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How to Start Disrupting Cryptocurrencies: “Mining” Is Money Transmission

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Re: How to Start Disrupting Cryptocurrencies: “Mining” Is Money Transmission

#71

Post by runbathtime »

DennisP wrote: post #44
runbathtime wrote: post #26

The reason why I believe mining isn't being labeled as money transmission is because the miners never take custody of any bitcoin, they collect/handle transactions themselves, but these transactions are p2p, the bitcoin do not go into the hands or control of a money transmitter. Where the author is correct is that the miners are the chosen ones for writing to the central ledger of bitcoin, but writing to a ledger inc…

Nobody human or corporation has custody of tokens deposited to Uniswap. It has no admin keys, just an autonomous script running on chain. I guess you could try to go after the guy who wrote Uniswap's code but that has First Amendment issues according to US vs. Bernstein: > the Ninth Circuit Court of Appeals ruled that software source code was speech protected by the First Amendment and that the government's regulatio…

Did Uniswap3 write itself? Are there humans that wrote the code and deployed it? Why is Uniswap3 protected with copyright law and who does that protect? Why is there a company called Uniswap? Why were they funded? Does the protocol receive tokens (sole control) and can it send them? How would you define custody?

Re: How to Start Disrupting Cryptocurrencies: “Mining” Is Money Transmission

#72

Post by CrazyStat »

dragonwriter wrote: post #68
CrazyStat wrote: post #66

Earlier quoted context omitted.

>as all potential transactions with a 0-or-higher bid-ask spread will occur, bid-ask spread isn't a property of transactions, it's a property of markets. Transactions will occur when someone is willing to pay at least as much as a supplier is charging. The bid-ask spread is how much less the highest bidder is willing to pay than the lowest seller is asking. It's a measure of how far apart buyers and sellers are from…

> bid-ask spread isn't a property of transactions, it's a property of markets The upthread poste by dragontamer which introduced it seemed to ascribe it specifically to particular transactions, and I responded to what waa described in that post, viewing terminological minutiae as less interesting than the concept being discussed for which there seemed adequate clarity in context.

Well yeah, that's why I felt like they were conflating two different topics. The bid-ask spread on a stock exchange doesn't really the same as my be willing to pay $350k for your house when you would be willing to go as low as $300k.

Re: How to Start Disrupting Cryptocurrencies: “Mining” Is Money Transmission

#73

Post by dragonwriter »

CrazyStat wrote: post #72
dragonwriter wrote: post #68

Earlier quoted context omitted.

> bid-ask spread isn't a property of transactions, it's a property of markets The upthread poste by dragontamer which introduced it seemed to ascribe it specifically to particular transactions, and I responded to what waa described in that post, viewing terminological minutiae as less interesting than the concept being discussed for which there seemed adequate clarity in context.

Well yeah, that's why I felt like they were conflating two different topics. The bid-ask spread on a stock exchange doesn't really the same as my be willing to pay $350k for your house when you would be willing to go as low as $300k.

> The bid-ask spread on a stock exchange doesn't really the same as my be willing to pay $350k for your house when you would be willing to go as low as $300k.

It kind of is if its a transaction that both parties are considering because the buyer has no more attractive properties (considering asking price) to buy, and the seller has no better bids.

Its a different kind of market because houses aren't non-differentiated mass commodities, but from the perspective of either the buyer or seller the opposing offer is equivalent to the price on the opposite side of the market in stock trade, once things have been narrowed to the best alternative to either do the transaction or not.

Re: How to Start Disrupting Cryptocurrencies: “Mining” Is Money Transmission

#74

Post by dnautics »

klipt wrote: post #30
dragontamer wrote: post #10

Earlier quoted context omitted.

> If I sell my house for more than I paid for it, it's zero sum since someone simply provided me that money. No transaction between rational individuals is ever zero-sum. If Bob values a house at $300,000 and Alice values the house at $300,000, the house will __never__ be sold. Because by the time transaction fees come about, Bob would have lost money in the transaction. In reality, Bob values the house at $250,000,…

How do you distinguish between true value creation and simple asset inflation? Low interest rates cause soaring asset prices, which can create an illusion of "value creation", but I don't see it actually increasing the value much.

> How do you distinguish between true value creation and simple asset inflation? Low interest rates cause soaring asset prices, which can create an illusion of "value creation", but I don't see it actually increasing the value much.

This is exactly the problem with inflation. It creates all sorts of distortion of what people value, by fucking with our concept of what cash is worth. Do keep in mind that "value" is not some sort of objective thing. Everyone values things differently. Someone who is allergic to peanuts, may have a negative value for peanuts, someone who thinks peanuts will give them immortality might have an unreasonably high value for peanuts. And capitalism just doesn't care. Live and let live. Important thing is that it's not just true for things, it's also true for money. (note that value is not price, though often times it's rhetorically convenient to conflate the two).

So the phrase "value creation" does not refer to some sort of intrinsic improvement in any given thing. What it means is, say the peanut allergy guy comes into posession of peanuts somehow, and he exchanges to peanut immortality gal for a wad of cash. This created VALUE for the allergy guy because he values cash more than the peanuts, and created value for immortality gal because she values peanuts more than (that amount) of cash.

Moreover, using amount denominated in money to track value creation is dangerous (note I didn't say necessarily wrong, I said dangerous), because it assumes that money is equally valued by everyone. That's not really true, and we probably shouldn't, in policy, implicitly judge people in one way or another for having different values for money.

Re: How to Start Disrupting Cryptocurrencies: “Mining” Is Money Transmission

#75

Post by dragontamer »

sedachv wrote: post #35
dragontamer wrote: post #10

Earlier quoted context omitted.

> If I sell my house for more than I paid for it, it's zero sum since someone simply provided me that money. No transaction between rational individuals is ever zero-sum. If Bob values a house at $300,000 and Alice values the house at $300,000, the house will __never__ be sold. Because by the time transaction fees come about, Bob would have lost money in the transaction. In reality, Bob values the house at $250,000,…

> then there was at LEAST $60,000 of value created by the transaction. That is not value creation, that is wealth transfer from Alice to Bob. Alice has to earn that excess $60,000 through labor, or exploiting labor.

Old retired couple have a 6-bedroom house for their former 4-kids (+masters bedroom + guest bedroom). All their kids have moved out, and they're tired of vacuuming so many empty rooms. They want to move to a retirement community.

New up-and-coming couple not only have 4-kids, but one more is on the way. They suddenly got an opportunity to work in... Chicago (or insert any other city here), and are looking for a new home to raise their kids in.

-----------

The old-couple will likely be willing to sell the house below market value, while the younger couple may be stressed out and otherwise willing to pay above market value.

Clearly, value will be created as the new couple buys the home from the old couple. The majority of transactions between rational individuals are of this nature. The only detail remaining is how to proceed with negotiations, but assuming they're rational, the two sides will come to a price point that's favorable to both sides.

Re: How to Start Disrupting Cryptocurrencies: “Mining” Is Money Transmission

#76

Post by nivertech »

I have much simpler explanation why miners should be regulated as Money Transmitters than the one described in the article.

Thinking from the first principles: what PoW, if not an obfuscated way to buy tokens/coins? I.e. you exchange money for electricity, then electricity for compute power, then computer power for a right to play a lottery, then periodically you win tokens/coins.

Money bag → High voltage sign → Personal computer → Slot machine → Coin

You can see emojis here:

https://twitter.com/nivertech/status/1376446367502114816

Re: How to Start Disrupting Cryptocurrencies: “Mining” Is Money Transmission

#77

Post by eloff »

thecrash wrote: post #27

This is an interesting exercise in legal argumentation, but it assumes that the US Government wants to push miners out of the US. It's not that they can't, it's that they don't want to. Outlawing mining in the US would not disable cryptocurrency networks, because miners could still operate in other jurisdictions (and covertly in the US). It might cause a panic and disrupt some American-based crypto companies, but cry…

Only because they don't feel threatened by it. The uptick in high profile infrastructure ransomware attacks is the first penny to drop there. A second will one day be high inflation rates for the USD. I don't pretend to know when that happens, but history of fiat currency is clear that it will happen with certainty eventually.

Bitcoin cannot succeed past a certain level because then it competes with the USD and becomes a threat. One way or another its days are numbered.

Don't forget the US outlawed gold at one point. Competition with the fiat currency monopoly will not be permitted because it undermines the sovereign power wielded by the state.

Re: How to Start Disrupting Cryptocurrencies: “Mining” Is Money Transmission

#78

Post by jjk166 »

effie wrote: post #69
jjk166 wrote: post #39

Bitcoin is legally an asset. Processing the transfer of bitcoin is legally no different from processing the exchange of baseball cards. Transferring $100 worth of baseball cards might be a money transmission, but transferring a signed Barry Bonds card regardless of its value is not. Likewise, sending $100 dollars in the form of bitcoin might be money transmission, but sending 0.03 BTC regardless of the dollar value i…

> To subject miners to FinCEN rules, the US would have to recognize bitcoin (and any other cryptocurrency one wanted to so regulate) as a legal currency. Isn't this just a detail, consistent with author's call for action? To him, participating in the bitcoin network means facilitating money transfers. If the gov. decides to adopt this viewpoint, calling bitcoin a foreign currency won't be difficult.

Yes, but recognizing it as a foreign currency would be a huge gain in legitimacy, which would seriously work against the author's stated goal of disrupting cryptocurrencies. Further, it's not enough to only require this for bitcoin, people would just jump to the next cryptocurrency. You'd essentially have to recognize all mined cryptocurrencies as valid foreign currencies (which would probably lead to a whole slew of complications) or significantly amend many existing laws to create some third category, which again goes against the author's "use existing laws to deal with bitcoin" approach. Of course once we get into this quagmire of trying to determine what exactly counts as a money transmission, there will be a whole host of financial institutions who will throw quite a bit of money at the prospect of creating new loopholes in existing regulations. All in all I would be very surprised if the author would desire the actual outcomes of their stated plan.

Re: How to Start Disrupting Cryptocurrencies: “Mining” Is Money Transmission

#79

Post by giaour »

bko wrote: post #3

> All cryptocurrency assets, not just Bitcoin, are zero sum. So every dollar “made” in cryptocurrency was simply provided by someone else. Can't you say that about any other asset? If I sell my house for more than I paid for it, it's zero sum since someone simply provided me that money. But that's not how we determine value. It's positive sum because the buyer attributes a value higher than he had paid for it, otherw…

> If I sell my house for more than I paid for it, it's zero sum since someone simply provided me that money.

I think the point the author was trying to make is that you can participate in the housing market by building and selling houses, with the former being “positive sum” (since the land and building materials have a cumulative value less than that of a finished dwelling). The positive sum stuff seemed to be describing markets, not individual transactions

Re: How to Start Disrupting Cryptocurrencies: “Mining” Is Money Transmission

#80

Post by omegaworks »

988747 wrote: post #63
tzumby wrote: post #54

Earlier quoted context omitted.

Here are a few reasons why I called it despicable: - Laundering money in poor countries directly hurt the citizens of those countries because the government doesn't collect the taxes it is entitled to - Most of the money to be laundered comes from illicit activities: drugs, prostitution, human trafficking. I don't have any citations here for proportions, sorry. Update: fix formatting

> Laundering money in poor countries directly hurt the citizens of those countries because the government doesn't collect the taxes it is entitled to Minior nitpick: Poor countries typically have authoritarian, corrupt governments, so keeping money out of their hands is actually a good thing :) But more to the point: the whole idea of money laundering is that criminals WANT and DO pay taxes on their illegal income by…

>Poor countries typically have authoritarian, corrupt governments

The western national media has been effective at propagandizing you toward this end. The "typical poor country is corrupt" trope is circulated widely and is used to discredit any attempt at wresting control over a country's fiscal future away from a cohort of wealthy western nations.

Corruption in the west is normalized and simply labeled "lobbying." "Corruption" elsewhere is used as an excuse to overturn elections, topple governments and assassinate leaders.

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