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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'

#381

Post by gwbas1c »

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…

I think it's pretty clear that most crypto currencies a Ponzi schemes.

But... There's enough demand for an international unregulated currency that I think it'll be around for awhile. There are plenty of people that tolerate its flaws. (Specifically, the volatile value.)

I personally think once the scammers and "true believers" move on, Bitcoin will stay around until some other international "unregulated" internet money comes around.

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

#382

Post by anonporridge »

anon-3988 wrote: post #328
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…

> 3. Bitcoin, which the SEC considers a commodity (it's explicitly excluded from the lawsuits), is bound to become even more dominant in terms of market capitalization. The longer Bitcoin survives, the more it will get adopted and integrated into the world's financial fabric, e.g., as a store of value. If this sounds far-fetched, consider that many smart and smart-sounding people have predicted Bitcoin's demise, and…

If you wait until you start to notice it immediately around you, you'll already be a late adopter.

That's ok though. Playing with new paradigms is a young person's game.

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

#383

Post by jeremyjh »

tromp wrote: post #164
this_user wrote: post #131

Earlier quoted context omitted.

> 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.

I like the part where you just ignore GP's famous example of miners colluding to void a transaction, quite successfully.

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

#384

Post by nootropicat »

I used to be optimistic, but it's 2023 and the only non-ponzi use case of crypto are stablecoins. What people actually want is to easily trade and transfer US dollars.

Some tokens are pure ponzi schemes (like shib, btc) some are ownership in something that could have productive use (eth, some other smart contract platforms tokens). Yet that use isn't actually happening, so from a general pov it's all a ponzi. The most likely outcome is that nothing productive happens at all.

For an average buyer (esp. btc) mark-to-market returns are already underperforming stocks for years when looking even at previous ATH. So many people own some crypto there's no possible separate source of greater fools elsewhere - most current crypto owners will end up at a massive loss. The long-term underperformance compared to other assets will get even worse.

From the pure hype perspective, I think there's room for one last bubble. There's an army of bagholders (of every token) that will throw good money after bad when prices are sufficiently high again, giving up real wealth (again) in exchange for virtual tokens of either zero or much lower value. They still hold hope of at least going back to 0, or maybe even making money. After the next one, they won't. It will get really depressing.

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

#385

Post by lamontcg »

anonymouskimmer wrote: post #246
lamontcg wrote: post #162

Earlier quoted context omitted.

> 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…

> Everyone becomes worried about being able to extract money/value from the crypto ecosystem as a whole due Some of those "everyone" are people who live in countries with both currency controls (so they can basically only buy their national currency, or cryptocurrencies), and a horribly inflating national currency. Even a non-exchangeable-for-fiat Bitcoin is better in their eyes than the only other alternative they h…

> Some of those "everyone" are people who live in countries with both currency controls

A minority of people flooding to the exits can easily remove all the liquid cash from the system and cause it to collapse. There's probably no more than around ten billion in cash at any one time supporting a nominally trillion dollar financial system. A 1% stampede for the exit can produce a crash by draining that liquidity to zero.

And when the dust settles it will all have been a transfer of wealth from the poor to the rich.

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

#386

Post by waynecochran »

Hermitian909 wrote: post #276
waynecochran wrote: post #73

Earlier quoted context omitted.

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.

Well said. There certainly has to be some oversight because there will be predators who take advantage of others. I am not even sure how to handle cryptocurrency, but I do know money runs this world and the powers that be do not want to let go of that power and nor have the inability to tax and control the flow of money. With that said, it is fairly obvious the core elements of freedom are not thought of in the same way as when I was young. For example, I never thought freedom of speech would be diminished as rapidly as it has.

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

#387

Post by nostrademons »

mplanchard wrote: post #341
nwiswell wrote: post #298

Earlier quoted context omitted.

> That being said, I doubt Bitcoin will be outlawed in the West, and generally agree that it will be around for the long term. Well, not entirely without precedent, since private ownership of gold was outlawed nationwide in the US during the Great Depression. It wasn't fully legalized until 1974. https://en.m.wikipedia.org/wiki/Executive_Order_6102

This is an entirely new fact for me. It’s surprising to me that I’d never heard of this. Thanks for sharing!

Wait till you hear that the first chairman of the SEC was a notorious market manipulator who was hired by his friend FDR to prevent anyone else from doing the things that made him rich. He also happened to be JFK's dad.

https://en.wikipedia.org/wiki/Joseph_P._Kennedy_Sr.#Wall_Str...

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

#388

Post by waynecochran »

knodi123 wrote: post #232
waynecochran wrote: post #73

Earlier quoted context omitted.

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.

and yet we gave up the liberty to allow citizens to own rocket launchers. we gave up the liberty to allow people to say "buy my elixir, it cures cancer". The proper answer is not "absolute unrestrained freedom", nor is it "absolute safety at all costs". We have to find a balance between the two- one that lets people live their lives in the way that they choose, but protects them from predators (or just grossly irresp…

True. Absolute unrestrained freedom only works when evil is absent. It certainly is not absent.

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

#389

Post by bandrami »

girvo wrote: post #369
bandrami wrote: post #361

Earlier quoted context omitted.

If something -- anything -- other than meth and murder-for-hire contracts gets priced in Bitcoin I would stop saying it's a dead end.

Meth/other drugs in general being purchasable via Bitcoin has value though. You and I might not find that useful or moral, but we shouldn’t pretend the drug market is a small or insignificant one either.

Right but if that's all it can be used for, it will eventually settle into a value below its equivalent dollar amount. That is, the amount of bitcoin you'll get for $100 will buy some fraction of the meth that $100 will buy. It will probably be close to 1:1 but that discount rate will be the only actually important question. The limited utility will function as a capital control, so it will be like Bahamian dollars.

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

#390

Post by anonporridge »

derbOac wrote: post #109
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…

Bitcoin is puzzling to me, in that a commodity usually has some value outside of a trading market per se. That is, it is usually consumable in some abstract sense. I'm not sure what you would "do" with Bitcoin other than as some form of currency. In this regard, ETH always seemed a bit more on track, in the sense that there have been attempts to use the ETH blockchain from the beginning for the purposes of computatio…

I think of bitcoin as THE null commodity.

No intrinsic use. No mass. No degradation. Transports at the speed of light. Perfectly scarce and not debaseable.

All other commodities exist at various vectors outside of this null point. They have various usefulness in and of themselves. They have mass and volume. They degrade at different rates. They take a lot of time and energy to transport. They aren't perfectly scarce and some are absurdly abundant.

Humans have overloaded various commodities throughout history with the memetic concept of "moneyness". Mostly gold and other precious metals because they have properties close to the null point that we find most important (primarily scarcity and close to zero degradation). We hoard these non null commodities because we came to collective consensus to imbue them as the database of our debt to each other, otherwise known as money. However, this had the negative effect of tying up otherwise useful commodities that we might have been able to put to productive work. This money also had the negative effect of being difficult to transport, store securely, and fractionalize.

Then came government backed, faith based currency. It's a near null point commodity and we really like that when choosing something to imbue our collective moneyness concept in. No intrinsic use. Low mass (paper) to no mass (digital). Limited degradation (paper with replacement service) to no degradation (digital). Easy transport (paper with high denominations) to light speed transport (digital). However, it's scarcity is highly questionable. To quote Satoshi, "The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust."

Bitcoin is the null commodity because it solved the final piece of the puzzle that we tried to solve with fiat currencies. Eliminating trust in central authorities and perfect scarcity.

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