261–270 of 364 posts
The “I have no sympathy for the victims” comments are crass. But there is a legitimate question of how much law enforcement these crimes deserve. Arizona has a stupid motorists law [1]. If a car “becomes stranded after driving around barricades to enter a flooded stretch of roadway,” the driver “may be charged for the cost of their rescue.” A similar concept for crypto may be necessary. Law enforcement will pursue. B…
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Even professional investors have a hard time telling scams apart from legit operations. Just look at the Madoff scandal. And when even the professionals fail to see scams, how is the general public supposed to do so?
Bernie Madoff's victims were mostly high net worth individuals (dumb money), not professional investors. While professional investors do occasionally get scammed that's much less common.
And sadly a lot of charities.
https://en.wikipedia.org/wiki/List_of_investors_in_Bernard_L...
No education will stop many from going to Casino and blow through their savings. If they wish to engage into recovery effort - there will be rules of this engagement.
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Perhaps more likely than the scammed. For example, the scammers may purchase equities.
In an economy where companies prefer to invest in R&D with credit and buy back stock, purchasing equities seems less beneficial than stimulating demand by just buying stuff.
The net effect of equity investment is to increase the amount of capital targeted towards the production of capital goods; i.e. deferring consumption makes humanity richer in the long term.
I often wonder to what extent scams like this have positive externalities, insofar as the people who get scammed were perhaps unlikely to allocate capital in socially efficient ways.
Define "socially efficient ways", because that sounds like a dog whistle.
I often wonder to what extent scams like this have positive externalities, insofar as the people who get scammed were perhaps unlikely to allocate capital in socially efficient ways.
From a game theory perspective, I believe that dishonest players are always a net negative for all other players. It might seem that it's good when capital transfers from stupid to smart people, but actually it moves from honest to dishonest people, which results in less efficiency. All this capital is now used to perpetrate more scams, which means that more capital will be allocated to these scammers instead of some…
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Interesting point. Would you rather have few unscrupulous, enterprising individuals have a significant proportion of wealth, or have this distributed between many people who are mentally challenged (easily conned)...
> people who are mentally challenged (easily conned)... I think the biggest predictor for being conned is not low IQ but high greed.
This is my biggest complaint against cryptocurrencies in general. I'm happy with my bank's fraud protection. How can crypto users protect themselves without recreating traditional banking? Bitcoin was released ~13 years ago, and wallet/transaction security has been one of the most important requirements since then (along with scalability, but let's not go there). If trillion dollar market caps and god-knows-how-many…
This is my favorite story about crypto fraud protection: The Winklevosses came up with an elaborate system to store and secure their own private keys. They cut up printouts of their private keys into pieces and then distributed them in envelopes to safe deposit boxes around the country, so if one envelope were stolen the thief would not have the entire key. https://www.nytimes.com/2017/12/19/technology/bitcoin-winkle…
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> but DeFi actually is a giant circular digital economy which doesn't create real world wealth. Isn't this true of the entire cryptocurrency cult though?
> Isn't this true of the entire cryptocurrency cult though? In the real world, "crypto holdings" are IOUs with a dynamic value of how much is being owed. This absolutely can create (and especially transfer ) real world wealth.
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This is my favorite story about crypto fraud protection: The Winklevosses came up with an elaborate system to store and secure their own private keys. They cut up printouts of their private keys into pieces and then distributed them in envelopes to safe deposit boxes around the country, so if one envelope were stolen the thief would not have the entire key. https://www.nytimes.com/2017/12/19/technology/bitcoin-winkle…
This key storage system is a now very common and (ostensibly) very secure model that has been iterated on and is in wide use, especially for hardware wallets like Trezor. The model they use is called the "Shamir Backup," here's more info: https://wiki.trezor.io/Shamir_backup
In a exaggerated 100-out-of-1000 scheme, even if you steal 99 out of the 100 required shares, you still have zero information. You are better off trying to brute force the value from scratch than trying to use the 99 shares you have.
It's also very simple to implement, making it my favorite algorithm.
[1] https://en.wikipedia.org/wiki/Information-theoretic_security