card or bank transfer then I'm probably not going to try and invest my pension in it, or invest in a high-yield staking account at Celsius, or just buy some BTC at an exchange to speculate on price rises, firstly because my bank would throw up obstacles and secondly because it would be difficult to rehabilitate any gains into the system. Yes, I might want some to buy drugs, but the pseudo-financial industry that's sprung up around this stuff (the FTXs, the 3ACs, the Celsius, Coinbase) wouldn't be able to operate in that sort of environment, and the number of people who are in it to make a buck would be considerably reduced.
So -
> Cryptocurrencies are a second-order desirable in the same way that meeting in private, instead of public, is.
Yes, for transactions where that's important, I can see it still being desirable, until/unless some other means to do this comes along, and you're right, that would likely be a comparatively resilient demand.
But for the current speculative mania, and the large-scale fraud it enables? Less so.
(Frankly if I have to take cash down a back alley to get some bitcoin to buy weed ... I may as well just buy the weed there!)
Where we disagree is the criminalization of cryptocurrency transactions to achieve that end. Owning, buying, and selling monero isn't illegal; regulations of some type (I am not aware of the exact structure) have prevented it from being touched by institutional players, but the risk of a private citizen getting caught in some sort of spike trap designed to eliminate reckless speculation and fraud on an institutional level is zero.
I agree 100% that there's a major bubble in cryptocurrency, the popping of which will happen in manner that is novel and unknown, but "make it illegal" means cops and guns, full stop. I (and I suspect many of the people who replied to you) see that option as a last resort, and totally inappropriate in the case of free exchange of innocuous assets between private individuals.
I think you can make something illegal for the banking industry to connect to, without too much in the way of cops and guns.
shrug
Either way, it’s fascinating to watch!
There are plenty of things that you currently can't legally exchange for dollars. But it happens.
Think about something that you like/strongly support getting banned. How would that make you feel?
Did the gov try banning stuff in the past? How did that work out?
If you sell goods or services for a bitcoin, you can buy a bitcoin worth of stuff. If bitcoin happens to be worth $15k, that means you can buy $15k worth of stuff, but the important thing is at no point in time do you need to convert your bitcoin into $15k.
Furthermore, you just handily stated cryptocurrency's true purpose, which is avoiding the modern world's curbs on the more destructive habits of unregulated finance.
You are not painting yourself into a good corner with a lot of more normal people here.
Yes, I stated bitcoin's purpose, but I said nothing about avoiding financial regulations. What I was referring to was ledger keeping.
I am quite happy with the corner I'm in. May I ask why you are opposed to and seek to vilify something you don't use, understand, or are in any other way affected by?
1. An annual wealth tax on crypto holdings to fund (a) a victims’ compensation fund and (b) an enforcement agency;
2. Said enforcement agency, whose job is to manage the compensation fund and make referrals to the DoJ (no rulemaking authority); and
3. Reporting requirements for crypto transactions, crypto-fiat or DeFi, above $10k, individually or in aggregate. Civil fines for first time violators. Criminal referrals for repeat, large-scale violators.
Also considering: SEC gets explicit jurisdiction over crypto and FinCEN over DeFi and mining. (I’ve toyed with extending liability to VCs, but that gets messy because it requires defining a crypto start-up, which is harder than defining crypto.)
However, I'm wondering, how would "1. An annual wealth tax on crypto holdings to fund (a) a victims’ compensation fund and (b) an enforcement agency;", make any sense? Why would someone who owns, say, Bitcoin, be required to pay a "wealth tax"? What is the rationale? Just because there are other people who use the Bitcoin system illegaly? If USD is used illegally, should everyone who holds USD pay a "wealth tax"?
In terms of "3. Reporting requirements for crypto transactions, crypto-fiat or DeFi, above $10k, individually or in aggregate. Civil fines for first time violators. Criminal referrals for repeat, large-scale violators.", how do you propose reporting works for personal wallet addresses, or DeFi protocols? It seems to me like the implementation of that would be a nightmare, not to mention the concerns with privacy.
Don’t we? The FBI and Secret Service are funded out of taxes. I don’t think someone who has never touched crypto should pay for crypto crimes. One could introduce a transaction tax, but that seems messier than counting up your crypto once a year.
> how do you propose reporting works for personal wallet addresses, or DeFi protocols?
Same way it does with cash. Most people voluntarily comply. Criminals don’t, and occasionally get busted.
I'm not saying there's no interesting technology going on but most normal people are going to go with the option which is cheapest unless it's a LOT harder to use.
Sorry if this is too opinionated to pass civility muster and I'm not usually much of a fanboy for political theatre, but if there's a place to buy tickets for the Katie Porter Crypto Show, I'm just sayin', I have money.
He said he gave publicly to Dems to get credit and via dark money to Reps due to reporters giving him a hard time about donations to republicans, which in of itself says alot about people these days:(
Sam is a liar. What we know: he predominantly gave to Democrats, though he “also made maximum donations to many individual candidates, including Republican senators John Hoeven (R-N.D.) and John Boozman (R-Ark.)” [1].
Meanwhile, “Ryan Salame, a top Bankman-Fried lieutenant at FTX” gave “$19 million…to Republican candidates and committees, and made him the GOP's 10th-largest donor.”
[1] https://www.axios.com/2022/11/15/ftz-crypto-bankman-fried-de...
And that's around the time he stopped donating to Democrats and claims he started making untraceable donations to the GOP. The GOP Senate Leadership PAC admitted to receiving large dark money donations in the summer, so it's fair to say that SBF was one of these donors since the timing adds up.