Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

twitter.com

Post reply on HN
Print view View original

491–500 of 515 posts

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

#491

Post by DylanDmitri »

lbotos wrote: post #293
darth_avocado wrote: post #290

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.

Also the US government threatens (and occasionally delivers) military and financial harm on entities that refuse to use USD for certain transactions.

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

#492

Post by thworp »

lbotos wrote: post #293
darth_avocado wrote: post #290

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.

Yes, this is the key dimension of the "currency" front. But bitcoin "advocates" (a term I'll use for diplomatic purposes) say that within a context that implies that is somehow a low bar to clear or just a consquence of the monopoly of force or somehow morally questionable. But becoming something people trust (or at least have some amount of confidence in multiple dimensions in) is one of the most difficult things for any new asset class or medium of exchange.

Some of the main ways currencies and commodities get there are value stability (sticking within a certain band with <100% annual swings), wide acceptance and utility. After 10 years of many techno-smart people trying to engineer cryptos to become that we are nowhere near any of these promises being fulfilled.

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

#493

Post by thworp »

polygamous_bat wrote: post #350
lbotos wrote: post #293

Earlier quoted context omitted.

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.

US Dollar has value largely because the United States government is legally obligated to accept it to settle debts.

Yes that is one small dimension of why the dollar is valuable. But a far bigger part is the fact that using dollars enters you into the US financial (and by extension legal) systems which has been far more stable, reliable and predictable than other systems over the last century. For a point of reference consider Switzerland, whose currency is a minor reserve currency and whose banking and legal systems are globally appreciated, despite the fact that they have no power projection and a tiny population in comparison to their financial markets. The Swiss central bank has even deviated from their usual stable policy since 2008 and yet still they see inflows.

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

#494

Post by thworp »

peoplefromibiza wrote: post #286
mabcat wrote: post #274

Earlier quoted context omitted.

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 wh…

I guess the difference is that you can live in a house. For the majority of people that's the real value. Real estate market is also heavily ( heavily ) regulated, to the point that buying and selling houses require so much paperwork that it's not really convenient for scammers. It's also quite stable, loans are secured by mortgages on the properties, I'm not sure anyone would accept bitcoins for the same purpose.

You sort of tipped around the main difference: Real estate is illiquid and intransparent sure, but it is a non-fungible productive asset, you can get people to pay you rents because they need precisely your building. There are no comparable income streams for bitcoin (outside of Ponzi "yield farming") so it is illiquid without any of the benefits of traditional illiquid assets.

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

#495

Post by thworp »

chromatin wrote: post #253
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…

Nobody can tell you what a gold oz. worth of wheat is without resorting to exchange rates of gold to actual currencies.

This is a very valid point. However, the gold: markets have been extremely liquid and somewhat transparent for the past thousand years. In the dark ages there was no way for someone to move the *global* gold:wheat chart by 50% just by executing shadowy trades at a single marketplace. Of course this is because medieval markets lacked a great deal of information synchronization, but it was also because medieval markets were actually decentralized.

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

#496

Post by thworp »

koolba wrote: post #349
chromatin wrote: post #253

Earlier quoted context omitted.

Nobody can tell you what a gold oz. worth of wheat is without resorting to exchange rates of gold to actual currencies.

We almost had that with oil, but then they killed the guy trying to make it happen.

Unrelated to the killing, tying you medium of exchange to a physical commodity was ill-suited to a time where the global productivity growth was double-digits for 50 years. Limiting the growth of your exchange medium to the rate at which a commodity can be extracted is almost as bad as going full command economy.

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

#497

Post by wolverine876 »

evandale wrote: post #477
wolverine876 wrote: post #396

Earlier quoted context omitted.

> Cash has been used for facilitating crime since currency was invented How is that relevant? Silver and papyrus were once popular too. > it will always be far easier to commit crimes with cash than with anything else It's not easy if I want to pay someone who isn't local to me, or whom I don't want to meet in person, or if I don't want to possess physical criminal assets. > it will always be far easier to commit cri…

wolverine876: The question is whether crypto in particular facilitates crime, and it does. evandale: Cash has been used for facilitating crime since currency was invented wolverine876: How is that relevant? The question obviously isn't whether crypto facilitates crime because USD facilitates crime better. If the ability to facilitate crime was a question of whether you should use a currency or not then we wouldn't be…

Attacking other people is not only weak BS, it violates HN guidelines. Have a good day!

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

#498

Post by anonymouskimmer »

lamontcg wrote: post #385
anonymouskimmer wrote: post #246

Earlier quoted context omitted.

> 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 ze…

If you actually are using it as a currency, you don't need it to have any liquidity (with respect to exchanging it for another currency). You just need the person you're dealing with to prefer it to the alternative.

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

#499

Post by chii »

HWR_14 wrote: post #456
AnthonyMouse wrote: post #427

Earlier quoted context omitted.

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

That's the only thing that gives Bitcoin value. So, in a crisis it can become false for some people, then spread to the people they know, etc. With dollars, all Americans need them. So do international companies that transact with Americans. If you think the US government will hold, then that belief will be true, it's only a question of the number of steps.

> in a crisis it can become false for some people

it depends on what the crisis is, and whether this same crisis also makes people believe that the US gov't will not hold.

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

#500

Post by peoplefromibiza »

thworp wrote: post #494
peoplefromibiza wrote: post #286

Earlier quoted context omitted.

I guess the difference is that you can live in a house. For the majority of people that's the real value. Real estate market is also heavily ( heavily ) regulated, to the point that buying and selling houses require so much paperwork that it's not really convenient for scammers. It's also quite stable, loans are secured by mortgages on the properties, I'm not sure anyone would accept bitcoins for the same purpose.

You sort of tipped around the main difference: Real estate is illiquid and intransparent sure, but it is a non-fungible productive asset, you can get people to pay you rents because they need precisely your building. There are no comparable income streams for bitcoin (outside of Ponzi "yield farming") so it is illiquid without any of the benefits of traditional illiquid assets.

rent is due after you bought the property.

which entails a lot of the aforementioned paperwork and checks and law abidings.

if bitcoin could provide the exact same level of security, it could be used as an asset, granted it failed as a currency.

the problem is it was designed precisely to not adhere to the standards everyone expects from "old-school" transactions, hence its main purpose is speculation, and it's barely good at that right now.

Post reply on HN