Founder of crypto lender Celsius Network arrested, charged with fraud • Hacker News Board

Re: Founder of crypto lender Celsius Network arrested, charged with fraud

#351

Post by wpietri » Fri, Jul 14, 2023, 2:56 PM UTC

bottlepalm wrote: post #188

wpietri wrote: post #157

Earlier quoted context omitted.

Well look at those goalposts move. Bitcoin's original purpose was precisely electronic cash: https://bitcoin.org/bitcoin.pdf But if you'd like to shift focus to why "store of value" is also wrong, I'm glad to. A store of value needs to be more stable than the thing you're moving out of. It also needs to be relatively liquid, and should have low transaction costs. But Bitcoin is very volatile compared with major fiat…

Again you're mixing up short term cash and long term store of value. Cash you want stability, fast and low cost transactions - you pay for all those benefits with inflation. A good long term store of value you will sacrifice a little of all those things for better inflation resistance. Gold and index funds are also good for long term value storage, but index funds you can't really use as a medium for exchange, and go…

You have ignored the central part of this: volatility. Bitcoin is not a good store of value. I don't have time for people who argue so misleadingly, so I'm done here.

Re: Founder of crypto lender Celsius Network arrested, charged with fraud

#352

Post by wpietri » Fri, Jul 14, 2023, 3:01 PM UTC

RestlessMind wrote: post #302

wpietri wrote: post #32

Earlier quoted context omitted.

And unfortunately I think the tech industry unintentionally enabled it in a few ways. The internet/mobile boom was a real leap for humanity. (Not an unmixed one, any more than the printing press was. But a real leap nonetheless.) This left a lot investors looking for the Next Big Thing. I think it made regulators very cautious of possibly harming something that could be The Future. Journalists were accustomed to tell…

> All the years and all the money spent on the mining/blockchain/smart contract/ICO/DAO/NFT/DeFi/Web3 series of bullshit "innovations" could have gone to real technology and real companies. Really? I imagine all the effort simply redirected towards social media (bad), adtech (bad), fintech (mostly based on ZIRP, like BNPL), self-driving cars (pie in the sky) and gig economy. The only truly useful thing SV worked on i…

Yeah, fair point. We could also include all the "blitzscaling" nonsense, which, given its ability to soak up far more capital, is much more attractive to VCs, allowing a pump-and-dump on a titanic scale.

But I saw so many entrepreneurs getting pulled into blockchain-ish spaces thinking they could do some good. Even given that most of the money would have gone to something else terrible, there were a lot of people who might have focused on actually useful things.

Re: Founder of crypto lender Celsius Network arrested, charged with fraud

#353

Post by wpietri » Fri, Jul 14, 2023, 3:06 PM UTC

pessimizer wrote: post #183

saurik wrote: post #113

Earlier quoted context omitted.

Which point of the Howey Test do you feel is not satisfied by Pokémon cards? (If your answer has anything to do with the existence of the game, I am curious what you think of baseball cards.) You state that they don't satisfy the test with quite some certainty but left the reasoning to the reader; but, it would seem, to me, like Pokémon cards are no different from many of these cryptocurrencies the SEC is interested…

I deeply disapprove of Magic and honestly think that it shouldn't be allowed to be marketed to children if cigarettes aren't allowed to be marketed towards children. But an enormous number of people actually play the (shockingly boring) game. And while there's little doubt that most of the cards being purchased now are going to end up worthless, the "long term" in Magic has already been reached because it's been arou…

Stellar point. I especially like the notion that cargo culting historic price increases is involved. You could look at so much of the cryptowhatever space as a series of cargo cults around different aspects of financial history. It seems like a crucial ingredient in any bubble, really.

Re: Founder of crypto lender Celsius Network arrested, charged with fraud

#354

Post by Closi » Fri, Jul 14, 2023, 3:17 PM UTC

esperent wrote: post #344

Closi wrote: post #336

Earlier quoted context omitted.

> Crypto currently makes up about 7% of the world's money supply, according to a quick search. That quick search is clearly way off, It's closer to 0.1% - 1% depending on how you calculate it.

Here's my source, what's yours? https://www.investopedia.com/tech/how-much-worlds-money-bitc... Although this is using data from when Bitcoin was worth 50k.

https://river.com/learn/how-much-worlds-money-in-bitcoin

Also the article you posted very specifically says that the market cap of cryptos is equivalent to 7% of the narrow money supply (not the full money supply, and NOT that crypto currently makes up about 7% of the world's money supply). Doesn't make sense to compare non-narrow with narrow IMO - i.e. you need to include ALL assets with the same liquidity.

Re: Founder of crypto lender Celsius Network arrested, charged with fraud

#355

Post by Nursie » Fri, Jul 14, 2023, 4:22 PM UTC

DennisP wrote: post #337

Nursie wrote: post #312

Earlier quoted context omitted.

I don’t think it’s clear from that case that XRP is not a security - “The SEC won a partial victory as Torres found the company's $728.9 million of XRP sales to hedge funds and other sophisticated buyers amounted to unregistered sales of securities.” It seems more that selling it on exchanges was not a violation of the law, but some of the activities around it still were. (Edit - in fact it may not even be that, acco…

Conclusion of section 2: "the Court concludes that Ripple’s Programmatic Sales of XRP did not constitute the offer and sale of investment contracts." If it's not an investment contract, it's not a security. That's one of the major points of the whole decision. Section 1 details ways that sales to institutional buyers did involve a contract. The footnote just says the decision does not directly address exchanges. But…

Sure - The point is it’s not as simple as “w00t Ripple won it’s not a security”, as the conduct of exchanges with respect to the token was explicitly not examined.

Re: Founder of crypto lender Celsius Network arrested, charged with fraud

#356

Post by sowbug » Fri, Jul 14, 2023, 4:35 PM UTC

wpietri wrote: post #350

TrapLord_Rhodo wrote: post #271

Earlier quoted context omitted.

Firstly, Transaction volume and total number of transactions are two different metrics. Bitcoin transactions are generally in the $400k-$800k range. Couple things that makes bitcoin more than what it appears: The metrics you quoted are on chain. There are no telling how many transactions are rolled up through the lightening network. With around $20B of various wrapped bitcoins being used in defi, you can easily put t…

I have a lot of questions about people who are making $400k-$800k cash-like transactions. But as far as I'm concerned, that's another sign of Bitcoin's failure in terms of its original goals. That's a sign that Bitcoin is even less useful for productive economic activity. > market cap is $600B Sorry, but talking about "market cap" for currencies and commodities is ridiculous. What's the market cap of the US dollar? W…

Money supply (M0, M1, M2, etc.) is an important concept, no citation needed.

Your quarrel seems be with the broad application of the term "market capitalization." From context, it's clear what people mean, much as it's clear what it means to "dial" a phone number on a phone that doesn't have a dial. Surely there's a better response against digital currencies than stating that Bitcoin's $607B aggregate value isn't technically called a "market cap."

Re: Founder of crypto lender Celsius Network arrested, charged with fraud

#357

Post by [deleted] » Fri, Jul 14, 2023, 4:54 PM UTC

latchkey wrote: post #305

alangibson wrote: post #218

Earlier quoted context omitted.

I transfer money internationally weekly. I would never consider using Bitcoin for this for these reasons: - volatility. This alone kills the wire transfer replacement use case - theft. Just read the news on this one. - speed. Instant SEPA is faster than any cryptocurrency. - fees. Many types of bank transfer are free. Crypto transaction fees are often high. When they're not, they are highly volatile. IMHO 'p2p' and '…

> - speed. Instant SEPA is faster than any cryptocurrency. Not really, when you take into consideration the KYC aspects. > - fees. Many types of bank transfer are free. Crypto transaction fees are often high. When they're not, they are highly volatile. Fees on the L2 chains are fractions of a penny.

[deleted]

Re: Founder of crypto lender Celsius Network arrested, charged with fraud

#358

Post by bottlepalm » Fri, Jul 14, 2023, 5:12 PM UTC

wpietri wrote: post #351

bottlepalm wrote: post #188

Earlier quoted context omitted.

Again you're mixing up short term cash and long term store of value. Cash you want stability, fast and low cost transactions - you pay for all those benefits with inflation. A good long term store of value you will sacrifice a little of all those things for better inflation resistance. Gold and index funds are also good for long term value storage, but index funds you can't really use as a medium for exchange, and go…

You have ignored the central part of this: volatility. Bitcoin is not a good store of value. I don't have time for people who argue so misleadingly, so I'm done here.

Cool, well the price of Bitcoin disagrees with you. Maybe you should think why after 10 years of the same tired arguments, Bitcoin is still going strong. How many years of success will it take for you to change your mind? Serious question.

Re: Founder of crypto lender Celsius Network arrested, charged with fraud

#359

Post by bottlepalm » Fri, Jul 14, 2023, 5:16 PM UTC

angry_albatross wrote: post #281

bottlepalm wrote: post #227

Earlier quoted context omitted.

Your passive analogy doesn't work because Gold needs to be secured and defended, which requires energy or other people are going to steal it. Just like Bitcoin needs to be secured and defended with compute for at least new transactions. A 51% attack will allow you block new transactions or double spend coins you have, not spend or steal other people's coins on the ledger because you don't have the private keys for th…

Yes, and I believe that the total energy needed to secure and defend all the gold in the world is still much lower than the total energy needed to run the entire bitcoin network. I don't feel motivated to do a back of the envelope calculation to justify that claim though, so maybe we disagree on that point. Still, there is the material usage argument for gold that helps it maintain its value that bitcoin does not hav…

Yep computing the energy comparison we’re not going to figure out here, but if you’re right then it would mean that it would require less energy to attack Fort Knox and take their gold. If not that means Bitcoin requires less energy. So which is it?

I’m going to store my value in the thing that’s harder to crack (which must mean it will require more energy, will it not?)

Re: Founder of crypto lender Celsius Network arrested, charged with fraud

#360

Post by latchkey » Fri, Jul 14, 2023, 8:26 PM UTC

Forgeties79 wrote: post #338

latchkey wrote: post #304

Earlier quoted context omitted.

As a US citizen who has lived for multiple years in Vietnam, I can guarantee to you that using Bitcoin is infinitely easier than dealing with the VN banking system. Forget the legal/identity aspects, just the language and cultural barriers alone are a huge pain in the arse.

I find it hard to believe you are doing even half your daily transactions without converting to fiat. I also don’t know how you can wait a few minutes for a transaction to clear potentially dozens of times in a single day. So my guess is you largely deal with dong regardless of how you store your wealth. This just sounds like a quick sound bite where the day to day realities would tell a more nuanced story. If it wer…

You're stuck on bitcoin, there are other cryptos far more suited to these things, like USDC/USDT. I only mentioned bitcoin because, even with the complexities of it, it is still easier than dealing with VN banks. That's how hard it is to deal with.

This is not a sound bite at all. More people ARE doing it, you just don't have any personal visibility into it. TONS of viets living abroad send money back and forth all the time. Money remittance is a huge global industry and the existing solutions all suck. KYC and fees are the two general major issues for people who just want to send money to their families.

Expats, like me, have an even harder time. Language and cultural issues often get the in way. If you're a nomad who works online and doesn't have a 'regular' job... you're out of the system and hard for the banking system to deal with. Try walking into a bank where literally nobody speaks english and open an account.

In Vietnam, there is also something that the US doesn't have much of. A black market for funds. I can send USDC to Vietnam and a local there will convert it to VND for a very small fee and zero hassle.

These are all things that based on your comments, don't impact you. That doesn't mean they aren't valid or that the usecase is moot. Try walking in others shoes for a bit before you jump to conclusions about things.