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Letter in Support of Responsible Crypto Policy

financialinclusion.tech

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Re: Letter in Support of Responsible Crypto Policy

#51

Post by danuker »

300bps wrote: post #47
danuker wrote: post #45

Earlier quoted context omitted.

> In first six months of 2021, there was $590 million in ransomware-related activity Well, in the same period, there were about $900 million (edited; I had it wrong the first time, sorry). https://www.blockchain.com/charts/transaction-fees-usd A lower bound of the benefits provided by the network (the transaction fees paid) is 50% higher than the ransomware. I am surprised it is that low, and am sad that the scammers…

It isn't just ransomware. It's money laundering, terrorist financing, drug trafficking, human trafficking and so much more. Think about it for a second - of those $900 million in transaction fees, how many of them were transactions involving legal vs illegal activities? Anyone involved in legal activities would have a much easier time and lower fees using ACH, wire transfers and other methods.

> Think about it for a second

Well, that is upsetting me. I am profoundly disappointed, but I think you have a serious point.

I will look for some more data on illegal activity. I hope the data is not accurate, but I would only be lying to myself if I refused to believe reality.

I accept that the lower bound of the value of the network does not surpass the illegal activity. But most of the volume should still be presumed innocent.

I see an estimate of $14B of volume was illegal: https://en.wikipedia.org/wiki/Cryptocurrency_and_crime

But that only makes up 0.15% of the total 2021 volume: https://www.wsj.com/articles/cryptocurrency-based-crime-hit-...

Thank you for your patience.

Re: Letter in Support of Responsible Crypto Policy

#52

Post by soco »

once_inc wrote: post #22
danuker wrote: post #17

Earlier quoted context omitted.

I would say the wasteful proof-of-work securing upwards of $1M per hour is destructive - https://www.crypto51.app/ . It can be solved through Pigovian taxes on externalities (carbon emission mainly). But it should apply to all industry fairly, and our energy-industry lobbyists will hear none of it.

Please note that Bitcoin is considerably more carbon emission friendly than most other industries. Also note that PoW is deliberately wasteful as feature.

Most other industries produce something also without being wasteful-as-feature.

Re: Letter in Support of Responsible Crypto Policy

#53

Post by danuker »

giaour wrote: post #46
once_inc wrote: post #30

Earlier quoted context omitted.

Environment FUD refutation (just the one I personally link to most): https://www.coindesk.com/business/2021/03/05/the-frustrating... PoW security is a vector, and doesn't flip from secure to insecure at some specific point. A gradual reduction in mining hash rate doesn't render the chain noticeably less secure. Feel free to fork Bitcoin and use it as an alternative. Please note that this has been done in the past, an…

> PoW security is a vector, and doesn't flip from secure to insecure at some specific point. The network does flip from secure to insecure whenever the cost of mounting a 51% attack dips below the amount an attacker could expect to gain. Markov and Schoar [0] made a convincing case last year that as minted rewards from mining drop, the active mining pool will naturally shrink and become more and more vulnerable. PoW…

It's not a network-wide flip. Certain victims suffer only, and they are very few - the ones not waiting for enough confirmations after receiving a large amount. For example, right now with a cost of mining of $1M/h, after receiving $2M, you should wait for 2 hours (12 confirmations), before accepting it as settled.

Re: Letter in Support of Responsible Crypto Policy

#54

Post by giaour »

_zllx wrote: post #50
giaour wrote: post #27

Earlier quoted context omitted.

> I thought, like China, [Russia] would ultimately ban it to prevent civilians from easily exiting the Russian economy. (another legitimate use of cryptocurrency that is often overlooked) You're kind of proving GP's point here. Evading capital controls is a criminal activity, and, though this is an example of a crime that we would all agree is morally righteous, you're still arguing that cryptocurrency is good becaus…

Good catch, but assuming evading capital controls is crime, then this becomes a debate of victimless crime. Under normal circumstances, it's not victimless, because it can hurt the economy and everyone in it. Who is the victim of a Russian civilian evading their establishment? I don't see the criminals running the establishment as a victim; they already did the most damage to their economy, and they're still the perp…

> Cryptocurrency makes everything pertaining to money easier, unfortunately crime too

This is where you lose me. Cryptocurrency makes most transactions considerably more difficult, and so far, the one segment of the economy that has consistently been willing to accept those tradeoffs is the criminal world. No one is going to argue that the law is always right or that criminals are always wrong -- after all, Oskar Schindler and Aristides de Sousa Mendes were criminals -- but what you are arguing here is that it's important to retain a tool to subvert the law for when the law becomes unjust.

I'm not saying you're wrong! I just happen to believe the harm of bad crime enabled by crypto outweighs the positive effects of crypto-enabled crime, but that's a personal opinion and one that might change if the world does. People in the US make a similar argument about guns (that retaining the ability to overthrow a tyrannical government is worth the extra gun crime we have to ensure); I disagree with them, too, but I would not be so sure if I lived in eastern Ukraine today or Berlin in 1941.

Re: Letter in Support of Responsible Crypto Policy

#56

Post by _zllx »

giaour wrote: post #54
_zllx wrote: post #50

Earlier quoted context omitted.

Good catch, but assuming evading capital controls is crime, then this becomes a debate of victimless crime. Under normal circumstances, it's not victimless, because it can hurt the economy and everyone in it. Who is the victim of a Russian civilian evading their establishment? I don't see the criminals running the establishment as a victim; they already did the most damage to their economy, and they're still the perp…

> Cryptocurrency makes everything pertaining to money easier, unfortunately crime too This is where you lose me. Cryptocurrency makes most transactions considerably more difficult, and so far, the one segment of the economy that has consistently been willing to accept those tradeoffs is the criminal world. No one is going to argue that the law is always right or that criminals are always wrong -- after all, Oskar Sch…

I see it as a kind of gold, or perhaps in a less cliche way of putting it, a sovereign unit of account. I call it easier because it can be handled entirely digitally with no great expenses to transfer it around the world unlike gold, therefore easily being used on the smartphones of people who need it. It is true that the tech currently has many shortcomings in accessibility now, but I see none that can't be overcome with further development. For an example, see Celo's development of a decentralized phone-number-to-EVM-address linking system. Actually, a lot of the projects surrounding Celo are what inspire me to publicly defend cryptocurrency, but I don't bring it up much because I'd be accused of shilling them.

Anyway, I think that cryptocurrency enables lots more non-criminal and should-be-non-criminal activity that can far outnumber the harmful-criminal activity. Perhaps it's already that way, or perhaps it will be so in the future. "In the future" is admittedly another pro-crypto cliche, but we're seeing results headed in that trajectory like the ones mentioned in the financialinclusion letter.

Re: Letter in Support of Responsible Crypto Policy

#57

Post by once_inc »

Cederfjard wrote: post #37
once_inc wrote: post #20

Earlier quoted context omitted.

There is a vast amount of legitimate use on the Bitcoin blockchain. Even companies that have a clear incentive to find criminal use of Bitcoin can only find anywhere between 1 and 4% possibly criminial transaction use. That is considerably lower than estimates for the USD or EUR. Comparing the energy usage of a single global industry to a mid-size country is dumb. All of this fud originates from digiconomist, which a…

> > Lacking viable uses outside of the criminal underworld and speculation You gave numbers for criminal activity, but the original claim also included speculation. If you take that into account as well, how much do you have left then? If Bitcoin remains primarily a vehicle for transferring wealth from new investors to incumbent holders by building hype, is it really a benefit to society?

Sure, there's speculation there. Probably a significant amount. That doesn't mean Bitcoin is a vehicle for transferring wealth from new investors to incumbent investors. There are quite a few people that aren't selling. There are quite a few people using it to get out of monetary experiments by governments. There are quite a few people using it to send money without intermediaries to family in the third world. I can't give you specific numbers, because the system isn't built to provide them. This is, in my opinion, a feature.
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