The number of banks willing to do business with the crypto industry is shrinking | Hacker News Reader

The number of banks willing to do business with the crypto industry is shrinking

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167 pointsthesecretceo351 comments

Archive with full text of article: https://archive.ph/3FWSM

So many HODLers in this thread. For the normal person on the street, Bitcoin or Crypto never mattered. The endlessly breathless PR was irritating. Whatever happens, this wont be missed.

I disagree. Crypto was the sort of thing you might hear about from a cabbie or at the barber shop. It was definitely something for the normal person on the street.

In fact, that was used as a common sell signal with people quoting the "When your shoeshine boy gives you stock tips" stuff.

I just wanted to add perspective that for these cabbies and normal people it was gambling.

It was not “get free from the government” it was not about convenience of digital payments or whatever crypto promise was there.

For normal people it was get rich quick scheme and that is why advertising was so annoying.

I agree with parent comment - in the end it never really mattered for normal people.

It was gambling for everyone. Investors just had more to lose, more options to help hedge, and, in theory, more financial knowledge.

It's not a commodity, and it's utility as a currency was debatable.

Though for many normal people it was also about buying drugs online which could be seen as "get free from the government" kind of thing

There are orders of magnitude more crypto gamblers than people buying drugs online.

If you buy drugs for which you need to hide from your democratic government, then you are not normal people: you are a criminal.

Good riddance!

Back in the late 1990's I had a laptop and was working in a cafe and the barista asked me if I worked in tech - I said I did - and then proceeded to excitedly go on about how Transmeta was going to dominate the x86 market. Yes, a barista (not knocking baristas but they are not known for their deep vertical knowledge in subjects outside of coffee, except maybe english lit). This was the level of enthusiasm at the time for one of the first techno disrupters. It very much reminds me of crypto a few years ago spinning off a cloud of so many a non techie person with a deep-seated, poorly-informed opinion backed up by a Robin Hood account full of DOGE.

>Crypto was the sort of thing you might hear about from a cabbie or at the barber shop.

Usually what you'd hear was "I don't get it."

> So many HODLers in this thread. For the normal person on the street, Bitcoin or Crypto never mattered.

Total copium from alt nerds is never ending, but the truth is neither of you know what you are talking about: Blackrock just added BTC to their $15B fund [0], which isn't much in total market-cap (despite the down market) but is a position to say the largest (and most predatory) hedge-fund sees value in utilizing Bitcoin denominated assets. So, it may have not mattered to you, but you just outted yourself as being no more insightful on financial matters than that 'normal person on the street.'

To be honest, I've been in this for over 11 years now, and the fact of the matter is we have won many battles along the way, but will have only truly 'won' when people like you don't realize you are using BTC at all, the level of financial literacy that it takes to be your own bank and self-custody and maintain financial sovereignty is FAR TOO much for the average person--I'm convinced no amount of simplification wit tech/device solutions will lead to that paradigm shift anymore in order to capture the average part of the bell curve.

What will occur is you will walk in to what looks like your typical bank/retailer which functions with BTC to reduce tx costs and settles on main chain on a periodic basis to fit business needs (and keeping some for strategic/investment purposes for long term duration like Microstrategy as an ancillary source of revenue), resulting in a situation just like how most never ask how does the plumbing work most won't realize how these establishments are running their own MC/LN nodes and probably use State subsidized solar panels for tax breaks via inflation reduction like legislation that then used to heat the building with miners if all goes to plan.

Just like engineers cannot rely on public convectional wisdom to understand the complexity and mechanics of an internal combustion engine, or the gearing ratio in their transmissions they use to get to place to place, our largest hurdle is no longer to inform the masses (I agree the PR has gotten out of hand but mainly by alt scammers and Ivy league thieves like SBF). Rather we need to focus on making the UI/UX indistinguishable from the current model all while running things on the back-end on either Mainchain or LN as needed.

People on hn complain about the 'eternal September' of the online World, I think what's sadder is that after over 5000+ years of debt based currencies that always end the same way even the supposed brightest amongst you are incapable of understanding the implications of the average age of fiat based currencies that have always led to collapse and induce war (see Russia and China) to prop up the disintegration of Society itself--de-investment, zero covid policy, real estate crashes ave put the CCP on the war path but at the core is the tight policy of te yuan on the mainland whih has led to massive real estate speculation and large holding of farm land in Australia wit capital flight.

Financial history is long, boring and tedious thing to study on your own time, but as I found out in 2007 leading into the crash its better to be informed than gullible--most don't realize the importance and take over of Washington Mutual (my bank at the time and the largest bankruptcy in US history at the time) was an expose that proved just how broken the system is and that the FDIC itself is insolvent and that State agencies will break laws in order to serve the large bank's interests whether it was this or the repeal of Glass-Steagall with Goldman Sachs etc...

I'm sure you sopped reading, by now, but if you haven't than it's probably worth your time understanding why tier has been a nearly decades long brain drain from academia, traditional finance, and tech into BTC over its lifetime.

0: https://financefeeds.com/blackrock-makes-bitcoin-eligible-in...

>financial history

Challenging to find reliable sources on this that actually include financial statements.

> Challenging to find reliable sources on this that actually include financial statements.

Look at anywhere the IMF or World Bank has been involved in where predatory loans have been issued and have led to massive re-valuations and ultimately had the Bank of intl. settlements come in. Everything from productive assets, to national parks, to lotteries, to pension/retirements get stripped under the guise of austerity to re-settle things; it's pretty wash and repeat.

The fat that you cannot find 'financial statements' underscores the very premise of my argument.

It never mattered if you live in a country with a stable currency and access to modern financial services. If that is you, you are in a very small minority of the world population. For the rest of the world, there seems to be some value...

https://blog.chainalysis.com/reports/2021-global-crypto-adop...

This is a complete BS, currently I'm in a country with very unstable currency that lost so much value during the last 2 crypto booms(2017, 2021) and I know what actually happened on the ground.

Crypto adoption is indeed high, much more than the western world but people are not in it to protect themselves from a volatile exchange rates but because they are desperate for a side hustle to make the ends meet. Those who are interested in preserving value simply buy USD, EUR or gold.

The "unbanked" concept is also complete BS, in those 3.rd world countries the banking systems and the fintech infrastructure is much more advanced than the ones in the west. There are indeed millions of "unbanked" people but they are unbanked due to political reasons and as a result they use alternatives payment processors which are not banks(or just use cash). When Europe was introduced to easy to use mobile banking with things like Monzo or Revolut and USA was adopting contactless payments or Chip&Pin these were already the norm. Before the iPhone&Android proliferation, people were able to do much of this stuff through the ATMs and payments systems integrated with the SIM cards. People from 3rd world visiting EU or the USA are often shocked when see how primitive retail banking and payment systems are.

I guess the rhetoric of "banking the unbanked in the poor countries" comes from the idea that "if we the rich have so many troubles with payments, surely it must be much worse in the poor countries". I assure you, this is not the case, the west is the one with primitive fintech.

The value of crypto came from the ability to speculate. Everyone younger than 30 was in it and some people made good money. These days everyone is in the stock market, anyone can buy and sell stocks from their banking app and all taxes and fees are handled so its easy as buying and selling candies.

> The "unbanked" concept is also complete BS, in those 3.rd world countries the banking systems and the fintech infrastructure is much more advanced than the ones in the west.

I've always noticed this hole said by cryptobros, and 4/5 of them who says this are Americans who never have interacted even with SEPA or (Canadian) Interac. It seems that this disconnect that "since American banks are already worse imagine what banks these people do have" without realising that the US has one of the worst domestic interbanking systems in developed countries - actually, delete developed as you correctly pointed out that developing countries have way better interbanking systems than the US. (To be fair, some of the hurdles apparently have legal concerns, but most of them can be explained by "(US) banks don't care about new technology".)

Edit: I have actually explained years ago why the unbanked are usually unbanked: it's not really solvable by technology.

- Wars. Most people in warzones don't want to hold a bank account because it is very unreliable. Cryptocurrency won't solve that problem, in fact it will exacerbate the problem because of your phone or computer is damaged it's game over*. Also, how do you even transact when you don't have any form of communication?

- Actually don't have anything to bank on. Their money is just enough to survive, so they can't even bank, regardless of its form. Giving cryptocurrency is often a proposed solution, while forgetting that regular currency works fine too in these situations.

- Cultural differences. Most, to be honest, don't want to depart their money to someone they don't know. They were introduced to money just a generation or two ago, so they are relatively new here. Good luck convincing that cryptocurrency is trustworthy in a way that can be easily understand.

* I mean you could write them on paper, but that's really stretching it, mainly because you need a computer to execute transactions.

Exactly, just added that to my post and noticed your comment. The "bank the unbanked" feed on the ignorance and superiority complex of the people in the western word. I guess they imagine that they are providing technology to people living in huts. How do they even imagine making money from this? Is it something like the guy in the hut is actually resource rich but wasn’t able to get a bank account to do business so they will enable him sell the milk and they will get a cut?

Providing banking services to people who are unbanked for political reasons is one of the main advantages of crypto imho. This is something you can get hit by in so called democratic countries as Canada demonstrated last year. https://www.businessinsider.com/trudeau-canada-freeze-bank-a...

This is not true at all. If the government doesn't want you to do something with your money its only a matter of time to catch up.

So you got untouchable by the banks because you participated in a political uprising that failed? You think that crypto will save you? Think again because it's only matter of time before the government makes it illegal to accept payments from that alternative payment method or from you directly.

The only thing that works is hard cash. The electronic stuff don't work because they by design work by bookkeeping(remember the ledger on the blockchain) and when there is a bookkeeping there are ways to trace and prevent. Oh you will use a coin tumbler? Money that went through it automatically becomes unusable. You will use somethingprivacy oriented like Monero? If the origin is untraceable its illegal.

Laundering money is getting harder every day. It doesn't matter if you agree or disagree with the motives, if you live in a society that agreed on how the society should work and they decided that certain activities are legal and certain taxes must be paid you will squeezed out. The wealthy are still finding ways but the wealthy are not unbanked, they set up shell corporations, move cash with private jets etc. Crypto was another opportunity but once it become large enough it got noticed.

The government can also make the use of cash illegal. They can also put a huge dent into encrypted messaging by sending anyone caught using straight to the electric chair. They can drag you out of your home at night. (So can your neighbour for that matter).

The argument was never that crypto is some kind of magic shield against bullets. It's simply a tool. It raises the cost of certain kinds of abuses for the state. In the balance between the individual and the state, it shifts the power, ever so slightly, to the former.

And the people who got their bank accounts closed will move to using bitcoin and live their lives? I guess maybe 10 (non-homeless) people can do that. It seems like all of these crypto-bullish scenarios are made up by 20-year-olds without analytical ability and with very little adult life experience.

The meme that cryptocurrency is good for people in countries without modern banking is long-dead at this point. First, and most importantly, many supposed not-modern countries actually have more robust banking than America: mobile money is more popular and has far greater penetration in large parts of Africa than it does America, for example. Secondly, for every cryptocurrency project that has provided value to places without modern banking, there’s a cryptocurrency project that has more effectively exploited people.

The fundamental problem with your position is that cryptocurrency does not offer a stable store of value and so while there may be short term examples where people have found value by using a non-government currency, these examples are often short lived. Just look at platforms like the YC-backed Stablegains, which are a great alternative to government-backed currencies… until they blow up and financially-insecure people are thrown into a dire situation.

People keep harping about that.

Let's say I'm some sort of Ion Trașcă from Moldova.

My country's in shambles, I need to buy and pay for stuff using crypto.

How can I do that? Are there simple to use apps to set things up from the start and then use crypto? UI/fully visual, I don't want to touch ANY scary command line. How do I or who manages my keys?

I'm not sure if you are being intentionally condescending but you are coming across that way. I am going to assume good intention here.

I am not that familiar with the 'end use ' of paying for stuff directly, maybe you can't in Moldova.

Even if you can't pay for things directly, there are plenty of relevant uses. Simply using USDC can be a great store of value for people if their currency is collapsing. See lebanon, turkey, egypt, sri lanka etc.

Then if things get really bad, having some crypto could be very useful again if/when you have to flee the country. There are so many stories of Russians and Ukranians that left and were not able to take any of their currency. Here is just one example: https://www.cnbc.com/2022/03/23/ukrainian-flees-to-poland-wi...

Pointing out these real use cases is not 'harping on', in some cases this tech has saved people from terrible situations.

Every bad thing has positive aspects just as every good thing also has negative ones.

For now I'm against cryptocurrencies because every plus I've seen is outweighed by the con (pun intended).

And this is actually the second time in a cryptocurrency topic that I ask this and nobody answers.

Let's say I'm in Extremistan or Extremistia. How do I use cryptocurrency? Is it just a store of value? Can I use it for payments?

I want a guide, I'm new to this. How do I use it?

You'd need to find people/businesses who are willing to accept crypto in exchange for goods or services, and if that is not an option, you'd need to exchange crypto for local (or another accepted) currency.

If your government tries to stop you from doing that, it is of course much harder, but not impossible, since decentralized exchanges such as Bisq would be an option, as well as LocalMonero or regular old black markets, assuming that you have coins that someone is willing to pay for.

Use euros

>> you are in a very small minority of the world population

Really? So EU, UK, USA, China, Australia, with stable currencies, are a small minority..?

Sorry but countries with wild instability are the minority and frankly gold would seem to be a better store of value if that's anyone's concern. Crypto remains speculation i.e. a gamble not a store of value.

After 2022, you still think that these countries (EU, UK, etc.) have a stabile currency? Well, that's some serious positive thinking. I'm still curious to see how people will react when we get a real crash within the next few years.

If the major currencies fail/drop 50%+ per year in N years, crypto value will be screwed too, even more.

Because all those major currencies are backed by huge economies and militaries and whatever's needed to prevent those people from starving.

As usual, it's great to have diversified assets, but that's not really a viable option for the average person that can barely pay their rent.

The worst inflation the UK and EU saw in decades saw their currencies lose 10% of their purchasing power in a year due to an energy price spike caused by a war (and the unwillingness of the central bank to take drastic action to counter it).

Also over the course of 2022, BTC lost more than half its purchasing power, meaning that anybody in the UK or EU that used it as a hedge against inflation got severely burned...

> EU

In 2013 the government of Cyprus decided to seize money directly from people's bank accounts. I would not call that stable.

https://www.theatlantic.com/business/archive/2013/03/everyth...

> China

In 2022, when some Chinese banks decided to freeze depositors accounts for shady reasons and debitors planned to protest the issue, authorities used Covid codes to block them from accessing the banks. That also does not seem stable to me.

https://www.reuters.com/world/china/china-bank-protest-stopp...

You're speaking as if the second largest crypto exchange hasn't just collapsed, and had turned out to be stealing all of its customers' money.

You're speaking as if gambling with other people's money was something new https://www.independent.org/publications/tir/article.asp?id=...

That's not the point. Everyone knows that crypto is full of scams and everyone tells you that you are supposed to hold your own keys instead of leaving coins on an exchange. Almost nobody tells you that keeping coins on an exchange is good practice.

You forgot the truckers in Canada last year

The government has the ultimate say!, what happens if they order all ISP's to stop traffic to BTC trading sites (or even shutdown internet if it wills) Solutions like the great firewall exists that constantly "learn" and will lock you out immaterial if the government decides so.So the argument that BTC / Crypto will take me to the moon (SafeMoon) is wishful thinking

If a government decides you'll get a haircut, you'll get one, even if they have to take out the sheep shears to do it.

The Cypriots who preferred to store their cash in their pillow did not get the haircut though.

Replying to myself to point out: "fluctuations" and "stability" are not mutually exclusive. Largely stable ecosystems do see occasional volatility but remain mostly stable.

UK for example did indeed see a few weeks of high volatility, which mostly stabilised and indeed recovered in large part once the right wing nutjobs were duly defenestrated.

India, China, the countries of the EU, the USA, Japan, Indonesia - these countries all have a stable currency and access to modern financial services, and together make up a majority of the world's population, or close to it - and there are many others fitting this bill. This "small minority" idea is ludicrous.

Having some friends in such countries (Argentina), my anecdotal reports are that they end up holding dollars rather than crypto.

Great take. I never see this type of anti-crypto sentiment on HN. What does it feel like to be a contrarian?

Did you ever wonder why HN has so few vaccine contrarians but it has a lot of cryptocurrency contrarians?

Smart people are generally[1] better at seeing through scams and dishonest deals.

[1] Not always, of course, and hype can infect everyone, for a while at least.

Really? HN is one of the most anti-vax and COVID conspiratorial sites I browse regularly, it's pretty right-wing.

If I were a bank, I'd stay far away from any non-bitcoin cryptos that I'm not an issuer of. Why would I want to own a coin that someone else is able to freely devalue, in addition to conventional currencies?

On the other hand, if I were a bank, bitcoin presents a compelling argument. The supply is finite.

Disclaimer: I don't own any crypto or bitcoin.

You're a bank. Three of your regulators (a) Board of Governors of the Federal Reserve System (b) Federal Deposit Insurance Corporation (c) Office of the Comptroller of the Currency release a "Joint Statement on Crypto-Asset Risks to Banking Organizations". It contains the following text:

"Based on the agencies current understanding and experience to date, the agencies believe that issuing or holding as principal crypto-assets that are issued, stored, or transferred on an open, public, and/or decentralized network, or similar system is highly likely to be inconsistent with safe and sound banking practices. Further, the agencies have significant safety and soundness concerns with business models that are concentrated in crypto-asset-related activities or have concentrated exposures to the crypto-asset sector."

The Joint Statement is dated January 3, 2023.

So, after this warning, what's your next move.

(This thread is hilarious. The title has now changed twice.)

I was about to thank you for an interesting hypothetical, but then I did a quick search.

Here's the link for anyone else who was wondering. https://www.federalreserve.gov/newsevents/pressreleases/file...

Rake in the $$ at the risk of paying a small fine?

How being the supply finite is relevant? This idea that being scarce implies value makes no sense.

You realize we can go on github and setup a bitcoin network too, we call it BitcoinYC, our coins have the same properties of bitcoins, why would that have a value?

Please repeat with me:

- currencies (wheter fiat or crypto) have no value. You can't do anything with them, maybe watch dead national heroes printed or them. They hold no assets and don't generate value.

- Currencies have a price though, in other currencies, assets or services. E.g. Both usd and bitcoin are worthless but both have prices set by demand vs supply

- scarcicity does not mean value. Intrinsic value means value. E.g. water has tremendous value but low price. Gold has tremendous value and price. A car has some value, a business has a value. But currencies only have a price.

If we are defining value, I would not say that value is equivalent to intrinsic value, or else the phrase "intrinsic value" would be redundant. Currencies have value even though they do not have intrinsic value. Notably, this value is as a medium of exchange, a unit of account, and as a store of value. Bitcoin's capped supply increases its ability to store value, and so too does its demand increases. Yes, you could make a currency the exact same as Bitcoin, but it probably wouldn't be as good as a long-term store of value, because its network is smaller.

If we are defining value, I would not say that value is equivalent to intrinsic value, or else the phrase "intrinsic value" would be redundant.

Nothing has intrinsic value, value is a relational and marginal property - I value things differently than you, and you value the first litre of water differently than the thousandth. And even then the value of something is not fixed and may change over time, you probably now value things differently than you did as a child.

> - currencies (wheter fiat or crypto) have no value. You can't do anything with them

You can pay taxes to stay out of jail with fiat, which seems desirable.

The example you've chosen reiterates that currencies have a price (letting you out), not a value.

If you had only Deutsche Marks to pay would that help you avoid prison?

No. Because they have no value, same as USD, on top of that, they have no price either because there's no demand for Deutsche Marks.

Food allows me to stay alive -> it has value for me

Legal tender of the country I live in allows me to pay taxes and stay out of jail -> it has value for me

Please send me all Deutsche Marks you have. I will then go to the Deutsche Bank and exchange them for Euros :)

We should get rid of them since they have no value. Personally I like them because they facilitate trade and finance on a global, immense scale and allow for decentralised price discovery and information distribution. But then does trade and finance have value? ..wait maybe money networks do have value

Don’t need to pay taxes if you don’t earn or own anything

You buy oil with USD.

P.S. Currencies allow you to exchange debt obligations with entities you don't know and for certain entities to issue debt.

P.S.2 I think you should formally define your denotation of value, as you do not seem to follow the usual definition. Same for price.

For now.. until it’s not the dollar anymore

> until it’s not the dollar anymore

which you'd better hope is not within your life time, because the implications is that the US has fallen, and that a new world order would've taken over. It is unlikely that you, as a citizen of the west (presumably) is going to fare as well as you are today.

As a non-USA citizen, that would be probably good for me.

But I know the USA would manufacture some bogus claims about dangerous weapons and go to war rather than letting it happen.

I'm not from or in the US, and I don't get paid from a US company. I'll get popcorn and enjoy the show

Scarcity has driven value before [0]. And the more scarce, then more valueable. This being combined with other characteristics necessary to be money: Divisibility, fungibility, salibility across time and space.

Some examples: wampum seashells, mammoth ivory beads, glass beads. None of these have "intrinsic" value.

By the way, the main point of the article I linked is that since humans like to collect random, valueless things (like seashells on the beach) then there must exist an evolutionary explanation for that. Meaning, the behavior must have been selected for.

[0]: https://www.fon.hum.uva.nl/rob/Courses/InformationInSpeech/C...

You can clone HN, or any number of things but they'll have little or no value just because of user adoption

Absolutely, see all the Github and Stackoverflow clones polluting search results all over the web. :D

if it has a price, it has value.

Why would the two concepts be related.

why would demand be related to supply and demand? hmm...

> This idea that being scarce implies value makes no sense

You’re putting words into their mouth, they didn’t say scarcity was important at all. They said that it was compelling the supply was finite. We can only guess what they meant since the comment didn’t elaborate, but they maybe meant that if there’s known, fixed quantity of BTC in existence there’s no chance of a big surprise quantity of BTC appearing from nowhere, and causing a price crash (like the Spanish mining silver in South America eventually did for the price of silver).

Personally I don't find that very convincing (BTC price already fluctuates wildly and there are enormous BTC “deposits” that could suddenly cause a crash if they were used) but maybe that's not what was meant either. Either way, I don't think projecting a non-obvious meaning onto this comment and using it lecture people on price-vs-value is very persuasive.

> there’s no chance of a big surprise quantity of BTC appearing from nowhere

Like from Satoshi's huge stash?

Precisely - there's a chance Craig Wright's bonded courier shows up with the missing pieces that allow him to produce the key necessary to access them ;) Hence:

> there are enormous BTC “deposits” that could suddenly cause a crash if they were used

Of course that Craig Wright thing was a hastily cobbled together lie he came up with based on Back To The Future, but there's still the outside chance the real "Satoshi" could show up and do something.

> You realize we can go on github and setup a bitcoin network too, we call it BitcoinYC, our coins have the same properties of bitcoins, why would that have a value?

Miners will only mine the blockchain with the longest proof-of-work. They won't mine yours, as Bitcoin's preexisting blockchain is longer. This principle was explained in the Bitcoin paper and is the heart of what makes Bitcoin work. Miners can only use their electricity for one thing at a time, thus the competition to secure the underlying asset (energy) forces what might seem to be otherwise unrelated projects to in actuality compete against each other.

Miners will mine whatever they can get paid to mine. Otherwise nothing but BTC would have any hash rate.

Miners mine the longest chain for a given coin. This poster is proposing just making another coin, not forming the existing Bitcoin chain.

why would mining something make it valuable?

I can dig up rocks in a field and they won't be valuable just because I'm tired and sweaty and don't have anything else to show for it

You could convince investors there's gold in there and give you money to extract it. (and run away with the investors' money)

Change the word mining to computing, and it’s more intuitive.

A network of nodes compute stuff together, making data available across the network. It’s like asking why is a distributed network valuable.

During the process of computing, the network validates stuff about the data, guaranteeing it properties, so that people can rely on it to a certain degree when reading from and writing to it.

> if I were a bank, bitcoin presents a compelling argument. The supply is finite.

I've worked at a number of banks now and what keeps them up at night isn't how much money they could make or what competitive technologies like Bitcoin are doing.

It's their ability to consistently operate with the increasingly tight regulatory guard-rails imposed by the government. And Bitcoin's incompatibility with KYC and AML regulations render it unpalatable for most financial organisations.

So many financial institutions use Watchtower for their risk assessment framework and I think they are adding crypto risk management to their portfolio

I'd stay away from BTC too, its poor environmental effects invite regulation and they have no plan to pay for chain security in a way that scales as issuance drops off.

If you like the "limited supply" thing (I don't) you might be interested to know that other chains exist that can even have negative issuance, and while there is a plan to eventually stop issuing BTC, right now the supply of BTC is actually increasing (1.72% at the moment i think).

Ultimately if you want people to hold your cryptocurrency as a store of value rather than spend it, and you are using an expensive means like POW to secure the chain, then its going to be difficult to pay for securing the chain just with transaction fees, calling the whole "limited supply" thing into question.

If you don't have issuance then the cost of securing the chain for all the people with value on the chain is an externality bourne entirely by those making transactions. Unless you have a plan to keep demand for transacting extremely high then the chain is unsustainable.

Yep. To put some numbers on this, transaction fees are currently about 1% of the block reward[1]. As of the next halving next year, transaction fees would have to grow by 50x to make up for the lower block reward.

Bitcoiners I talk to either haven’t gamed out the long term, plan to sell before then, or have some wishy-washy story about how Coinbase et al. will mine as a loss leader to keep the industry running.

1: https://bitinfocharts.com/comparison/fee_to_reward-btc.html#...

Coinbase mining at a loss makes it more difficult for other miners to turn a profit?

The profits for miners = the security budget. The chain will work fine regardless, it's just less secure.

I think the idea is that if big institutional holders like Coinbase subsidize mining at a loss, the for-profit miners become less necessary. To be clear, I'm not defending this theory, it's just the most reasonable theory I've heard.

As it happens, mining is currently also subsidized by a bunch of retail investors flocking into the publicly traded miners, given that most of them are currently losing money per coin on a unit basis once hardware depreciation is factored in.

> I think the idea is that if big institutional holders like Coinbase subsidize mining at a loss, the for-profit miners become less necessary.

I suppose it's one possible future, but I'd be shocked to hear a bitcoiner say it, since it would effectively turn a decentralised chain into a chain run by a consortium of large financial companies.

I agree, but the other path I've heard proposed is for miners to force a hard fork to lift supply cap and keep subsidizing the network with inflation. I think that's even less true to bitcoin's original ethos.

(I also think it overestimates the power that miners have to unilaterally hard fork and have the community accept it, but so goes)

>if I were a bank, bitcoin presents a compelling argument. The supply is finite.

Do you think that the most important thing about the value of something is the finite supply of it?

Fiat currency is theoretically infinite since we abolished the gold standard, but seems to be compelling.

Why would bitcoin be more compelling than gold (a finite store of wealth) or fiat currency (a fluctuating/volatile/infinite store of wealth)

I think he means the compelling aspect is its fixed monetary policy. Gold deposits can be discovered (Uganda) or asteroids mined. Governments actively change their monetary policy. But bitcoin, for the first time in history, sets monetary policy in stone and gives all participants perfect information (in the game theoretic sense). I'm not saying that's overall good or bad, but it certainly makes predicting the future easier!

> But bitcoin, for the first time in history, sets monetary policy in stone

There’s nothing preventing Bitcoin miners from modifying the Bitcoin supply algorithm and inflation rate, except for their collective unwillingness to do so.

Bitcoin block rewards go down over time in Bitcoin terms—but so far the long term trend has been that the rewards have gone up in USD terms. We have never seen a sustained, long-term decline in the block reward in USD terms.

When we have seen short-term declines in the USD-denominated block reward, the hash rate has also declined—meaning a good number of miners have stopped mining.

What happens if the price of Bitcoin stagnates in the long term? Will miners still mine when the block reward is slashed again? Or will they decide to modify the algorithm to ensure that they remain profitable?

To change the algorithm, all three of miners, users, and nodes would have to agree to the change. If there is any disagreement, the network continues running under current consensus rules.

In fact, a majority of miners did try to strongarm a fork 5 years ago, and they failed, because the users did not agree. There was even been a book written about it. https://www.amazon.com/Blocksize-War-controls-Bitcoins-proto...

If they tried again, they would fail again -- literally nobody would agree to a fork whose purpose is to enrich miners at the users' expense.

While the block reward remains high in USD terms, I think you’re right with regards to the power balance. But if the reward falls low enough—which very well might happen, if the price of Bitcoin stagnates and if transaction fees stay low—then there won’t be enough miners to secure the network without some kind of change to the algorithm.

The Bitcoin Cash fork happened when prices were rising and the inflation rate was still high. What would the balance of power have been if the block reward were 1/16 what it was at that time? What if the only miners willing to stay in the network were trying to exploit it in some other way, because the block reward was insufficient an incentive?

In that kind of environment, both users and miners might start looking to make changes.

Isn't it that the less miners, the lower the difficulty therefore each miner that continues to mine will win the block reward more often because of less competition?

The security issue with less miners is the whole 51% attack, but even with a substantial drop in miners, it would still mean the attacker would need many thousands of nodes. Seems like that kind of energy and spend would be more profitable mining.

Users don't really matter all that much, miners and exchanges are the only parties that really matter these days.

> But bitcoin, for the first time in history, sets monetary policy in stone and gives all participants perfect information

This is as true as saying that the United States Department of Treasury sets the supply of dollars in stone. Bitcoin is as fixed as the relatively small number of parties who run the network want it to be. If enough of them wanted to fork it, remove the deflationary model, change their rewards, etc. most users would be dragged along for the ride because there’s no anchor.

What would be the shared motive for any of that tho? Like considering the requirements for forking (and the likely crash / loss of value) does that not present more of an anchor than most / all fiat systems which are regularly debased?

Say the mining rewards fall off as planned and electricity prices go up. What percentage of miners is going to stand up for purity of the original vision versus voting for them to make more money? As we’ve seen so many times already, wasting lots of resources doesn’t make cryptocurrency middlemen any less tempted to abuse their positions, there’s nothing like the democratic accountability which keeps most sovereign currencies more stable than Bitcoin, and every major holder knows that they’re holding the weakest fiat currency and will only profit if they cash out ahead of everyone else.

You don't need to cap supply to set emission in stone. People are already discussing how to amend bitcoin's emission to deal with the future lack of security when reward is dominated by tx fees.

An uncapped emission like 1 coin per second forever would be more immutable as it is simple as possible (not to mention much fairer) and leaves no uncertainty about long term security.

You seem to be forgetting the hard forks of bitcoin.

https://www.investopedia.com/tech/history-bitcoin-hard-forks...

Creating new digital currencies is also rampant. It seems to me that a finite representation of the current wealth of the economy (the money in circulation) is not even desirable. New things are being created all the time that increase that wealth. It seems reasonable to be able to adjust the amount of currency in circulation to reflect that.

I personally find Bitcoin much easier to send to family than a chunk of gold, and Bitcoin’s block reward results in a far more favorable inflation rate than many currencies. There’s more to money than these two aspects, but they are IMO solid positives for Bitcoin.

You're obviously talking about supply inflation there, because price inflation (the more usual definition of inflation) measured in bitcoin has been about 250% over the last year.

What would a family even do with bitcoin or a chunk of gold?

In the USA? Not much. Bitcoin is a decent choice for sending your money across borders though! It could also be a gift if you think holding it long-term would be valuable. I remember my grandma buying me bank bonds as a kid for the same reason.

I usually send money across borders using Wise.com or wire transfers. What am I missing out on with bitcoin?

What are the associated costs with those services?

Fees

I have sent money across borders countless times and it arrived just fine. No need to give my money to shady exchanges like FTX.

You don’t have to use an exchange to send a cryptocurrency. I personally use them to buy crypto, but then I send my assets to a hardware wallet asap. From there, you can send it anywhere you’d like.

Chunk of gold - go down to the local gold broker pay a fee to get dollars. Bitcoin - pay a fee to get it exchanged for dollars so that you can buy something before it loses it's value ($60K -> $17K).

Or just use dollars.

What if they were on the other side of the bull run where it went $3.5k -> $65k? Why only focus on the maximum loss scenario?

They likely saw the $65K and listened to all the people that said it was going to $100K and never sold - watching it plummet. The "what if" scenario is pretty useless considering the entire point of any currency is to maintain value - which allows the predictable purchase of things creating an efficient market.

One of the original arguments for BitCoin was that it would maintain it's value during inflationary periods - clearly something it has not achieved. The justification for BitCoin seems to be a moving target - depending on whatever the perceived problems are - Dr BitCoin's economic cure all.

That would arguably feel worse for the sender. "I did what?!"

No thanks :)

Yes, let's focus on the *positive* returns of Enron, you guys.

If you have some spare unwanted chunks of gold i'll happily take them off your hands.

You can own both gold and Bitcoin. At a minimum unless you think those who think bitcoin is ultimately worthless are right, it’s a way to diversify a gold-like asset class along the axis they are similar.

Let's compare a highly valuable and needed metal with 6000+ years of history as a solid investment, with...cryptocurrencies and their proven record of having no real life utility but lots of speculation. Makes sense.

> Let's compare a highly valuable and needed metal with 6000+ years of history as a solid investment

Hi, I've worked in the global mineral exploration industry for decades, both as a mine worker, an exploration geophysicist, and as a compiler of a global DB that now backends the S&P mineral intelligence division.

Let's clear up some things about gold.

1) It's valuable because it's valued ..

That's pretty much it, it's kind of rare, its shiny, it "stands alone" as a noble metal that doesn't easily react.

2) Much needed - it's used in jewellry, it's essential in high end long life zero maintaince space electronics ... a great deal of other uses (Gold Speaker Cables!!) are just pure performative BD (ie. it's not "essential") - other metals are in the same ballpark for conductivity, etc.

3) The greatest single application for gold, once mined at great expense, is to be formed into ingots and sit about as bullion as "proof" of work (digging a super pit and spending > billion to recover it per annum) and proof of wealth.

It's more or less solid crypto that persists after the power goes out, can be worn as shiny jewellery, and has some neat niche applications that it is essential for.

I'm not a huge cyrpto fan, although I did hang on the cypher punk boards where the bitcoin paper was first announced (as I have a math background) - I'm no fan of the vast amount of energy wasted (IMHO) on both gold extraction and bitcoin mining.

I don't understand how does that relates to calling a cryptocurrency a gold-like asset.

There's nothing in the world with such a long history of a solid investment that goes back to ancient times on a global scale.

They're saying that gold is a cryptocurrency-like asset. Gold's value is primarily that looks cool and it serves as proof of work: the work of finding, mining, and processing it.

So basically, cryptocurrency (i.e. proof of work limited shiny token) has "a long history of a solid investment that goes back to ancient times on a global scale"

Your sarcastic reply was unnecessary, if you read my post you’ll see I carved out the case you’re talking about. Time will tell.

If you can’t see literally any axis along which Bitcoin and gold are comparable, then I can’t really help you. It’s obvious there are some ways the two are comparable, even if you think these comparisons are weak or ultimately insufficient to hold up the price.

Nobody said it would be more compelling than gold or fiat. Even if it's less compelling than both, banks still like to diversify.

....Actually, lots of people have been saying cryptocurrency is or would be more compelling than gold or fiat for several years now, and deriding those of us who disagreed with phrasing like "how do you like being poor?"

> The supply is finite

Until It isn't.

Miners will one day decide to hardfork bitcoin to increases the mining rewards, hence increasing the supply. They will of course need to prepare the narrative, and say "it is for the good of bitcoin".

It might be in 10 years, or in 50 years. But on a long enough time-scale, you can be sure of one thing: Bitcoin will change, because it's man-made and because it's mutable/forkable.

Has that worked in the past? While they could obviously create their own fork, they can’t force people to actually use it.

I hadn't really considered this before, but I think there's a good chance they'll do something to increase their take-home if bitcoin becomes cheap enough relative to the mining reward that its security becomes threatened. Right now there are lots of people mining bitcoin at a paper loss due to speculation. If they go out of business after a few years, or are forced to sell because "number goes up" doesn't happen, there will be an exodus of mining power, which could then lead to the Bitcoin network being vulnerable to double spend attacks (these have already happened a number of time on networks with less hash power, like Ethereum Classic [not ethereum])

If double spends looked imminent, or started occuring, I think it would make sense to fork to increase the block reward. Of course, bitcoin has forked before and it becomes a political issue. Personally, the big block wars (and subsequent Bitcoin Cash split) was where I got off the Bitcoin train.

But if a fork happened, and the network that didn't adopt the higher block reward started getting 51% attacked, I do think people would move over to the new network (and that would become "bitcoin")

It's entirely political. The miners and related business interests that profit off of bitcoin have a lot of influence and a lot of clear incentives, but any message signed by Satoshi could completely alter the direction of bitcoin.

No, but lets say a the big traditional instances do not accept the non-forked chain. Only the forked one. How good would that chain be for your average new user that is forced to accept transactions on the new chain.

If nobody mines the old fork then users will have to switch.

>Miners will one day decide to hardfork bitcoin to increases the mining rewards, hence increasing the supply.

This line of thinking is a fundamental misunderstanding of who holds the power to change the rules of a system like Bitcoin. It's not the miners, they just enforce the rules. Economic actors are the ones who agree on which rules miners enforce.

That hard fork the miners created? It's worthless, just like every other time miners have tried to change the rules.

That's a good thing. It means that they found a sound argument for it. Sound argument has to be something that keeps bitcoin alive and valuable to users. Bitcoin always follows the path which makes it survive. It can mutate, but only if the mutation makes it stronger.

> On the other hand, if I were a bank, bitcoin presents a compelling argument. The supply is finite.

The supply of most cryptocurrencies is finite. That in itself is completely meaningless.

> Disclaimer: I don't own any crypto or bitcoin.

Nor have you read about many of them, then?

'finite' bitcoin is also only finite by consensus, as are all the rules around it. As emission continues to decline, it's entirely possible the ecosystem could change the rules.

And that's before we talk about what 'finite' means in the context of forks, be they source-code forks that spin up a new chain with an all-new supply of pretty much the exact same thing, or chain forks that instantly create new cryptocurrencies with the same history as the existing one.

> if I were a bank, bitcoin presents a compelling argument.

Banks don't make money by owning assets. That's not their business model.

And more importantly their model is actually build on currency not being finite. Transactions make only so much money. Making loans that is non-finite money scales much higher.

Good point. Catering to crypto or bitcoin firms is not the same as buying / lending crypto.

Lol a compelling argument for what? Like as an investment?

Compelling against the US dollar which is "printed" by the trillions and is constantly losing value based on arbitrary decisions of people with effectively no accountability

Good job nobody's advising you to invest in dollars then!

FYI the 'trillions printed in the last two years!' line is a meme, not a reality, and those running the currency are accountable democratically, in a way that cryptobros are not.

> those running the currency are accountable democratically

Except they can't be fired, and there's absolutely zero pressure for a presidential candidate/sitting president to hold this person accountable.

Those running crypto networks are accountable legally. Those running the currency are not.

I think you have that backwards.

Those running the currency are accountable to the democratic system of the countries they operate within, even if they are not directly elected.

Those running Bitcoin mining and nodes are accountable to nobody.

> Those running crypto networks are accountable legally.

How? Aren't 99% of cryptocurrencies unregulated, ergo Ponzi schemes, pump and dump, trades by the same (hidden) identity? That's also a feature why a lot of people and finance institutions are drawn to them.

Plus, did anyone take to account Ethereum, for example, for forking it?

The thing is banks dont have lots of their own money, why would they give a shit about the value of the unit they do their accounting in?

I don't even understand what you're arguing for. Accounts at the bank would still be denominated in dollars, right?

> On the other hand, if I were a bank, bitcoin presents a compelling argument. The supply is finite.

Finiteness is a neccesary but not sufficient condition for something to be valuable. Lots of things are finite that are stupid investments. Its not like banks are investing in vintage comic books.

Finiteness is not even necessary for value (ideas being the go-to example). Its necessary for a price (actually non-finite things are free, assuming they're produced in a free market).

I don't know that ideas are really the best example. Most of the valuable ones (in the money-sense) are valuable more due to the person attached to them, and their ability to implement the idea or improve on it.

Why would a bank use Bitcoin instead of forking it? If a bank uses Bitcoin, they are buying out the early holders who got in cheap. They’d be better if with a fork - plus they can fix a lot of issues with scaling, cost, and energy usage.

> The supply is finite.

Finite supply is overrated [1].

[1] https://john-tromp.medium.com/a-case-for-using-soft-total-su...

> Why would I want to own a coin that someone else is able to freely devalue

The same stands for USD and any other fiat currency. All of which are being debased right now.

Water is finite

Not in any practical sense. There's enough water in the universe to have a whole private solar system made entirely out of water for every single human.

What you’re describing is hypothetical. Following the dictionary definition of practical, our supply of water is limited to what we can actually use — and since people usually want fresh water, that means it’s limited to the point where there have been many conflicts over it.

grains of sand are finite

A worrisome title.

https://www.businesswire.com/news/home/20230109005186/en/

The Company expects minimal financial impact from the exit of this vertical. MCB currently has four active institutional crypto-asset related clients that in the aggregate currently account for approximately 1.5% of total revenues and 6% of total deposits. MCB’s relationships with these clients are limited to providing debit card, payment and account services.

The Company has no loans outstanding to any of these clients, does not hold crypto-assets on its balance sheet and does not market or sell crypto-assets to its customers.

Mark R. DeFazio, President and CEO of MCB. “Crypto-related clients, assets and deposits have never represented a material portion of the Company’s business and have never exposed the Company to material financial risks.

Seems like this experiment never brought anything but account maintenance fees and they simply revised regulatory risks after FTX noise. A “deep liquidity” which was left unused for years.

But “Banks Are Fleeing” makes a better headline indeed.

A few years ago crypto often had large jumps from deals like these, not so much because of the immediate affect but more because it implied much larger growth was on the horizon. That seemed reasonable at the time, and the reverse seems reasonable now.

If large financial institutions don't want to touch crypto, that severly limits the foreseeable upside for the industry.

Interest in crypto comes in cycles, and with each new cycle there are more incumbents that want to get involved. This bear market may have been particularly worrying for the industry, but I'm confident that in 5-10 years from now large financial institutions will again want to incorporate crypto. The networks behind these currencies are too resilient and the upside is too high to avoid.

Why 5-10 years? Hype cycle, or do you think there will be changes in the tech that could make it useful to these institutions at that point?

Because 5-10 years is a long enough period for another generation of youthful greater fools to enter the market who weren't old enough to have been burned by the previous cycle.

Both. There are ongoing developments in Decentralized Finance and Identity Networks on Ethereum that are reinventing more parts of the current financial system, as well as the shift to proof-of-stake that is making Ethereum more scalable and efficient.

I focus on Ethereum just because it's the center of innovation in crypto nowadays. Bitcoin has only incrementally changed its software throughout the years and only gains more use as a store-of-value as demand for it increases (hype cycle). After a bull market run it generally takes 5-10 years to reach its peak again.

> After a bull market run it generally takes 5-10 years to reach its peak again.

Bitcoin has only existed for 14 years—seems a bit early to generalize anything based on the two times it has peaked and crashed so far.

You're right, my generalization is too early. It is based on crypto's correlation with the overall stock market since it is seen as an investment, which has always returned positive over a 15 year period. But this is more speculation than anything else.

There's been more than two peaks and troughs, I would disagree with the numbers presented

Ethereum is not decentralized. Decentralization is the most important thing in a blockchain. The sooner everyone realizes that, the sooner we can start building momentum on the chains that are viable.

The title that's inside <title></title> is not so bad.

"Metropolitan Bank Is Fleeing Crypto. Bitcoin Investors Should Be Worried"

As for other banks, what about Silverlake.

Not many banks are offer crypto services. Regulators are stepping up.

https://fortune.com/2023/01/04/crypto-winter-us-regulators-w...

It is likely that countries will launch their own digital currencies.

How is the US dollar not a digital currency as-is? I can put physical money into anything that is a bank in the states and get dollars to spend digitally…

Banking is digital, and thus functionally money in general is digital and has been since the 60s. The dollar itself is physical.

No central banks are proposing the use of a blockchain, as that would be a completely ridiculous and counter-productive thing to do. But some are investigating good old-fashioned centralized ledgers that work, can scale, are cheap to run, have reversibility, have fraud protection, have identification, etc.

Introducing a digital dollar would be a new piece of the financial infrastructure.

Possible reasons to want it might be:

1) Better auditability

2) Quicker for the government to send stimulus payments to boost the economy

3) Possibility of implementing new monetary levers like demurrage

Ultimately, whether it is implemented or not, would not make too much visible difference in our lives. And we would almost certainly carry on with using deposit accounts, because digital dollar accounts probably wouldn't pay interest. Most of it would probably just be held as bank reserves, and individuals would generally want to move it out of there unless the government got into the business of providing deposit accounts as well.

I don't think the US will be rushing to nationalize commercial banking anytime soon.

Improvements like Same-Day ACH and Zelle have been rolling out, and these are much more relevant to consumers.

> The dollar itself is physical.

That's not true in practice. Dollar may exist in physical form but most of them or any currency exist in purely digital world. When Fed announces a trillion dollar stimulus, printing press don't go burrr. They just make some entries in computer an a trillion dollars are created.

The Fed doesn't create new base money, and they cannot really offer "stimulus" the way Congress can. They can just change the asset classes on their books. But because of their unique position, the choice of those asset classes affects how much money ends up back in their reserve accounts.

Only the Treasury can create new money. The proliferation of banknotes, which are considered legal tender, makes it a bit more complex and thus money in your checking account is money by some definition, but could not exist without base money. The Fed can change the incentives that drive the level of debt, and in that way manage the money supply.

It is for this reason that some call CBDC "digital base money." It is the money that is in reserves or cash, not merely an IOU... even if that IOU is federally insured.

But yea, monetary reserves held in Federal Reserve accounts is also digital already.

CBDCs are a digital equivalent to cash more than currency as a whole - they are something you hold yourself in a "wallet" instead of existing as bank deposits, and in fact they could end up reducing the need for current accounts by providing digital and automated payments directly, although banks will still serve other purposes and most will likely still not want to hold all their own money for security and just general change aversion.

Just like a dollar, digital currency would be liable to your central bank, whereas the digital forms of payment that you use now are liable to your bank. So a digital currency would allow people to spend digital money without the need of a bank account.

I don’t think this one example they provided is indicative. Didn’t the BIS just give their okay for banks to hold 2% of reserves in Bitcoin? Also, didn’t FASB just change their accounting rules to make businesses holding crypto easier on the balance sheet?

Presumably demand is going in the opposite direction that this blurb would indicate.

The story about BIS authorizing banks to hold 2% of reserves in Bitcoin was dramatically misreported. This was actually placing a limit on their holdings, to 2%, which is down from no limit previously.

A quick read seems to me to state that no, the Basel crowd did not give banks an OK to hold 2% in Bitcoin. On the contrary they've added a new rule that states it needs to be <1% (and even then should be risk weighted at 1250%).

BIS (https://www.bis.org/bcbs/publ/d545.pdf) This states that banks should in the normal course of business hold less than 1% and must report anything higher, 2% is when an additional 'penalty' applies.

> The problem, in a nutshell, is that for Bitcoin and other digital assets to have any chance of becoming mainstream, banks—with their access to deep sources of liquidity and experience in facilitating payments—will have to be on board. For the time being, they’re running in the opposite direction.

What does Bitcoin "becoming mainstream" look like specifically? The article doesn't offer anything - not even a link.

Let's say it's 1974 and you're writing an article about the desktop computer "becoming mainstream". What does that look like exactly to you? I'm guessing it doesn't look anything like the last 30 years. Not even close.

So how can the author be so confident in asserting that banks must be "on board" for this mainstreaming to happen?

The desktop computer was an attack from below, in the Christenson Innovator's Dilemma sense. It looked and acted exactly like a toy for the first decade of its existence. Most incumbents who saw through that surface illusion were powerless to do anything about it. The one that did (IBM) tried, briefly succeeded, then lost the entire thing.

Banks with their highly touted "experience in facilitating payments" are the very thing Bitcoin has in the crosshairs. Banks losing interest now that the Bitcoin FOMO is gone? Good riddance to them and their AML/KYC bootlicking.

Bitcoin already went mainstream; everyone who cares has heard all about bitcoin for years now, it's permeated pop culture, referenced in TV, movies, music, even superbowl ads - we've reached peak bitcoin saturation. The problem for cryptocurrencies is that that they just aren't very useful to the masses, thus the vision of "mainstream" as imagined with desktop PCs will never happen for bitcoin - what we have today is basically all bitcoin will ever be.

I know that everyone has a different idea of "mainstream" for bitcoin, but to me would be that I can expect to use it to pay for "regular stuff".

Maybe paying at the bakery is never going to happen with crypto, but would be nice if I could pay my next car or used car with it.

> to me would be that I can expect to use it to pay for "regular stuff".

There would be many difficult practical barriers to overcome for this to happen, and more importantly, nobody has any incentive to overcome those barriers. In fact, for almost everyone bitcoin is objectively worse than government issue currency.

> would be nice if I could pay my next car or used car with it.

Why would this be nice? It's totally irrelevant. Certainly the masses do not care at all, they're only concerned with the specs of the car.

That’s the problem: the problems Bitcoin is solving aren’t problems in the first place.

Yeah, I can't imagine anybody wanting to buy a car and being deterred because they didn't have a means of exchange.

When someone bought my car we used cash. How is bitcoin superior to being able to take physical property in my hand that I know will be respected 1:1 by every legitimate institution, business, or person I know?

I don't think bitcoin is superior, in fact I think it's inferior, that's the point.

I'd like this to, but to me it's still unclear whether Bitcoin's potential will be just as a reserve currency and store-of-value (like Gold), or also as a unit of account and medium of exchange (like the dollar). I'm more confident in the former and less on the latter.

There's a difference between being known by the mainstream and being used by the mainstream. Bitcoin is the former, but not yet the latter. It appears that Bitcoin's main use case is as a long-term store of value (like Gold, but digital). It will be very helpful to have a currency that anyone can use without one country's central bank controlling it, and with Bitcoin's strong network effects, its only a matter of time before it becomes adopted by more commercial banks, central banks, and individuals.

> It appears that Bitcoin's main use case is as a long-term store of value

If we grant this for the sake of discussion, bitcoin has been capable of this for more than a decade, the masses aren't interested in this, the only thing they like about bitcoin is the fun of gambling which is the mainstream success I referred to in my previous comment.

> It will be very helpful to have a currency that anyone can use without one country's central bank controlling it

Again, bitcoin has been capable of this since the beginning, it's a niche use case that has its place but the masses don't care, central bank money will always be superior due to its intrinsic connection to the governing authority of the region that mediates the economy - people want their stuff, they don't want bitcoin and have no reason to use it.

> its only a matter of time before it becomes adopted by more commercial banks, central banks, and individuals.

There's no reason for them to do so, least of all a monetary authority like a central bank. Peak bitcoin is what bitcoin looks like today.

> the masses aren't interested in this

Having a store of value is in fact appealing to the masses, especially those with weak national currencies. We know this because the rates of crypto adoption are highest in developing nations, where national currencies are not as strong.

Yes, the possibility of making a lucrative investment is also appealing, and is what's driving most of its current growth, but as BTC settles into its role as store-of-value (which may take 10+ years) it is expected to become less volatile, and adopted for this use case.

> central bank money will always be superior due to its intrinsic connection to the governing authority of the region that mediates the economy

There are two sides to this sword. In wealthy, democratic governments this allows for more control over the economy, boosting it in times of need, but for oppressive regimes it just gives the government more power to act in their own interest.

> * people want their stuff, they don't want bitcoin and have no reason to use it.*

People do not immediately use all of their wealth to consume things, instead they have to store some of it somewhere. This is one of the uses of currencies. In countries with high inflation there is difficulty for people to store any wealth at all in their central bank's currency, and have instead resorted to Gold, USD, and Bitcoin.

> Peak bitcoin is what bitcoin looks like today.

If peak BTC is what it looks like today, then there is no incentive for people to keep pouring money into it, so its value relative to Gold, USD should not increase too much from what it is today.

I believe we are still far away from peak Bitcoin, and that Bitcoin will continue to rise in value in terms of USD over the long run.

> they have to store some of it somewhere. This is one of the uses of currencies

Currency is for current things. You don’t store wealth in currency. Even in poor countries wealthy people store wealth in assets, be it real estate, businesses, cars, or cattle. Only poor people store their “wealth” in currencies, because they can’t afford any assets.

> there is no incentive for people to keep pouring money into it, so its value relative to Gold, USD should not increase too much

If there is no incentive to keep pouring money into it — not feeding the miners who maintain security and turning gears of the network — then indeed the value will not increase, but rather rapidly decrease.

> * You don’t store wealth in currency. *

Do you have a bank account with money in it? If so you are using currency as a store of value. This is a very common use case.

> Only poor people store their “wealth” in currencies

So are we just dismissing the needs of poor people then?

> the value will not increase, but rather rapidly decrease.

So a testable prediction would be come back to this and ten years, look at the price of Bitcoin, and see who was right.

> Having a store of value is in fact appealing to the masses, especially those with weak national currencies.

I think you're being overly generous in your estimation of the thought processes of the masses. All the normies I know that are into bitcoin (or talk about it) aren't into it because of "weak national currencies". The normies are into crypto because of hype and FOMO. "Hey did you hear, you can make a ton of money in bitcoin! What's bitcoin. It's internet computer money". "It's the future!" "Gotta get in early." That kind of nonsense. At best you get a few of the "fuck the government" crowd in the mix.

Normies don't spend one second thinking about the dollar beyond "how can I easily get more of them." When talking about economics they parrot "the Fed sucks" or "Biden destroyed the economy" narratives etc.

They want dollars because dollars lets them purchase everything they need and pay taxes. They're not interested in monetary policy beyond paying lip service.

I have to assume this is pretty universal the world over. People are just trying to survive, and [local_currency] lets them do that. Bankers and fiscal policy setters worry about the stuff you're talking about.

> The normies are into crypto because of hype and FOMO.

Hype and FOMO are indeed drivers of growth, but those alone would not explain why rates of crypto adoption are highest in countries with large unbanked populations.

Take a look at this website, which ranks countries by rates of crypto adoption: https://blog.chainalysis.com/reports/2022-global-crypto-adop...

Then compare it to this chart from Statistica, which ranks countries with highest unbanked populations: https://www.statista.com/statistics/1246963/unbanked-populat...

Notice that there is a lot of overlap.

While Bitcoin adoption in countries with strong national currencies like the US or EU is likely driven by FOMO and hype, its main appeal is as an investment/store-of-value for those who lack access to them otherwise, and that is why Bitcoin adoption is highest in unbanked populations.

Thing is, if someone needs a store of value that's not controlled by the bank, gold is already there - and, for most people, it being physical is actually an advantage (easier to secure in a way that they can understand and verify).

Then again, most people who hold crypto today, do so in third-party wallets on platforms like Coinbase. At which point the "gold equivalent" would be to buy gold certificates from your bank of choice.

Thus, the only practical value proposition of Bitcoin is that it can do long-distance transactions outside of the established bank network and its regulations. I'm not saying that dodging regulations is always a bad thing, but regardless of that it's a very niche use case by definition, never mainstream.

The reason why it is so popular outside of that niche is speculation. Which is also why we're seeing those wild swings - if the current price was anything resembling its real utility, it would be a great deal more stable.

> * being physical is actually an advantage (easier to secure in a way that they can understand and verify). *

Because gold is physical it is not easy to transport, and can more easily be seized by the government -- both of which make it a worse store of value. It is also worse because its supply growth rate is higher, which means that if you hold gold you are losing more value every year (absent changes in demand) than if you hold Bitcoin. In fact, we know exactly what Bitcoin's total supply count will be, whereas with Gold we do not. If BTC gains mass adoption, then it will be the best store of value that we have.

A tiny amount of gold costs a shitload of money. 1kg of gold costs around 60k eur. More than most people have in savings. No problems to transport something like that if you don't brag that you own it.

But the same applies to BTC. Telling others that you own a large amount of it is not a good idea. It can be stolen in various ways too. Like by an exchange that's owned by a trustworthy and altruistic billionaire.

It's been 14 years and BTC is not even close to mass adoption.

Even my mom knows what it is but has no need or interest to use it.

What would make "normies" switch to BTC if they haven't already?

I don't think it is so simple. There is already a EUR 10k limit on the amount of cash that you can carry across EU border without declaring it. In case of violations the money may be confiscated. I would assume that the same would apply for gold above some reasonable value (e.g. a really big gold necklace :) ).

> Because gold is physical it is not easy to transport, and can more easily be seized by the government

For most people, the more immediate threat is not the government seizing it, but robbers and/or scammers. Defending against robbers isn't that hard, especially if you have so much money to park somewhere; but more importantly, it's well-understood. OTOH the average level of technical literacy makes malware and scammers much more dangerous, and Bitcoin is far more exposed to both.

The usual retort is, "just learn how to secure it properly, it's as easy as this 20-point list". When it comes to mass adoption, this is kinda like pitching Vim + LaTeX to Word users. It doesn't matter that you can secure Bitcoin better than gold, if you know what you're doing, because most people do not and will not.

> It is also worse because its supply growth rate is higher, which means that if you hold gold you are losing more value every year (absent changes in demand) than if you hold Bitcoin.

You can't realistically assume "absent changes in demand" IRL, making this point completely moot.

On top of that, scarcity is not the determinant of value in and of itself. It's easy to make tokens of which there's a limited supply, but it's much harder to convince everyone else that they're worth using. But, for gold, that part is already done, and this consensus has been stable for literally millennia. Bitcoin is still in a consensus-building stage, and it's not even clear whether it'll ever be achieved at all, much less how long it'll take.

> If BTC gains mass adoption, then it will be the best store of value that we have.

So, BTC should be mass-adopted because it is the best store of value, but it can only be the best store of value if it's mass-adopted?

BTW, I should be clear that I'm not anti-Bitcoin or anti-crypto in general - I just think that speculating on it is neither productive nor safe. Unfortunately, that's also 99% of all the economic activity in the ecosystem right now. Hopefully that bubble will burst eventually, and it'll go back to its crypto-anarchist roots.

> Let's say it's 1974 and you're writing an article about the desktop computer "becoming mainstream". What does that look like exactly to you? I'm guessing it doesn't look anything like the last 30 years. Not even close.

Sure it does. Read Alan Kay's "Personal Dynamic Media". His vision of the ultimate personal computer was what today we'd consider a very bulky laptop.

Alan Kay was one of the few people in 1974 qualified to make predictions about computers. I'd compare that to Andreas Antonopoulos making predictions about bitcoin in 2011. I wouldn't trust your average journalist's predictions in either situation.

Link for the curious. http://augmentingcognition.com/assets/Kay1977.pdf

It's a neat read, from 1977 to be pedantic. It does miss networking - the DynaBook misses the forest for the trees in that it is a personal computer that doesn't account for the advent of the internet and how PCs/smartphones are a communication tool right after being a fancy calculator at their core.

In a sense that's an apt description for how a lot of people view crypto - they see it as purely a currency network, but don't realize its much more than that.

We've heard that argument for a decade now, cryptocurrency has still failed to find any use cases besides speculation an law breaking.

Banks have experience maintaining trust and not losing customer deposites. Cryptocurrency is struggling with this and I haven't seen any evidence of any radical new approaches to mitigate these issues.

Here’s what desktop computing in 1974 looked like:

https://en.wikipedia.org/wiki/Wang_2200

Despite all of the hardware limitations, real businesses found things like that useful for work which wasn’t selling desktop computers.

The future was visible, too:

https://www.computerhistory.org/timeline/1974/

The Xerox Parc Alto was “a groundbreaking computer with wide influence on the computer industry. It was based on a graphical user interface using windows, icons, and a mouse, and worked together with other Altos over a local area network. It could also share files and print out documents on an advanced Xerox laser printer. Applications were also highly innovative: a WYSISYG word processor known as “Bravo,” a paint program, a graphics editor, and email for example. Apple’s inspiration for the Lisa and Macintosh computers came from the Xerox Alto.”

The key thing to remember is that while desktop computing had huge places to go, it was useful almost instantly. In contrast cryptocurrencies have been globally available for almost a decade and a half, with only self-imposed drawbacks – nothing even remotely like the limits on early computer hardware or usurious network pricing — but despite that nobody has found them useful enough even at the level of a small company replacing a typewriter with a word processor. Almost nobody uses them instead of PayPal / Venmo, the few licit businesses which still accept them almost always immediately convert to a stable currency, and when these major players fail it has almost no real-world impact. That’s actually astonishing for a globally-available technology with billions of real dollars in funding.

I'm having a hard time not seeing this take on BTC as being a version of the Galileo gambit: https://en.wikipedia.org/wiki/Association_fallacy#Galileo_ga...

The problem with reasoning that way is survivor bias: we remember the things that did change the world, and tend to forget the things that didn't. Or, even when we do remember things, we tend to do so in a selective manner. Beanie Babies, for example, did change the world, after a fashion, but not exactly in the way anybody thought they would at the time. Beanie Babies themselves mostly died out and lost all their on-paper value, but not before kickstarting the rise the rise of eBay and PayPal. But that isn't quite what any of the "this time it's special" people had in mind. It turns out that, all too often, the dichotomy turns out to have been false all along, which leaves plenty of room for literally everyone to be wrong about how things are going to play out.

> What does Bitcoin "becoming mainstream" look like specifically?

Just like your desktop computer analogy, it looks like Grandma using Bitcoin in an everyday, mundane way like paying the electric bill.

...which was so very obviously never going to happen.

The original Bitcoin white paper mentions commerce (in the introduction) as the primary use-case and it does not qualify this in any way.

But yes, in hindsight many things become obvious.

My mom knows what the Bitcoin is. She hasn't bought any and pays bills with euros instead.

Euro and Yuan are mainstream, but I haven't bought either in years.

Euro and Yuan don't claim to be the ubiquitous currencies in your region. Bitcoin would want to be that. Or at least that's what it was made for.

> “AML/KYC bootlicking”

This is where your 1974 PC analogy breaks down.

The Apple II wasn’t a tool for breaking laws. People didn’t buy them to produce Communist Party leaflets in their homes on matrix printers.

But crypto is a political project. It’s intertwined with a very specific view of how money and government should work, and it’s not compatible with the legal framework in place.

(Rhetoric like “bootlicking” is revealing because it’s associated with a very different 1970s movement than the computer revolution.)

The PC really took off when IBM made one. That’s the equivalent of banks adopting Bitcoin. But things would have been pretty different if you needed a Congress full of Maoists first before IBM could make a personal computer.

I'm guessing mainstream means that it's enough that traditional finance has had to deal with requests to invest in it to some degree. https://michaelwgreen.substack.com/p/do-not-buy-this-etf-1e8... (May 2021, Michael Green of Simplify) sorta touches on this.

It seems easy to draw a 'commodity' box around Bitcoin and thus explain what it going 'mainstream' means: just as easy to trade via legitimate institutions, on behalf of people who have no idea about managing money. A small part of some portfolios, like gold. You seem to have some grand context beyond this? Please share.

What does Bitcoin "becoming mainstream" look like specifically?

When I use it for normal internet purchases in preference to a credit/debit card.

I have a strong personal and moral conviction in favor of money-laundering so I’m pretty happy big banks are getting out of the crypto space.

I minted nearly 1 BTC rather a lot of years ago and it vanished with a Pentium II to III upgrade (or similar). Oh well! I probably ran up £5 of 'leccy back then minting it. I probably spent more on Folding@Home and the like.

For me the ledgers/blockchains and provability things are important but trying to fennangle a "value" out of thin air is a step too far. Even if that step involves a Norway MW Year.

Eventually something useful might come out of all of this but I don't think it will be a currency you can spend. In the meantime, the world burns or at least gets a bit more toasty.

> I minted nearly 1 BTC rather a lot of years ago and it vanished with a Pentium II to III upgrade (or similar).

How did you do that?

I idly played with BTC one evening and I let it mine for about a week or so on a fairly poky PC and got bored of it eventually. I was more interested in Folding@Home.

As it turns out I was both right and wrong. That BTC was going to be worth up to $64,000 at one point in time. However, protein folding might save lives.

I ditched that PC and didn't copy over the wallet because I'd forgotten about it - it wasn't that important. I am very aware now that it would probably be a good idea to back up things like that 8)

I always console people by telling them there's no way you'd have held on to that BTC all the way to $64k. You'd probably sell it for a few hundred

And if not — definitely when it hit a thousand.

I'd love to believe you but this sounds somewhat farfetched given quoted specs. It was very early on that CPU mining was almost useless and even when it was useful it would not have been on a Pentium II

In addition the early reward for mining a block was 50 bitcoins, there was no way to "mint" a smaller number.

You did not even have to mine them, you could just enter an address and get 5 BTC [1].

[1] https://web.archive.org/web/20100703032414/http://freebitcoi...

Anecdotal evidence: Friends of mine tried to open up a corporate bank account in Singapore for their crypto-business. Doesn't go too well.

Hodlnaut is in Singapore. Makes sense banks there would want to avoid crypto companies after this huge failure. https://en.m.wikipedia.org/wiki/Hodlnaut

3AC as well.

Probably all those regulations put in place to keep people from disappearing with your money. There are many other friendly countries for these types of businesses like the Bahamas for example.

I don't know about Singapore specifically, but it has always been notoriously difficult for crypto businesses to open bank accounts.

Anecdotal evidence: I tried to open up a personal bank account in Singapore for myself. Doesn't go too well.

And that was with a bank that I have a private banking relationship in 6 countries already...

Banks don't work with crypto. It's known.

I have the feeling that this crypto winter is different than the previous ones.

I think that we're finally reaching a critical mass of people understanding the nature of the proposition.

It's just like the Scientology Winter.

Nobody could stop Scientology until South Park did a series of episodes about them.

And South Park recently did a number on NFTs and crypto currencies a year ago:

Crypto Curious - SOUTH PARK: POST COVID: THE RETURN OF COVID

https://www.youtube.com/watch?v=N8f-BQFo7lw

>Vic Chaos presents a proposal on the potential of selling NFTs to Denny's Applebee's Max customers.

Did that actually stop Scientology? Last I checked, they still have that crazy pinky-swear-it's-not-a-gulag compound, the Sea Org is still around, recruiting via "free stress tests" is still a thing...

> I think that we're finally reaching a critical mass of people understanding the nature of the proposition.

Most people have only heard of Bitcoin and think crypto is about sending digital gold coins to people. That hasn't been relevant in years and the crypto industry moved on from Bitcoin half a decade ago and pretty much all of the development and activity happens on Ethereum.

Most people have never heard of Ethereum and only a small portion of those that have understand what it is. I don't think we're anywhere near a peak

> Most people have never heard of Ethereum

Paris Hilton and jimmy fallon were shilling bored apes on late night tv. Kim kardashian and Floyd Maywether promoted crypto scams. Tom Brady was a big FTX promoter and investor. There were like 4 formula one teams named after shitcoins.

Those names are some of the most famous in the world across a number of demographics. Mass media already pushed the crypto scams on the world. There is no one left to push the ponzi onto.

Oh man, stop shilling. Ethereum is a stupid idea and responsible for the most amount of financial scamming in human history. That's what it's good for, nothing else. All the grifters and scammers moved onto Ethereum, if that's what you mean by "crypto industry".

Hilarious thread. Whichever way it's going to go, it will be fun to come to back to read it in 5 to 10 years.

3 years ago ETH was $100, today it's $1300, maybe we should all just wait and see before writing the obituary

And that is why I don't go near any crypto. Don't get me wrong I love the idea but I don't like volatility. I can't wait until a stable DeFi is established. for international transactions this will be a dream.

If it's up over 10 fold in 3 years then I don't see why it couldn't drop 3 fold in the next 3. I like simple investments where the value is obvious and a simpleton like me can guess if the price matches the underlying value.

Can you give an example of what you’d consider “simple investments where the value is obvious” and where “a simpleton like all of us can guess if the price matches the underlying value”?

I’m genuinely curious.

Most commodities such as gold and oil. You don't need to know much about them to know they have value. Government bonds because you're trusting in the government lasting that period and keeping their word.

Index funds, you're just following the market and betting it will do the same thing it did the last 30 years over the next 30 years.

All of these I'd only look at for long term investing. Short term trading is not for me. My crystal ball is just not good enough for that.

It baffles me, that the people that are the most cryptocurreny-enthusiast are the ones most likely to confuse the proof for a _usecase_ of a technology with the sheer _price_ development a digital token on a completely volatile market.

What your comment says is that more people decided to pump money into a cryptocurrency over (completely biased chosen) x amount of time than people cashing out (if put differently one could definitely encorporate the terms of greater-fool or pyramid in this senetence).

I mean I could list a ton of milestones and use cases and things but on HN few people care about that. The price is an easy way to quantify the value to the market holistically.

And yet again you confuse monetary "value" (more like exchange value) with value as in there is a use for it.

There’s no reason for it to have gone up but there are plenty of reasons for it to go down. Keep HODLing though.

Calling this an obituary is rather hyperbolic.

It is, though, yet another indication that crypto is losing momentum among mainstream consumers. Perhaps that's simply collateral damage from a downturn that's affecting all segments of the economy. But, then again, perhaps not. It strikes me as a distinct, qualitatively important development that's worth observing carefully rather than dismissing out of hand.

I mean, META stock has been a worse investment year over year than bitcoin. I know everything is relative, but the "momentum losing" I think is fueled by people who vehemently dislike this technology more than what the market is determining

You can't draw a distinction between people who dislike an asset and "the market" like that. The market includes everyone, not just a select group of people who hold a specific set of opinions.

Also, this focus on the USD exchange rates of specific cryptocurrencies is akin to moving the goalpost right out of the stadium and into, like, a tennis court or something. The shift this article is talking about is not about prices, it's about mainstream institutional support for the asset class. That's not driven by exchange rates, per se, because they're not speculating on it, they're simply enabling their clients to do so. It's more driven by things like whether they believe there's a stable consumer market that can be relied upon to cover their cost of operating in the space and provide some profit as well.

1 year ago it was $3000.

A year ago TSLA was $368 and today is $120. I don't think we should ban electric cars or think the tech is dead

What in particular does TSLA do that makes it worth more than toyota, honda, and ford combined in market cap?

They produced 20 times more fully electric vehicles than toyota, honda, and ford combined in 2022.

Tesla produced about 1.4 million all electric vehicles in 2022 with a growth rate of about 40%.[1] Toyota:1220 (The BZ4X is the only full electric sold in 2022)[2] Honda: I don't think they sell any all electric cars right now. None on this list[3]. Ford about 65 thousand.[4]

[1]https://www.cnbc.com/2023/01/02/tesla-tsla-q4-2022-vehicle-d... [2]https://www.prnewswire.com/news-releases/toyota-motor-north-... [3]https://electrek.co/2022/10/18/us-electric-vehicle-sales-by-... [4]https://web.archive.org/web/20230109011143/https://www.nytim...

> Tesla produced about 1.4 million all electric vehicles in 2022 with a growth rate of about 40%.

And their inventory is growing, their backlog is shrinking: https://twitter.com/TroyTeslike/status/1609346097733828609

And you are almost for sure American. Check out how many EVs/PHEVs were sold by:

Mercedes

BMW

Renault

Volvo

Chinese manufactures

Everyone is catching up to Tesla and it's going to be just a face in the crowd in about 2-3 years.

I would love to see the numbers if you have them. EV and not EV/PHEV combined. That is definitely not the same and obscures the comparison. The Chinese are going to be the main Tesla competitors. There is a reason that the Chinese let Tesla own their plant in China 100% instead of making them a minor partner in a joint venture like everyone else. Telsa insisted and they gave in because they wanted to build up an EV manufacturing area with Tesla bringing lots of cutting edge tech and buy lots of batteries and other parts.

VM fired Herbert Diess, who was pushing EV very hard. Now VW EV production is decreasing.

"Everyone is catching up to Tesla and it's going to be just a face in the crowd in about 2-3 years." This has been said for many years. Time will tell of course.

and Toyota sold an infinite times of hybrids than Tesla, which are more profitable, accessible, affordable. Your point?

Margins on Tesla cars are the highest of any major manufacturer. Ferarri is about the same.

It's still just a car. Toyota alone sold 10x more in 2021, not produced but sold.

Isn't that actually a bad thing? Wouldn't I want the currency I use for finance and so on to be relatively stable? And money come from these activities and not the currency changing in value.

There is no reason to be invested in crypto. It is no more valuable than a trading card and the volatile nature of trading cards are equal part. Noone also needs to invest in something that has an unsure future. While people would argue that it is like investing in stocks that crypto is the new Apple stocks of 80s. It simply isn't that stocks come with volatility but you own a share of the company as in you own that percentage.

Yet banks do not close accounts of people selling, buying, designing, or printing trading cards, do they?

Actually they can! If a large amount of money transfers because of selling/buying anything it can cause freeze on an account. But the individual value of a card is not likely to cause the trigger. Just like... ... crypto.

But cash you can pretty much hide it even if you have finger quotes to finger quotes.

> it's nothing to worry about

> if we will ever catch you using that you will be punished

Comments here are hilarious, while Visa is testing Ethereum network and Stripe, Paypal etc took a decade to use it.

Wait until they realize that Ripple is running a good portion of financial institutions.. Seems like people prefer keeping their heads in the sand, nobody is here to convince anyone of anything though because for some reason most of the critics happen to be the most ingorant of the matter

need quotes around "investors"

Humanity isn’t ready because we can’t build perfect code yet. Once crypto isn’t incentivizing nation state actors from working on $50M bug bounties, maybe we will be ready…

> Humanity isn’t ready because we can’t build perfect code yet.

Let me rephrase that:

[Nobody] is ready because we can't build perfect [anything], [ever].

What is problematic with the banks' approach to crypto is that by closing accounts of companies or persons having something to do with crypto they are making it impossible to pay taxes. This is putting people and businesses in serious jeopardy of being prosecuted on the grounds of tax avoidance. I would love to know if such behaviour falls under anti-trust laws or may even be unconstitutional. Refusal of provision of services that may result in prosecution looks illegal to me, but I'd like to hear a lawyer's opinion.

That isn't the bank's problem, nor is it new.

In the US, you are supposed to pay taxes on any profit, even if you don't get actual cash on it. Prizes from The Price is Right? You gotta have the cash for taxes.

If illegal gains aren't exempt, I don't see a reason to exempt crypto. If you can't afford the tax, don't buy. (FWIW, they don't give you the price is right prizes unless you have cash upfront. Not getting the prize is you being poor or being tricked. I view crypto similarly.)

Bitcoin doesn't need banks. That's the whole point.

Bitcoin doesn't, bitcoin investors do. And until you can pay your Snickers at a grocery store with bitcoin, that won't change.

There's a huge fight to kill crypto adoption and this article is an example..

You won't be able to buy snickers everywhere in BTC, but we are slowly getting there.. The number of things I can buy with crypto is increasing significantly (now I pay for VPN, web hosting, domain nane, consulting, ... in crypto). In addition, probably firsties are not aware, but P2P networks without KYC are exploding everywhere. I can get cash for crypto in under one hour where I am. You can today go to a number of touristy countries and live of exchanging BTC for cash securely and with 0 identification. If this is not big enough then I don't know whay would be.

My fear is that eventually people will star loosing holding over cryptos and banks will star to buy them very cheap, so they will control the supply and not people. once again banks having the full grip.

Yea, that’s the idea. Someone is buying when there’s blood in the streets and it’s not usually the idiots.

Reducing in converted value actual crypto? I think almost everybody who kept reduced their exposure bc the price dropped

I'd like to see a chart of negative HN posts vs bitcoin price. I have a feeling you could make a lot of money.

But what about Bitcoin?

Cryptonomics?

Crypto is fleeing banks. Bank investors should be worried.

I vouched. This is a very valid concern, that was even recently mentioned in a paper from the Fed.

Large crypto "banks", with large holdings in fiat banks, can cause huge outflows from those banks, upsetting their reserves balance. Essentially a crypto bank run can cause a fiat bank run. This couldn't be more true when you see examples like where FTX bought a small community bank.

People pretending crypto only effects those in the crypto space are burying their heads in the sand. Crypto is here to stay in some form or fashion.

The number of fiat banks to crypto banks is in the realm of 10,000 to 1.

So yes a crypto bank could maybe cause a single fiat bank to fail but it would be isolated. And likely a very small bank.

The entire crypto industry could collapse tomorrow and there would be likely no systemic risk to the global financial system.

Indeed, not currently. The problem is where crypto will go after the next winter. Maybe FTX will have scared off the next batch of newcomers, but then again 2017 and people still were lured back again.

Difference now is that VCs have lost interest in the crypto space.

LPs are freaking out over what happened with FTX and wanting to limit their exposure and investors in general are increasingly dubious that crypto is capable of generating sustainable, highly profitable businesses.

Indeed, but I have no doubt they will be back yet again, when there's money to be made again.

It's been the same with each tech economic bust, but the VCs come back and offer money again. Time heals wounds.

A bank run isn't a systemic risk to the banking system because we have the FDIC.

It doesn't change the fact said bank would have gone under, and people would only be reimbursed up to $250k. It is in everyone's interest for banks to remain healthy.

You may not remember 2008, but banks are absolutely, massively, a systematic risk to everyone, everywhere.

And nobody lost their deposits!

Bank regulations have completely changed since then, so if anything we'll get new problems.

How does FDIC behave in a high-inflation environment?

FDIC was introduced in 1933.

And the inflation rate today is nothing compared to previous years [1]. So my guess is just fine.

[1] https://www.macrotrends.net/2497/historical-inflation-rate-b...

The government is good for all debts, until it isn't. But at such a point as it isn't then I think FDIC insurance becomes the least of our concerns.

Much better than crypto has

Laughs in Argentinian peso

India's 6 year old UPI does 7B transcations per month. Its used by all classes.

Crypto is pathetic in comparison

How many transactions per months does UPI support for people who are banned from the system or whose assets are frozen?

For those who do not use archive.ph, here is the crux of the article:

https://www.occ.treas.gov/news-issuances/bulletins/2023/bull...

Banks are being warned against crypto.

The article also claims bitcoin cannot survive without banks.

Unfortunately, archive.ph requires the use of a "preferred browser" and the need to send data to Google.

First, to get past the CAPTCHA, one has to access www.google.com, so Google now has data that the user is visiting archive.ph.

https://www.google.com/recaptcha/api.js?onload=onloadCallbac...

https://www.google.com/webmasters/tools/ping?sitemap=https:/...

Once past the CAPTCHA, more fun.

https://a.publir.com/platform/1100.js

Publir looks like adtech. For example, https://a.publir.com/sellers.json https://a.publir.com/ads-txt/505/ads.txt

The next one looks like some data collection by archive.ph

https://[YOUR_IP_ADDRESS].[YOUR_COUNTRY].inc1.358424231.pixe...

Archive.ph itself is blocked in some countries.

Maybe it wants to know where users are coming from.

Archive.ph does not work with Clouflare DNS because CF refused to send archive.ph a portion of the user's IP address in a DNS packet, i.e., EDNS0 Client Subnet.

Instead archive.ph will now use "x.gif" to cause a DNS request that reveals the full IP address of the user.

Next, add in some tracking.

https://top-fwz1.mail.ru/js/code.js

Last but not least, everyone wants to let Google know what they are reading at archive.ph. Here, Barrons.

https://www.google.com/s2/favicons?domain=www.barrons.com

https://t1.gstatic.com/faviconV2?client=NULL&type=FAVICON&fa...

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