Yes, Crypto Is All a Scam
stephendiehl.com
stephendiehl.com
https://twitter.com/dystopiabreaker/status/14701269278180679...
Stephen Diehl is also no better than the crypto maximalists with his extreme absolutism. You won't see him debate and test his arguments with a balanced panel discussion so that you can easily see how extreme his arguments are. He has a book to sell and is full time, 24/7 tweeting the 'all of crypto is scam' chorus.
Not all cryptocurrencies, tokens will survive, but only a select few of them and their technologies will still be around to be used under regulations.
The 24/7 crypto is a scam community is extremely odd though. I can't stand the sport of NASCAR but I can't imagine enveloping my entire thought and identity around how much I think NASCAR is a bullshit sport and trying to convince people to stop watching NASCAR.
Finding an anti-passion to that degree seems extraordinarily unhealthy mentally.
Crypto might well be the biggest vehicle for financial fraud the world has ever seen.
Whatever you think of Crypto more broadly, millions of innocent people are being prayed on, who have lost collectively, literally billions of dollars, some more vulnerable to the impact of that than others.
To a lot of (good) people, it’s unacceptable to allow that to go unchallenged.
So yeah I think I can see how it’s a bit different.
No chance in hell. The only sustained market this technology has are illegal transactions/black market.
To begin with: a regulated Blockchain is an oxymoron. The technology ceases to have any meaning if the government has the ability to regulate the chain. They'd be able be more effective with regular acid databases and certificates for the web of trust, like they've been doing for a very long time now. You be combining the downsides of Blockchain with the downsides of traditional banking, gaining only the weaknesses of both.
The blockchain will have no value.
It's almost as old as the smartphone, and we still don't have a killer application for it, or any application at all.
Given the level of Rage Against The Crypto ™ displayed, that's pretty much implicit.
That's because the value these things provide is money-laundering, bypassing of international financial regulations and tax fraud.
Yeah that's a superb value proposition right there, and definitely something we want to keep free and available /s
The current system is flawed in many, many ways, but none of it happened arbitrarily; the restrictions we have are the because malicious actors abused the system.
> For example, illegal transactions, scams and gambling together make up less than 3% of volume.
Note that:
1. This quote is talking specifically about bitcoin, not crypto overall
2. This paper is written by a notable crypto skeptic, so he's not using bro logic. He found the main usage by volume is speculation, with very little illegal activity.
In fact, the US underground economy is 11-12% of US GDP[1], which is a much worse proportion than bitcoin.
[1]: https://www.investopedia.com/terms/u/underground-economy.asp
1. >flows to addresses which have been identified as illegal
These are only identified as illegal. First off, only a small number of adressess has been marked as illegal, since it doesn't make much sense to have everyone know the dirty deals you're making, most of the real illegal traffic is not there. Also a large number of DN markets uses 1-time wallets, so it's impossible to identify those.
2. Most of the traffic analysis is based on private to/from exchange and exchange to/from exchange data. As exchanges require a KYC, it can be assumed that most of the exchange routed transactions aren't illegal, or first go into a mixer if they are coming from an exchange, decreasing the odds that it can be classified as illegal.
3. Analysis was done in a crypto bubble market, where everybody and their moms were trading it on a daily basis to earn money.
In conclusion - the paper is bull. Yes, a large amount of usage is speculation, but illegal activity is way larger than assumed in the paper. But also, when you remove trading/gambling for speculative profits, what usages remain? Mostly illegal ones, small amount of legal ones and a few believers.
1. They analyzed clusters of addresses, not individual addresses, so one-time addresses are accounted for (unless the vendor never collected their payment from the DN, in which case they gave away the drugs for free)
And anyway since 5 years ago all the DNMs use monero, not bitcoin, so talking about DNMs in the context of bitcoin is an anachronism. If you use a traceable currency with a public ledger for drugs, you're not very bright.
2. Volume associated with a mixer is classified as illegal in the paper, so it's part of the 3%. Bitcoin mixers are not plausibly deniable the way Tornado Cash is (because of UTXOs) - mixers still leave an obvious trail.
3. The analysis covers data from 2015-2021, so it covers two halving cycles.
> flows to addresses which have been identified as illegal transactions, scams, and gambling together make up about 4% of the volume at the beginning of our sample in 2015. By the end of of our sample in the middle of 2021, this fraction has fallen to less than 0.4%
Illegal activity is 0.4% in a bull market and 4% in a bear market. Overall it averages to the headline 3%. You can infer speculation volume goes up 10x in a bull market.
The whole point of it is _not_ to get caught. In a space like cryptocurrencies where creating a new wallet to launder your money through and no longer have anything associated with evil_wallet_of_bad_illegal_man (which had all its funds sent to a tumbler and came back to the new account anyways). The whole point of underground transactions is to not be tracked.
It's all fraud.
I read that crypto is also being used for rapid cross country remittances, which may be totally legal.
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Don't think I'm a crypto fan. The value is all based purely on shared beliefs. At least government fiat is backed by the taxing authority (while undermined by the printing authority)
Crypto and NFTs are just easier, less risk, less chances of being caught.
Maybe we should talk diamonds. Inherently worthless objects, easy to hide and transport, easy to make part of jewelry, and thus free to transport almost anywhere. Yet that one tiny rock can cost tens of thousands and will allow the corrupt politician to sell for cash money perfectly fine.
I can understand the appeal, but I do find it amusing how we (humans) instantly abuse anything if modicum of abuse is possible :)
This seems like a good example of the just-world fallacy.
The current system absolutely has many arbitrary restrictions. The problems those restrictions allegedly solve don't have only one possible solution, but that's what we got stuck with.
The distinction matters because it raises the question of that process repeating again. Since it’s not random, the same forces will push in the same direction unless those problems can be recognized and countered in a different means.
For instance, do you think our regulatory framework would look the same today had Prohibition not happened? That's a case where the State created a problem (black market funding large scale organized crime) and then added yet more rules to try and fix that problem.
Edit: so one could argue that we "need" those regulations because of crime, but another could say if we eliminate the prohibitions funding those crime syndicates, then the problem is equally solved. Doesn't that make those regulations kind of arbitrary?
This is not true for digital property. Digital property is just as "made up" as the NFT that proves its ownership. People hear "NFT" and for some inexplicable reason jump to physical art.
If the network believes, by whatever consensus methods for proof of ownership that are employed by this network, that you own one coin then those same methods can be used so that the network can believe that you own a certain digital asset. That ownership is just as real as the ownership of a coin.
What people get confused with is the concept of copying or using (both are actually the same problem) this asset. But, this is not an NFT problem, it is a digital problem. All digital assets have this problem, if you give me the asset I can copy and use it without your consent.
Example: I can trivially copy the entire Netflix catalogue on my hard-drive. Since those bits land on my system to be shown on a screen they can just as easily land on my HD as an mp4 file. Are we on any disagreement that Netflix owns those shows? No. But once made available to me, I can use them however I want. Ownership and "use" are to unrelated things when it comes to digital.
Completely and utterly unlike and in no way whatsoever similar, at all, to stock markets, futures exchanges, CFDs, options, CDOs, etc, etc, etc.
Crypto is just a speculative digital asset. Sure it's been a playground for all kinds of scams and charlatanry, because there's no oversight, just as stock markets once were (and still can be in some areas eg pink sheets), but crypto is not a scam in itself.
Those things are backed by cash flows, which crypto isn't because noone ever wants their coin to be considered a security.
And from that you can tell you live in a nice country with reasonable laws. You can't fathom that not all countries are like that.
If people in Venezuela want to use bitcoin, they can go ahead. That doesn't mean we should embrace is in the Western world. It's a net negative for us.
Yeah because every single government out there is competent, non-corrupt and cares for its citizens. You are definitely not living in a bubble /s
And is BTC goes close enough to zero, double spend protection becomes increasingly tenuous, and the incentive to switch to something else gets stronger.
The fallacy in this argument is that there's something special in crypto that makes this more likely to happen. There isn't. In fact, you could argue that the enormous activity of scammers in this space actually points to some inherent qualities that might be useful beyond just running ponzi schemes and other scams.
One of these qualities is that scammers are unusually aware and mindful that they might get robbed by people equally untrustworthy on the same platforms that they use. So, the notion that that isn't happening on popular blockchain platforms is useful to them, and others. Tamper proof ledgers are useful for all sorts of things. The history of money is basically increasingly elaborate measures to prevent theft, forgeries, and other abuse. People trying to abuse the system are a constant.
Blockchains and other cryptographic tools are just that: tools. I expect banks to gradually incorporate these tools into what they do. That's already happening. E.g. China rolled out the the e-yuan currency last year. Not a decentralized blockchain but it obviously incorporates some of the technology. Other countries are doing similar things.
I think this goes without saying: money and financial systems are regulated—to some degree—everywhere in the World. They are regulated by Governments, and there are real penalties for evading those regulations and getting caught. Many of these regulations were put in place to prevent the kind of shenanigans that is commonplace in crypto.
In crypto, by design, there is no regulation, nor is it really possible. This is the something that's special about crypto.
Regulation always comes after the fact. The history of the "modern" banking system is that merchants at some point got bored getting robbed of their gold while traveling from A to B. Also, moving around tonnes of gold is actually expensive and tedious. So, they started sending each other bank notes underwritten by bankers who kept the gold in their vaults. Out of that modern banking and eventually central banks emerged. The notion of keeping gold in a vault became optional some time later. The regulation we have resulted from robbery getting more sophisticated. Initially all of this was unregulated. Regulation just happened as a reaction to all the inevitable bad stuff that happened.
What's a bank: a ledger of value denominated in currencies and a promise to account those ledgers correctly. Why do banks need regulation? Because ledgers are manipulated by people that can and will cheat if they can get away with it.
What's a blockchain: a tamper proof, shared ledger. If that sounds like a useful tool to have in a bank that would be because it is. You need a bit less regulation to keep the ledger correct. But you still need some regulation to ensure bankers use them properly and appropriately. Technology doesn't fix their tendencies to not do that.
Using an unregulated blockchain is not a whole lot different from using bank accounts in dodgy jurisdictions to evade taxes and oversight. Popular with the same types of people for the same types of reasons.
The real bug is that irreversibility, and immutability in general, isn't possible in centralized systems. Which is why you can never be 100% sure that your bank account won't be empty next time you check. This doesn't happen in crypto.
That's demonstrably untrue—at least, that it's not possible. (I'm perfectly willing to believe it was designed to be unregulatable; it's just that, as usual, programmers echo-chambering at each other about how they think the law works didn't actually take into account how the law really works.)
Crypto is becoming regulated more and more as time goes on.
There's nothing special and magical about it; it was just new, and with the US Congress hopelessly dysfunctional, it was not hard to predict that it would take some time for them to actually catch up and start doing something about it.
Beyond the protocol is the arena of application standards and legal jurisdictions, which is the subject of economics.
If by "regulation" you mean an external authority dictating rules to the crypto world, then yes, there is no regulation. But how many times have regulatory authorities for legacy finance lost track of the ball and permitted dangerous activity and even outright fraud? In the late aughts, regulators were so blind to reality that they permitted the Madoff scam and even the completely reckless trade in CDOs & CDSs that tanked the global economy. Then they promulgated "too big to fail" and bailed out the banks that had defrauded us (though at least Madoff went to jail).
On the other hand, if by "regulation" you mean a set of rules that can help guarantee the credibility, transparency and stability of financial institutions, then crypto can absolutely do that via e.g. smart contracts. That regulation would be entirely opt-in and the onus would he be on the buyer to evaluate the crypto for dangerous & vulnerable bits. That may be easier said than done.
Regardless, GP's point is well made, and the story about crypto regulation isn't so clear-cut.
Perhaps you expect right:
https://www.theguardian.com/business/2023/feb/06/britcoin-di...
But why?
If you use a debit card, you earn interest on your balance, and there's no anonymity. Britcoin supposedly won't bear interest. How do they implement traceability? Surely not blockchain - that's an environmental disaster. So presumably a centralized ledger, which WILL be hacked, even if the BoE runs it. But they probably won't - the current government doesn't like the state running anything. If the high street banks wanted to offer shitcoin acccounts, they'd already be doing it; so I guess Britcoin will have to be implemented by the sort of people who are already into shitcoin.
[Edit] If you use coins and banknotes, you get anonymity AND interest on your balance. What's the potential benefit of Britcoin?
Uh.. like what? A highly available distributed database? So grateful that Cryptocurrency teams invented those, what ever would we have done?
Governments will do it as they need a regional monopoly on their fiat scam. The new centralization and financial tracking are features.
What is policing crypto?
https://twitter.com/bitcoinrabbi01/status/137372358916224205...
As far as I know there is no alternative with the same level of convinience that crypto provide (KYC-less and fast payments to anyone in the world with just one secret). Remember that next time you suggest something among the lines of "crypto should be made illegal".
How dare I use a self-proclaimed currency as a currency. I lost all interest once I realized very few people actually want it to be a currency and the main excitement stems from the potential to make money, not the tech or a very idealistic view of banking independent from banks.
1 type of person "Bicycle for the mind", another type of person "porn machine". This has no bearing on the value prop of personal computers.
Guess which kind of person is building better and better things?
You ultimately need a financial authority to promote "stable" prices, and even that statement is highly political. You also need some serious gravitas to protect the currency, and this is where the crypto episode is most curious. Governments that for years prohibited "competition" of this nature for years in the most draconian of ways, suddenly have been missing in action. That created an environment where crypto metastisized into something socially corrupt, and also it fosters doubt in the competency and motivation of governments to protect what has forever been their turf.
Nothing I do is illegal; I pay my taxes; sometimes I make mistakes. Why would I ever want to use crypto over real money?
Being able to anonymously transfer value should be a fundamental right, as part of our fundamental right to privacy. In the past, cash could be used for that, but with society going increasingly cashless and some governments trying to make large cash transfers illegal, crypto is now the only way to keep this right.
It’s like saying money laundering should be a right or evading taxes should be a right.
Cash transactions and commerce has been regulated for most of human history, whether it’s been for tax collection purposes or to regulate certain types of transactions.
People who work in cash businesses have never had a right to anonymity. They’ve always had to report sales receipts and earnings so they can pay income, sales taxes or value added taxes.
If you want to buy things with cash, you can. If they don’t take paper currency, use a gift card.
Keep in mind, you’re on camera everywhere and your phone is always tracking you. Practically speaking, it’s very unlikely you’ve been anonymous for some time.
Most of human history. People were born with this right.
Even in Hammurabi's code, receipts for agents, witnesses, and contracts, were only used for settling disputes in court where fraud may have been committed. Those instances with conflicting claims were a tiny minority of overall transaction volume, meaning receipts were optional and not required for the vast majority of transactions; especially between trusted parties.
As far as that "state" was concerned, all transactions were anonymous until a dispute was brought to court.
Why? That doesn't seem like that would produce good outcomes. It's not a 'fundamental right' to transfer unlimited amounts of money with no oversight.
Money is not speech. If you care at all about governments being able to function from taxes, financial regulation, and myriad other things, you don't want people to be able to anonymously transfer as much money as they want.
Even cash has regulations about reporting, especially over certain amounts.
Crypto is never going to be the option that is best for me. Nor most of 8 billion other people on the planet.
But legitimacy and legality diverge.
Not sure if it’s marketing BS or similar, but I’ve read that some people used it to circumvent defunct government or hyper inflation.
If that’s true, then I side with those that want to live a decent life despite corruption and (international) politics exploiting and oppressing them.
Again, I don’t know how reliable that info is, and I doubt that there isn’t a better solution.
1 - Banks can make mistakes.
2 - Banks can be slow.
3 - Banks making it really hard to do transfer large sums of money.
I can't solve 1, but I can tell you that crypto definitely doesn't solve it. Because making a mistake with crypto is irreversible. The money is just gone. Mom forgot her password because she's getting old? Well, too bad, now Mom is broke and her money is gone forever.
Two is a solvable problem and it's getting better over time. It used to be even slower.
But 3, I'm in favour of. I want it to be hard for me to transfer away my life savings. I want there to be many steps in which my ID is checked and people look me in the eye and verify that yes, this is the thing I want to do. Because I am an idiot, and if you give me a gun I will shoot myself in the foot. I don't want it to be easy to accidentally go broke.
If I could have paid with, say, a dollar-backed stablecoin from a reputable institution, I could have made the payment digitally and closed the sale/rental without waiting days for a bank to mail me a check. In the apartment rental case, I might not have gotten passed up because someone else arrived check-in-hand ready to close the deal.
Curiously, this also describes the process of mining the next block in a PoW blockchain...
Capital controls are a political topic. You can disagree with them, dissent is important, but it’s also important to be honest and say that you’re seeing an advantage through breaking the law, which is like discovering that your business is more profitable if you don’t pay taxes.
It was useful to me for that use case. How would you have done that?
Tomorrow, I might not be able to buy goods from some of their vertical intergrated partners.
Freedom to transact has many forms. Sue you pay youre taxes and do nothing illegal now. But that is only true as far as you follow their laws of what is right and not illegal.
Sure, that's true, but you don't need the exchange to transfer value if you're using Bitcoin. Granted, you need them to get that value in your local currency and in cash (just like you need another Bank to transfer Paypal into cash).
> No exchange will touch it, and in extreme cases, the blockchain can be forked to undo a transaction.
How often has the fork happened though ... twice? three times? If we're getting into that kind of rareness, we'll lose all relevance. Banks sometimes outright steal from their customers, but it's so rare that I wouldn't put it up as an argument against using a bank.
As for receiving tainted coins: that's a more interesting point. Has anyone ever tried tainting large wallets by transferring known-bad coins to them?
So you shouldn't use non-crypto convenient near-realtime payments? Stripe seems to have similar events regularly judging by the "Support HN" posts.
It's an issue that seems to arise from misaligned incentives, and regulators are looking the other way, as they do on many things in banking.
It is definitely an area where regulation can help but the point is that you don't need to wait to give your business to someone else.
Lots of things would be vastly improved if only improbable things would happen (Google fights SEO-spam! Fusion brings unlimited energy too cheap to meter! Humanity unites in peace!), but would you place your bets on them happening instead of assuming the messed up reality we're in an dealing with it?
Payment processors are currently a form of zero representation government that decides what businesses are allowed to exist online, and they frequently abuse this power. They can only by avoided by using crypto. This is the one big use case of crypto i see as important, really...
I hear this quite a lot. Do we have any figures that say it’s actually happening at any scale?
https://www.freethink.com/hard-tech/crypto-argentina-black-m...
Same as companies using offshore bank accounts for the same purpose, or paying out cash in envelopes.
People getting paid in USDC of course still need to convert a large amount of it into local cash/cash-equivalent because they still have to pay rent, pay for food etc.
someone not using a product doesn’t mean it’s not useful
1 BTC currently is 22,987 USD. "The 2023 Honda Civic has a base MSRP of $24,650" [1]. No sane person, i.e. person not having more money than they can count [2], wanting to buy a car would ever spend the 1 BTC today for a Honda Civic, maybe the 'market' will go up and they will be able to afford a 48K Mustang Mach-E, or maybe it will go really up and be able to afford a 250K Lucid Air Sapphire. Actually spending the crypto 'money' is irrational behaviour, from an economical standpoint: just wait a few months/years, maybe it will go up: crypto forces the users into typical pyramidal thinking, a forever delayed gratification.
One must stop once in a while and ask themselves: what are they are trying to achieve, do they really want to be an effector in maximizing the pain and suffering of the world through vapid technology.
Hawala https://en.wikipedia.org/wiki/Hawala is in practice for long long time, and it is almost exclusively used to avoid tax and for underground operations (ex. illegal betting).
Huge volume is moved, so should it made legal? No.
There is a legitimate argument for creating KYC-light rails for small global transfers. That argument is not advanced by crypto's wanton criminality.
Then let's do it! I keep hearing that we "should" fix regulation or we "should" improve global transfers. Competition spurs innovation. The global financial hegemony can now consider themselves competed against. The proper move is not to ban your competition, the proper move is to build a better product.
If, for every citizen in every country on earth, we fix regulations, build efficient payment rails, solve corruption, and stop printing money and causing hyperinflation, crypto truly will have no use case and will quickly go to 0. I'd love to see that happen. Your move, incumbents.
This isn’t how politics works. Crypto threw a flaming lint ball of fraud at the rich world. Pleading that it’s also helping the disenfranchised doesn’t help advance a KYC-light discussion as much as a regulatory-vacuum one. It’s easy to ban (or heavily tax and erect stricter KYC guardrails at the interfaces between crypto and the fiat and real economies, what I’m concluding is the best middle path) and punt the “what did we learn” bit to a committee with a few years to write a report. Especially when the beneficiaries don’t vote for you.
Saying that cryptocurrency should be made illegal is a stupid idea, of course. However, cryptocurrency miners should have to declare their activities and pay much higher electricity prices, so that we could actually use that electricity for more useful things.
EDIT: because the argument of "how is this different than the dollar hurr durr": it's not! The dollar has value because people trust the US government to keep existing, because I can exchange it for actual goods and people want it. The primary goal of the USD isn't to speculate, it's to exchange goods. The same cannot be said about your favorite shitcoin.
Your bitcoin only has value because it can be used to... have more value. It's worthless, and should speculation be gone, you'll go back to it being an unused toy.
The big difference is the infrastructure required. If crypto goes out of fashion, your random numbers get riskier to test as virtual silver because transactions will get slower and riskier.
The other big thing is that crypto fills a void between dealing with bank settlement costs and cash. Once the US government or Eurozone come up with a digital currency model, crypto is pretty much dead as a means of transacting.
These risks are what make it so attractive to scammers.
Payments are fast and relatively easy if the recipient wants to be paid in crypto. There are lots of fast and easy payment options if the sender gets to dictate how the value is stored. I can email you an IOU right now. But most people would prefer their local currency, and getting currency A -> crypto -> currency B is neither fast nor easy and almost always involves a KYC process.
Yes, there should be something better for these people.
Is your argument seriously that crypto shouldn't be illegal so it can remain a convenient method of payment for illegal activities?
should it be possible to transfer 100k to a friend without the government knowing?
i support paying taxes btw
i also hope that cash never goes squat but i great it will within 50 years
Yes. It has been this way since Babylon. It is a principle of financial civilization.
> should it be possible to transfer 100k to a friend without the government knowing?
Of course not.
Cryptocurrency is used for illegal activity.
Therefore, cryptocurrency is a moral good.
^ This is a classic logical fallacy called a false syllogism. The archetypal example is "All men are mortal. Socrates is mortal. Therefore, all men are Socrates."
I assure you that all cryptocurrency is neither a moral good, nor is it Socrates.
Crypto is awash in scams. On top of the scams you have people who are not intentionally scamming but are misguided and will end up doing harm to others and/or themselves. On top of that there is crypto that could genuinely work under certain circumstances (ie have a use-case that provides value to its users without significantly adversely affecting others).
To me personally, this is the biggest lie there is about crypto/ blockchain. To this day no application has been identified that could not be better solved with existing tech.
The whole crypto space seems to be a solution in search of a legitimate problem to solve. (Plenty of illegitimate use cases sure)
The trouble with crypto is most of the use-cases it claims to solve, either aren’t solved, or they’re often better solved with more efficient and time-tested solutions.
So, let’s get specific and jump into the technical details of specific use cases.
What use-cases does crypto solve?
(It feels weird to defend crypto as I've always been extremely dismissive of the entire tech/community but again, the GP is right. You don't have to make absurd arguments, like that all crypto is just being used for scams or that it has absolutely 0 use, to make a coherent anti crypto argument.)
Ok I will be that guy. Not trolling. But after more than a decade, isn't it clear that crypto as a whole has failed to live upto the promise. The idea of decentralization is awesome but doesn't work in practice especially for payments.
I am not necessarily dismissive of crypto but increasingly, it is becoming difficult to see any real practical applications. Almost everything around it is a Scam.
> Ransomware was made possible by computers so.. uhm.. there's that.
1. https://www.crowdstrike.com/cybersecurity-101/ransomware/his....
What's the point of making yet another article blasting it with the same old tired arguments that have been continuously repeated ad nauseam for the last 12 years or so? I'm honestly surprised the article does not link to the Line Goes Up youtube video...
This guy has an unhealthy obsession against crypto, and paired with https://news.ycombinator.com/context?id=34693042 I'd say it's either sour grapes or has some kind of agenda, even if it's a personal vendetta.
In any case he's not even worth the bytes used to receive the webpage.
Ah, but then what would he apply his savior complex to?
There's only so many "worthy" causes in the world, and the market for self-righteous do-gooders is a very crowded one.
This fits many projects in the cryptocurrency space. But what about the first successful cryptocurrency Bitcoin? Was it dishonest? What about Ethereum, is it also dishonest?
Seems like yes, there are lots of scams in cryptocurrency. But there is also projects that are not, so in the end, the title ends up being clickbait, which I (just like you) fell for...
Bitcoin per se, no. Bitcoin as practiced, yes.
Broadly brushed, there are legitimate academic questions in crypto/blockchains/web3. The moment the work is remunerated for something other than its intellectual value, however, it's fair to revoke the benefit of doubt.
I'm sorry, I don't understand what you mean with "Bitcoin as practiced". "Bitcoin as practiced" made Bitcoin into a scam while it wasn't one before "it was practiced"?
The way it works (place data in a file, distribute file to everyone, use cryptography to verify that data in file placed by $someone is valid) is great.
The paper and concept are fine. People marketing Bitcoin as an investment, et cetera, or more broadly selling anything related to it, are enabling a scam.
- Like indulgences, crypto made value out of thin air
- Indulgences were a scam so crypto is a scam
- Crypto doesn't fit with Keynesian economics and is therefore false
I am not Catholic, but his tone implying that anyone who is religious is a fool feels more like an ad hominem attack than anything.
As to the veracity of Keynesian economics, I am less than convinced he got everything right.
That said, I am personally suspicious of crypto but I don't think it has no use just because it has no intrinsic value. We do not use paper dollars because of their material or their craftsmanship.
With as much money that has been poured into crypto related businesses, I still can't easily send or transact business with it.
It's used a lot in the third world. In Georgia you can buy a burger paying crypto via NFC terminal. I also know people who get their salaries in crypto. And it's used a lot for donating to opposition where it's illegal, like in most dictatorship.
Hundreds of years of liberal ideas of individual rights just crushed below collective responsibility idea for some dictator actions.
People moved billions out of Russia with bitcoin and other currencies. They saved their money after sanctions with passports based discrimination and their whole country actions against them. But rich people from first world country will still push these ideas, that's it all scams and casinos.
And the only alternative they provide as "real money" is something like "give all your money to our banks, sign some contract with humiliating visa conditions, pay us 40% taxes and pray we won't take it back". Yeah, sure, thank you very much!
And if something had collective approval (even through silence), then it must also have collective responsibility.
Don't try to play a victim card here, Russian, we all saw what you did and continue doing. And some of us even experienced it.
Talking generally, that's true that most people didn't leave, and that's totally fine. People don't deserve to play heroes and suffer in prisons because they were unlucky enough to born in wrong place in wrong time. Everybody deserve to have a peaceful life with their families, hobbies and jobs. Wanna play hero - get a visa, go to Russia, give your life, get shit done, if that's so easy. Humanity will be grateful for you.
If you don't - don't say people to do that just because they have different color of passport or speak other language. There is nothing wrong in being a "coward", people just want to live their lives, it's not a game, there is no savepoints.
Each person in the world can be only judged by his own actions, not by others'. Simple, but extremely important, idea which was an outcome of 2 world wars. If you create more hate by nationality or citizenship - you are just like Putin with his "bandera" fetish. Just different objects, really.
Certainly it’s a valid way to send money, but it’s not hard to see the faults.
I just used it to pay someone from a US bank account to a Costa Rican bank account. $1000 payment, it reached their bank account in 12 seconds (we counted) and we paid a total of $1.80 in total fees (18 basis points).
I can’t think of a faster or cheaper way to pay internationally.
On the US side, I used the Strike app so my balance is in USD and I’m not exposed to the fluctuating value of BTC.
On the CR side, they used an instant off-ramp converting the BTC to CRC instantly, also limiting their exposure to BTC volatility.
No scam involved. It’s just the cheapest, fastest, easiest way I’ve found to send money from the US to countries with lackluster banking infrastructure.
99.99% of crypto is unsustainable speculation on a game of musical chairs or outright scams / ransomware.
If you look at the entire picture, crypto has such a negative impact on this world. It makes me sad.
Sometimes what you need are not "sustainable solutions", that's something you can afford when you are not struggling daily just to stay alive. Sometimes you just need something that solves the problem right now, damned by "sustainability".
Just like most people in poverty don't give a fuck about climate change, there are so many other problems on their mind about their daily life, that there is no space to focus on "bigger problems" or "sustainability", it's just about surviving and finding ways around whatever problem arises.
It’s just all bad, there is no justification for “oil” to exist.
There is no product being sold. People are being convinced to surrender working currency in exchange for a public database entry that records the fact they were duped.
The product is clearly the ability to exchange financial value friction-free and with no middle men or central authority. The various crypto coins achieve this property quite well with various tradeoffs on speed, anonymity, etc.
The exchanges are both --- the middle men *and* the central authority.
They set the "financial value" of crypto. They mint their own "stable coins" at will without any verifiable backing and use it to trade against their own "customers" --- because there is nothing to prevent it.
And yes, I am aware of the peer-to-peer exchanges --- which provide no real, practical alternative but to more or less follow along with the prices set by centralized exchanges.
Also, there is no central authority telling exchanges how they have to operate, that they have to collect certain kinds of data or regulate certain kinds of transactions (in theory). If you don't like an exchange's rules you can move to another or create your own fairly easily.
By contrast, consider how difficult it would be to start a bank.
Why? Centralised exchanges are more convenient, but as you've said you can use a local p2p exchange. It will cost you more, and take more time, but you can. In comparison, you can't make a SEPA transfer without a bank.
Two services I admire:
A currency that doesn't inflate, doesn't get spent. It gets horded and stops acting as a medium of exchange. Exactly what we see with crypto and why the currency part is bullshit with it.
It is just embarrassing how ignorant people into crypto are with economics. This is economics 101 stuff, most basic ideas.
So you are saying Bitcoin made saving value possible again?
it’s more that using fluctuations is bad logic for both crypto and fiat
being a user of US currency over the last 100 has been generally good for all involved
i’d say the same is true for ethereum (i’m a bit eth maxi with small holdings of other crypto)
if you are at all actually curious i wouldn’t read anything about crypto since the writing is so polarizing (crypto =scam or crypto is saving the world).
neither is true but no amount of words will give conviction.
download metamask, buy $500 of eth, swap it into usdc on uniswap, buy a shitty nft on opensea. then see if you like it. do not treat the $500 as investment. treat it like education.
Yet he still write daily about Crypto. Very weird. Whoever wanted to be convinced that is a scam should be convinced by now, everyone else just want to hold some coins.
In other words, "please don't scare away the remaining suckers."
Until those people inevitably get rug pulled, scammed, ponzied. Then they will be convinced.
Actually, most people who "hold some coins" know 99.99% of crypto is a scam but they still do it anyways in hopes of making money.
"You're an idiot, it's a scam, it's a ponzi, why are you still holding????"
Live and let live.
Not weird.
He found a way to make himself sound important on the internets and therefore clings to it.
Do you also have high praise for the book he wrote with Donald J Trump about "Why We Want You to Be Rich?"
Who you choose to worship and parrot says so much about you and the quality of your advice and beliefs.
https://en.wikipedia.org/wiki/Why_We_Want_You_to_Be_Rich
>The Intercept wrote critically of the book's advice, including the recommendation by Trump and Kiyosaki to invest in multi-level marketing companies, asserting instead that these are harmful pyramid schemes.[1] The Intercept contrasted assertions in the book with promises by Trump during his 2016 campaign for president, writing Trump's later views were contradictory with the work.[1] San Antonio Express-News was critical of the contradictory advice imparted in the book, writing, "Trump and Kiyosaki argued that because they were already rich, they had no need to make more money, all the while cashing in on the very books that said so."[8] The paper marveled at the reaction among consumers, "Fans responded to this kind of contradiction by praising both the authors' earlier financial success and their shrewdness in taking advantage of the new opportunity to sell."[8]
https://thecollegeinvestor.com/4726/ultimate-hypocrite-rober...
>The Ultimate Hypocrite: Robert Kiyosaki and His Company’s Bankruptcy
>A story came across the news this weekend about Robert Kiyosaki, the author of Rich Dad, Poor Dad, and how his company went bankrupt last month. Basically, the company didn’t pay the proper royalties on its seminars, and when they lost in court, they didn’t have enough money to pay at all. It wasn’t a personal bankruptcy, rather, a corporate bankruptcy. However, a corporation with money should be able to pay up for a minor royalty dispute (only $23 million compared to $400+ million in revenues). And when your name is attached to a company, and your business is built around creating wealth, the word bankruptcy associated with it usually isn’t a good thing.
>However minor you may consider it, I find it appalling as a personal finance writer. This guy made a living on selling “his story” and encouraging others to fork out tons of money to hear it. In the end, the story crumbles, and it just makes him a hypocrite.
https://www.theroot.com/the-rich-dad-poor-dad-guy-is-a-racis...
>The Rich Dad Poor Dad Guy Is a Racist, Idiot Trump Supporter So Please STFU About That Shitty Book Forever
>People who pray at this altar are specifically susceptible to the sort of symbiotic grift that has made Robert Kiyosaki a rich man.
>If you’ve never heard of Robert Kiyosaki or his Rich Dad Poor Dad empire of financial advice, I want you to stop reading this, I want you to get on your knees, and I want you to thank God for granting you such luck. You are blessed. You are highly favored. Unfortunately, many of us are not as fortunate, as this book exists in the curricula of Shit Frequently Cited by Douchebags Who Say Dumb Shit Like “I’ll Sleep When I Die” and “Rise and Grind” and “We Need Black-Owned Prisons.”
>If you ask someone to name their favorite reads, and they list this or The Art of War or The 48 Laws of Power, it’s a foolproof tell of a money-centered morality—a devotion based on the belief that people with money are better than those without it. Not wealthier or more privileged or provided more opportunity to live a better life, but inherently smarter, harder-working, less impulsive, and more trustworthy. It doesn’t matter how you got the money, or who you stole from (or killed) to have it. If you have it, you’re God.
>People who pray at this altar are specifically susceptible to the sort of symbiotic grift that has made Robert Kiyosaki a rich man. (Well, rich-ish.) He convinces you to buy a book with Fisher-Price financial advice, and then encourages you to spread the gospel of grift to others—which creates the sort of following that allows him to charge tens of thousands for Matryoshka doll-constructed seminars where he delivers gems like “invest in things” and “dimes are worth twice as much as nickels.”
[...Kiyosaki's ranting racist anti-vax pro-trump plannedemic conspiracy theory tweets redacted...]
>THIS IS YOUR FINANCIAL ADVICE KING??? This guy??? Darth Dale Carnegie is your money mentor??? This is the guy who Danny Ocean steals shit from in movies. I wouldn’t trust this man to crack an egg.
>If this information upsets you, and you find yourself in dire need of a new source for surefire financial advice, don’t fret! I got you! It even remixes Rich Dad Poor Dad. You ready for it? Ok, here it comes:
>1. Have a rich dad.
>Thank you for attending my seminar. That will be $17,000. I take Cash App and Venmo.
You don't just get into debt without anything on the other side
It shouldn't happen if you really don't get into debt without anything on the other side, yet, it happens?
The only problem still making me feel slightly uncomfortable is I don't understand how do Monero and Zcash achieve anonymity, how is it possible to transfer money without registering who (whose wallet) pays who. Ideally you should understand how do your tools work. But I don't care enough to dedicate time to study this.
Sure, you can mail an envelope with cash for a very small number of online services. But, the US government OCRs the return+to address on every letter in the country. So, even your envelope with cash is being traced. And there's the risk of the letter being lost/stolen. There's also a carbon footprint involved in sending physical letters around the globe on cars/planes.
Bitcoin is more private than bank/credit card transfers even if you don't try to hide your identity, because it costs more to follow your trail (especially if you bought it from a natural person rather than a KYC centralized exchange). But it is pretty convenient, as it can be done fully online.
it's as bad as the "cryptobros" stuff
https://alphahistory.com/weimarrepublic/wp-content/uploads/2...
All innovation, all technology can be wielded for good or for evil.
With fire anyone can burn a building or cook a steak.
I like to find the people who are using technology to help others.
Let's make stuff to amplify them.
What a bizarre argument. Keynes wrote in the 1920s and 30s, so according to Diehl, did economics and finance not exist prior to Keynes? Was it all just a simulacrum until Keynes showed up and whipped out his General Theory? The map is not the territory.
This isn't even factually true. Crypto is in fact used in the real economy of places that have such bad monetary systems that crypto is much more stable. Look at Venezuela or even Ukraine and how much crypto is used there because the formal financial system is shambolic.
Crypto scams may be more common in the developed world where formal institutions are decent enough that the marginal cost of using crypto in the real economy is just too high compared to the legacy financial system.
Moving dollars in and out of authoritarian or war-torn countries isn't trivial. That's why I mentioned Venezuela and Ukraine.[0] Russia itself also has a significant crypto economy. None of this is to say there isn't demand for dollars in those places, just that supply of dollars is not exactly abundant. Thus, they go to crypto.
That's the argument.
[0] https://www.elliptic.co/blog/live-updates-millions-in-crypto...
In 'normal' life this kind of organization, investment, company creation and management et al are all gated behind legal complications and requirements of minimum capital and many others. Even when a major movement succeeds in setting up a foundation, the running of it is complicated, non-transparent and anti-democratic.
Even with companies it is the same - for the ordinary person creating or participating in a company is difficult and it requires understanding legal implications and responsibilities. Even if you do, there are various legal and economic barriers to investing and participating in such large companies.
With DAOs, everything is in broad daylight - depending on how the DAO is set up of course. But any properly set up DAO gives the power to the people in taking up the culture that we created in Open Source Software movement up a notch - by enabling organized economic movements.
That DAO which tried to buy the US constition failed. There was no way a new, emergent, new way of doing things could gather enough money in enough time to overcome the already aggregated private capital that it competed with.
But it proved something - for the first time in history, such things are possible. Economic organization for the masses.
Those who criticize crypto seem to have scarce awareness, leave aside understanding of what DAOs represent, and what is happening in DAO space. Of course, its hard to blame people - some understanding of at least Early Modern human history, economic systems and organization patterns and the development of democracy would be required to understand how big a change DAOs are. And that requires an ample interest in history itself.
Bitcoin is not crypto.
In any case, you could make similar arguments about banks and the "Federal" Reserve being scams. In fact, quite a few well regarded politicians of old made exactly those arguments. The implicit agreement in this particular argument is that the scam we've accepted is somehow better.
Please stop this delusional thinking trying to separate them, we both know that all of crypto is full speculation and you know it.
There is no difference, it doesn't matter if it was 'first'.
In history books they tell that people used salt, animal furs, shells etc. as money. What's forgotten is that there was always a 'bro' who shilled these new forms of money to other people. This bro had found a way to produce these cheaply and could get rich.
Eventually people realized this scam and moved onto rare metals which can't be produced from thin air, without work. However, these were minted into standard coinage, and eventually they were clipped or mixed with cheaper metals. Again, someone found a way to scam.
Next, we moved onto gold-backed paper money and then to fiat currency, and yet again the scamming continues, even easier than before. They've even made the scamming official, by mandating the 2% inflation target.
I can use money to purchase goods and services. Not a scam.
I can't use crypto to purchase goods and services. Yes a scam.
Simple.
However when many people agree of a price at a given time, anything, including a scam, can in turn become money.
Diehl is not rational and utterly biased (he's party to a startup that will fail if any blockhain type tech. becomes popular).
Does anyone know if companies are actually using blockchain for production, revenue generating business (real companies, not crypto companies)?
That sounds fancy, but who's actually using it in production? All these blockchain companies are highly self referential. It all sounds like 1) Build Block chain. 2)???? 3) Overledger.
It must be nice to be able to just state something is thoroughly debunked and not have to give any evidence, despite billions of people not knowing, and be magically right...
That's quite the amusing comment, given the fact that crypto-bros reiterate that crypto is somehow money in spite of if repeatedly failing each and every single trait that makes something a currency.
Now, when someone points out that fact, here we are with a newfound passion for argumentative formalities as if you can make this fact go away by petitioning the ref.
A lot less of that going on now, with the current argument being all about "due diligence". Crypto works as an inefficient payments mechanism and a ledger for trusted and equal peers. It somehow did not magically break the fundamental rules of investment nor collective ecosystems.
A transparent anonymous and independent system of transactions is possible, but it is vastly different from the incentives existing in the space now.
* that so many people think crypto is either perfect or totally evil and admit no middle ground.
* that both groups constantly claim their (rather extremist) views are facts but refuse to substantiate them.
I wonder how long it will take for people to agree that crypto neither cures cancer nor causes it...
Even bitcoin proponents no longer claim it’s a currency - many of them even pretend never to have claimed otherwise when it interferes with the sales pitch - and the investment claims have been similarly defined by lots of people losing money and learning what an unsecured asset run by less than fully forthcoming people means.
If you disagree with the conventional wisdom on either point, the onus is on promoters to back that claim up with hard data. In particular, data from sources who weren’t making glowing claims about Luna, 3 Arrows, FTX, etc. right up until reality asserted itself.
And if such an economist were challenged on whether the USD is stable, he would presumably be able to cite decades of data of inflation rates, FX etc.
It would be a bit crazy to write a whole article about one thing, but say nothing because the thing is obvious and widely accepted (so why write it)...
Plus, "Crypto Is All a Scam" is the claim here. So if people making claims are the ones obliged to support them then...
As I say elsewhere, I am not some crypto evangelist. I am just tired of both sides being so vacuous and relying on prejudice and publishing such poor materials...
Which is fine, but call it what it is.
Also, he says most counterarguments are in bad faith. Foes that mean some aren't? Wouldn't refusal to address these good faith claims mean you're arguing in bad faith as well?
Listen, have you ever observed a troll writing a book?
Really? Currency is a scam. You get paid in paper, pay taxes on it, which gets stolen( sorry in edged) in corrupted corps, with a debt system where you are just a slave of your mortgage - unless you're a clever troll, and you bought 10btc 10 years ago, write a book to put the price down, while at the same time, being the most biased possible to trigger HN readers in the hope of getting a Google page rank.... Pathetic.
By your definition, all business needs to be scammy in some scene to make money, for survival.
Proof is simple: Non of any existing business will tell you anything on why it's bad, nor why you should not use it. And by proof of contradition (Nothing is perfect), you got the proof.
Meta won't tell you why it's bad for your psy health, no warning at all.
Google won't tell you why it's bad for your privacy, or why its search result is so bad for you, because Ad result is shit.
...
Cryptocurrencies do have some non-scam value because they fulfill the technical end of such a belief based value store. Don't get me wrong. Plenty of scams in that business...
https://go.chainalysis.com/rs/503-FAP-074/images/2022-Geogra...
For those not aware, the company that produced this report, Chainalysis, actively aids prosecution of illegality in the crypto space, acting as primary advisors to the FBI, IRS etc. They may just know what they're talking about:
But with an open mind I read the section you called out and I have several issues.
The first is that the report doesn’t actually discuss or show the numbers. The country reporting only talks about inflation in those countries and percentage of transactions, how much volume and coins are these countries actually moving?
They have the stats, but know it’s all wash trading. Funny how ‘wash trading’ or even ‘money laundering’ doesn’t even make it I to the report. Really makes the branding of building trust in blockchains laughable.
Second this report is very outdated.
This is seen in the Mexico section; it talks about inflation numbers and the potential for remittances. It even mentions coinbase’s program which was shutdown in sept 22 for lack of usage (as in a couple hundred bucks a week).
[0] https://www.reuters.com/article/mexico-bitcoin/insight-latin...
In the Mexico section it says:
> Bitso alone has already processed more than $1 billion in US-to-Mexico remittances in 2022 as of June, representing a year-over-year growth rate of 400% and a grip on 4% of Mexico’s remittance market.
A wee bit more than a couple hundred per week. Maybe Bitso cornered the market there?
Who died and made you the Minister of Truth?
So no-one can offer free/demo tier CPU access anymore e.g. on low-end box VMs, ISP shell servers, etc.
Likewise any sort of interaction with strangers get absolutely bombarded with fake accounts pushing crypto scams - second-hand sales, dating apps, meetups, pen pals, language exchanges, property listings, job boards, etc., there was always spam before but it was harder to directly monetise.
I hope it all gets banned soon. If we can ban Russia from SWIFT, we can do the same to all accounts that ever have transactions with known cryptocurrency exchanges, and refer their owners to the local tax authorities for auditing, etc.
I mean aren’t there even services used by law enforcement for such?