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Former US SEC attorney: 'Get out of crypto platforms now'

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Re: Former US SEC attorney: 'Get out of crypto platforms now'

#91

Post by misnome »

uLogMicheal wrote: post #67
alephnerd wrote: post #53

Earlier quoted context omitted.

They do. The SEC pays competitively and there are a lot of crypto adept people who feel there is also a case for regulation in the space.

People need to justify the battle they are paid to fight so they find reasons to do so? I hope they realize at some point that they are playing for the wrong team. The increased surveillance they want means privileged access for few versus everyone needing to play under the same rules of transparency.

This seems to have circled back round to “It works as long as you trust everyone involved”.

Re: Former US SEC attorney: 'Get out of crypto platforms now'

#92

Post by toomuchtodo »

rohith2506 wrote: post #87

I am absolutely baffled by how much negative criticism the whole blockchain industry gets here and I would like to understand the reasoning behind it. Most of the arguments fall into these following buckets concluding to "IT MUST DIE" 1. The whole crypto is a get rich quick scheme with predatory practices everywhere. It's a wild wild west with no sort of regulations. Well, guess what, regulated industry is no differe…

Blockchains are unnecessary in a world with trusted entities and functional legal frameworks. In places that require a blockchain, you're still going to be at the whim of whomever has a monopoly on force. Sure, your key passphrase may be in your head. You'll end up getting beat with a rubber hose. It was never your crypto so long as someone has the guns (wrt "Not your keys, not your crypto").

https://xkcd.com/538/

> A massive decoupling from US economy. I wonder what people call US economy if they call crypto pyramid scheme. Sitting on trillions and trillions of debt, printing money according to their will completely ignoring the effect of their childish actions on the global economy

US Treasuries would like a word (they are the safest financial asset in the world, "full faith and credit"). There is no safer capital market than the US. Sure, there will be some de-dollarization, but that won't fix a rapidly aging China, a "teetering near the cliff" Russia, a Central and South America that is slow steady state, etc. And Africa? Very young still but a hard sell for investing.

> Sitting on trillions and trillions of debt, printing money according to their will completely ignoring the effect of their childish actions on the global economy

Debt backed by future productivity, but also debt that can also always take a haircut during legal proceedings. Laws and courts > smart contracts, broadly speaking.

Re: Former US SEC attorney: 'Get out of crypto platforms now'

#93

Post by cs702 »

misnome wrote: post #84
cs702 wrote: post #58

Three highly speculative predictions: 1. The courts are more likely than not to rule that many crypto-assets -- but not all -- should be regulated as investments. It won't be fun for a lot of crypto traders. 2. Over time, the usual giant financial institutions are bound to become the dominant market makers in crypto-assets. In all likelihood, one of them will end up buying Coinbase. Those giant financial institutions…

3 - The “value” is higher, but can you actually do more with it now than you could five years ago? Hasn’t the entire community given up on buying things such that they know pretend that was never the goal? Without any real way to convert back and forth into real money, what reassurance is there that the price even means anything when every single holder is incentivised to lie and transact with themselves just to keep…

> ...can you actually do more with it [I assume you mean Bitcoin] now than you could five years ago?

Not really. To date, Bitcoin has been used successfully only as an alternate store of value -- one which, like gold, doesn't depend on the financial credibility of a particular government or country. Bitcoin's continued existence depends only on the integrity of its distributed consensus algorithm, which so far has withstood all attempts at hacking it. The "alternate store of value" opportunity is not small. Gold alone has a current market capitalization of $12.9 trillion.[a]

---

[a] https://companiesmarketcap.com/gold/marketcap/

Re: Former US SEC attorney: 'Get out of crypto platforms now'

#94

Post by bulbosaur123 »

misnome wrote: post #80
bulbosaur123 wrote: post #69

Earlier quoted context omitted.

This is what most people got wrong. Crypto solves one problem and one problem only: censorship. Crypto is the only, single censorship resistant asset on the entire earth. You can't remove private key by force ($5 wrench is not an argument). You can confiscate land, stocks, freeze bank accounts, take gold. You can't extract a string of numbers which you aren't even sure is there in the first place. Not yet at least. M…

So, people have no problem - say - redeeming tokens that have been through Tornado? Or trouble redeeming bitcoins that have been through known, sanctioned wallets? How is “Everyone can see every transaction you have ever done” censorship-resistant, doesn’t that mean you have to be extra careful about every single person or service you have ever transacted with? And, excluding the $5 wrench seems a really, really larg…

> So, people have no problem - say - redeeming tokens that have been through Tornado? Or trouble redeeming bitcoins that have been through known, sanctioned wallets?

Nothing prevents us agreeing to trade those bitcoins for cash or anything else.

You are correct that some Bitcoins are "tainted", which is why it's not the absolute, most perfect cryptocurrency. But they are still censorship resistant. That was my point. They still can't be confiscated.

And to further your argument, if you want to find the best crypto that is actually fungible - that would be Monero (all Moneros are the same, there are no "tainted" or "blacklisted" Moneros). However, because of that very fact it is banned on exchanges and blacklisted everywhere. It's just too good.

Bitcoin is good enough to get popular yet at the same time shitty enough (traceable) not to get outright banned, that's why BTC is here to stay while better coins like Monero will perish.

> How is “Everyone can see every transaction you have ever done” censorship-resistant, doesn’t that mean you have to be extra careful about every single person or service you have ever transacted with?

Just to reiterate. It's because not even the government can confiscate your Bitcoin (them beating you into telling your seed phrase means you still giving it up and let's not pretend there aren't 21st seeds and duress phrases just for this very reason).

> And, excluding the $5 wrench seems a really, really large oversight when it results in every single asset or piece of ”money” you own being irretrievably, instantly stolen.

Again. Anyone with significant amount of crypto will not be public about it, will keep duress phrases, 21st seed words and extra wallets while giving up the minimum. In theory, with $5 wrench you could keep beating a totally innocent person hoping they give you a crypto wallet that doesn't even exist and if they gave you one, you could keep beating them until they give you the "other one" and the "third one", it just isn't a solid argument.

Re: Former US SEC attorney: 'Get out of crypto platforms now'

#95

Post by ysavir »

bulbosaur123 wrote: post #69
babypuncher wrote: post #54

Earlier quoted context omitted.

And then they wonder why regular consumers aren't fleeing banks to start using crypto for everything. I've yet to see cryptocurrencies actually solve a problem that your everyday average person has when buying groceries or going out to eat. They just make things more difficult and confusing, and all these attempts to alleviate that just lead us straight to "banks, but worse".

This is what most people got wrong. Crypto solves one problem and one problem only: censorship. Crypto is the only, single censorship resistant asset on the entire earth. You can't remove private key by force ($5 wrench is not an argument). You can confiscate land, stocks, freeze bank accounts, take gold. You can't extract a string of numbers which you aren't even sure is there in the first place. Not yet at least. M…

This exposes exactly why crypto is _not_ a solution: It's only a preferable alternative when the broader societal context is a strong net negative. In the current US, while financial censorship can happen, it doesn't happen often enough that the pains of using crypto as a primary currency are are outweighed by the benefits. And if the situation changes to a place where that's true, we've got some bigger problems. That is, in that situation, making an economy function smoothly isn't as important as removing the problematic censorship. Our GPUs could be put to much better work than bitcoin.

This also doesn't account for a government being able to just outlaw cryptocurrencies. They may not be able to confiscate your bitcoin, but they sure can throw you in jail for trying to spend it at the grocery store. Or impact your ability to access the blockchain, etc.

Re: Former US SEC attorney: 'Get out of crypto platforms now'

#96

Post by HDThoreaun »

cs702 wrote: post #93
misnome wrote: post #84

Earlier quoted context omitted.

3 - The “value” is higher, but can you actually do more with it now than you could five years ago? Hasn’t the entire community given up on buying things such that they know pretend that was never the goal? Without any real way to convert back and forth into real money, what reassurance is there that the price even means anything when every single holder is incentivised to lie and transact with themselves just to keep…

> ...can you actually do more with it [I assume you mean Bitcoin] now than you could five years ago? Not really. To date, Bitcoin has been used successfully only as an alternate store of value -- one which, like gold, doesn't depend on the financial credibility of a particular government or country. Bitcoin's continued existence depends only on the integrity of its distributed consensus algorithm, which so far has wi…

Bitcoin is a horrible store of value. It's incredibly volatile.

Re: Former US SEC attorney: 'Get out of crypto platforms now'

#97

Post by otoburb »

cs702 wrote: post #58

Three highly speculative predictions: 1. The courts are more likely than not to rule that many crypto-assets -- but not all -- should be regulated as investments. It won't be fun for a lot of crypto traders. 2. Over time, the usual giant financial institutions are bound to become the dominant market makers in crypto-assets. In all likelihood, one of them will end up buying Coinbase. Those giant financial institutions…

>>If this sounds far-fetched, consider that many smart and smart-sounding people have predicted Bitcoin's demise, and so far all have been utterly wrong

Bernie Madoff pulled off one of the largest (literal Ponzi) scams and evidently stated that he started in the 1990s for a run of just over 15 years until being arrested in 2008, although some investigators thought that his fraudulent activities started as far back as the 1970s (!!).[1]

The Lindy effect[2] works until it doesn't. Taleb popularized the theory in pop-culture with his books, but the problem is that it's seemingly impossible to know when/if something will collapse/fail to the point that this "effect" doesn't seem all that useful as a predictive indicator.

[1] https://en.wikipedia.org/wiki/Madoff_investment_scandal

[2] https://en.wikipedia.org/wiki/Lindy_effect

Re: Former US SEC attorney: 'Get out of crypto platforms now'

#98

Post by HDThoreaun »

uLogMicheal wrote: post #32
api wrote: post #25

Earlier quoted context omitted.

He's not entirely correct. Crime is a major application but by far the largest use case for crypto is "investing" (gambling) in crypto.

The number one facilitator of crime/gambling is USD, might want to check your facts.

non-sequitor. The question is what bitcoins use is, not how crimes are most often facilitated.

Re: Former US SEC attorney: 'Get out of crypto platforms now'

#99

Post by cs702 »

HDThoreaun wrote: post #96
cs702 wrote: post #93

Earlier quoted context omitted.

> ...can you actually do more with it [I assume you mean Bitcoin] now than you could five years ago? Not really. To date, Bitcoin has been used successfully only as an alternate store of value -- one which, like gold, doesn't depend on the financial credibility of a particular government or country. Bitcoin's continued existence depends only on the integrity of its distributed consensus algorithm, which so far has wi…

Bitcoin is a horrible store of value. It's incredibly volatile.

Gold is pretty volatile too. Its price has gone up and down between 5x and 10x a few times in just the past century: https://www.macrotrends.net/1333/historical-gold-prices-100-... -- no one sane would call it stable. And yet, despite its volatility, gold has been used as a store of value for millennia.

Re: Former US SEC attorney: 'Get out of crypto platforms now'

#100

Post by adgjlsfhk1 »

bulbosaur123 wrote: post #94
misnome wrote: post #80

Earlier quoted context omitted.

So, people have no problem - say - redeeming tokens that have been through Tornado? Or trouble redeeming bitcoins that have been through known, sanctioned wallets? How is “Everyone can see every transaction you have ever done” censorship-resistant, doesn’t that mean you have to be extra careful about every single person or service you have ever transacted with? And, excluding the $5 wrench seems a really, really larg…

> So, people have no problem - say - redeeming tokens that have been through Tornado? Or trouble redeeming bitcoins that have been through known, sanctioned wallets? Nothing prevents us agreeing to trade those bitcoins for cash or anything else. You are correct that some Bitcoins are "tainted", which is why it's not the absolute, most perfect cryptocurrency. But they are still censorship resistant. That was my point.…

> It's because not even the government can confiscate your Bitcoin.

They can really easily do that though. A court can say "give us your keys or you are going to sit in jail until you do and we will record your conversations so if you tell the keys to someone else, we'll sell them"

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