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Former US SEC attorney: 'Get out of crypto platforms now'

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Re: Former US SEC attorney: 'Get out of crypto platforms now'

#161

Post by mrkeen »

vladd wrote: post #16
zhvihti wrote: post #14

It's strange to me how people keep comparing cryptocurrencies to equity, but don't compare them to their closest counterpart - fiat currencies. Are fiat currencies treated like securities? No. Are there "best execution requirements" when I exchange my USD for EUR. No. Did somebody have to register the Brazilian Real with the SEC for it to be exchangeable in the US? No.

People cannot create fiat currencies out of thin air. When done it's a crime (currency forgery).

That's precisely what fiat currencies are. Currencies which can be created out of thin air. That's what 'fiat' means - "Let there be".

Fiat currencies are 'fiat' in stark comparison to wealth which can't be created out of thin air, e.g. gold or cryptographically-protected numbers.

Re: Former US SEC attorney: 'Get out of crypto platforms now'

#162

Post by lamontcg »

cs702 wrote: post #116
otoburb wrote: post #107

Earlier quoted context omitted.

Exactly my point. The Lindy effect probably shouldn't be used as an argument for either side of this debate (or any, for that matter). But that's a specific (partial) statement that I saw in the parent comment.

Ah, I see what you mean now. I agree with you on the Lindy effect. What I meant is that the arguments used by many past predictions of Bitcoin's demise have been proven wrong. Anyone making new predictions of Bitcoin's demise must explain precisely how and why its distributed network would fail. Sorry if that wasn't clear in my comment above!

> Anyone making new predictions of Bitcoin's demise must explain precisely how and why its distributed network would fail.

A systemic banking panic.

Everyone becomes worried about being able to extract money/value from the crypto ecosystem as a whole due to the failure of some exceptionally large entity (Coinbase or Binance or Tether failing).

They all run for the exits at the same time trying to cash whatever crypto they can into currency. With no sort of backstop, no FDIC, no government intervention, no failsafes, etc there's nothing to stop it from all unwinding to effectively zero in a panic. And panics aren't concerned about market efficiencies or intrinsic value or network effects or anything other than the ability to flee into some other unaffected liquid asset. The contagion would spread throughout the network with people trying to take any exit they could find until that exit was shut down.

Given that the crypto ecosystem in general doesn't believe in government regulations to prevent panics it is nearly certain that one will happen, which will bring crypto to a very sudden halt. The probability over time reaches 100%, but it will likely take some kind of precipitous drop from a sufficient height that no individual Billionaire will be willing to step in and buy it all up cheap (previously crypto has likely been "small enough" that a billion here and there was able to stop the crash in e.g. 2018).

It is impossible to predict when it will happen since it requires knowing how much systemic cash is available for withdrawals and how much can be raised, and the timing of financial entities failing, and the appetite for risk of anyone with deep enough pockets to try to bail it out.

And Bitcoin has never really been tested by a recession that would cause it any kind of problems. The V-shaped pandemic recession was cushioned by a lot of injected liquidity in the markets and people switched to greed almost right away after the first bit of panic waned. It has never been stress tested by something like 2001 or 2008 in the broader economy.

Re: Former US SEC attorney: 'Get out of crypto platforms now'

#163

Post by codegeek »

cs702 wrote: post #58

Three highly speculative predictions: 1. The courts are more likely than not to rule that many crypto-assets -- but not all -- should be regulated as investments. It won't be fun for a lot of crypto traders. 2. Over time, the usual giant financial institutions are bound to become the dominant market makers in crypto-assets. In all likelihood, one of them will end up buying Coinbase. Those giant financial institutions…

"The longer Bitcoin survives, the more it will get adopted and integrated into the world's financial fabric,"

How long do we need to give Bitcoin a chance to gain mainstream adoption as its been 15 years already ? So far I don't see much real use except speculation, extortions, get rich quick scams and websites where you want to be anonymous. For the most part.

Re: Former US SEC attorney: 'Get out of crypto platforms now'

#164

Post by tromp »

this_user wrote: post #131
bulbosaur123 wrote: post #69

Earlier quoted context omitted.

This is what most people got wrong. Crypto solves one problem and one problem only: censorship. Crypto is the only, single censorship resistant asset on the entire earth. You can't remove private key by force ($5 wrench is not an argument). You can confiscate land, stocks, freeze bank accounts, take gold. You can't extract a string of numbers which you aren't even sure is there in the first place. Not yet at least. M…

> Crypto solves one problem and one problem only: censorship It doesn't even do that properly, because there is no guarantee of service given by the system. Miners could just decide that they don't like you very much and refuse to process your TX. Or they could conspire to blackmail you: "pay us or your tokens are useless". Sure, someone might be willing to process your TX, or you could try to do it yourself, but tha…

> Miners could just decide that they don't like you very much and refuse to process your TX.

Some miners perhaps. But others will like every tx that pays a decent transaction fee and these tend to eventually get your tx included.

Re: Former US SEC attorney: 'Get out of crypto platforms now'

#165

Post by alphanullmeric »

Hermitian909 wrote: post #60
waynecochran wrote: post #45

With crypto trading platforms, the SEC lacks any sort of oversight and access — and has scant ability to detect, investigate and deter fraudulent conduct. As a result, the crypto marketplace operates without much supervision Isn't that the main idea of a decentralized currency? No doubt this has/does/will harbor criminal activity, but it will also foster the ability to exchange goods and services without third partie…

Sure - and the question is - do we as a society want to allow that, do we think it's worth the tradeoffs? Five years ago I think the answer was still "wait and see", I think it's reasonable by now to say "actually, no, it's not worth it".

Allow what exactly? Consenting individuals to risk what they want to risk with each other?

Re: Former US SEC attorney: 'Get out of crypto platforms now'

#166

Post by ttobbaybbob »

otoburb wrote: post #97
cs702 wrote: post #58

Three highly speculative predictions: 1. The courts are more likely than not to rule that many crypto-assets -- but not all -- should be regulated as investments. It won't be fun for a lot of crypto traders. 2. Over time, the usual giant financial institutions are bound to become the dominant market makers in crypto-assets. In all likelihood, one of them will end up buying Coinbase. Those giant financial institutions…

>> If this sounds far-fetched, consider that many smart and smart-sounding people have predicted Bitcoin's demise, and so far all have been utterly wrong Bernie Madoff pulled off one of the largest (literal Ponzi) scams and evidently stated that he started in the 1990s for a run of just over 15 years until being arrested in 2008, although some investigators thought that his fraudulent activities started as far back a…

bernie == bernard fwiw

Re: Former US SEC attorney: 'Get out of crypto platforms now'

#167

Post by fwungy »

There are $5T of foreign exchange transactions per day.

Btc is already getting traction in the developing world as a reliable currency and that is likely to grow under de-dollarization.

The entire crypto market is about $1T right now of which btc is about half.

There is so much space for Btc to grow as an option for international settlement, it's already working and trusted as much or more than many sovereign currencies. As it becomes more trusted it will increase in price which will decrease its volatility.

If Btc just takes a little slice of the FX market it's an easy 5-10x. I wouldn't bet everything on it, but it does seem rational to have a corner of your portfolio in it.

The Feds and the bankers hate it because it's a direct threat to their business model. There's no room for a middle man to fugazi in btc.

Re: Former US SEC attorney: 'Get out of crypto platforms now'

#168

Post by evandale »

wolverine876 wrote: post #138
uLogMicheal wrote: post #85

Earlier quoted context omitted.

Hopefully you can see the absolutist nature of his comment and come to the realization that crime is a universal aspect of money, so of course any form of money would be a facilitator of it.

> crime is a universal aspect of money, so of course any form of money would be a facilitator of it. That's irrelevant. The question is whether crypto in particular facilitates crime, and it does. All airplanes facilitate passenger death, but some are far more dangerous than others. If I'm considering boarding a plane, don't tell me 'well, any plane might crash' - I don't care, I care about this plane, this pilot, et…

Cash has been used for facilitating crime since currency was invented and it will always be far easier to commit crimes with cash than with anything else and that will never change until humans find a better way to fund crime.

Bitcoin may be an attempt to make funding crime easier but it hasn't been very successful. USD is still king for funding any criminal endeavors.

Re: Former US SEC attorney: 'Get out of crypto platforms now'

#169

Post by charlieyu1 »

roarcher wrote: post #18
paxys wrote: post #6

If you don't hold your own keys privately and offline then you don't really own any crypto. At best you own a share in a dicey exchange that may go under at any time (due to regulation, fraud or whatever else).

An exchange is basically a bank without the regulations and consumer protections of real banks. It also defeats the purpose of crypto. It's the worst of both worlds.

Still, exchanges exist because there is a large demand of customers converting between fiat and crypto, also probably reduce transcation fee and time to be low enough to allow trading derivative products. Not perfect but probably a necessary evil.

Re: Former US SEC attorney: 'Get out of crypto platforms now'

#170

Post by eli »

cs702 wrote: post #150
youreincorrect wrote: post #136

Earlier quoted context omitted.

When people talk about Bitcoin's potential demise, they are referring to its price and perceived value, not whether it will cease to exist necessarily. Madoff also was not ultimately caught and his scheme ended because of the accounting fraud being revealed (i.e. the fraud was not that important). That happened later. He was caught because a market downturn resulted in him being unable to acquire new victims for the…

The longer Bitcoin's network continues to function, more and more people will become aware of its resiliency . Governments may topple; banks may fail; exchanges may go bust; Bitcoin keeps on ticking. As long as the network continues to function, Bitcoin will have a price.

It's possible that more people are aware of Bitcoin than 18 months ago, but I doubt many think it's more resilient.

Since Bitcoin depends on a functioning network it seems more likely than something physical like Beanie Babies or baseball cards to one day become effectively worthless.

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