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Proposed SEC order to freeze, repatriate Binance.US assets

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Re: Proposed SEC order to freeze, repatriate Binance.US assets

#531

Post by lordfrito »

omniglottal wrote: post #522
lordfrito wrote: post #494

Earlier quoted context omitted.

> As long as it's still helping people, we should keep building it. What if it's hurting more people than it's helping? Just seems like a handwavy way to ignore the scams, fraud and collateral damage. We're talking billions. If we want to spend capital to help people in other countries, there are better ways of doing so. I do not believe for one second that the people from rich countries spending money in this space…

You're talking about billions of... dollars. Sounds to me like more scams exist because of fiat. Are you implying that scams don't exist with dollars, and it's the crypto alone which makes for fraud? Or is it that, if it's abused for corrupption and fraud, then it's hurting people so we should do away with it, like fiat?

Of course scams exist with dollars. Scams exist wherever people hold things of value that others want.

People want the USD. I'd argue that crypto is mainly a dollar/fiat scam, as getting their hands on fiat seems to be the point of it. "I'll trade you magic beans for those USD" isn't about the beans, its about the USD.

People are free to trade BTC on the blockchain no matter what the US government says. It's anonymously cashing out to dollars that seems to be their main goal, and the source of all the ecosystem's trouble and reputation problems.

It seem clear to me that almost all of the utility in the crypto space revolves around fraud and criminal behavior. There is little intrinsic "value" in a crypto token, it seems to be nothing more than an unit of account for a large extra-governmental online casino. It empowers and amplifies criminals who do more collective damage than the few "unbanked" that are helped.

And so my argument is that because of the above, crypto is not The Future of Finance by a long shot. And my original point was that there are a surprising number of people here that still believe it is in spite of the evidence.

Re: Proposed SEC order to freeze, repatriate Binance.US assets

#532

Post by imtringued »

siwatanejo wrote: post #366
Animats wrote: post #340

Earlier quoted context omitted.

Ah. That's helpful. It's peer to peer, but not trustless. There's a moment in the transaction at which one party can default. So they need a reputation and dispute resolution system.[1] You'd think there would be trustless decentralized exchanges by now. Ones have been proposed.[2] Some even exist. It's possible to have a truly trustless exchange where orders are smart contracts on a blockchain, transactions are atom…

Sorry but, do you know exactly what trustless means? This concept applies to custody, not to fiat-to-crypto exchanges. Because a fiat-to-crypto exchange is an on/off ramp into/outside crypto. And as fiat cannot be held in a trustless way, the most "trustless" way to make a swap without the exchange holding the fiat amount is by using an escrow system. If the escrow system can only be moved to party A or party B durin…

I was going to write the same post. All you need is escrow and no, escrow is not as dangerous as cryptoexchanges holding onto fiat deposits because you don't give them your money ahead of time, you only give them exactly how much you want to transfer for any given transaction down to the cent. If they screw you over, they will lose their payment service provider license and go out of business.

Re: Proposed SEC order to freeze, repatriate Binance.US assets

#533

Post by imtringued »

siwatanejo wrote: post #373
tsimionescu wrote: post #369

Earlier quoted context omitted.

> not being affected by QE in the medium-long term (e.g. put your savings in it and forget about for 4 years[2] Sure, why care about the possibility that cashing out early might mean you lose half your money? Trust instead in the long long long history of BTC as a stable currency.

> Trust instead in the long long long history of BTC as a stable currency. You perceive it as unstable because you're using USD as a unit-of-account. As a thought exercise, if you were using BTC as the unit of account, what you would perceive unstable is the US dollar. And what you would see is that the USD value would be trending down against BTC, especially if you choose a time-frame equal or higher than 4 years. S…

>As a thought exercise, if you were using BTC as the unit of account, what you would perceive unstable is the US dollar.

No, you would literally have to negotiate prices every single day. The vast majority of currencies have less volatility than Bitcoin. People don't think the dollar is unstable in the euro area.

Re: Proposed SEC order to freeze, repatriate Binance.US assets

#534

Post by lordfrito »

EscapeFromNY wrote: post #530
greatwave1 wrote: post #517

Earlier quoted context omitted.

> illegal transactions, scams and gambling together make up less than 3% of volume > To me, 3% is an acceptable level. It's a lower percentage than the black market in many countries even. Yeah, but that's because the vast majority of volume comes from speculation and wash trading lmao. What do you think the ratio of speculation and illegal activity to legitimate use cases is? I'd be willing to be it's greater than 1…

You don't have to bet, the data is in the paper I linked. 75% of bitcoin volume is speculation. Meanwhile in the traditional economy, 95% of global financial activity is speculation (see below). What level of speculation would you say is high enough to justify throwing away the remaining productive uses of an asset class? --- In 2019, forex volume was $6.6T per day[1], or $1716T per year. In 2019, global GDP was $87.…

I should not have said speculation, the article makes it clear that 70% plus of unregulated exchange trades are wash trades.

Speculation (short selling etc) is a necessary part of a healthy financial system. Wash trades on the other hand are simply market manipulation.

GDP / production is what it's all about. The dollar is powerful in part because of US GDP. The financial sector exists to help put capital to work and extract more P (and to do so more efficiently). The financial sector cannot exist on it's own without meaningful production of value underneath it.

The crypto exchanges are different from forex in that forex facilitates people from other countries doing business with each other helping convert the value of one country's productive output into the value of the other countries productive output. Exchange rates rise and fall relative to GDP from the two countries.

I don't think comparing crypto exchange trading to forex makes sense, as that the crypto currencies don't have a meaningful connection to any nations GDP.

I think the point I'm trying to address here is that there is no P with cryptocurrencies. So the "crypto financial sector" seems more about price manipulation and gambling than it is helping facilitate trade between two economies.

Re: Proposed SEC order to freeze, repatriate Binance.US assets

#535

Post by imtringued »

samstave wrote: post #43
lvl102 wrote: post #36

Bitcoin solves this. Sorry I just had to. I think crypto as an investable asset class is finished. SEC is sending a very clear signal here. It’s entirely the community’s fault for failing to properly manage this space. They actually earned public’s trust (sometime during the pandemic). And then they threw it all away for a few bucks.

We should keep a record of all the crypto failures / scams / people dying in weird ways on some sort of blockhain

The list is too long.

Re: Proposed SEC order to freeze, repatriate Binance.US assets

#536

Post by mindslight »

olalonde wrote: post #486
lordfrito wrote: post #469

After everything that's happened in this space, the number of "true believers" I'm seeing here is astounding to me. After a decade of use the tech hasn't found many real world uses beyond gambling, drugs, confidence schemes, money laundering, tax evasion, and other financial criminality. This is 100% the community's fault, as they're the ones burning a lot of real world capital to build this stuff but have very littl…

> After a decade of use the tech hasn't found many real world uses The use case was found over a decade ago: "A Peer-to-Peer Electronic Cash System"[0]. I don't know why HN commenters seem to think we are supposed to come up with other use cases. [0] https://bitcoin.org/bitcoin.pdf

To answer your question plainly: because Bitcoin addressed the value question by just letting it float, meaning that its value and the stability of that value are directly tied to its uses that drive demand (as with all currencies). This also led to the ecosystem being dominated by speculation, giving exchanges outsized importance - and simplistically implemented exchanges are a great setup for exit scams.

Contrast with say Hashcash where anybody can make more for a fixed amount of computation, so there would be little point in speculating on Hashcash tokens.

One also has to wonder how much Bitcoin's asymptotically limited supply directly caused the blooming of thousands of shitcoins [0] to satisfy the demand for monetary units. If newcomers could have just straightforwardly minted their own like Hashcash, would there have been as much of an incentive to go create competing currencies?

(I'm not some Hashcash maximalist or something. It's just an example of a system with a different paradigm of monetary creation, regardless of its other flaws)

[0] (not that Bitcoin itself isn't a shitcoin, being non-fungible and all)

Re: Proposed SEC order to freeze, repatriate Binance.US assets

#537

Post by boring_twenties »

lordfrito wrote: post #469

After everything that's happened in this space, the number of "true believers" I'm seeing here is astounding to me. After a decade of use the tech hasn't found many real world uses beyond gambling, drugs, confidence schemes, money laundering, tax evasion, and other financial criminality. This is 100% the community's fault, as they're the ones burning a lot of real world capital to build this stuff but have very littl…

Gambling and drugs represent a ton of value, though.

Re: Proposed SEC order to freeze, repatriate Binance.US assets

#538

Post by ericd »

FabHK wrote: post #371
cft wrote: post #184

Earlier quoted context omitted.

Crypto has a viable micropayments for content story, see e.g. https://stacker.news . An upvote costs a minimum of 1 Satoshi (currently about 0.025¢)

Micropayments have been around since the 90’s, and never taken off. At any rate, a centralised version would likely be cheaper, more efficient, easier to use, with more functionality and better customer service.

I don’t know if a centralized payment service that’s usable for that and trustworthy, do you? Most of the services that I know of charge a fixed fee that’s ~7x higher than that, in addition to ~3%.

Re: Proposed SEC order to freeze, repatriate Binance.US assets

#539

Post by EscapeFromNY »

lordfrito wrote: post #534
EscapeFromNY wrote: post #530

Earlier quoted context omitted.

You don't have to bet, the data is in the paper I linked. 75% of bitcoin volume is speculation. Meanwhile in the traditional economy, 95% of global financial activity is speculation (see below). What level of speculation would you say is high enough to justify throwing away the remaining productive uses of an asset class? --- In 2019, forex volume was $6.6T per day[1], or $1716T per year. In 2019, global GDP was $87.…

I should not have said speculation, the article makes it clear that 70% plus of unregulated exchange trades are wash trades. Speculation (short selling etc) is a necessary part of a healthy financial system. Wash trades on the other hand are simply market manipulation. GDP / production is what it's all about. The dollar is powerful in part because of US GDP. The financial sector exists to help put capital to work and…

Each of my links has examples of people exchanging goods and services in bitcoin for various reasons. Do you consider that productive economic activity (the "P")?

If you don't: why is it productive when I buy a car using dollars, but not productive when I buy a car using bitcoin?

If you do: why must a currency's worth be tied to one particular country's GDP? Why can't it instead be tied to the global production of everyone on earth, in any country, who has chosen to use that currency? I think it's actually a sign of strength when someone goes out of their way to adopt a global non-politcal currency, instead of succumbing to inertia and using the currency that was foisted on them by the geographical circumstances of their birth.

Re: Proposed SEC order to freeze, repatriate Binance.US assets

#540

Post by RestlessMind »

lordfrito wrote: post #469

After everything that's happened in this space, the number of "true believers" I'm seeing here is astounding to me. After a decade of use the tech hasn't found many real world uses beyond gambling, drugs, confidence schemes, money laundering, tax evasion, and other financial criminality. This is 100% the community's fault, as they're the ones burning a lot of real world capital to build this stuff but have very littl…

> the number of "true believers" I'm seeing here is astounding to me.

Because maybe when you see crypto, you see scams (SBF, Terra, etc). When we see crypto, we see legit decentralized asset like Bitcoin or massively successful open source project like Ethereum.

> After a decade of use the tech hasn't found many real world uses

Or maybe, there are legit uses but you are ignorant because of your bubble? I compiled some examples here long time back: https://news.ycombinator.com/item?id=32406095 (and this has only grown since)

> money laundering, tax evasion, and other financial criminality

That just depends on your pov ("freedom fighter vs terrorist"). If someone is trying to protect their wealth from Venezuela, Putin, Taliban or other despotic regimes, that is still "money laundering" in those regimes' eyes. See my examples above.

> I have no trouble sending fiat money where I need to at the click of a button

My colleague begs to disagree. He can send fiat USD to his native country but official exchange rate is suppressed and he loses a lot of value through fiat channels.

> I don't understand how intelligent people can continue to believe this stuff is the future of finance.

I don't think this will supplant finance as much as augment it. Also, maybe you haven't yet had real conversations with intelligent people who believe in crypto?

> it's something something human nature

Yup. Wanting to escape oppressive regimes with your wealth. Or freedom to protest your government's tyranny (imagine the uproar if Trump had frozen assets of all the BLM protestors in the summer of 2020. Now see what happened when Canadian goverment froze the assets of truckers).

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