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Comment by brutusborn | Hacker News Reader

It's used because it solves a problem: 'trustless' transfer of value (in that you trust the network and not a centralized authority). It's 'big' because people who don't have this problem speculate on Crypto, even if they don't need trustless transfer of value.

How else would I pay a cybercriminal without Crypto? I ask this in good faith, I genuinely don't know of any other methods. Unfortunately the current method uses lots of resources, which I'm guessing is why you hate it so much. I'm all for better alternatives, but what are they?

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How big is the 'trustless' part of the ecosystem? 5%? 1%? Most of the speculation happens on centralized exchanges which very much involves (completely unjustified) trust.

For bitcoin, this site suggests ~90% (2 million bitcoin on exchanges vs 20 million in circulation)

https://www.coinglass.com/Balance

Wikipedia tells me there are in fact a hair under 19 million Bitcoin minted. I am willing to believe this site is getting the large exchange component right, or at least conservatively right (conservative in that it's unlikely to be claiming coins that don't exist, but it's possible exchanges have additional coins not listed, and it's possible there are other exchanges not listed).

Googling, it seems that the best estimates seem to indicate between 2 and 4 million Bitcoin are permanently lost (lost keys, known hardware failures of failed wallets, unclear if this counts Satoshi's million bitcoins or not). This estimate [0] by an analysis firm who appears to be broadly pro-crypto suggests 3 million lost, and that ~14.5 million BTC are "illiquid". Illiquid obviously doesn't mean lost

Illiquid doesn't mean lost, but it suggests something to me about the current conversation. If only ~4.5 million BTC are even a little bit liquid, then it's fair to say that at least half the engagement with BTC in balance terms is on exchanges, and probably more considering velocity of money. Not the grandparent's claim of 99%, but also not your claim of 10%. At the very least, not an obviously settled question.

[0] https://insights.glassnode.com/bitcoin-liquid-supply/

It isn't just the problem of paying for illicit goods/services. I was paid (for perfectly legal work) in crypto earlier today. In many perfectly legitimate cases, there's substantially less friction involved when compared to established methods. I didn't have to muck around with archaic systems and bad UX or provide endless information, and I like that the whole affair is so conceptually simple as opposed to the black box that is the backend of my bank account.

"How else would I pay a cybercriminal without Crypto?"

Before cryptocurrency became widespread, they were limited to gift cards and MoneyPaks, which kept the ransoms to the several hundred dollar level, and therefore to the "oops, clicked on a dodgy site," individual PC level, rather than the finely targeted attacks on organizations able and often willing to pay multimillion dollar ransoms, and the criminal ecosystem that has developed around that.

There was Liberty Reserve, Webmoney, e-gold. Even now there's a bunch of sketchy EMIs in Belize and Lithuania like Advcash and Perfect Money. Ransomware before just wasn't highly targeted because "installs" were a lot cheaper and there was lots of other profitable easier scams to run like spamming pharma, FakeAV, etc. An increased amount of attacks like the Colonial Pipeline hack may have coincided with the rise of cryptocurrency but I think it would have happened even without it. There has always been groups that "cash out" fradulent wire transfers for 50-60%, go read wwh-club[.]vip or bhf[.]io if you want to know more (I read these occasionally out of curiosity but there are more "elite" forums out there). Not really any reason to think most of these attacks couldn't have worked with just paying ransom by wire transfers, especially when you consider that after the money has gone through a few countries it is practically unseizable given the amount of time international cooperation takes.

"How else would I pay a cybercriminal without Crypto". Does paying a criminal also makes you a criminal? Would using cash be an option?

Exactly. It’s like the folks who say these things don’t understand they are defending criminal activity. Now, one can argue things like the sale of “illegal drugs” shouldn’t be illegal in the first place, but that’s an advocacy issue not solved by decentralized payments. All you do with decentralized payments is make it exponentially more efficient to engage profitably in illegal activity. Not exactly ideal given much of what constitutes illegal activity is well deserved to be outlawed (sex trafficking, murder for hire, etc…)

How about decriminalized drugs? There's also still on-going issues with getting bank accounts if you're handling decriminalized drugs like marijuana. There was even an attempt to pass a law that specifically for this in the United States (SAFE Banking Act) that is faltering.

Without a bank account, it's near impossible to accept credit card or any other alternative. You can pretty much only accept cash. And since you can't just deposit it into a bank account, retail has to pay growers (and employees and withhold taxes) in cash, and they have to find agricultural equipment suppliers who will accept cash. And in my experience, even they can get their bank accounts shutdown just for being in an adjacent industry and handling too much cash.

I’m not defending criminal activity. I’m being a realist and recognising it exists, and thus there is a logical reason for the existence of crypto. It’s all well and good to say the solution is to not break laws, but that is not how the world works. It’s like saying the solution to lung cancer is for people to stop smoking, it’s absurd.

> How else would I pay a cybercriminal without Crypto?

You don’t. That is the point of laws.

In good faith, the commenter specifically mentions the DoJ. People want laws against cybercriminality because it hurts them. Your argument is similar to answering “I hope AR-15 rifles get abolished” with “well, how else can I do a mass shooting?”

Illegal doesn't necessary mean that something is morally wrong. I'm all for making ransomware actors life harder, but it should not come at the cost of also affecting regular drug buyers/sellers.

And similarly, you will find many people arguing that AR-15 are morally good to own even if they are banned.

Laws are not about morality as much as effect; but people still want them applied.

The alternative are systems like:

UPI (India)

Pix (Brazil)

PromptPay (Thailand)

PayNow (Singapore)

Which works infinitely better than crypto.

These look like centralized systems, which require trust. Am I missing something?

These systems have proven to work better than what we have now with crypto which is full of unregulated, volatile fictitious tokens that attract offshore exchanges.

Funny how developing countries have come up with better solutions to what crypto was trying to solve for them in payments, but crypto failed in doing just that.

You are confused about the value proposition of crypto. These systems do not solve the same problem.

There is no value proposition of crypto and my point still stands.

What has crypto done better than the systems I have mentioned?

I’m not going to repeat my explanation from my parent comment. The fact that you can’t form a rebuttal shows that you do not understand the value proposition. I suggest reading the original bitcoin white paper. If you can understand it then the differences with the systems you mentioned will become obvious.

> You are confused about the value proposition of crypto.

Then you should tell us what is the real value proposition of crypto then, because I cannot see it.

The Bitcoin whitepaper is moot since the whole point of Bitcoin is to be a P2P payments system and yet it has failed in that aim alone.

Therefore, since Bitcoin in its current form has failed, the value of crypto is nothing.

>How else would I pay a cybercriminal without Crypto?

Gift cards?

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