Crypto crash deepens, stocks slip

I can't find where this is true. There are some restrictions about denominating some contracts, etc. in FX, but nothing about investing in foreign currencies. And it looks like many Turks are in fact doing this [1].

On the other hand, after a non-zero level of crypto hype [2], a lot of Turks invested in crypto only to fall prey to some bonkers scams [3]. I know the typical rejoinder is "there are fiat scams too", but particularly in failing/failed states, the regulatory infrastructure is completely incapable of policing this stuff, making it all the more likely. The fact is it's easier to run these scams using crypto than fiat, because of the lack of international banking controls and KYC.

> 2. USDC stablecoin actually has explicit sanction exemptions from US Govt to help people in Venezuela. They aren't easy to get at all, but I guess according to USDC does absolutely nothing in Venezuela, so it must've been a waste of effort.

The argument crypto advocates make is that if you're in an failing/failed state, you can just switch to BTC. This clearly hasn't happened. The US is using a blockchain and VPNs to get aid to Venezuelans. That's (super) cool, but it's not at all what crypto advocates were talking about. It's also worth saying Venezuela is still in dire straits, despite all this. So while it's not a wasted effort, it certainly isn't a cure-all (again, what crypto advocates have argued).

> 3. transaction fees are measured in milli-cents on Lightning Network. They are also instant. Still Bitcoin, with the same security budget.

Lightning has all kinds of problems, and is probably unworkable:

- It currently only holds $70m, despite being available for years.

- It doesn't solve the problem of very small transactions across multiple parties (think gas stations, retail, vending machines, tolls, monthly subscriptions, etc. etc. etc.)

- It's fundamentally a desync from the blockchain, with all the potential for fraud that implies.

- The protocol requires constant internet connectivity; if you disconnect you risk losing your funds in the desynced transaction (again, bad for developing nations)

> 4. Why is using renewables super bad for the planet.

Crypto advocates seem to have a lot of assumptions about the use of renewable energy for mining, but the best study that wasn't conducted by people heavily invested (literally and figuratively) in crypto shows a pretty mixed bag, and indicates that a lot of the reason for the use of renewables is that it can't be used for anything else (e.g. it's too far away and transmission costs are too high) [4]. In the Xinjiang region in China, for example, it's all coal.

There's also a lot of externalities when it comes to mining. Hydropower has a significant environmental impact. ASICs evolve and the old ones become e-waste.

> Either renewables can power the planet and our industries - or they just don't work. Make up your mind.

They can power the planet and our industries, as long as we're wise about their use. Using them for crypto mining is an unwise use, akin to leaving the A/C on and all your windows open.

> Proof of Work exists to remove any subjectivity from consensus. Longest valid chain with most work, period. Subjectivity = politics, and everything that comes with it.

You can't seriously say crypto governance is free of politics. Look at the block size debate, or all the weirdness around ETH2.

> devs do not have anywhere as much control as you think, and the ecosystem can trivially eject malicious devs. happened a number of times.

ETH devs keep pushing ETH2 into the future, putting off the gains of people who bought into PoS and shoring up the positions of people who invested in big PoW mining rigs. That's politics, with devs at the heart of it. I can't think of a bigger issue in ETH, now or ever.

> Everyone is a criminal.

First of all the book that "article" references is pretty cranky. That said, it's true that it's very easy to incidentally commit crimes. However, there's plainly a difference between incidental criminal acts, and trafficking drugs or people. Don't equivocate between these two things.

[1]: https://www.bloomberg.com/news/articles/2020-09-15/turks-are...

[2]: https://www.coindesk.com/turkey-doesnt-regulate-crypto-its-t...

[3]: https://www.aljazeera.com/economy/2021/5/5/for-the-ruined-tu...

[4]: https://cdn.crowdfundinsider.com/wp-content/uploads/2018/12/...

2. I agree tether runs their operation in a bit of an opaque way.

However, that should be the criticism indeed, not the composition of their portfolio, which is much the same as any other bank, really.

To steelman Tether's position, it seems that their opaqueness is an intentional strategy to make them more resilient. They could easily get a bank charter somewhere, however you lose control, and must share it with the regulator. Regulators will review and approve directors/offices of the bank, you may in fact lose control over your own business. It also comes with all sorts of jurisdictional and political risk. Having been in that industry, I can sympathize with Tether, it's extremely hostile to large fintechs.

They could be targeted simply for political reasons, or because someone connected decides to destroy by leveraging their regulator buddies power.

How do you prevent that, without being opaque and telling those that may target you, exactly where all your assets are so they can just freeze them directly?

I really wonder if they ever disclosed to NY AG whose commercial paper they hold.

a. https://www.duvarenglish.com/turkey-could-resurrect-past-def...

Scams: Permissionless systems can be trivially used by anyone, and yes there will be bad actors.

How do you have a permissionless system that only allows good guys? The best I've heard so far is collaborative deanonymization, but it is very much work in progress.

Governance: Proof of Work is an attempt to minimize governance. Proof of Stake is governance by plutocracy, but with emojis. I agree if an alternative to PoW can be found - it should be improved, but PoS is a regression to the status quo, not an improvement.

Ethereum itself is nothing but a quasi-corporation with all the politics that entails, it even has founders, foundation, ,trademarks, conferences, venture arm.

The best thing Satoshi has done is disappearing. It is for this reason I find Ethereum objectionable, the politics. Even a stupid exchanged-sponsored chain like BSC is more legitimate in that context, at least they do not pretend to be decentralized and have no control over the chain. Cringy as it sounds, Binance is more honest than Ethereum sometimes, lol.

I think Bitcoin community remains cognizant of devs being nothing but potentially another failure point and an attack vector, should they become compromised. This is why everyone is so big on running their own nodes, and only making thoughtful consensus changes.

Block size wars (they weren't debates) were really just a battle over who gets to control the protocol, and thankfully status quo prevailed.

I remain optimistic on Bitcoin's future for that reason - it could withstand a coordinated attack driven by quite intelligent people with large budgets. Today, it likely can only be attacked by a nation state, and not just in 51% sense, but also social attacks on miners, devs, and so on.

Lighting network: I'm not sure I understand your criticisms. It is exactly designed for smaller payments, which is why 70 million float isn't that big of a deal. Bitrefill does a good amount of LN volume, and I think it's use will pick up with exchanges coming on board. Bitcoin as a daily transaction currency is simply too nascent, still in the speculative growth stage. LN transactions are not decoupled from Bitcoin, and are in fact un-published properly formatted Bitcoin transactions. The security model is different, but I'd say it's certainly acceptable for payments up to 50-100k USD if not higher. Much work left to be done, but it is working.

Most of actual Lightning currency usage is in the third world. If USDC is cool - you must agree LN is doing good works too.

As for the common saying "fix the money, fix the world", I believe Bitcoin is far too early here, this may take decades or maybe even hundreds of years. I certainly do not expect it in my lifetime, but maybe my grandchildren will have additional freedoms. Just like we today take freedom of speech and association for granted, many of our grandparents did not. In fact, I believe people today gotten so soft and weak that our vigilance is slipping and we are slowly rolling back right into neofeudalism.

The point is to separate state power and money.Just like we separated state and religion, and it was great, I believe separating money will be just as beneficial.After all, money isn't just speech, it is also a religion of sorts.

I don't see this as an innovation in finance, get rich scheme, opportunity to make a quick buck, inflation hedge, good investment, etc.

I see it as a transformational quantum leap humanity can make, something on the scale of the printing press. That is the reason why I support it. It is one of the most important public goods one can be working on today.

It can fail, which would mean we are not yet ready for that stage in development and Bitcoin was before its time.

We must indeed become multi-planetary species if we are to survive and travel to other stars. Do you see interstellar species trade by using money issued by some banking cartel? shiny rocks of the Au79 element?

Money is information. Bitcoin is a very solid attempt at that.