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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'

#271

Post by zirgs »

cs702 wrote: post #102
otoburb wrote: post #97

Earlier quoted context omitted.

>> 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…

The comparison to Madoff is not apt. Madoff hid losses by committing accounting fraud, whereas every single transaction in the Bitcoin network is visible to everyone and, moreover, cryptographically verifiable by everyone. As long as the distributed consensus algorithm continues to function, Bitcoin will continue to exist. Period. (Government regulations cannot kill it; they can only drive it underground, as with gol…

Its network could stop functioning simply because it would no longer be profitable to mine it. Sure - a few hardcore believers would continue mining at a loss, but I doubt that they'd have enough computing power to secure the network properly.

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

#272

Post by mupuff1234 »

carleverett wrote: post #226
this_user wrote: post #119

Earlier quoted context omitted.

That is exactly why most people no longer use gold as a store of value and are instead using currencies that are much more less volatile. Meanwhile, Bitcoin alone has an annual volatility that is about an order of magnitude larger than gold's, and it's even worse in every other crypto token. None of these things come even close to qualifying for being a store of value.

I think you're confusing store of value with medium of exchange... most people don't really store value in currencies long term - usually they just keep enough to pay near term bills. Stores of value are things like stocks, bonds, treasuries, real estate... and yeah commodities like gold and bitcoin. People don't care so much about volatility if they're planning to park their value there for a long time.

Sounds like you are confused about what and why something is a store of value.

https://en.m.wikipedia.org/wiki/Store_of_value#Money_as_a_st...

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

#273

Post by sacrosancty »

codegeek wrote: post #163
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.

[dead]

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

#274

Post by mabcat »

thworp wrote: post #115
cs702 wrote: post #102

Earlier quoted context omitted.

The comparison to Madoff is not apt. Madoff hid losses by committing accounting fraud, whereas every single transaction in the Bitcoin network is visible to everyone and, moreover, cryptographically verifiable by everyone. As long as the distributed consensus algorithm continues to function, Bitcoin will continue to exist. Period. (Government regulations cannot kill it; they can only drive it underground, as with gol…

No, this is an absolutely ass-backwards argument. To be a currency or a store of value or money (read: to be of any use) it has to be exchangeable for goods and services . Now we can see transactions on the blockchain but we have no idea what that transaction was for. *Nobody* can tell you what a bitcoins worth of wheat is without resorting to exchange rates of bitcoin to actual currencies. But because the entire exc…

You do need to separate medium of exchange from store of value. Real estate is useless as a currency while being the primary store of value for most people. Most of your objections also apply to real estate: can't know how much wheat a house is worth, houses are notoriously illiquid, price discovery is difficult and quite opaque, the sector is rife with misrepresentations. I wouldn't go so far as to say fraud, but where does "real estate agent" sit on those polls of "most trusted professions"? Houses aren't even fungible!

And if anyone thinks BTC/ETH transactions are slow and expensive (me!), around here the gas fee on real estate transactions is ~5% with a 6-month processing time...

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

#275

Post by HWR_14 »

nwiswell wrote: post #248
thworp wrote: post #115

Earlier quoted context omitted.

No, this is an absolutely ass-backwards argument. To be a currency or a store of value or money (read: to be of any use) it has to be exchangeable for goods and services . Now we can see transactions on the blockchain but we have no idea what that transaction was for. *Nobody* can tell you what a bitcoins worth of wheat is without resorting to exchange rates of bitcoin to actual currencies. But because the entire exc…

Isn't this counter-argument equally applicable to silver or gold?

Yes.

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

#276

Post by Hermitian909 »

waynecochran wrote: post #73
Hermitian909 wrote: post #60

Earlier quoted context omitted.

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".

Not to argue, but it really strange how the things that my generation valued (e.g. individual freedom) are being overturned. The old axiom "Those who would give up essential Liberty, to purchase a little temporary Safety, deserve neither Liberty nor Safety." was a mantra in my younger days.

There has always been a tension between individual freedoms and societal good, it has not been clear cut for any generation in American history.

As an example, 1933 is the origin of the Accredited Investor rule in the US which directly interferes with commerce between two consenting adults in order to reduce societal fraud and risk. You can find similar laws from any decade you care to mention.

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

#277

Post by neilparikh »

yazaddaruvala wrote: post #117

I'm not pro crypto exchanges, but does the SEC really live up to this guy's promises? > SEC registration establishes critical requirements that protect investors from individual risk and protect capital markets from global systemic risk. The requirements also make U.S. markets among the safest, most robust, most vibrant and most desirable marketplaces in the world. Does he mean the requirements that continue to allow…

I don't think it's clear that PFOF is bad for retail investors. Many people argue (see Analysis section of the article you posted, and also Matt Levine's writing about it on Money Stuff) that PFOF is actually a net good for retail investors, getting them both price improvement and lower commissions.

Also:

> In the United States, accepting PFOF is allowed only if no other exchange is quoting a better price on the National Market System. ... Transactions must be executed at the best execution, which could mean the best price available or the speediest execution available.

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

#278

Post by dvt »

peteradio wrote: post #268
throwme_123 wrote: post #257

Earlier quoted context omitted.

Wow. Both parent and grand-parent seem wrong. GP: Bitcoiner, dooming everything else. Parent: Anti-crypto (the majority here), up to the point on comparing Bitcoin (which might be a bubble, that's not the point here) to a Ponzi (that it is not: Supply is fixed, there is no new deposits paying previous depositors).

What's the difference if you are getting payout from a bigger fool?

There's no such thing as "payout" in free markets—someone buys your thing for money (sometimes less money than you paid for it, sometimes more money than you paid for it). So, while it might be a speculative bubble (like Beanie Babies, or Tulips, or whatever), it's certainly not a Ponzi. Also, the bigger fool theory (which is what you're conflating it with) is also not a Ponzi.

This might be confusing, because many other crypto products are very Ponzi-like. For example, Voyager literally paid new "stakers/depositors" (a.k.a. investors) with old "stakers'/depositors'" (a.k.a. investors') money to reach the insane return rates they were advertising.

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

#280

Post by calvinmorrison »

zirgs wrote: post #271
cs702 wrote: post #102

Earlier quoted context omitted.

The comparison to Madoff is not apt. Madoff hid losses by committing accounting fraud, whereas every single transaction in the Bitcoin network is visible to everyone and, moreover, cryptographically verifiable by everyone. As long as the distributed consensus algorithm continues to function, Bitcoin will continue to exist. Period. (Government regulations cannot kill it; they can only drive it underground, as with gol…

Its network could stop functioning simply because it would no longer be profitable to mine it. Sure - a few hardcore believers would continue mining at a loss, but I doubt that they'd have enough computing power to secure the network properly.

Isn't difficulty set based on the previous block time?
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