Regulating Crypto: How we move forward as an industry from here(coinbase.com)
coinbase.com
Regulating Crypto: How we move forward as an industry from here
https://www.coinbase.com/blog/regulating-crypto-how-we-move-forward-as-an-industry-from-here
23 comments
> You got to love how industry regulations really defeat most of the benefits and points of the decentralization by going in the opposite direction.
Are industry regulations preventing self custody?
I hope and believe we're talking about regulation being rightly applied to centralised exchanges. So they don't front run customers on token listings (Coinbase), use customer funds when customer's haven't allowed them to (FTX), replace their customer's coins with a different currency (Binance), or whatever else.
Are industry regulations preventing self custody?
I hope and believe we're talking about regulation being rightly applied to centralised exchanges. So they don't front run customers on token listings (Coinbase), use customer funds when customer's haven't allowed them to (FTX), replace their customer's coins with a different currency (Binance), or whatever else.
industry regulations really
defeat most of the benefits
and points of the
decentralization
1: Hold something that is expected to stay scarce and not printed or mined to infinity
2: Make international, fast and cheap payments that are instantly finalized.
You seem to have jumped my second sentence:
> The problem in reality would be non existent if people used crypto currencies for what they were meant to be used for
Which is more or less what you're pointing at.
> The problem in reality would be non existent if people used crypto currencies for what they were meant to be used for
Which is more or less what you're pointing at.
Most regulations around securities involve disclosures as in over some percent threshold the entity owning that security must disclose their ownership and report on it every quarter to the SEC.
Disclosure of ownership in crypto really should be around a dollar threshold, not percentage and that mostly defeats the purpose of anonymity. I think financial institutions (banks, exchanges, wall st.) should have to disclose holdings in crypto for both crypto trader awareness but also for their customers in other business sectors awareness.
There should also be strict rules preventing operating an exchange/market maker and any sort of investment firm (hedge fund, etc.) by any degrees of separation. That means they can have no relationships at all organizationally (parent/grandparent company owns both type of thing). Any transactions between exchanges and funds of that sort should 100% be reported and tracked. I think it can be anonymously tracked for some period of time but must be disclosed to an independent regulating organization.
Disclosure of ownership in crypto really should be around a dollar threshold, not percentage and that mostly defeats the purpose of anonymity. I think financial institutions (banks, exchanges, wall st.) should have to disclose holdings in crypto for both crypto trader awareness but also for their customers in other business sectors awareness.
There should also be strict rules preventing operating an exchange/market maker and any sort of investment firm (hedge fund, etc.) by any degrees of separation. That means they can have no relationships at all organizationally (parent/grandparent company owns both type of thing). Any transactions between exchanges and funds of that sort should 100% be reported and tracked. I think it can be anonymously tracked for some period of time but must be disclosed to an independent regulating organization.
Bitcoin is not a security though. Both the CFTC and SEC have said so publicly:
https://bitcoinist.com/cftc-chair-only-bitcoin-is-a-commodit...
https://decrypt.co/103926/sec-chair-gensler-bitcoin-not-secu...
https://bitcoinist.com/cftc-chair-only-bitcoin-is-a-commodit...
https://decrypt.co/103926/sec-chair-gensler-bitcoin-not-secu...
maybe it should be?
on SoFi for example the UI/UX for trading stocks and ETFs is the same flow for trading crypto and people trade it like it is one. Else, why hodl at all if it's not in hopes it'll go up in value?
on SoFi for example the UI/UX for trading stocks and ETFs is the same flow for trading crypto and people trade it like it is one. Else, why hodl at all if it's not in hopes it'll go up in value?
1: How do you easily get bigger amounts of crypto, without a centralized exchange?
2: How does the receiving person use the received bitcoins, unless there is a real economy or again a centralized exchange?
2: How does the receiving person use the received bitcoins, unless there is a real economy or again a centralized exchange?
Who said anything about not having a centralized exchange? Centralized on ramps are not necessarily antithetical to a decentralized system.
This argument kills me all the time.
Like, yes, when I take my kids to Chuck E. Cheese I do want to convert my money into the tokens. I do not want to store them as that.
Like, yes, when I take my kids to Chuck E. Cheese I do want to convert my money into the tokens. I do not want to store them as that.
In this specific argument, it was about regulations, which such centralized exchanges would need to comply with.
Generally, it's literally the whole basic premise of everything 'crypto'!
Generally, it's literally the whole basic premise of everything 'crypto'!
I’m sorry, but yes they are… the security of the system was supposed to be built in, and it was supposed to have its value built in. Neither are true. It’s not decentralized and at this rate it never will be, and seeing how it turned out so far, it would be a good thing to fail.
> A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution
> We have proposed a system for electronic transactions without relying on trust.
Any regulation introduces a 3rd party which Bitcoin was designed to remove.
> We have proposed a system for electronic transactions without relying on trust.
Any regulation introduces a 3rd party which Bitcoin was designed to remove.
When it comes to money, a purely peer to peer system of payment is just not possible unless you are doing barter. Even when you use cash, you are using the cash issued by a third party that both the payer and the receiver trust to have value. Whoever wrote the Bitcoin whitepaper was definitely a brilliant programmer but had no idea about human psychology and economics. Trust is the most important factor in economic transactions. In a complex world like ours third parties like government, banks, exchanges provide the trust.
You cannot outsource the trust to code. Code is not law. You cannot solve all problems with code.
You cannot outsource the trust to code. Code is not law. You cannot solve all problems with code.
I tend to agree with you.
Yeah ok but the first use case kind of doesn't work. The "nanny" state raises interest rates a tiny bit and suddenly nobody cares about the scarcity of Bitcoin. What gives?
> The problem in reality would be non existent if people used crypto currencies for what they were meant to be used for
In other words, "if people would stop exercising their free will and acting in ways that may benefit them, but are detrimental to my idea/this system/society/etc, everything would be fine!"
As the admin and main developer of a small browser-based game, this is a hard lesson I've had to learn over the past several years: We don't get to define how people act and think. When we build systems, we must take into account how people will actually try to use them...and if we find that they're using them in ways that are detrimental to the structure as a whole, we need to rethink our systems.
In other words, "if people would stop exercising their free will and acting in ways that may benefit them, but are detrimental to my idea/this system/society/etc, everything would be fine!"
As the admin and main developer of a small browser-based game, this is a hard lesson I've had to learn over the past several years: We don't get to define how people act and think. When we build systems, we must take into account how people will actually try to use them...and if we find that they're using them in ways that are detrimental to the structure as a whole, we need to rethink our systems.
Do you mean that crypto actually might not solve a real problem within the realm of finance and that the tools and structures that exist today actually serve a purpose?
Who could have seen that coming? /s
Who could have seen that coming? /s
> Who could have seen that coming? /s
Clearly someone who lives in some small insular corner of the world with good governance and stable currencies would definitely imagine all the benefits of crypto. /s
Some real life examples of problems crypto has solved (compiled just for comments like yours which seem to be lacking empathy or imagination or both): https://news.ycombinator.com/item?id=32406095
Clearly someone who lives in some small insular corner of the world with good governance and stable currencies would definitely imagine all the benefits of crypto. /s
Some real life examples of problems crypto has solved (compiled just for comments like yours which seem to be lacking empathy or imagination or both): https://news.ycombinator.com/item?id=32406095
you ought to tell that to the millions of people across the developing world who suddenly have a means of resistance to their governments debasing their savings: https://upload.wikimedia.org/wikipedia/commons/5/5d/Venezuel...
crypto is many things, but the single most important is demonstrating cryptography as a foundation for robust digital rights. we can guarantee digital rights in a way that require complex and frequently corrupt institutional enforcement in the real world. this is a mind-bending achievement and we're only at the very outset
crypto is many things, but the single most important is demonstrating cryptography as a foundation for robust digital rights. we can guarantee digital rights in a way that require complex and frequently corrupt institutional enforcement in the real world. this is a mind-bending achievement and we're only at the very outset
Except that's not really what's happening. In Venezuela the only people using crypto to any extent is people who already are tech savvy and have the skills to work around these limitations. The "unbanked" however still don't use crypto and hardly any shops are using it because of the volatility and the long times to approve transactions. It's good for payments of services (e.g. utilities) I hear, however.
But I think more crucially is that what's increasingly looking like "the only good use of crypto" is really a consequence of social issues a similar way to how cars are very popular in countries with poor infrastructure (e.g. USA). If the country gets its act together, this aspect of crypto's value add vanishes and will just be seen as a slow and poor quality volatile payment system.
But I think more crucially is that what's increasingly looking like "the only good use of crypto" is really a consequence of social issues a similar way to how cars are very popular in countries with poor infrastructure (e.g. USA). If the country gets its act together, this aspect of crypto's value add vanishes and will just be seen as a slow and poor quality volatile payment system.
> Except that's not really what's happening.
Or maybe you are just ignorant? Here are some examples I have compiled (took me <5 min): https://news.ycombinator.com/item?id=32406095
Or maybe you are just ignorant? Here are some examples I have compiled (took me <5 min): https://news.ycombinator.com/item?id=32406095
I've been in crypto a long time. I chose specifically Venezuela as I know that is a good case of Bitcoin not achieving its objectives and was called out specifically as an example of it supposedly being successful. And I very much stand by this and my related points.
Since I cannot edit my other reply to this comment anymore, here is one more counterpoint: Nigeria is 11th in terms of Crypto adoption [1] while its government is hostile to Crypto [2]. A great example of how Crypto can help ordinary people fight shitty regimes with unstable currencies.
[1] https://blog.chainalysis.com/reports/2022-global-crypto-adop...
[2] https://www.bloomberg.com/news/articles/2022-11-27/nigeria-s...
[1] https://blog.chainalysis.com/reports/2022-global-crypto-adop...
[2] https://www.bloomberg.com/news/articles/2022-11-27/nigeria-s...
> And I very much stand by this and my related points.
You say - "If the country gets its act together...". I think crypto will get its act together and get around the adoption blockers before despot regimes of the world get their act together. Just a gut feeling based on our history so far. I also agree that there will be multiple crypto scams along the way. Such is the allure of the new tech.
You say - "If the country gets its act together...". I think crypto will get its act together and get around the adoption blockers before despot regimes of the world get their act together. Just a gut feeling based on our history so far. I also agree that there will be multiple crypto scams along the way. Such is the allure of the new tech.
if the existence of cryptocurrency uhh, solves central banking then i think it will have achieved its purpose regardless
That's not the point OP is making.
"If the country gets its act together".. you know by fair elections, good governance and you know by similar such 'non-crypto' things.
"If the country gets its act together".. you know by fair elections, good governance and you know by similar such 'non-crypto' things.
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Ok but the only one that even attempts to "solve" central banking is RAI. So according to your hypothesis, the vast majority of cryptocurrencies don't serve any purpose.
Instead, by declining against the dollar by a factor of three in the past year, Bitcoin is quite good at debasing people's savings on its own.
Mere issuance isn't enough to guarantee price stability.
(There's an interesting question to be asked about whether the US should allow the usage of its digital dollars by non-US persons as a means of evading the currency controls of South American governments, effectively exporting price stability. Much as the existing Eurodollar system. But I don't think this is the place for that discussion)
Mere issuance isn't enough to guarantee price stability.
(There's an interesting question to be asked about whether the US should allow the usage of its digital dollars by non-US persons as a means of evading the currency controls of South American governments, effectively exporting price stability. Much as the existing Eurodollar system. But I don't think this is the place for that discussion)
> Instead, by declining against the dollar by a factor of three in the past year, Bitcoin is quite good at debasing people's savings on its own.
Srilankan rupee lost 50% value overnight in March 2022 and is subject to futher deterioration due to the corrupt incompetent government. Same with Venezuela. Bitcoin or Gold or USD/EUR are the only good options for the millions of citizens of those countries, albeit generally available on black markets because of government controls. My colleague has his family in such a country. Guess what is the easiest way for him to help his family in need? [Hint: gold is hard to transfer and USD/EUR transfers are sanctioned because of US/EU govt policies].
Srilankan rupee lost 50% value overnight in March 2022 and is subject to futher deterioration due to the corrupt incompetent government. Same with Venezuela. Bitcoin or Gold or USD/EUR are the only good options for the millions of citizens of those countries, albeit generally available on black markets because of government controls. My colleague has his family in such a country. Guess what is the easiest way for him to help his family in need? [Hint: gold is hard to transfer and USD/EUR transfers are sanctioned because of US/EU govt policies].
In these situations, I always have to ask: who's taking the other side of the transaction, and for what fee? Who's trading Bitcoin for rapidly inflating Sri Lankan rupees?
One anecdote from someone I know personally - it is more of a barter. Her family needed to do a medical procedure, she transferred bitcoin from the US to her family who then gave that to Doctor in exchange for medical services. Probably, Bitcoin is working as intended?
People who have opportunities to buy at shops with old prices is my guess.
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The idea that money (which is made as a mean of transmission between goods) should be hoarded is stupid.
No wealthy person in this planet got wealthier by hoarding pieces of paper with pictures of national heroes, but by investing it in gold, art, land, real estate, stock markets and many others.
If you and some other people agree that specific hashes on a specific blockchain have some value for you and avoid "debasing your savings" you're free to hoard them.
No wealthy person in this planet got wealthier by hoarding pieces of paper with pictures of national heroes, but by investing it in gold, art, land, real estate, stock markets and many others.
If you and some other people agree that specific hashes on a specific blockchain have some value for you and avoid "debasing your savings" you're free to hoard them.
The problem isn't necessarily hoarding but rather governments decided to only have one legal tender and sabotaging that legal tender is effectively the same as sabotaging the entire economy. Hoarding is a kind of sabotage but if people hoard something that isn't legal tender they are not threatening the economy.
The wealthy might be hoarding Lamborghini's but we can always build more cars. Can't do that with money unless the government or a commercial bank does it.
The wealthy might be hoarding Lamborghini's but we can always build more cars. Can't do that with money unless the government or a commercial bank does it.
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Democratic world could provide that service without exposing their own citizens to a world of scams.
Furthermore, crypto is spectacularly effective at violating rights; "so, Mr Arnold, I see on the blockchain your paid for your wife to have an abortion. That's 10 years in jail for you".
Exactly! What's the blooming point?
What governments want is digital currencies, all the privacy concerns and none of the benefits of cryptos.
But, let's see if crypto can survive this pressure. Really it must be robust to this if it has any purpose.
What governments want is digital currencies, all the privacy concerns and none of the benefits of cryptos.
But, let's see if crypto can survive this pressure. Really it must be robust to this if it has any purpose.
Currencies are already mostly digital since decades.
Not disagreeing but to many's surprise cash is more popular than ever.
Most of us no longer us bank notes, yet the amount in circulation climbs...[0] what's going on?
It actually probably acts like a buffer, with BOE spending the net on government assets while the notes vanish off to places we prefer not to think of
[0] https://www.bankofengland.co.uk/statistics/banknote
Most of us no longer us bank notes, yet the amount in circulation climbs...[0] what's going on?
It actually probably acts like a buffer, with BOE spending the net on government assets while the notes vanish off to places we prefer not to think of
[0] https://www.bankofengland.co.uk/statistics/banknote
> Most of us no longer us bank notes, yet the amount in circulation climbs.
The plots you shared are meaningless if they are not normalized against the total money supply. I think if normalized by total amount of money in circulation the percentage would be shrinking and not growing.
The plots you shared are meaningless if they are not normalized against the total money supply. I think if normalized by total amount of money in circulation the percentage would be shrinking and not growing.
didn't read the article
its regulation on centralized popup companies and letting onchain activity and constructs operate as they are
its regulation on centralized popup companies and letting onchain activity and constructs operate as they are
> The problem in reality would be non existent if people used crypto currencies for what they were meant to be used for: an alternative economy with no need for exchanges and third parties
You know, I think we can help you with that: crypto exchanges should be banned on sight. Including localbitcoins.
Let the libertarians have their playground, but there must be no linkages between it and the regular world of money.
You know, I think we can help you with that: crypto exchanges should be banned on sight. Including localbitcoins.
Let the libertarians have their playground, but there must be no linkages between it and the regular world of money.
why?
"Regular world of money" is bizarre phrase. I'm assuming you mean the government monopoly on currency, but the idea that a country outsourcing its currency management to a central banking cartel is "regular" is lunacy.
It looks pretty regular to me? Currency issuance has been a function of the government since the Bronze age? And paper money since, what, the Song Dynasty?
You missed the part where I pointed out that the US government outsourced the administration of its currency to a private banking cartel and some people just think it's normal.
So we have now come full circle.
Crypto started out as a naive attempt at money without government. But this was quickly shown to be an open invitation to rampant fraud that is still ongoing and technology alone can not prevent.
So now in a last ditch effort at survival, crypto is begging for a government lifeline with oversight and regulation.
I said all along that the only thing government needed to do to kill crypto was absolutely nothing --- just give it some space to self implode.
This has largely come to pass. Only one final realization remains ---- if regulation is needed, crypto is not. It no longer will have any compelling *legal* reason to exist
Crypto started out as a naive attempt at money without government. But this was quickly shown to be an open invitation to rampant fraud that is still ongoing and technology alone can not prevent.
So now in a last ditch effort at survival, crypto is begging for a government lifeline with oversight and regulation.
I said all along that the only thing government needed to do to kill crypto was absolutely nothing --- just give it some space to self implode.
This has largely come to pass. Only one final realization remains ---- if regulation is needed, crypto is not. It no longer will have any compelling *legal* reason to exist
This is not crypto, it's parasitic centralised exchanges that want a bunch of institutional money in the ecosystem so that they can collect their cut of the fees.
And why do these "parasitic centralised exchanges" exist? Because the crypto market isn't really functional without them.
Even people using so called "decentralized" exchanges turn to them to obtain a market rate for their transactions.
In effect, "decentralization" is just a crypto marketing/selling point that has never been achieved. It takes more than accounting to build a functional market.
Even people using so called "decentralized" exchanges turn to them to obtain a market rate for their transactions.
In effect, "decentralization" is just a crypto marketing/selling point that has never been achieved. It takes more than accounting to build a functional market.
The only thing decentralised was the ledger and it's consistency. There never has been any sense to "political decentralisation" having anything to do with crypto.
A social network isn't decentralised because it's people use a centralised or decentralised proof-of-correctness. An economic network isnt centralised or decentralised if its ledger of promises is stored centrally or otherwise.
This is a fairly obvious fallacy to anyone who understands that centralisation of power is a social-graph structure, and economic centralisation is transaction-graph-structure and crypto "decentralisation" concerns only the storage-and-computation of a ledger.
Ironically, the crypto "economy" is radically more centralised in social-graph and transaction-graph terms. So much so that it's incredibly fragile to a handful of individual failures.
The idea that these have anything to do with each other is such an obvious nonesense that the only reason its repeated is just people do not understand at least one of these issues. Ie., very few are both in the camp of technically, politically and economically competent.
Money is already close to the maximally decentralised a ledger storage can be. It's already close to maximally decentralised proof-of-correctness. Having a bank-note in your hand is extremely good proof it's yours, and extremely hard for others to steal.
Decentralisation, in the only relevant sense to crypto, already exists in a close to perfect form (ie., money).
A social network isn't decentralised because it's people use a centralised or decentralised proof-of-correctness. An economic network isnt centralised or decentralised if its ledger of promises is stored centrally or otherwise.
This is a fairly obvious fallacy to anyone who understands that centralisation of power is a social-graph structure, and economic centralisation is transaction-graph-structure and crypto "decentralisation" concerns only the storage-and-computation of a ledger.
Ironically, the crypto "economy" is radically more centralised in social-graph and transaction-graph terms. So much so that it's incredibly fragile to a handful of individual failures.
The idea that these have anything to do with each other is such an obvious nonesense that the only reason its repeated is just people do not understand at least one of these issues. Ie., very few are both in the camp of technically, politically and economically competent.
Money is already close to the maximally decentralised a ledger storage can be. It's already close to maximally decentralised proof-of-correctness. Having a bank-note in your hand is extremely good proof it's yours, and extremely hard for others to steal.
Decentralisation, in the only relevant sense to crypto, already exists in a close to perfect form (ie., money).
Decentralized exchanges are in their infancy. They're not as efficient as centralized exchanges yet, but that seems more like a temporary technological limitation rather than some sort of iron law. What can't be decentralized is the fiat currency interconnect.
That is cryptocurrency, even if you find it inconvenient for marketing purposes. You can “no true coin” everything negative but at that point there’s almost nothing left — all of the billions in funding have had surprisingly little real-world impact because once you subtract the scams and the effort spent trying to work around problems created by the design there isn’t much left.
But "not much" is completely different from "nothing," and it would be a massive mistake to presume "little real world impact" because you haven't seen it now, or yet, e.g. Black Swans et al.
I said little real world impact because after many years and billions of dollars, the number of people outside of the industry who’d be inconvenienced if it disappeared is very small - perhaps a few people who can save a percentage over Western Union and some people in Venezuela who prefer laundering money that way. Contrast that with things like the web which despite much higher barriers to adoption had been incorporated into normal people’s lives within a couple of years. In less than the time bitcoin has been around, we went from the pre-iPod era to one where most people were connected everywhere and the way people worked, played, traveled, dated, etc. had changed notably.
Frankly, I was expecting Coinbase to capitalize on the roaring 20s by slowly pivoting from crypto to something that had legs in the real world and start building software useful for small businesses, you know, start slowly entering into something like Stripe's domain, since they had a front-row seat to the mess and should have been able to see that the good times couldn't last.
I was stupefied as I watched the opposite happen. If memory serves me correctly, it was Stripe that started getting into crypto instead of the other way around as the bubble was bursting--to my amazement. And this despite having patio11 in their ranks. Yeah yeah big company etc etc, but still, it really dented my confidence in the Stripe brand and the people working under its umbrella.
I was stupefied as I watched the opposite happen. If memory serves me correctly, it was Stripe that started getting into crypto instead of the other way around as the bubble was bursting--to my amazement. And this despite having patio11 in their ranks. Yeah yeah big company etc etc, but still, it really dented my confidence in the Stripe brand and the people working under its umbrella.
Lots of companies start with a singular idea ... and never grow beyond it.
At one time, I looked at using Coinbase/crypto for money transfer purposes. I had several clients who tried to open an account but their applications were rejected. They were more strict than most banks.
At one time, I looked at using Coinbase/crypto for money transfer purposes. I had several clients who tried to open an account but their applications were rejected. They were more strict than most banks.
You're right we are going to rid of the biggest money invention ever just because. Even beanie babies are still around. You give no reasons, no facts, basically make shit up and then draw a conclusion. Probably should research the subject a bit more before committing to your conclusion.
Bitcoin isn't going away, sir.
I never said it was. But with regulation and increased focus on blatant market manipulation/fraud/speculation, the demand for it will likely decline from current levels in my opinion.
Just wait for a full government mandated audit of Tether and other "stable coins" then get back to me on this. "Stable coins" are the support mechanism for Bitcoin and the crypto market in general. And they are on less than firm ground --- again, in my opinion.
It's difficult to say anything truly definitive about the current crypto market because transparency is the exception rather than the rule. This will likely change with government regulation.
Just wait for a full government mandated audit of Tether and other "stable coins" then get back to me on this. "Stable coins" are the support mechanism for Bitcoin and the crypto market in general. And they are on less than firm ground --- again, in my opinion.
It's difficult to say anything truly definitive about the current crypto market because transparency is the exception rather than the rule. This will likely change with government regulation.
Bitcoin has gone away several times already.
https://en.wikipedia.org/wiki/List_of_bitcoin_forks
https://en.wikipedia.org/wiki/List_of_bitcoin_forks
The incentive structure for any large exchange is to make an attempt to capture the regulator. In a free market, exchanges can't make a big profit because they are too easy to replace. In a regulated market, where new entrants are blocked by KYC and AML regulations and a host of red tape, the exchanges can maintain a much higher profit margin.
I don't think Coinbases' interests align with the interests of the people using crypto in this article.
I don't think Coinbases' interests align with the interests of the people using crypto in this article.
Classifying crypto as a "commodity" rather than a currency or a security was the fundamental mistake. Correct that mistake and really no further regulation is required. If you want to take deposits and make loans, you must be licensed as a bank. If you want to execute trades and make markets for securities, you must be licensed as a broker-dealer. If you want to manage funds for customers, you must be licensed as an investment company. Existing banking and securities regulations cover all of this.
I am somewhat surprised they tout self-ownership, which would work against any fractional reserve scheme that exchanges might try with customer funds.
> First, self-custodial wallets allow customers to store their own crypto in a way where they don't have to trust anyone else.
But the "multi-party computation and social recovery" is exactly "having to trust someone else".
> First, self-custodial wallets allow customers to store their own crypto in a way where they don't have to trust anyone else. Technology improvements, like multi-party computation and social recovery, will make it easy for anyone to safely store their own crypto without needing to trust third parties.
I wonder if their tune would change once centralized exchanges would become influential again.
> First, self-custodial wallets allow customers to store their own crypto in a way where they don't have to trust anyone else.
But the "multi-party computation and social recovery" is exactly "having to trust someone else".
> First, self-custodial wallets allow customers to store their own crypto in a way where they don't have to trust anyone else. Technology improvements, like multi-party computation and social recovery, will make it easy for anyone to safely store their own crypto without needing to trust third parties.
I wonder if their tune would change once centralized exchanges would become influential again.
20 Oct 2022 — FTX CEO, SBF Releases Draft That Proposes Crypto Regulation
SBF was the complete opposite of this proposal if my memory serves. He wanted to neuter defi with regulation and push more people to his centralized exchange.
Once we’ve seen how the sausage was made at FTX, you can see why haha.
Once we’ve seen how the sausage was made at FTX, you can see why haha.
> Coinbase - "Regulating stablecoin issuers is a good place to start"
12 Oct 2022 - Sam Bankman-Fried: Stablecoins Are ‘Lowest-hanging Fruit’ for Crypto Regulation ... One regulator should have the duty to ensure all stablecoins are backed by dollars, FTX founder says
12 Oct 2022 - Sam Bankman-Fried: Stablecoins Are ‘Lowest-hanging Fruit’ for Crypto Regulation ... One regulator should have the duty to ensure all stablecoins are backed by dollars, FTX founder says
As someone who hates SBF I think he was right on requiring proof of capitalization for stablecoins that say they're capitalized. USDT used to say this on their website, then removed it and now they just print money (Hacker News doesn't support emoji but I'd use the person throwing trash into the bin emoji here).
If stablecoins are regulated then they are just USD's.
They are just an excuse to earn transaction fees and print fake money in exchange for bypassing regulations, always has been - insert Always has been meme.
They are just an excuse to earn transaction fees and print fake money in exchange for bypassing regulations, always has been - insert Always has been meme.
I can send you a million USDC right now on the most popular blockchain, it’ll arrive in less than a card tap and the transaction fee is USD .00025.
I can write you a cheque for a billion actual USD for 0 cost.
Cool but:
- my bank has an upper limit of 1500 GBP so I can't receive the cheque
- if I could receive the cheque, the latency on me getting the funds is a few orders of magnitude more than 400ms
- my bank has an upper limit of 1500 GBP so I can't receive the cheque
- if I could receive the cheque, the latency on me getting the funds is a few orders of magnitude more than 400ms
And getting 1 mil of USDC to your bank account would take longer and be more problematic!
I don’t need a bank account to use the USDC. I can store it myself, buy goods at retail or online, and purchase tokenised investments (eg real estate, equities, ETFs) with the USDC, invest in physical art, pay people I need to pay, etc.
An established player looking to cement its position through regulation? Color me surprised. Less cynically, though, crypto could stand to benefit from more regulatory clarity. Though it's interesting that coinbase considers stablecoins "other" when I believe coinbase itself offers interest on its stablecoin. It remains to be seen if interest-bearing stable tokens are securities.
“Trust the laws of math”
Can someone explain to me how code that processes my private information, in some “Bob’s 40K Basement Mining” node is protected and secured? Whether it be a smart contract or these new “use GPU VMs at fraction of cloud costs- through this token market”
“Because Bob risks a large stake if reputation is tampered” doesn’t cut it.
What’s the tech here, genuinely.
Can someone explain to me how code that processes my private information, in some “Bob’s 40K Basement Mining” node is protected and secured? Whether it be a smart contract or these new “use GPU VMs at fraction of cloud costs- through this token market”
“Because Bob risks a large stake if reputation is tampered” doesn’t cut it.
What’s the tech here, genuinely.
The only info miners/validators have is public info anyway. Their job is just to constantly decide which public ledger is the "real" one.
The miners don't decide the chain. The users do. You can fork off to a lower hash rate chain if you want to.
We haven't specified which exact blockchain we're talking about but in basically all cases you're wrong.
Users just send their transactions to a p2p network. It's miners that pick those up and put transactions into a block and decide which block is the parent to the one they built.
Users just send their transactions to a p2p network. It's miners that pick those up and put transactions into a block and decide which block is the parent to the one they built.
Social consensus > blockchain consensus.
Its the job of miners/validators to pick the head of the chain.
But users have the ability to send transactions to whatever p2p network they want to send it to, even if it's a fork proposed by CurrentB on Hackernews.
Its the job of miners/validators to pick the head of the chain.
But users have the ability to send transactions to whatever p2p network they want to send it to, even if it's a fork proposed by CurrentB on Hackernews.
I'm sorry that you don't know how either the Bitcoin or Ethereum blockchains work but still have strong opinions about it.
To re-iterate, it's the users (with Full-Node) that decide which chain to follow. That is essentially what a hard-fork is (a portion of these users moving to a different chain) and it requires no special mining capabilities.
Miners follow the users, not the other way around. However, in reality, users are also led by network effects. Users can always cancel any chain the miners have decided to support if they collectively decide to do so.
To re-iterate, it's the users (with Full-Node) that decide which chain to follow. That is essentially what a hard-fork is (a portion of these users moving to a different chain) and it requires no special mining capabilities.
Miners follow the users, not the other way around. However, in reality, users are also led by network effects. Users can always cancel any chain the miners have decided to support if they collectively decide to do so.
Trick question: Bitcoin-style systems make all your transaction information public. Including before confirmation, so people can front-run you.
The "security" is trying to hide your payment addresses to avoid people associating them with you.
The "security" is trying to hide your payment addresses to avoid people associating them with you.
I think these proposals are mostly good and practical. I see two issues though:
* first, we've seen resistance from BOTH sides to sensible proposals in the past. Some because they thing Crypto should be totally unregulated (purists) and others because they want crypto shut down completely and any reasonable (even enabling) regulation makes that less likely
* second, there are still some core issues here. For instance, a major up side of crypto is the ability to evade regulation like sanctions. On a case by case basis this is sometimes good (helping Venezuelans access desperately needed international help) or bad (helping corruption or ransomware). This line:
>Establish a blacklist capability to meet sanctions requirements
hides within it a very large technical and social problem depending on exactly how it is implemented. And should that be different between stable coins (where the requirement is listed) and other coins?
* first, we've seen resistance from BOTH sides to sensible proposals in the past. Some because they thing Crypto should be totally unregulated (purists) and others because they want crypto shut down completely and any reasonable (even enabling) regulation makes that less likely
* second, there are still some core issues here. For instance, a major up side of crypto is the ability to evade regulation like sanctions. On a case by case basis this is sometimes good (helping Venezuelans access desperately needed international help) or bad (helping corruption or ransomware). This line:
>Establish a blacklist capability to meet sanctions requirements
hides within it a very large technical and social problem depending on exactly how it is implemented. And should that be different between stable coins (where the requirement is listed) and other coins?
So outside drug trade and crypto lockers what constitutes the crypto industry? The only constant I know are pump&dumps, be it in form of alt-coins, ICO or NFT.
How about the recent news from Visa where they would like to develop a smart contract wallet infrastructure (no seed phrases and account abstraction) on a layer 2 which uses zero knowledge proofs to batch transactions offchain for scalability? https://usa.visa.com/solutions/crypto/auto-payments-for-self...
Oh right, this doesn't follow the narrative that crypto is useless for everything.
Oh right, this doesn't follow the narrative that crypto is useless for everything.
> As part of Visa’s internal Crypto Hackathon challenge earlier this year, we took on the opportunity to explore the above scenario using a novel technique.
They say in their conclusion that they're interested in this. I don't see any talk of commitment.
They say in their conclusion that they're interested in this. I don't see any talk of commitment.
All you need to know is right there in the heading - "Visa Crypto Thought Leadership".
You can go back years finding all kinds of research papers, press releases, broad statements from you-name-it Fortune 500 talking about some crypto project.
It means absolutely nothing for these big corps to take a tiny portion out of their income-offsetting R&D departments to put a few people on moonshot/fluff/PR campaigns for papers like this. It makes them look cool, relevant, whatever and in the event it somehow goes somewhere they look like geniuses (and some exec gets a promotion). If it doesn't work out they never mention it again -OR- release a statement announcing termination of the project because of environmental concerns, etc (like Tesla).
You can go back years finding all kinds of research papers, press releases, broad statements from you-name-it Fortune 500 talking about some crypto project.
It means absolutely nothing for these big corps to take a tiny portion out of their income-offsetting R&D departments to put a few people on moonshot/fluff/PR campaigns for papers like this. It makes them look cool, relevant, whatever and in the event it somehow goes somewhere they look like geniuses (and some exec gets a promotion). If it doesn't work out they never mention it again -OR- release a statement announcing termination of the project because of environmental concerns, etc (like Tesla).
Because you say so? Is that why it doesn't mean anything. At least the parent poster posted some links, you didn't and are still drawing baseless conclusions. Next time please do provide something more.
Conversely, I'd love to see examples of successful blockchain/crypto projects in production in large enterprise/Fortune 500 or anywhere else. Or anything pointing to mainstream blockchain/crypto adoption outside of gambling on exchanges. Bitcoin is almost 14 years old and Ethereum is coming up on eight...
For starters:
https://www.maersk.com/news/articles/2022/11/29/maersk-and-i...
https://www.reuters.com/markets/australian-stock-exchanges-b...
Nice overview and summary (including Walmart):
https://www.wsj.com/articles/blockchain-fails-to-gain-tracti...
Tesla accepted payments, stopped, then hinted over a year ago they might resume them. Still hasn't happened:
https://www.yahoo.com/now/tesla-hints-may-accept-crypto-1043...
Another example of a splashy announcement that went nowhere:
https://www.ledgerinsights.com/walgreens-walmart-mediledger-...
It's getting tired to debate but I've been very active in blockchain since 2017, with two startups in the space. After more than a decade and tens of billions of dollars in spending and funding by everyone from enterprise to VC blockchain and crypto penetration and adoption is abysmal. If you want some sources and background on that conclusion I wrote this nearly a year ago and if anything usage and adoption is lower:
https://blog.cryptostars.is/blockchain-the-most-poorly-adopt...
For starters:
https://www.maersk.com/news/articles/2022/11/29/maersk-and-i...
https://www.reuters.com/markets/australian-stock-exchanges-b...
Nice overview and summary (including Walmart):
https://www.wsj.com/articles/blockchain-fails-to-gain-tracti...
Tesla accepted payments, stopped, then hinted over a year ago they might resume them. Still hasn't happened:
https://www.yahoo.com/now/tesla-hints-may-accept-crypto-1043...
Another example of a splashy announcement that went nowhere:
https://www.ledgerinsights.com/walgreens-walmart-mediledger-...
It's getting tired to debate but I've been very active in blockchain since 2017, with two startups in the space. After more than a decade and tens of billions of dollars in spending and funding by everyone from enterprise to VC blockchain and crypto penetration and adoption is abysmal. If you want some sources and background on that conclusion I wrote this nearly a year ago and if anything usage and adoption is lower:
https://blog.cryptostars.is/blockchain-the-most-poorly-adopt...
https://www.ibm.com/blockchain/services Big Blue didn't stop using blockchain.
Let me guess you lost a bunch of money or didn't make enough and are ready to give up? Or did you lose a lot and now think it's bad? Fact remains that blockchain is around and not going anywhere. While HN is super negative about blockchain, not sure why as this is a tech. innovation but still super negative, like this place is being run by big banks who stand to lose the most?
Let me guess you lost a bunch of money or didn't make enough and are ready to give up? Or did you lose a lot and now think it's bad? Fact remains that blockchain is around and not going anywhere. While HN is super negative about blockchain, not sure why as this is a tech. innovation but still super negative, like this place is being run by big banks who stand to lose the most?
If you had read the article I wrote I started it by explaining that I divested of all crypto holdings in 2021. Even with those (very) positive returns I can't look away from what I've experienced and seen in the space.
My change in thinking comes from five years very deep in this and realizing:
1. It's been five years waiting and we've yet to see any meaningful adoption. Bitcoiners (as one example) still post videos on social media of them doing Lightning transactions at some random one-off retail location like it's worthy of a post... The pro-crypto/blockchain community is like a cult following a doomsday preacher that keeps predicting dates for the apocalypse that come and go - only to believe yet another future date. If after a decade it's still a big deal to buy a sandwich with crypto it's really time to reconsider your position. If after a decade you're still celebrating things like a Visa press release of some blockchain research project it's really time to reconsider your position. Wouldn't we all laugh at someone getting excited to send an e-mail, shop online, or have $CORP setup a website in 2000?
2. Living blockchain and crypto everyday for five years has only served to reinforce and demonstrate first hand the attitude you see on HN - even with the incredible amount of time and resources thrown at the space it's still nowhere near ready for prime-time. I've written plenty of comments describing the horror that is even the most fundamental layers - node implementations, etc. See point #1 - I've been waiting for it to grow up and as a rational person I can't keep falling for lofty promises that never materialize. HN (for the most part) thinks the tech sucks because it does.
3. Being active in the space has only exposed me directly to the incredible sleaziness that is crypto and blockchain. I've had founders of large and well-known startups show up to meetings obviously high on drugs, saying things like "I'm just trying to get made, paid, and laid" repeatedly. I've had meetings with large blue chip VC firms active in crypto that essentially describe the position of SBF - "We're in the ponzi business and it's going well". My latest startup is an anti-fraud solution for blockchain and I've been repeatedly told things like "Why would we want this? We make our money on fraud." Needless to say details of SBF unfolding - drug usage, criminality, etc are not surprising to me in the least. HN (for the most part) thinks crypto and blockchain is a cesspool of bad actors because it is.
Five years ago I was convinced blockchain was the next big thing - akin to the internet/web. After five years of these personal experiences, all of the available data on adoption, headlines of people in crypto getting indicted, faking their own deaths, rugpulling, exchanges collapsing, Defi and wallets getting hacked left and right, failed project after failed project, dealing with people I want nothing to do with, etc, etc I see it for what it obviously is - even though I've personally come out ahead financially (largely due to timing and luck).
How much of your personal self-interest/stake is driving your position on all of this?
My change in thinking comes from five years very deep in this and realizing:
1. It's been five years waiting and we've yet to see any meaningful adoption. Bitcoiners (as one example) still post videos on social media of them doing Lightning transactions at some random one-off retail location like it's worthy of a post... The pro-crypto/blockchain community is like a cult following a doomsday preacher that keeps predicting dates for the apocalypse that come and go - only to believe yet another future date. If after a decade it's still a big deal to buy a sandwich with crypto it's really time to reconsider your position. If after a decade you're still celebrating things like a Visa press release of some blockchain research project it's really time to reconsider your position. Wouldn't we all laugh at someone getting excited to send an e-mail, shop online, or have $CORP setup a website in 2000?
2. Living blockchain and crypto everyday for five years has only served to reinforce and demonstrate first hand the attitude you see on HN - even with the incredible amount of time and resources thrown at the space it's still nowhere near ready for prime-time. I've written plenty of comments describing the horror that is even the most fundamental layers - node implementations, etc. See point #1 - I've been waiting for it to grow up and as a rational person I can't keep falling for lofty promises that never materialize. HN (for the most part) thinks the tech sucks because it does.
3. Being active in the space has only exposed me directly to the incredible sleaziness that is crypto and blockchain. I've had founders of large and well-known startups show up to meetings obviously high on drugs, saying things like "I'm just trying to get made, paid, and laid" repeatedly. I've had meetings with large blue chip VC firms active in crypto that essentially describe the position of SBF - "We're in the ponzi business and it's going well". My latest startup is an anti-fraud solution for blockchain and I've been repeatedly told things like "Why would we want this? We make our money on fraud." Needless to say details of SBF unfolding - drug usage, criminality, etc are not surprising to me in the least. HN (for the most part) thinks crypto and blockchain is a cesspool of bad actors because it is.
Five years ago I was convinced blockchain was the next big thing - akin to the internet/web. After five years of these personal experiences, all of the available data on adoption, headlines of people in crypto getting indicted, faking their own deaths, rugpulling, exchanges collapsing, Defi and wallets getting hacked left and right, failed project after failed project, dealing with people I want nothing to do with, etc, etc I see it for what it obviously is - even though I've personally come out ahead financially (largely due to timing and luck).
How much of your personal self-interest/stake is driving your position on all of this?
Where are you getting that they would like to develop or even explore this further?
From the link, this was taken from an internal hackathon earlier in the year before the further crypto meltdown. they didn’t even write a proof of concept. Call me when they actually trapease or do something.
From the link, this was taken from an internal hackathon earlier in the year before the further crypto meltdown. they didn’t even write a proof of concept. Call me when they actually trapease or do something.
> Oh right, this doesn't follow the narrative that crypto is useless for everything.
As someone with casual knowledge of crypto, that jargon in the first paragraph sounds useless to me
As someone with casual knowledge of crypto, that jargon in the first paragraph sounds useless to me
That describes an approach to solve a problem with using crypto for payments. The problem (bill pay) is already solved in the real world.
Art NFTs seem legit. I like this piece of digital art, I pay in crypto for the piece. It's like an open art collection database.
Is it a billion dollar opportunity, don't think so but I can understand the appeal.
Is it a billion dollar opportunity, don't think so but I can understand the appeal.
Has ownership of any artwork actually changed hands through NFT sales? Every NTF project I have looked at are just digital receipts containing an URL.
> Every NTF project I have looked at are just digital receipts containing an URL.
That is how digital art changes hands.
That is how digital art changes hands.
No, the ownership has not change by buying a NTF. Not the rights to the work nor even the ownership of a specific digital file. That's why I'm asking. Cause the whole NTF space is held up by a general misunderstanding of ownership and rights.
> Cause the whole NTF space is held up by a general misunderstanding of ownership and rights.
It would we more correct to say that critical NFT commentary is held up by misunderstanding about what digital art collectors actually think and want.
If I want to buy rights to a JPG, I go search on Shutterstock. If I want to buy a piece of digital art (in form of a limited edition receipt), I go to a gallery.
It would we more correct to say that critical NFT commentary is held up by misunderstanding about what digital art collectors actually think and want.
If I want to buy rights to a JPG, I go search on Shutterstock. If I want to buy a piece of digital art (in form of a limited edition receipt), I go to a gallery.
I use it as a highly-leveraged stock market index, but:
- without the risk of a margin call, and
- with the ability to cash out from a broker and hold your own "shares".
- without the risk of a margin call, and
- with the ability to cash out from a broker and hold your own "shares".
How many tokens on Coinbase are securities? The SEC won’t audit them and Coinbase pretends that they have done due diligence. This is the elephant in the room.
Whether a given token is a security or not is independent of whether a given exchange can pass an audit (and audit also does not mean what you think it means though everyone seems to use it that way so I am probably over reacting)...
Agree. That's my entire point. Coinbase is not in the clear. Not even close.
You know what this currency that was designed to be unregulated and decentralised needs?
Regulations and centralisation!
Regulations and centralisation!
Do I see the observation that quality of HN comments on crypto has increased as the price stays low and all those people with "fear of missed out" are no longer aggressively posting?
You are correct. This place needs to fill the coffers of even the ones who missed out a few times. Then we will think it's more than a scam.
“2. Enforce a level playing field
Getting regulatory clarity would be a good first step, but if we don't enforce these rules evenly, both domestically and abroad, we will not have a path forward.”
How ironic, so a crypto exchange wishes the U.S. government, an immensely powerful centralized entity crypto was designed to omit, makes everyone else play nice on the global stage. How would the US do that? Hmm… guessing regulating flow of dollars.
Ha!
How ironic, so a crypto exchange wishes the U.S. government, an immensely powerful centralized entity crypto was designed to omit, makes everyone else play nice on the global stage. How would the US do that? Hmm… guessing regulating flow of dollars.
Ha!
China's crypto regulation history: https://www.coindesk.com/learn/china-crypto-bans-a-complete-...
I would be quite keen to know how a state trust based "stable"coin would work in an environment where treasuries give negative yield. (Only a question of time, even if yields are currently going up)
[deleted]
I often find myself wishing that half of all financial regulations were replaced by an aggressive consumer education/consumer reports type agency.
This all seems to make sense to me. I hope it is implemented.
why would anarchists even use centralized exchanges and provide their identities. i'd say these central crypto bros go serve coffee to your boss on walk street
I say don't regulate it and let it eat itself.
you die, hopefully.
crypto will live on. but the "industry" of money people parasitising on it will inevitably die. and that's a good thing
crypto will live on. but the "industry" of money people parasitising on it will inevitably die. and that's a good thing
When it comes to crypto, no one is thinking big enough, with the exception of maybe Satoshi Nakamoto. Bitcoin is much bigger than people realize. I have a better idea on “how we move forward as an industry.”
Money is just a piece of the social contract generalizing specific work into tokens of value. It allows a specialized worker to transact with another specialized worker such that we all have our needs met. It is a mechanism of decentralized organization enabling deep specialization absent needed to trust of even know someone else. You can see the production of someone, and transfer value to them without them needing to trust them personally.
You could say finance is the backbone of modern technological society. It is implicitly pseudo-democratic, in that where it flows, resource allocation power is afforded, which results in production of resources based upon the usage of whoever wields resource allocation.
If you analyze systems from this lens, look at the production of money itself. What work is being distilled into generalized value with money systems? What is the minting processes relationship with governance and democratic institutions?
There is a theme here. Money is directly coupled with governance. That coupling comes in the form of resource allocation, and it comes with an assumption of government control — where government is entrusted with the interests of public good. Hence, taxation comes into play, and a treasury, and tax collectors, and penalties, and policing, and military — the full faith and confidence of the people.
With something so tightly coupled to democracy, would a free and democratic people not want their money system to also be free, open, and democratic? Yet before the invention of Bitcoin, it has been anything but that — and if you can’t see that, you have some reading to do.
Long story short: bitcoin is part of a bigger picture. It is the backbone of government. Of a new form of government. Of a government bound in the laws of physics, codified as subservient to the governed. Of a government true to the cause of freedom. Of a government mathematically and verifiably auditable, in which no man can corrupt the fundamental rules of governing, in which every human has a voice, in which the evils of the world have no recourse nor cracks to hide in.
Imagine that for a moment. What that means for all of us. Imagine taxation as an automated component of crypto, for instance. No more taxation by force, no more complex paperwork, no more statistical enforcement, all of that process and ruling by fear — ALL of it — gone.
There are countless additional ripples here, but I will leave you with some food for thought on the possibility and dire necessity of this:
- houses are no longer affordable to most people who do not own one. This means that family and community is no longer possible for most people. Many of you here enjoy this. What would you so if you lost your house and had to care for your family in a cramped, crime-laden apartment?
- food is increasingly not affordable. What happens when people can no longer eat? How stable is that?
- medical care is not affordable for anyone, without perpetual servitude, and often times the insurance is a joke coming with it
- transport is out of reach for most people. This means you have no mobility to change your physical circumstances
- police are out of control. Their union is too powerful and their primary interest is securing property rights.
- tax payer funds are stuck in a transfer of wealth from the poor and middle class to the mega rich. Look at the military industrial complex, the medical complex, and all the other complexes across industries.
- the politicians are bought and paid for. You think any of those people have power? How effective have any of their policies been on solving these basic and ancient problems?
- the climate is killing life as we know it on this planet, and while society is increasingly aware of this and want it to be fixed, policy makers and corporations are barely changing. Who really controls everything if not the people?
I could go on all day, but the summation is: the current system is tyrannous and oppressive to most. It is faceless and has no central target to blame. The people are left in darkness, condemned to having no present, no future, reduced to a fragment of themselves, consumed in servitude of a faceless shadow. We have a resource allocation problem. A big one. Bitcoin was stage one of the cure to this problem. It has done something most people thought was impossible before it: it made the minting process accessible to anyone, and liberated the opaque financial system into the hands of the people, turning a shadow system into a beacon of light. It gave humanity its collective spine.
What comes next? It is inevitable what comes next. And it is unstoppable. Our current society is having trouble feeding its people, housing its people, healing its people — these are the most basic upon basic needs, in a world of automation and light speed communications, we can barely manage even the basics. It isn’t just sad, it isn’t just pathetic — it is negligent, it is malicious, and it is not necessary. When government in the information age, an age of mastery of atoms, of space, of light, of matter, how is it possible society CANNOT HOUSE AND FEED THEIR PEOPLE.
It makes my blood boil. But I keep it in. I keep it calm. I imagine the suffering of billions and feel their pain. It is paralyzing. But cool heads prevail. We all must carry on and not let the flames of rage consume us. If you don’t see or understand the connection to bitcoin, I just don’t know what to tell you. Maybe, in your relative luxury, you don’t see the reality of the suffering your fellow man is enduring. And so maybe, you haven’t had cause to investigate the root causes. If you did, you would inevitably be lead to the mode of thinking I carry.
I don’t want to spoil the next steps, you all know it already, you feel it in your hearts, but here’s a raging clue for you to chew on:
> WHEN in the Course of human Events, it becomes necessary for one People to dissolve the Political Bands which have connected them with another, and to assume among the Powers of the Earth, the separate and equal Station to which the Laws of Nature and of Nature’s God entitle them, a decent Respect to the Opinions of Mankind requires that they should declare the causes which impel them to the Separation.
> We hold these Truths to be self-evident, that all Men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty, and the Pursuit of Happiness—-That to secure these Rights, Governments are instituted among Men, deriving their just Powers from the Consent of the Governed, that whenever any Form of Government becomes destructive of these Ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its Foundation on such Principles, and organizing its Powers in such Form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for light and transient Causes; and accordingly all Experience hath shewn, that Mankind are more disposed to suffer, while Evils are sufferable, than to right themselves by abolishing the Forms to which they are accustomed. But when a long Train of Abuses and Usurpations, pursuing invariably the same Object, evinces a Design to reduce them under absolute Despotism, it is their Right, it is their Duty, to throw off such Government, and to provide new Guards for their future Security.
Money is just a piece of the social contract generalizing specific work into tokens of value. It allows a specialized worker to transact with another specialized worker such that we all have our needs met. It is a mechanism of decentralized organization enabling deep specialization absent needed to trust of even know someone else. You can see the production of someone, and transfer value to them without them needing to trust them personally.
You could say finance is the backbone of modern technological society. It is implicitly pseudo-democratic, in that where it flows, resource allocation power is afforded, which results in production of resources based upon the usage of whoever wields resource allocation.
If you analyze systems from this lens, look at the production of money itself. What work is being distilled into generalized value with money systems? What is the minting processes relationship with governance and democratic institutions?
There is a theme here. Money is directly coupled with governance. That coupling comes in the form of resource allocation, and it comes with an assumption of government control — where government is entrusted with the interests of public good. Hence, taxation comes into play, and a treasury, and tax collectors, and penalties, and policing, and military — the full faith and confidence of the people.
With something so tightly coupled to democracy, would a free and democratic people not want their money system to also be free, open, and democratic? Yet before the invention of Bitcoin, it has been anything but that — and if you can’t see that, you have some reading to do.
Long story short: bitcoin is part of a bigger picture. It is the backbone of government. Of a new form of government. Of a government bound in the laws of physics, codified as subservient to the governed. Of a government true to the cause of freedom. Of a government mathematically and verifiably auditable, in which no man can corrupt the fundamental rules of governing, in which every human has a voice, in which the evils of the world have no recourse nor cracks to hide in.
Imagine that for a moment. What that means for all of us. Imagine taxation as an automated component of crypto, for instance. No more taxation by force, no more complex paperwork, no more statistical enforcement, all of that process and ruling by fear — ALL of it — gone.
There are countless additional ripples here, but I will leave you with some food for thought on the possibility and dire necessity of this:
- houses are no longer affordable to most people who do not own one. This means that family and community is no longer possible for most people. Many of you here enjoy this. What would you so if you lost your house and had to care for your family in a cramped, crime-laden apartment?
- food is increasingly not affordable. What happens when people can no longer eat? How stable is that?
- medical care is not affordable for anyone, without perpetual servitude, and often times the insurance is a joke coming with it
- transport is out of reach for most people. This means you have no mobility to change your physical circumstances
- police are out of control. Their union is too powerful and their primary interest is securing property rights.
- tax payer funds are stuck in a transfer of wealth from the poor and middle class to the mega rich. Look at the military industrial complex, the medical complex, and all the other complexes across industries.
- the politicians are bought and paid for. You think any of those people have power? How effective have any of their policies been on solving these basic and ancient problems?
- the climate is killing life as we know it on this planet, and while society is increasingly aware of this and want it to be fixed, policy makers and corporations are barely changing. Who really controls everything if not the people?
I could go on all day, but the summation is: the current system is tyrannous and oppressive to most. It is faceless and has no central target to blame. The people are left in darkness, condemned to having no present, no future, reduced to a fragment of themselves, consumed in servitude of a faceless shadow. We have a resource allocation problem. A big one. Bitcoin was stage one of the cure to this problem. It has done something most people thought was impossible before it: it made the minting process accessible to anyone, and liberated the opaque financial system into the hands of the people, turning a shadow system into a beacon of light. It gave humanity its collective spine.
What comes next? It is inevitable what comes next. And it is unstoppable. Our current society is having trouble feeding its people, housing its people, healing its people — these are the most basic upon basic needs, in a world of automation and light speed communications, we can barely manage even the basics. It isn’t just sad, it isn’t just pathetic — it is negligent, it is malicious, and it is not necessary. When government in the information age, an age of mastery of atoms, of space, of light, of matter, how is it possible society CANNOT HOUSE AND FEED THEIR PEOPLE.
It makes my blood boil. But I keep it in. I keep it calm. I imagine the suffering of billions and feel their pain. It is paralyzing. But cool heads prevail. We all must carry on and not let the flames of rage consume us. If you don’t see or understand the connection to bitcoin, I just don’t know what to tell you. Maybe, in your relative luxury, you don’t see the reality of the suffering your fellow man is enduring. And so maybe, you haven’t had cause to investigate the root causes. If you did, you would inevitably be lead to the mode of thinking I carry.
I don’t want to spoil the next steps, you all know it already, you feel it in your hearts, but here’s a raging clue for you to chew on:
> WHEN in the Course of human Events, it becomes necessary for one People to dissolve the Political Bands which have connected them with another, and to assume among the Powers of the Earth, the separate and equal Station to which the Laws of Nature and of Nature’s God entitle them, a decent Respect to the Opinions of Mankind requires that they should declare the causes which impel them to the Separation.
> We hold these Truths to be self-evident, that all Men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty, and the Pursuit of Happiness—-That to secure these Rights, Governments are instituted among Men, deriving their just Powers from the Consent of the Governed, that whenever any Form of Government becomes destructive of these Ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its Foundation on such Principles, and organizing its Powers in such Form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for light and transient Causes; and accordingly all Experience hath shewn, that Mankind are more disposed to suffer, while Evils are sufferable, than to right themselves by abolishing the Forms to which they are accustomed. But when a long Train of Abuses and Usurpations, pursuing invariably the same Object, evinces a Design to reduce them under absolute Despotism, it is their Right, it is their Duty, to throw off such Government, and to provide new Guards for their future Security.
The problem in reality would be non existent if people used crypto currencies for what they were meant to be used for: an alternative economy with no need for exchanges and third parties: you sell me a banana, I give you some satoshis.
Not saying this is convenient IRL, requiring to sync to a network and chain is expensive and difficult from a phone, but that was the supposed use case.
I'm more and more convinced that blockchain industry solves no real world problems at all, except in the crypto sphere itself (like smart contracts do have a use...for crypto exchanges, crypto games and crypto gambling) and that 99% of the people who get involved couldn't care less about crypto use cases, only if they will sell for more $ than they bought for.