Former US SEC attorney: 'Get out of crypto platforms now' • Hacker News Board

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

#431

Post by ac29 » Wed, Jun 21, 2023, 6:01 AM UTC

hattmall wrote: post #340

cs702 wrote: post #150

Earlier quoted context omitted.

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.

Doesn't the Bitcoin network continually require increasing power, storage, and bandwidth? Isn't there a value of Bitcoin that if it falls below all mining is unprofitable? Are these incorrect assumptions?

Bitcoin doesnt use much storage or bandwidth.

Power is more complicated. By design, Bitcoin has one block created by one miner every 10 minutes on average. All other work by all other miners is discarded and unused. So no, only a single miner is required to sustain the network. But, there is a economic incentive to add miners to the network when the price goes up, because even though only one miner gets rewarded per block, that reward is worth quite a bit. Currently approximately $1M of bitcoin are mined per hour.

There is no specific value at which all mining is unprofitable because mining difficulty is dynamically adjusted to maintain a 10 minute block generation rate regardless of the number of miners.

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

#432

Post by sh34r » Wed, Jun 21, 2023, 6:04 AM UTC

lmm wrote: post #288

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…

> Anyone who predicts Bitcoin's demise must explain precisely how and why its network would stop functioning. I've been saying for years that Bitcoin will go down like Second Life. Remember when there were news stories about Sony or whoever buys an island for X million dollars? And now... I mean it's still there (presumably), I don't think they've turned off the servers or anything, but no-one cares and it's obviousl…

Ransomware will keep it going for quite some time after the last pump and dump fizzles out, but it only needs a price of ~$1000 or so to facilitate that.

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

#433

Post by jaimex2 » Wed, Jun 21, 2023, 6:12 AM UTC

Is he talking to American citizens only?

None of what he is saying applies to me.

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

#434

Post by elkos » Wed, Jun 21, 2023, 6:15 AM UTC

onlyrealcuzzo wrote: post #130

rcme wrote: post #105

Earlier quoted context omitted.

The issue I have with the argument is that you can apply it to anything. The fact that Bernie Madoff pulled off a ponzi scheme for years and the fact that "The Lindy effect works until it doesn't" isn't a specific critique of Bitcoin.

The Lindy Effect is meant to describe things like buildings and cities, that generally you don't have an outside risk to consider that the whole time they might've been a fraud or illegal. We don't really need to worry that The Great Pyramids have been a hologram all this time. We don't need to worry that the US is going to make The Great Pyramids illegal (I mean, anything can happen, but it's a much smaller chance t…

I mean the US has several pyramid-like structures doesn't it?

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

#435

Post by carleverett » Wed, Jun 21, 2023, 6:52 AM UTC

mupuff1234 wrote: post #272

carleverett wrote: post #226

Earlier quoted context omitted.

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...

I’m not saying fiat currency doesn’t store value… just that, of the functions of money, it’s better as a medium of exchange + unit of account where you care way more about price stability and liquidity.

A good store of value is scarce, durable, transferable and divisible - and I think most people agree that you compromise scarcity to get price stability.

We don’t have to take anyone’s word on this though you can just look at what endowments and wealth funds hold to see what people believe are the best stores of value: https://www.nbim.no/en/the-fund/investments/#/

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

#436

Post by Jason676 » Wed, Jun 21, 2023, 7:02 AM UTC

eterm wrote: post #3

Finbold is not a reliable news source / site. Even r/cryptocurrency flags finbold as unreliable.

Nop. I noticed r/cryptocurrency flags enormous amount of articles from many recognized websites. And this article is based on a quote from former SEC official.

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

#437

Post by zirgs » Wed, Jun 21, 2023, 7:24 AM UTC

calvinmorrison wrote: post #280

zirgs wrote: post #271

Earlier quoted context omitted.

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?

If the difficulty is too low then the network becomes vulnerable to a 51% attack. If it's too high then it becomes less profitable to mine and transaction processing speed slows down. So it has to be high enough to prevent attacks, but low enough for mining to be profitable.

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

#438

Post by peoplefromibiza » Wed, Jun 21, 2023, 7:29 AM UTC

AnthonyMouse wrote: post #427

HWR_14 wrote: post #417

Earlier quoted context omitted.

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...

except bitcoin is one of the worst choices for that purpose

even the Iranian Rial is more reliable

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

#439

Post by peoplefromibiza » Wed, Jun 21, 2023, 7:33 AM UTC

AnthonyMouse wrote: post #424

steveBK123 wrote: post #336

Earlier quoted context omitted.

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 g…

> But then you have to explain why gift cards are worth something

gift cards are vouchers

You pay $30 to the store so that someone else can spend the $30 in that store.

It's a certificate, not a currency, not a store of value.

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

#440

Post by koonsolo » Wed, Jun 21, 2023, 8:01 AM UTC

toomuchtodo wrote: post #92

rohith2506 wrote: post #87

I am absolutely baffled by how much negative criticism the whole blockchain industry gets here and I would like to understand the reasoning behind it. Most of the arguments fall into these following buckets concluding to "IT MUST DIE" 1. The whole crypto is a get rich quick scheme with predatory practices everywhere. It's a wild wild west with no sort of regulations. Well, guess what, regulated industry is no differe…

Blockchains are unnecessary in a world with trusted entities and functional legal frameworks. In places that require a blockchain, you're still going to be at the whim of whomever has a monopoly on force. Sure, your key passphrase may be in your head. You'll end up getting beat with a rubber hose. It was never your crypto so long as someone has the guns (wrt "Not your keys, not your crypto"). https://xkcd.com/538/ >…

> Blockchains are unnecessary in a world with trusted entities and functional legal frameworks.

This is such bullshit. In practice the banking system is a messed up piece of old crap.

Let me illustrate my point from my experience a few weeks ago: Had to transfer 20 euro's from my account to my sons account, same European bank. In fact, my sons account is also under my supervision. It was on a Saturday, so guess what: no transfers in the weekend! Had to wait until Monday for the money to go through. Yeah, if Monday was a Holiday, we had to wait until Tuesday.

Is that the efficiency your "trusted entities" can come up with? Don't get me started on "instant cross border transfers". If a well known bank can't handle 20 euro's from one account to another, then what do you expect cross-bank, cross-border does?

In contrast, look at the Nano cryptocurrency: 0 fees, sub second transfers, any amount, anywhere in the world.

Your theory of "trusted entities" all sounds nice, but in practice it's old bureaucratic bullshit. Thanks to blockchain the technology has a solution. Only now is still proper adoption.