Comment by Qub3d | Hacker News Reader

Comment by Qub3d | Hacker News Reader

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I'm confused then, are you in support of cryptocurrency? Because what you're describing (the "system") sounds an awful lot like reinventing banks from first principles but much less efficiently. If that is how it's intended to function then why are we bothering with this at all?

And aside from KYC issues, another recently posted article pointed out that when a single individual tried to unload around a 1500 BTC (%0.03 of the coins in circulation at the time) it caused a liquidity crisis that crashed the market by 20%.[1]

In this case the individual in the Twitter thread has an amount of ETH of that magnitude.

Basically because crypto is performing the job of a speculative asset it results in the liquidity issues that you would see in things like company stock.

[1]: https://blog.dshr.org/2022/02/ee380-talk.html?m=1 (see footnote 11. The gist is that this sale put enough pressure on the order books that a lot of leverage positions cascaded into selling as well causing the flash crash)

> I'm confused then, are you in support of cryptocurrency?

I'm neither. I treat it as a protocol like HTTP, use it where it makes sense, don't use it where it doesn't make sense.

When I say the "system", I'm referring to the system of centralized currencies. Banks have always wanted to know where large sums come from, and where they are going to, as the government will ask them questions about it and they like to be prepared.

> And aside from KYC issues, another recently posted article pointed out that when a single individual tried to unload around a 1500 BTC (%0.03 of the coins in circulation at the time) it caused a liquidity crisis that crashed the market by 20%.[1]

Not sure what KYC issues you're referring to. They are only a issue if you're having a hard time explaining where the money comes from. If you have a legitimate source for your funds, it's a couple of emails with some attachments to pass the KYC/AML checks that the major exchanges perform. Same thing will happen with you bank, and they normally will accept the same amount of evidence you send to the exchange.

And yes, if you try to offload 1500 BTC on the open market the market will correctly adjust. That's why I wrote about the OTC offers in my initial message, that's normally how you want to offload/purchase a large amount, as it's not gonna change the pricing on the open market, as you manually match buyer/seller.

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