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The political case for a blanket cryptocurrency ban

stephendiehl.com

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Re: The political case for a blanket cryptocurrency ban

#601

Post by einpoklum »

jtolds wrote: post #153
einpoklum wrote: post #99

Earlier quoted context omitted.

I'm not sure. Do these DeFi schemes involve currencies which cannot be cancelled or created in large amounts by political decision (e.g. democratic)? If the answer is "yes", then these may be just another form of pyramid scheme, perhaps less taxing on the environment.

The answer is not yes, and there is clear evidence that cryptocurrencies are cancelled and created democratically. https://vitalik.ca/general/2021/03/23/legitimacy.html ( https://news.ycombinator.com/item?id=26560626 ) talks about the Steem/Hive split, and explains how the community democratically overrode the network owner's undemocratic decisions.

That Steem example is interesting. I wonder what the basis for the voting system they have there, though.

Anyway, when you have a democratic (or otherwise subject to popular influence) institution which can do things like "print more money", forfeit some part of existing money, levy taxes etc. - then indeed it's an interesting and potentially positive-in-my-opinion cooperative pooling of resources. Of course then you have the opposite problem, which is the tyranny of the majority, but "you can't grab the rope at both ends".

Re: The political case for a blanket cryptocurrency ban

#602

Post by einpoklum »

luxuryballs wrote: post #344
einpoklum wrote: post #83

Earlier quoted context omitted.

> I wonder how many people who got into crypto and found something they clicked with and were able to make something of compared with a dead end job For every one of these people who bought cryptocurrency and "made something", there is someone - for the sake of discussion, another poor sap with a dead end job - who just bought cryptocurrency and hasn't made anything. And lots more from the second group who have made…

Sure but that doesn’t take away from the other guy, not everything is for everyone, that’s ok.

It literally takes away from the other guy. Poor sap #1 earned money so far, poor sap #2 lost money so far. At any given point there are more poor saps of type #2 than of type #1.

Re: The political case for a blanket cryptocurrency ban

#604

Post by pas »

selectodude wrote: post #368
pas wrote: post #364

Earlier quoted context omitted.

Not just denominated, settled. They literally want USD for their oil instead of SAR (riyal). (Sure, SAR is pegged to USD.) Here's a very thought provoking article about the "dollar system": https://phenomenalworld.org/analysis/the-class-politics-of-t...

Why would they want riyal for their oil? That would cause massive price action and destabilize their currency causing wild swings in the value of the riyal depending on the demand for oil. The last thing in the world an export economy wants is a currency that becomes stupidly expensive when people want it and worthless when people don’t. Settling in dollars allows for a stable riyal.

The riyal is pegged to the dollar.

But the point is that if you want the "maximum wealth" for your export stuff and you export a lot you obviously want to settle in your domestic currency, since that would lead to you being able to stock up on enormous amounts of foreign currency reserves. Just like China did.

Because if there's demand your your currency you can just print it.

Sure, this way they are stocking up on USD, but they can't print USD.

The destabilization on the other hand is also "exported" to the US. Eg, when oil demand drops, US Treasury rates increase coupled with the economic downturn, less tax revenue, more volatility, but this increase in uncertainty leads to people flocking to stable investments, which pushes rates back down a bit, plus it seems central banking is inseparably coupled to near-zero rates going forward.

(Of course the US economy is a lot bigger, they were the main buyers of oil anyway, so it made sense to just settle in USD, and initially the extra demand for USD was seen as a good thing, as it helped finance the US public spending via keeping bond yields - interest rates - low.)

---

That said, I'm not fully sold on the linked article's arguments.

Re: The political case for a blanket cryptocurrency ban

#605

Post by pas »

imtringued wrote: post #468
pas wrote: post #364

Earlier quoted context omitted.

Not just denominated, settled. They literally want USD for their oil instead of SAR (riyal). (Sure, SAR is pegged to USD.) Here's a very thought provoking article about the "dollar system": https://phenomenalworld.org/analysis/the-class-politics-of-t...

The "exorbitant privilege"? You mean the exorbitant privilege to create government debt to cancel out a savings glut? I've never understood this argument. I always heard how the USA is "riding" or "abusing" the US to achieve some nefarious goal when from my perspective it was always the inverse. Since I lacked the necessary knowledge I tried to think about how the effects work from first principles and I always came…

The US Fed is starting to come around to this viewpoint too, and starting to address the employment mandate a lot more aggressively. I'm absolutely a layman compared to the complexity of the problem, so we shall see how this will work.

Re: The political case for a blanket cryptocurrency ban

#606

Post by paulryanrogers »

tanseydavid wrote: post #585
paulryanrogers wrote: post #522

Earlier quoted context omitted.

Stocks are usually shares of a company with assets. Assets that can be sold off to pay back shareholders when things go sideways.

Usually, "when things go sideways" there is nothing left to be sold off.

I mean when the company's stock becomes worthless. Obviously if all stocks or the whole world crashes at the same time that's something else.

Now if a blockchain's exchange value goes to zero then all that's left is a very expensive data chain.

Re: The political case for a blanket cryptocurrency ban

#607

Post by SkyBelow »

andreilys wrote: post #593
SkyBelow wrote: post #399

Earlier quoted context omitted.

>If a state actor, such as China, was motivated enough to identify, capture and coerce these miners it would be pretty easy to perform a 51% attack given that China accounts for around 65% of all bitcoin mining globally. This is because people don't consider it likely. Once it happens, people will move to new crypto and will devalue any crypto that is too centrally mined by a single country.

Why wouldn’t it be likely? Currency flight from China is a serious problem, and the CCP has instituted controls to make sure money doesn’t leave the country (except for some permitted amount) I don’t think it’s unlikely that BTC gets cracked down on by the CCP if they notice that a large volume of citizens are using it to skirt capital controls.

>Why wouldn’t it be likely?

What matters is public perception of if it could happen, not if it can happen.

Re: The political case for a blanket cryptocurrency ban

#608

Post by DennisP »

agentultra wrote: post #223
_nckn wrote: post #5

I think the main premise of this article is the fact that crypto's carbon emission is insane, especially Bitcoin, which I agree (I don't hold Bitcoin for this exact reason). But there are many other crypto that uses Proof of Stake, way way greener than Proof of Work, such as Cardano. Even Ethereum is transitioning to Proof of Stake. This article should be re-titled "The Political Case for a Blanket Proof of Work Ban"…

I think part of the problem with believing that "at some undetermined point in the future, it will improve," is not a compelling argument against turning off crypto-currencies. From an emissions perspective Ethereum has been clinging to the belief that Proof-of-Stake is better, in theory, and is perennially, "just around the corner." In the mean time it has been and continues to run on Proof-of-Work and contributes i…

Ethereum's proof-of-stake has been running perfectly since it launched on Dec. 1, and has over $6 billion staked.

They launched it as a parallel chain first, but it's going so well they've accelerated the plan to move the rest of the network to it. That's a relatively simple task and should happen in early 2022 at the latest, and possibly this fall. You can judge for yourself how hard it will be: https://notes.ethereum.org/@vbuterin/B1mUf6DXO

Re: The political case for a blanket cryptocurrency ban

#609

Post by DennisP »

superkuh wrote: post #79
_nckn wrote: post #5

I think the main premise of this article is the fact that crypto's carbon emission is insane, especially Bitcoin, which I agree (I don't hold Bitcoin for this exact reason). But there are many other crypto that uses Proof of Stake, way way greener than Proof of Work, such as Cardano. Even Ethereum is transitioning to Proof of Stake. This article should be re-titled "The Political Case for a Blanket Proof of Work Ban"…

>This article should be re-titled "The Political Case for a Blanket Proof of Work Ban". I don't see the difference between that and "The Political Case for a Blanket Cryptocurrency Ban". The outcome is the same. Etherium has not proven proof of stake can work at scale. If it does that will be great. But it's no certain thing and it'll probably mean more Eth forks like Eth classic. Most other cryptocurrencies are tied…

I'm not sure what you mean by "at scale" but Ethereum's PoS currently has over $6 billion staked with over 100,000 validators, without any sort of delegation. The protocol is designed to handle a lot more validators without modification, and resource requirements on validators today are low.

Re: The political case for a blanket cryptocurrency ban

#610

Post by DennisP »

christiansakai wrote: post #30
jtolds wrote: post #16

Earlier quoted context omitted.

I came here to say this exact same thing. There is seriously interesting and useful real work being done under the umbrella term "decentralized finance" or DeFi. It is hard to cut through the noise of get rich quick schemes, but at the core, the DeFi stuff, built on top of green cryptocurrency (proof of stake), along with quickly improving zero-knowledge proof tech, is actually useful and groundbreaking. Bitcoin and…

Indeed, the world of cyptocurrency/blockchain research has many ground breaking papers and news are often real time, even crypto news aggregator can't keep up with it. HN crowd refuses to care about it because of bad taste of crypto in general.

Could you link "crypto news aggregator" for us?
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