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U.S. Senate Vote in Favor of Amendment That Threatens Crypto Industry

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Re: U.S. Senate Vote in Favor of Amendment That Threatens Crypto Industry

#151

Post by hoops8 »

woah wrote: post #95
JumpCrisscross wrote: post #31

I've been following this discussion in Washington and on Hacker News. I'm moderately anti-crypto--I don't buy the pitch but am open to being wrong and believe folks should be free to do what they want with it. I've also been struck by the proliferation of bank-like services without bank-like obligations. This stretches from fractional-reserve and maturity-transforming services like Tether to exchanges/dealers like Bi…

Your comment is completely unrelated to the matter at hand, and the article. The controversy here is about this law potentially placing reporting obligations on software developers who never have any custody of client funds. Sort of like requiring the developers of Excel to report on users of Excel using it to manage their money. > I've also been struck by the proliferation of bank-like services without bank-like obl…

I’m anti-crypto cause not enough people can understand how it works as a value store.

It’s fascist to peddle what is effectively magic as truth of reality when it’s just another man-made concept power brokers will (already have?), manipulate for their outsized gain.

Nation state money schemes are low tech and well known; they haven’t changed much. We don’t need to make a meta-value store to exchange for nation state currency, at great material expense. I’d propose the opposite; we stop treating people like concepts we must pressure to import our perspectives and preferences.

It’s unverified, but I’m pretty sure if we just made medicine, offered education, and built technology for those ends rather than moved at the drumbeat of elder rich to validate their once youthful existence, and pipe dreams none of us will live to verify came true, humanity would be in a much better place.

Talk about energy vampires; don’t focus on living a varied and full life! Focus on validating the rich! Focus on consuming what we can make the best margin on! Watch our ads so you never forget us!

And then once they’re empowered… my privacy! My freedom of speech!

Nice work.

Re: U.S. Senate Vote in Favor of Amendment That Threatens Crypto Industry

#152

Post by jondwillis »

sumeno wrote: post #92
frankbreetz wrote: post #55

Strangely, crypto has gone up in spite of this news. This seems worse then China banning mining, which caused a pretty significant drop earlier this year. Why would this not effect the market in a similar fashion. As far as I understand it, this effectively bans crypto mining in the US. Am I missing something?

Because whenever there is bad news for cryptocurrency Tether prints a billion dollars worth of coins out of thin air to artificially inflate the price of BTC

I am no fan of the ongoing Tether fraud and share this view, however, instead of cynically declaring this to be the case, it'd be nice to see evidence of that occurring right now.

Re: U.S. Senate Vote in Favor of Amendment That Threatens Crypto Industry

#153

Post by alksjdalkj »

dcolkitt wrote: post #85
alksjdalkj wrote: post #50

I don't really follow any cryptocurrency news but wasn't one of the main appeals early on that it would be independent from any governments? Specifically that it could be a currency not subject to the oversight and sanctions of the US treasury? I guess "cryptocurrency" is different from "cryptocurrency industry", but it still seems like the ecosystem as a whole should be more resilient to actions from the US governme…

Cryptocurrency is extremely resilient to government action. Regardless of what happens with this legislation, I can virtually guarantee you that crypto will still exist in a decade. Obviously the market agrees, as the major coins and tokens have reached 3 month highs while this legislation was unfolding. The reason I oppose hamfisted laws in crypto is the same reason I oppose the War on Drugs. Is the government even…

If you need to hire high powered lawyers to be able to use crypto, isn't that demonstrating that crypto has failed to be a universal, government-independent currency? Or am I misunderstanding something and that was never the point?

Re: U.S. Senate Vote in Favor of Amendment That Threatens Crypto Industry

#154

Post by cinquemb »

JumpCrisscross wrote: post #63
zarzavat wrote: post #51

Earlier quoted context omitted.

The entire point of cryptocurrency is precisely to enable bank-like services without bank-like obligations, to enable individuals to be their own bank and manage their own money if they want to. You're right that it's unsurprising that the US Senate does not care about this problem. On the other hand, I'm pretty sure that the cryptocurrency world does not care about the US Senate. This will just end up being another…

> point of cryptocurrency is precisely to enable bank-like services without bank-like obligations Crypto has shown some rules are unnecessary or even harmful. They should be repealed, across the board. In other cases, many cases, it's reinforced some rules' necessity. Their scope should be broadened. That's what's going on here. If the sole value of cryptocurrencies is in evading the rules, it's going to have a tough…

> which virtually guarantees more-onerous rules than would have been necessary.

I see this as a good thing™, since more onerous rules will probably negatively affect a lot more people who may not even care about cryptocurrency just because they may be doing something that could be used for interacting with them.

The more invasive the better!

Re: U.S. Senate Vote in Favor of Amendment That Threatens Crypto Industry

#155

Post by sterlind »

SpicyLemonZest wrote: post #140
nine_k wrote: post #136

Earlier quoted context omitted.

Could you please share an example or two where custody of funds is not clearly defined? I'm not in finance, and to me this sounds weird. Unclear custody looks to me as an obvious opportunity to plainly steal someone's funds.

The basic example most others are built on is a locked smart contract, where none of the participants can control the funds until the smart contract is programmed to release them. Most crypto developers conceptualize this scenario as the smart contract having custody (you can only steal the money if you trick the smart contract into giving it to you), but the smart contract can't exactly report things to the IRS.

How does the tax system work for financial instruments implemented by pen-and-paper contracts? Seems to me very similar to owning shares in Special Purpose Vehicles, with the (perhaps important) difference that a judge can't overrule the contract.. but they can still bind the owners right?

Part of me wonders if you could create a contractual "shim" that judges can read, which mirrors what the smart contract does and dictates behavior of the parties for matters outside the contract itself. Sort of like the template contracts used for mortgage-backed securities.

Re: U.S. Senate Vote in Favor of Amendment That Threatens Crypto Industry

#156

Post by SpicyLemonZest »

sterlind wrote: post #155
SpicyLemonZest wrote: post #140

Earlier quoted context omitted.

The basic example most others are built on is a locked smart contract, where none of the participants can control the funds until the smart contract is programmed to release them. Most crypto developers conceptualize this scenario as the smart contract having custody (you can only steal the money if you trick the smart contract into giving it to you), but the smart contract can't exactly report things to the IRS.

How does the tax system work for financial instruments implemented by pen-and-paper contracts? Seems to me very similar to owning shares in Special Purpose Vehicles, with the (perhaps important) difference that a judge can't overrule the contract.. but they can still bind the owners right? Part of me wonders if you could create a contractual "shim" that judges can read, which mirrors what the smart contract does and…

The difference is that the SPV is itself a legal entity responsible for keeping track of who owns it. (That's not to say it's a silver bullet, since SPVs can be and quite regularly are used to try and play accounting tricks to hide stuff from tax authorities.)

Re: U.S. Senate Vote in Favor of Amendment That Threatens Crypto Industry

#158

Post by sumeno »

jondwillis wrote: post #152
sumeno wrote: post #92

Earlier quoted context omitted.

Because whenever there is bad news for cryptocurrency Tether prints a billion dollars worth of coins out of thin air to artificially inflate the price of BTC

I am no fan of the ongoing Tether fraud and share this view, however, instead of cynically declaring this to be the case, it'd be nice to see evidence of that occurring right now.

https://onlinelibrary.wiley.com/doi/full/10.1111/jofi.12903

https://twitter.com/whale_alert/status/1424484871737692161?s...

Re: U.S. Senate Vote in Favor of Amendment That Threatens Crypto Industry

#159

Post by dcolkitt »

alksjdalkj wrote: post #153
dcolkitt wrote: post #85

Earlier quoted context omitted.

Cryptocurrency is extremely resilient to government action. Regardless of what happens with this legislation, I can virtually guarantee you that crypto will still exist in a decade. Obviously the market agrees, as the major coins and tokens have reached 3 month highs while this legislation was unfolding. The reason I oppose hamfisted laws in crypto is the same reason I oppose the War on Drugs. Is the government even…

If you need to hire high powered lawyers to be able to use crypto, isn't that demonstrating that crypto has failed to be a universal, government-independent currency? Or am I misunderstanding something and that was never the point?

My point is that you don't need a lawyer to use crypto. Just the same that you don't need a lawyer to order LSD off the dark net. And 99% of people who do both, do so without a lawyer. The rising price of crypto clearly shows the market shows no fear about this measure slowing down widespread adoption.

But for a small percent of unlucky people, mostly disadvantaged people without connections who can't afford the lawyers to insulate themselves from legal risk, the government will come in and randomly ruin their lives. No enlightened society should ever criminalize a victimless behavior, unless it's capable of widespread enforcement. Like the war on drugs, criminalizing an activity that you know you can't stop only ruins lives, without actually stopping the thing you're ostensibly worried about.

Re: U.S. Senate Vote in Favor of Amendment That Threatens Crypto Industry

#160

Post by EGreg »

starkd wrote: post #146
logicchains wrote: post #75

Earlier quoted context omitted.

>There seems to be a naive belief that it can never happen here, just because it never has. What do you mean it never has? FDR literally stole everybody's gold in 1933 and got away with it.

Good point. Tyranny is not all or nothing gambit.

FDR was, in a sense, the Trump of the Democratic party. Hated by the industrialists, and he welcomed their hatred.

Big populist, had the Japanese put into internment camps, turned back ships full of Jewish refugees fleeing the Holocaust, and so forth.

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