Live data from Hacker News

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

twitter.com

421–430 of 515 posts

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

#421
post #118
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…

> why its network would stop functioning If it fails, it's most likely because block subsidy will become negligible in a few decades and transaction fees alone won't always provide sufficient security against re-org attacks.

The "transaction fees won't protect against reorgs" argument assumes that miners count the value of future block rewards at 0. This is poor logic that models mining as a single game of the prisoner's dilemma. Modeling it as a repeated game arrives at the opposite conclusion: that most miners will cooperate to some degree, because the future value of their rewards depends on it.

I say this as someone very much opposed to the "deflationary" model, because I think it's bullshit that generates a "landed gentry" (thanks, spez) that can forever dominate the distribution of a currency. If you're going to make a currency, inflation of some degree is required to ensure fair(er) distribution over time.

I just think the idea that, when block rewards dissipate, miners will suddenly lose the ability to think more than one block into the future should be called for what it is: bad logic. It's also readily disproved by the most trivial glance at their history of long-term, forward-looking investment.

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

#423
post #145

Earlier quoted context omitted.

Filecoin is probably one of the best examples of a decentralized storage rewarded via crypto. There's also several Defi lending platforms that have helped students paying off debt, although I don't know enough about which networks are the best there.

Isn’t it just a worse implementation of BitTorrent?

No. If people are seeding a file that you care about on bittorent today, there's really no mechanism to ensure that it will be available tomorrow besides seeding it yourself.

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

#424

Earlier quoted context omitted.

USD holds value because the government says it does. The government holds authority because they have a monopoly on violence. Or, if your less pessimistic, it's because people believe in the government.

Exactly To paraphrase a quote attributed to Stalin - how many divisions does Satoshi have?

But then you have to explain why gift cards are worth something. The answer is, because someone will give you something for them.

Meanwhile there are a large number of entities that have already entered into long-term contracts denominated in cryptocurrencies and any of them would pay you something for it when they need to satisfy their obligations.

That doesn't mean the value never changes, but that's also true of government-issued currencies. That's what inflation is.

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

#425
post #191

Earlier quoted context omitted.

Zealot or not, it sucks to miss out on having a few dozen millions. My cofounder also sold very early and he refrains from talking about it

Knowing I wouldn't have to work if I just held on to it... It does sting. But I had to get a car to get to work back then. So there's not much to be mad about.

It is ok to be mad about a "currency" that devalues human effort and rewards blind luck instead.

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

#426

Earlier quoted context omitted.

> 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. Crypto has spawned their own classes of middle-men. At best, you have a changing of the guard - new boss, same as the old boss. At worst, you have traditional finance buying a stake in crypto and ending up in the exact dominant same spot they were before. And of course, all of th…

> it merely aims to be a new mechanism by which value is transferred, which by most objective measures it's very bad at doing. What objective measures are you using? Over $3 Billion in value is transferred over the Bitcoin network every day. There has never been any downtime, nor has it ever been hacked, and fees are flat and transparent (just a few bucks to transfer unlimited value across the world).

one objective measure: speed. another: efficiency + energy demanded to maintain

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

#427
post #417
post #404

Earlier quoted context omitted.

> USD holds value because the government says it does. so how do you explain dollarization of failed economies? Such as lebanon, or venezuela etc? Surely, you're not saying that the US gov't somehow is exerting violence on another country to make the dollarization happen.

The people in Lebanon and Venezuela trust that the US government will continue to exist and that they will either meet with people who want to do business with it, or will meet people who assume they will meet people who will, etc. So they have value.

So if people trust that Bitcoin will continue to exist and they will meet people who want to do business with it etc...

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

#428
post #420

Earlier quoted context omitted.

I remember being annoyed on the 2nd day of Econ class when the prof mentioned that empirically we know human preference graphs can be cyclic but we have to pretend that's not true for any micro to work at all.

That's succinctly phrased. I don't know why it would bother you. It seems like it's admitting a limitation of the model he's about to teach.

It's a fundamental premise of the entire discipline and it's known to be empirically false

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

#429
post #407

Earlier quoted context omitted.

Gold, like stocks and real estate, trades at some multiple of book (with metals this ratio is generally between 0 and 1, with stocks it's generally greater than 1). In fact, looking at the P/B ratio is often one of the first things someone does when evaluating an investment. That ratio for bitcoin is infinite which is why it's not an "investment" in the usual sense of the word.

why is BTC ratio infinite, but not gold?

Gold has industrial uses; the gold traces on a PCB add $X value to it which is a floor for the value of the gold itself

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

#430
post #293

Earlier quoted context omitted.

You can live in a real estate investment or grow food on it or run a business in it. Bitcoin is a bunch of 1s and 0s that is same as a blank canvas hung in museum and is priced at $20M. It is essentially useless, but people believe it’s worth something, so it keeps holding value. Until one day, it doesn’t.

I'm not a bitcoin maximalist, but you have to acknowledge that in this day and age that your definition pretty much applies to USD as well. People believe it's worth something. And so it is.

I have to agree, fiat currency seems very similar to bitcoin. Its a manmade currency essentially that is backed by nothing.

Bitcoin appears to be the next phase of that manmade currency.

Post reply on HN