Tech experts urge Washington to resist crypto industry’s influence
ft.com
ft.com
Damned if you do and damned if you don't.
The existing, centralized electronic payment systems are a disaster for financial privacy, and it'll only get worse with CBDCs.
If you try to make something private, then you're helping money launderers, criminals and pedophiles.
Therefore, the message from the incumbents:
Shut up and embrace the unfolding panopticon, otherwise you're a bad person.
Also, we reserve the right to dictate what you spend your money on and if you want to donate to causes (e.g. Wikileaks or truckers) that we don't approve of, we'll block your bank account and cut you off from the system.
Lastly, we reserve the right to manipulate the money supply. It's enough for you to know that we are experts and have your best interests in mind. You don't need to concern yourself with how much money there is, how its supply is managed or the potential negative effects of our manipulation, you wouldn't understand the implications anyway.
I’m working in a legal-but-taboo industry, where mastercard and visa don’t want to deal with us, which is a huge pain in the ass - but every time I’ve looked at crypto, it seems to fix one or two problems and introduce 10 more...
Central Banks are privately owned and by design are meant to be "independent" of politics (otherwise politicians would use the money printer to continuously to buy votes, destroying the currency in the process).
There is no real oversight over central banks and nobody (outside of the peanut gallery) has meaningfully questioned the extreme central bank policies of the last 10 years or asked the central bankers any uncomfortable questions.
The Bank of England has only been independent for a pretty short time, for example, so central bank independence is a fairly new concept that could change again - because it is a political decision, not a law of nature.
The US fed is by far the most important Central Bank due to dollar being the global reserve currency.
Source: https://www.quora.com/Is-the-European-Central-Bank-privately...
EDIT: The ECB is owned by member-states's banks, some of which are privately owned.
In any case, private ownership is only one issue, the other is that central banks are designed to have very little oversight.
Saying that "we can change the laws" doesn't change that. It's not always easy or possible to change laws. When is the USA going to repeal the 2nd amendment?
And, of course, the ownership of the Fed (or the ECB) could be changed by changing laws (the Bank of England is an example here of how central banks might enjoy changing degrees of freedom).
Addendum: to say that it is not easy to change the law is ok, maybe it should not be. But to use some technology to get around laws where there is not enough social capital for change is a very tricky position. If that holds for law X, why not law Y? What if there is never enough social capital for change? Would it then imply a break-up of that society into multiple ones?
(i) get enough people on your side to change the society you are in; or
(ii) move to a society that operates closer to what you want
Technological escape hatches are probably at best a stop-gap measure, but not a replacement for (i) or (ii)
Privacy-coins could be the next big one. It switches accounting from being a tool of coercion (c.f. the famous case of the Canadian truckers) to something like air which just cannot practically be denied.
If politicians banded together and behaved like civilised adults then crypto would be worthless. But they aren't about to try that sort of radical change, so this tech might actually solve a lot of problems. With something like Monero I really do not see, at any level, how they could stop me doing stuff like donating to political causes I agree with. That is scary in some ways, but there is also reason to be optimistic.
I generally agree with you but don't understand this example: the concept of an LLC is not a technology that stands against law in a way that forces the law to adapt but is a construct that only exists by the grace of law... like, what would it mean to illegally form an LLC in a world that didn't agree with such actions?
A country that doesn't adopt LLCs or some similar method of pooling risk will tend to get overrun by a country that does. So people can try to stand against the tide by not allowing pooled risk and capitalism, then 50-100 years later the capitalists role over them because the wealth gap has gotten so large there isn't room for meaningful resistance.
Kind of like what happened between the USSR and the US, or Europe v. All Other Civilisations. You can technically choose not to use the legal ideas, but that is really just choosing to be overwhelmed by more organised groups of people. Much like how a military that refused to use guns would get overwhelmed by one that does.
If your fellow citizens in aggregate really don't like what you do and want to stop you, the will eventually find a way. You want a society that does not police where money flows - which is a big change and there is no evidence that broadly people like to open the taps on things like terrorist financing, slave trading etc. So there will likely be some limits that societies like to enforce.
And of course they could attack crypto by taking over mining, policing any sale of hardware, making touching any crypto a felony, clamp down harder on any cause you want to donate to, etc. They might not win completely, but they might make things pretty uncomfortable for most that would want to use it.
Democracy is a very powerful technology, no argument there. But it can't overcome technical realities. It is better at adjusting to them and giving up when the cost gets too high.
And no, technologies do not freely diffuse through societies, some stuff remains pretty firmly in highly policed boxes when the cost of letting it run free is deemed to high (can you just go buy nuclear weapons, for example?). Who is to say that the cost of banning crypto would be too high - I have not seen the evidence for that (also not really for a ban, either)? That is a political decision, not a technical one. And, yes, there can be bad decisions with really high costs, no doubt.
Yep. Happens regularly.
> ...or pay for it to change?
And nope, certainly not. But crypto will fall into the same category - stamping out the ability to do the - rather simple - necessary maths would require horrific compromises that are simply not supportable. This technology has radically altered the power balance of moving funds around. Sure that isn't sunshine and roses, but at least we don't have to worry about so much about asset freezes.
Plus asset freezes are on the cards for shutting down protesting truckers. If we're living in a world where the Canadian government can attack truckers (of all people) with asset freezes why can't it happen to you or me? I don't see the much difference between myself and a Canadian trucker. I suppose I couldn't handle working hard for more than about 6 hours at a time.
I can believe that for some people the topic is high on the agenda, but really "most"?
Like I said upthread, this lasts until the second plane strikes the tower.
The invasion of Ukraine by Russia brought a huge, unprecedented wave of financial sanctions. If cryptocurrency actually worked for private, uncensorable transactions, they would have shrugged this off and moved to Monero. Perhaps we shouldn't rule this out. But remember the level of law changes to privacy and surveillance rolled out after 9/11 as well. We've not yet seen the first terrorist attack that would not have been possible without uncensorable cryptocurrency funding; the response to that will be something to behold.
This doesn't work. All countries are pressured to adopt the same compliance and framework. OECD, IMF, WEF, and other world organizations will successfully force same reforms everywhere.
They offer money, but with strings attached. Either the country conforms or it doesn’t get the money.
Yes. Germany is the highest user of cash in G-7 and has radically different views on privacy from other G-7/G-20 country, doesn't even have a centralized citizen register.
They have very little in common with Italy on many aspects, and certainly standards would vary as well.
But what does it matter? You think supra-national organizations actually care what some little people think?
Edit: German citizens are all properly in registers, more local, but very registered nonetheless. You need to have government ID by law. Plus there is a national tax ID.
FATF is an unelected, undemocratic body, where you have absolute monarchies like Saudi Arabia and authoritarian states like Russia audit the free/democratic/morebuzzwords West.
I can only imagine you think voting matters too.
It doesn’t, never did.
The IMF immediately told them that they would no longer be elligible for any IMF loans or financial transactions until they sold all Bitcoin they owned and rolled back the Bitcoin legislation. And the kicker, El Salvador bought and held XX million dollars worth of Bitcoin (last I checked), while their GDP was XX,XXX million dollars, and the loans that they roll were for X,XXX dollars.
There aren't many other players at nation state level like the IMF... so they can exert a lot of pressure on monetary policy. If you want another example, look at how the IMF dealt with Greece.
a 2-3 verified examples will suffice, tia.
The banking holiday was declared in Cyprus, banks and ATMs shutodnw, everyone local is locked out completely, meanwhile deposits were drained by the rich international depositors thru oversease branches that remained open.
Why do you love defending the indefensible so much? Take the L and move on.
Was what happened the best possible result - probably not. But I would say that goes for all European responses to the financial crisis then - but that is not the same as being totally indefensible. The question has to be: what outcome could we have now that would be better and what should we have done then and could that have been done? And with Cyprus one issue is the smallness of the economy, which meant what a US might be able to do might not be possible for them on their own.
EDIT: and one of the issues in Europe certainly seems to be that broad, untailored measures are not very popular even though ex-post they appear to perform better - so popular opinion does matter
Who really would be fine with giving the government 10% of their money, so they can pay their gambling debts?
[0] https://news.ycombinator.com/item?id=29867057
[1] https://news.ycombinator.com/item?id=28441794
The panopticon you refer to is called "human society", by the way. You cannot participate in one and maintain unlimited freedom. If you are an evil jerk who kidnaps my child or steals life savings from my mom I want to be sure your assets can be seized. If you want to build anarchy, go ahead somewhere else but I think you'll find yourself tired of it rather quickly (and likely get eaten by ruthless command economies).
I want to live in this wonderland too, where are you?
Hence Bitcoin.
If you live in a democratic country, you actually have ways of fixing it. And no, you don't need to give up your freedom for blockchain panopticon in the process.
You still haven't told me in what fantasy land you live where that is actually possible.
I know that's cynical, but welcome to reality.
I have long been disillusioned by the fact that people can have an impact on their society by simply electing someone that will totally be fixing the issues that have been plaguing society for decades, for real this time, pinky swear.
But hey, again, if you live somewhere that actually happens let me know and I'll board the next rocket.
If there is no one suitable to vote for, maybe you can be that guy. And on flip side, if you think no one will vote for you, maybe your opinion is not aligned with the majority in your country.
Just because you believe money is printed as much as the dark secret super elite group wants it be printed?
Ah yes the sseg.
But yes we are still living in a democracy (a lot on hn at least) and the solution to all of these problems definitely are not getting solved by crypto.
You as an avg joe you are much better off with our current fiat system. The money they collect is used for a lot of things you depend on.
You might be totally ignorant to this but just switching to crypto doesn't solve a single problem.
Democracy is a nice value, but so are freedom and human rights. I expect to have the right to buy crypto or not.
I only argue about wrong crypto bro arguments.
Feel free to invest in whatever you want but in these discussions cryptobros argue from crypto is the future and is better than fiat.
Be aware though about the energy consumption of BTC. The GPU shortage and Asics garbage it creates.
I would have loved to buy an rtx GPU over people gambling on the side.
But you can't just hand wave concerns regarding money laundering and other criminality away. If you want to, you should just say "these things don't matter that much", but don't just avoid them entirely.
>Lastly, we reserve the right to manipulate the money supply. It's enough for you to know that we are experts and have your best interests in mind. You don't need to concern yourself with how much money there is, how its supply is managed or the potential negative effects of our manipulation, you wouldn't understand the implications anyway.
You mean to say that we live in a democracy. We elect our representatives, and they pick who runs these institutions. They are relatively "undemocratic" because when politicians are able to manipulate the interest rates directly, well things are perhaps even worse.
I'm not, I'm pointing out the rhetorical techniques being used to delegitimize people who try to create privacy tools.
You mean to say that we live in a democracy. We elect our representatives, and they pick who runs these institutions.
It's a pernicious myth that there is some meaningful democratic oversight over monetary policy. Central banks are privately owned and/or structured in such a way as to not be beholden to political pressure (for the somewhat justifiable reason that politicians are even worse at managing monetary policy).
Latinate words are not a useful cover when you're lying. All Western central banks are effectively a branch of government and are directly responsible to Congress/euparl/$local_variant, and are run by a bunch of politicians (the chair of the Fed is Powell and the president of the ECB is Lagarde, ffs).
The notion that they aren't beholden to the popular will is just ridicolous.
Central banks in most developed nations are institutionally independent from political interference.
"The governance of central banks has two dimensions: corporate governance and public governance. Public governance is an institutional framework whereby the general public governs a central bank by and through the legislative and executive bodies in a country (...)".
"Independence of the central bank" means independence from direct intrusion by the executive branch, in the same sense the judiciary is independent from political interference.
That doesn’t mean that those are not government institutions.
I think it's important to expand on the above because the above terms are tame. They give an impression of individual small time criminals.
It's North Korea, Russia, dictators and despots across the world, the cartels, organized criminals. Large scale Tax avoiders, human traffickers, drug traffickers, weapon smugglers. It's the organized big money criminals, both high and low class that fund the worst aspects of humanity.
(Talking about Bitcoin here. Not all crypto applies)
The ones who are paying for these open ponzi schemes by having their electricity stolen by the state?
How about El Salvador, or Argentina, or Nigeria where the poorest lost significant chunks of their capital from btc crash to terra/luna collapse.
D'you think an "ordinary person" is going to risk being thrown in a gulag?
The problem with all these tech utopians is they think the relevant problems are technical: we've solved trust! (Between machines negotiating over a network). We've solved currency manipulation (oh its not a currency, it's an asset; and oh it can be manipulated by the 3 people who own 50% of it).
All the problems are social, not technological. And crypto makes all of them worse! By an order of magnitude worse.
They can try, but it's very difficult to do. I hear we'll win the war on drugs any day now.
All the problems are social, not technological
No solution is 100% social or technological, you need both. The existence of cryptocurrencies doesn't remove the need for social coordination.
Is a worse situation, right?
Crypto is just fedualism with land=coin. Really. That's what it is.
It's about as anti-freedom as one can imagine. It's "freedom in form" and not in content. It's the freedom of the colonizer on new land, and the oppression of all else who live there. A necessary oppression, not open to revision, and executed by machine.
Satoshi advertised the currency and the start of mining beforehand, to give other people a chance to participate. There was no pre-mine.
In the early days there were faucets that handed out bitcoins for free.
Due to the boom and bust cycle of Bitcoin, many of the early holders cashed out instead of holding all the way to untold wealth. This is actually a nice side-effect of the early stages of Bitcoin adoption.
Very early holders of Bitcoin had to take the risk that the currency was somehow flawed and would go to zero, in some sense, the gains they made are a function of the risk they took.
The solution to wealth inequality is not to force everything to be equal, it's to allow both upward and downward mobility. The wealthy must be allowed to fail and not be bailed out.
Interestingly, bailouts are a common feature of the fiat monetary system.
A deflationary asset, like land for example, is not a good currency. As a powerbase, it's called feudalism. And that's not a good politics.
Power in crypto is radically centralised to the owners, not the users (unlike democracies).
One has to imagine people like you know this, or feel it, in the lust for the value increases to your own stake: that is, a lust that you are the one in control. Either way, you're playing the role of a daemon here, whether you realise it or not.
And the devil you are putting on the thrown are a handful of billionaires with power and control executed by a machine.
Thankfully bitcoin has no army, and all of this will fade into the obvious malicious stupidity it already is.
I wrote about Bitcoin, not Ethereum. There are lots of Bitcoiners that think Ethereum is a scam due to the large premine and larping as a decentralized project.
Either way, you're playing the role of a daemon here, whether you realise it or not.
And the devil you are putting on the thrown are a handful of billionaires with power and control executed by a machine.
The fact that you have to start using flowery religious language of condemnation appears to me an indication that you're running out of logical arguments.
Thankfully bitcoin has no army
That's one of its features, which proponents value.
Then some people comply and some don't
Actually you can. The war on "money laundering" is a total failure. Those laws costs billions of dollars in compliance, stifle competition, harm innocent people by excluding them from the financial system (estimated 1.7 billion worldwide) and don't actually stop criminals. There's a serious case to be made for putting an end to that war and diverting those resources to old school crime fighting.
https://www.cato.org/blog/money-laundering-laws-ineffective-...
I'm totally against money laundering. It takes the money away from us people for streets, school and healthy care.
And crypto is not providing any solution to this at all. So why not fixing that issue inside the crypto bro fan club first and than trying to replace our current fiat with it?
I think you're confusing money laundering and tax evasion.
This represents a massive misallocation of resources. Public safety would almost certainly be improved if we doubled police spending by slashing AML burdens by 2/3rds.
Unfortunately it's hard for politicians address crime by raising taxes to fund real police but easy for them to attempt to address crime by increasing AML regulation, even if the latter is barely effective.
[1] https://www.oxfordeconomics.com/resource/cutting-the-costs-o... [2] https://www.statista.com/statistics/298637/united-kingdom-uk...
You may dislike the way central banks control and manipulate the money supply, but the reality is that an unmanaged currency is generally a disaster for everyone. To fulfill its role as a stable store of value, a currency has to be managed. The notion that an inherently deflationary unit of accounting (such as Bitcoin), or a completely unmanaged one, or one subject to "management" only through crowd action (as in true Defi) can achieve this is delusional.
But they don’t optimize for “stable store of value” over “full employment” or “hidden taxation through monetary inflation”.
In fact, they have the opposite goal because “the velocity of money” is negatively influenced by people using money as a store of value. Keeping money in a savings account and collecting interest is bad for society because reasons.
What do you think will be worth more in 100 years from now? 1 US dollar or the equivalent of gold? How about 500 years? 1000 years? My money is on the gold.
Every fiat will be stable until it blows up. It will necessarily be mismanaged in a long enough time line, and based on history it really isn't that long.
The only limits on the gold supply are technological ones. If one takes an optimistic view of the future where we become a space-faring species the future supply of gold is effectively unlimited.
Edit: As much as I'm a huge crypto detractor, at least Bitcoin's supply is limited mathematically, not just circumstantially. I would argue this is a bad thing, but if you're looking for something that will hold its value due to scarcity a durable commodity we dig out of the ground seems like a bad long-term bet. What if we discover a massive gold deposit?
Right, there's nothing special about it besides the technical limitations. But what's the alternative? With fiat you still have those technical limitations (someone could create indistinguishable counterfeit money and dump it on the market). But there's also the political risk. Someone can get power at the Fed and decide to double the money supply over night. In fact, this has happened time and time again with many fiat currencies so its not exactly an unfounded risk. That's why the precious metal standard is lower risk for arbitrary manipulation
I think there is more than technological limitations to making this happen. Not only is counterfeiting considered a major crime by the state (who has a monopoly on violence), but the amount of "money" in circulation that has a physical representation is dwarfed by "money" that does not. Even if you doubled the physical currency in circulation you'd only increase the "monetary supply" by 10% or so. Plus there are huge logistics issues with moving that much weight/volume without getting caught.
> Someone can get power at the Fed and decide to double the money supply over night.
I think that if the function of government breaks down to this extent, I will have bigger problems than currency devaluation.
I don't know how to tell you this but...
And it's not like precious metal based currencies were stable over long periods anyway. There is nothing in the working of economies that guarantees that precious metals will accumulate in sync with economic growth and contraction. Trying to tie one to the other is every bit as much "fiat" economics as an untethered currency, like the dollar.
There are some things that are plain illegal. If you’re laundering money, selling illegal drugs, running guns, funding terrorist groups, etc you run the risk of getting caught and having your accounts shut down.
We’re not living in a dictatorship (yet). There’s still due process and the justice system.
Lastly, we reserve the right to manipulate the money supply.
“In our time, the curse is monetary illiteracy, just as inability to read plain print was the curse of earlier centuries.” — Ezra Pound
If you’re interested in how money works you should read a book or two about it. It’s pretty interesting. “The government,” isn’t “printing money.”
Absolutely concern yourself with it.
The problem right now is that government regulators aren’t technically savvy enough to understand cryptocrap and it’s implications. They read what briefs they can but they face endless technobabble from lobbyists and “industry representatives.” The hearings with the US congress were something else.
Funny how people here assume we all live in the same country. There are lots of people on HN who live in dictatorships.
If you’re interested in how money works you should read a book or two about it. It’s pretty interesting.
Thanks for the condescension. Money printing is a colloquial term used to describe various ways in which the money supply is manipulated by Central Banks, they like to use terms such as Quantitative Easing (creation of new bank reserves that didn't before exist) and open market operations (buying assets with money that didn't before exist).
It's certainly increasing the maximum potential supply in ways divorced from any market mechanism. They are central planners and they're failing hard like central planners did before.
Conventional banking combines a moderate level of privacy with effective measures against money laundering. Why shouldn't we ask that crypto be judged against this baseline?
"Based on 2009 data, the UN, with US State Department assistance, calculated the global success rate of money laundering controls at just 0.2 percent (UNODC 2011, 14, 119, 131), but, as noted above, the confiscation rate might be 0.07 percent. In other words, despite ubiquitous money laundering controls, criminals retain up to 99.93 percent of criminal proceeds."
https://www.tandfonline.com/doi/full/10.1080/25741292.2020.1...
Rather fake than moderate, I would say.
https://moguldom.com/351338/fact-check-do-jp-morgan-chase-we...
As long as banks can just pretend to protect my privacy, while they sell my data, I feel more comfortable about the type of privacy that cryptos like monero provide.
> Why shouldn't we ask that crypto be judged against this baseline?
Why shouldn't we ask for a reasonable baseline that really protects people's privacy and not just some corporate version of "privacy™"?
> effective measures against money laundering
Just yesterday, Deutsche Bank's HQ was searched over possible money laundering.
Surely there is a middle ground between "every single transaction that has ever occurred in the history of the blockchain is public and visible to all" and "no transactions are ever visible to anyone including governments investigating crimes that have exercised due process in obtaining warrants and subpoenas".
Electronic money of whatever form is equally trackable regardless of the value of the transaction. That forces a world where either you can drop country-destabilising quantities of money anywhere without any law enforcement or every microtransaction ends up in the security services database.
Anonymous billions are all fun and games until the second plane hits the tower.
What? security services can only spy on money, but just can’t do their main job of preventing attacks by humans?
Maybe we should hire a competent replacement for that job then.
My ego doesn’t, but I generally find it very valuable.
This letter is honestly not thoughtful criticism.
It reads like a group of academics and specialists annoyed they were too early to profit from a technology they spent a lot of time thinking about esoterically and avoids specificity in…well… any meaningful way.
It also makes no effort to segment the space.
If a critical letter created by supposedly credible experts in a field can’t spare a paragraph to delineate between DeFi, NFTs, L1’s, smart contracts, stablecoins, and whatever else is bothering them then I think it’s fair to assume they don’t know the difference.
And if they don’t know the difference then why are we even reading this letter?
It’s a waste of our time (and theirs) to try and unpack what is pretty clearly frustration at the fact that the effective application of basic research is all that matters for adoption.
I think (at its core) everything crypto is a novel economic incentive layer wrapped in a technology package.
This creates the opportunity for blazingly fast user feedback loops and incentive alignment that wasn’t possible before (for better or worse).
Taken from that perspective, this letter misses basically everything interesting about the potential of Crypto.
So.
Read it. Form your own opinion. And move on with your day.
Gm everyone
"na na sore loser" is quite the angle for someone bemoaning a lack of "thoughtful criticism."
Do try and grow up.
I guess my speculation stems from a lack of substance to poke holes in?
Even going line by line beginning with the first real paragraph we find they launch into a classic straw man of rejecting the "industry claims that crypto-assets an innovative technology that is unreservedly good". Nobody with a whiff of tech acumen in crypto thinks or says this. Additionally, anyone not thoroughly anarcho-Libertarian also gets the need for guardrails to squash scams.
A scattershot of the other tangible claims in the paper feel pretty similar.
"Append-only digital ledgers are not a new innovation. They have been known and used since 1980 for rather limited functions." <- true, but the also can be said for the evolution of AI models and we see where we're finally at with those today.
"Blockchain technology cannot, and will not, have transaction reversal mechanisms because they are antithetical to its base design." <- quasi true depending on the chain, but also we can approximate reversibility with clever escrow-like transactions (I'm actually building this full disclosure)
"Financial technologies that serve the public must always have mechanisms for fraud mitigation and allow a human-in-the-loop to reverse transactions; blockchain permits neither." <- unequivocally stating blockchain tech can't mitigate fraud in ANY way is silly and reductionist. Deciding human-in-the-loop reversibility is the pinnacle of fraud mitigation is also pretty wild considered how much effort and resources developers just on HN put into removing humans from their process execution loops.
"Finally, blockchain technologies facilitate few, if any, real-economy uses." <- partially true in the present tense (similar to how everything has to be adopted before it reaches mass adoption), but glaringly narrow minded if considering potential uses. Anywhere there is asymmetric trust and power between transacting parties one can imagine the possibility of an application! Not to say its necessarily the best use case, but the lack of effort of consideration seems intentional.
There's more, but I hope this provides some context to my initial post
One might also "wonder" why the only people with positive things to say about cryptocurrency are those with a vested interest in its success. That's not true of any other technology.
DeFi is a scam to let crypto gamblers avoid taxes on their gains by taking profits as a "loan". The space is filled with unrealistic interest rates, and in general is a scam. See stablegains as a good example of this fraud.
NFTs are essentially a way to do money laundering with "art". The market, as a whole, is predatory, and is dominated by artwork stolen from legitimate artists who didn't mint the NFTs. It's mostly already collapsed, and essentially no one is making money on secondary sales. The space is filled with wash trading, often by the trading platforms or their employees directly.
I don't see what L1s have to do with the conversation. No matter the layer, the same criticisms apply, because ultimately, they roll back to the L1.
Smart contracts don't actually fulfill their basic premise. They don't replace normal legal contracts, and they can't stay in sync with real world assets. Nearly every day one of these contracts is owned and everyone loses their money. They're also incredibly inefficient and expensive.
Stablecoins have proven to need very strict regulation, and in reality a bank charter should be required to run one. Tether alone shows that they're a very serious problem, though the recent issues with Terra/Luna also show their general problem.
The entire stack, from top to bottom, is built on unfulfilled promises, and their very existence introduces new, horrible problems for us to deal with. For example, ransomware is simply not possible at its current scale without cryptocurrency.
using defi to minimize tax burden is neither a scam nor unethical. plenty of people borrow against their houses or stocks.
> nfts are dominated by stolen pieces
most nft volume is made of bored ape yacht club, moonbirds, doodles, and similar properly licensed pieces.
> smart contracts don't replace legal contracts
right, they allow you to transact trustlessly for defi and nfts.
> stablecoins [should require] bank charter
https://www.bloomberg.com/news/articles/2022-04-13/circle-ba...
Today the global community of technologists sent a letter to Congress urging them to resist the crypto industry’s lobbying influence. The letter was signed by some of the most respected scholars and technologists in our field. And now we need your help.
Crypto fraud is spiraling out of control. So-called "web3" is not going great. Regulators are paralyzed and people are getting hurt left and right. It's on us as citizens and responsible engineers to help fix the problem we created by our inaction.
Crypto lobby is spending millions to tell leaders that crypto-assets are "innovation" and all fintech innovation is unqualifiedly good, no matter the human cost. Today we set the record straight on what computer scientists really think about blockchain.
https://twitter.com/JorgeStolfi/status/1522011168604409856
"The claims that the blockchain advocates make are not true," said Bruce Schneier. "It's not secure, it's not decentralised. Any system where you forget your password and you lose your life savings is not a safe system," he added.
"The computational power is equivalent to what you could do in a centralised way with a $100 computer," said Miguel de Icaza. "We’re essentially wasting millions of dollars’ worth of equipment because we’ve decided that we don’t trust the banking system."
The externalities related to crypto investments are neither isolated nor are they growing pains of a nascent tech. They are the inevitable outcomes of a technology that is not built for purpose and will remain forever unsuitable as a foundation for large-scale economic activity.
Our call to action is simple. If you are a computer scientist or developer concerned about this issue, we're opening the letter to the wider tech community to sign and tell our policymakers that enough is enough, the status quo has to change.
Read the letter and sign at https://concerned.tech/
The reality is that both the hard crypto-skeptics and the crypto-maximalists will be disappointed in achieving their utopian goals of fully stopping crypto and also gaining full adoption of it.
Only a few of them will survive the test of time and further regulations.
[0] https://stripe.com/blog/expanding-global-payouts-with-crypto
[1] https://www.bloomberg.com/news/articles/2022-05-29/moneygram...
[2] https://www.bloomberg.com/press-releases/2020-06-23/algorand...
[3] https://www.whitehouse.gov/briefing-room/statements-releases...
It must be going disastrously when your 3 examples of things going grate are a start of a pilot project, an announcement of a project and what seems to amount to a sponsorship deal. And you wonder why people don't speak more widely about it.
Can you at least backup your claims on them 'going disastrously' and being cancelled, scrapped or abandoned rather than making very unsubstantiated and baseless claims? Since I have already backed up my claims with links that these projects are still alive?
> And you wonder why people don't speak more widely about it.
Or is it because these companies know that the ones they selected are suitable for their use cases and are compliant with regulations and are not part of this extreme 'all cryptocurrencies is scam, ponzi, planet incinerating' narrative that these 'technologists' are pushing?
No you did not. You provided a link to a closed pilot project that started a month ago, technically not alive and no way for you to know if it is going great. A link to an announcement of starting a project in the future, so not alive and no way for you to know that it is going great. Finally you provided a link to a "project" that amounts to nothing more than a sponsorship deal.
> You provided a link to a closed pilot project that started a month ago, technically not alive and no way for you to know if it is going great.
So "technically" it is not cancelled, scrapped or abandoned then and the project is still alive. Yes or No? Where is this 'disaster' you are speaking of since they are still launching it?
It seems you have admitted that it is still alive and going great by attempting to deny and shift the goal posts!
> A link to an announcement of starting a project in the future, so not alive and no way for you to know that it is going great.
In that link as of today, who is the partner that is using this crypto payouts product right now? Has that one been cancelled too?
> Finally you provided a link to a "project" that amounts to nothing more than a sponsorship deal.
And since then somehow they didn't use it and it was cancelled or abandoned, therefore a 'disaster' and they are not using it? My suspicions suggest that you read as far as the headline.
So not only you have just admitted that you're yet to read them, none of your responses are a refutation to my claims as you continue to dodge the fact that these projects are still alive and once again unable to give a single link to backup your own so-called claims of all of them going 'disastrously'.
- ”Dad, all I need is 10k loan” - ”I will give you the money, son. And I’ll see you in court if it doesn’t work out.”
[0] https://www.investor.gov/introduction-investing/general-reso...
But 1) the arguments against crypto are specific to crypto; 2) the very people who are arguing against crypto are the same people who have been the most vocal advocates of an open web; 3) this is a dismissal from a technologist perspective of the finance industry's self-interested pro-crypto lobbying - there's no obvious parallel of an industry lobbying for 'pro-web' policy over technologists' objections that you can analogize this to. If anything, web-related regulatory discussions in the 1990s were the opposite - entrenched industries lobbying against technological arguments.
Short and succinct is not the same as shallow.
> You are trying to insinuate that people who believe crypto is bad technology and bad for society, are doing the equivalent of arguing that the web is bad technology and bad for society.
I’m not insinuating anything, I’m explicitly saying that is the case.
> 1) the arguments against crypto are specific to crypto
“Crypto” is so broad, there’s no such thing as an argument specific to crypto. Are you saying all crypto-related data structures, protocols, and algorithms are de-facto bad for society (and thereby anything that stems from them)?
If so, that argument sounds blatantly absurd to me. And if not, then your argument is so non-specific it’s meaningless.
No it isn't. Which is presumably why they didn't use those words.
Critics of crypto are almost always objecting to its use as a financial instrument, or as a way to technologically convert social relations into markets (as in the case of "play-to-earn" games turning MMO guilds into a peasant-lord economic relation, fun fun fun). There are already substantial, standing arguments against all of the meaningful permutations/additions to the blockchain technology (NFTs, DAOs, stablecoins, proof of stake...).
These arguments are not necessary because in practice every crypto project to date has been a scam, an inefficient implementation of something that already exists (either slower, more wasteful, or not fixing any of the problems that it points out in its traditional equivalent), or is just an unregulated security. The self-proclaimed geniuses that develop crypto projects have spent the last decade rediscovering all of the pitfalls that led to the present-day financial system they so badly want to disrupt, and losing gullible people's money doing it.
The core of crypto, in my opinion and explicitly in Bitcoin, is "trustless money" but crypto is only trustless in the abstract. We have to have trust that the developers of our coin didn't make any mistakes. We have to trust that the coin will not just fork if a rich guy loses money (like Ethereum did in the 2016 DAO attack).
If we want to build something complicated we have to trust that the smart contract developers are not malicious and made no mistakes. Obvious counter to this is that they are open source, but we're not talking about trustless money for programmers. Some will say that "the market" will figure out who to trust through adoption but in empirical reality this has not been the case.
I am not an economist, but basic observation also tells us that an asset that fluctuates as wildly as Bitcoin and other cryptocurrencies is also not good as a currency. Transaction are also slow and expensive, and any crypto project that purports to solve this problem may want to check out a similar little technology called "Visa".
We can hate the way central banking is done, but developers really need to come to terms with the fact that we have had far too many technological fixes for social problems. Many crypto projects promise many things, but I ultimately trust a central, predictable authority (even if it's corrupt) more than some guy operating in a field that, time and time again, just takes peoples money and runs.
I want to see crypto remain 100% legal but get taxed fairly, because everyone who is pretending it's the future will immediately liquidate their assets and leave.
Engineers don't fix problems by begging the government to create laws that will throw people in jail for using a given technology in a way they don't like.
Bullshit. As a member of the "global community of technologists", I sent no such letter to Congress nor did I appoint anyone to send a letter on my behalf.
I don't even see a point in addressing the same old anti-crypto arguments contained in the letter. The real story here is the presumption of these self-appointed "respected scholars and technologists".
https://world.hey.com/dhh/i-was-wrong-we-need-crypto-587ccb0...
Regulators should pay attention to MEV and order flows on decentralized exchanges. Some blockchains are not permissionless to write to (proof of stake). As such, they are ripe for front running and forced liquidations of retail users.
The regulators are already asleep at the wheel in terms of oversight on traditional exchanges (or more specifically what is happening outside of them). Sure, additional oversight would be nice in crypto-land, but increasing the regulator's scope seems like wishful thinking to me.
With decentralized exchanges at least, all of the data necessary to audit what is happening is all public and instantly available... so maybe things will flip and the additional oversight for decentralized crypto exchanges will be trivial?
Is this arguing both for and against the need for financial privacy at the same time?
No.
It's a perfectly reasonable position to take. I want my transactions to be private to the world but it's reasonable that law enforcement has a method to investigate criminal behavior.
If law enforcement has a method to investigate your behavior, its not private. You want to have your cake and eat it too. Either you enjoy privacy (and so do criminals) or criminals do not (and neither do you).
That doesn't seem to reflect how the world has worked up until now.
There are plenty of things that are private except with a legal warrant. There's an entire legal history of wiretap laws and circumstances under which law enforcement can open mail I'd invite you to look at.
https://en.wikipedia.org/wiki/Cayman_Islands
No. Like all things connected to real power, the subtext is that the sovereign alone can setup "privacy-focused" banking for 'special' interests. Anyone else who attempts it is a rebel and may be drawn and quartered. Long live the lizard queen.
With public ledgers like Bitcoin, everybody can reconstruct your financial history if they know your wallet address.
With privacy-focused blockchains, nobody can do that.
However, with a bank, your financial history is not publicly available but the bank still can perform checks to guard against money laundering.
There are several different levels of privacy [1]. Some hide amounts and wallet addresses, while still exposing the transaction graph.
I wonder if we will start identifying factions of tech by the political orientations expressed by the technology in question.
Thus I am extremely skeptical of people with pro-cryptocurrency views on this website.
If I had significant holdings in crypto, you can bet I would also be on hacker news trying to legitimize and defend anything to do with crypto to get people to buy in.
This is also amplified by the sunken cost fallacy, and not wanting to admit someone convinced you to spend thousands of dollars on fake coins and an ape jpeg for your twitter profile.
In your comment I read rhetoric that attempts to de-legitimize the other side by questioning if they are even authentic members of your community. Your comment is not "wrong" but it paints with a very broad brush (something I see a lot of crypto fans doing all the time). It certainly places you in one of two sincere-but-polarized political groups.
I wish more people would foster nuanced attitudes about topics such as this. It makes for more interesting discussion.
However, how do you approach a nuanced debate on this issue when one side has a financial incentive to promote their views and is liable to act in bad faith because of it?
Not to mention the proliferation of bots online making it extremely hard to trust that any online discourse is genuine anymore.
Not suggesting that half of hacker news is bots, but it only takes a few to seed an idea in a community.
For too long, the only voices in the room were there for hype. It's easy for those with critical views to just ignore it.
In this case you have a finance industry trying to get congress to give them free rein to experiment with crypto. They're asking for latitude around things like securities law, financial disclosure requirements, anti-money-laundering, consumer finance protection, etc. - with the excuse being 'we have to be allowed to explore innovative technologies!'
And what this letter represents is technologists trying to say, there's nothing sufficiently interesting here technologically speaking to justify granting that license.
There's simply no equivalent to this in 'internet' regulation terms. ARPAnet wasn't opened up to commercial use based on finance industry lobbying over the objections of technologists.
This is an important difference because really you should be able to explore tech without having to show up-front (to the satisfaction of a government agency or a self appointed group) that it is sufficiently interesting technically to be permitted.
Also, I don't entirely buy that Coinbase (specifically) want to prevent regulation. They've worked hard to position themselves as the regulated, above board, professional option in the space. More or Tighter regulation (but not an outright bad) would likely help them as they would likely already be compliant and other providers would either fold or close to US users or scramble to catchup...
This is how lobbying works.
Cryptocurrency has been a energy wasting, grift enabling nightmare. It will (and already has) go in the history books as an example of the biggest Ponzi scheme amplified in the social media era.
I can’t wait until the world moves on. Until then I hope you all enjoy expensive ape jpegs.
If bitcoin became a legal tender then Monero would have that bridge though, so I'm routing for it, but it doesn't effect crypto all that much either way.
So many of these "cryptocurrencies" everyone and they're dog loves are just scams. If they get legal support then governments will just have a new set of rich incompetents to bail out...
Not that they can't afford it.
Total US money supply ~21 Trillion
Total monopoly money supply (the boardgame) 20,580 x 250,000,000 = 5.145 Trillion
They have some to spare.
Real crypto will always be underground. That's where it's ment to be.
Co-chair, Global Future Council on Responsive Financial Systems, The World Economic Forum<*
-- >The penny has dropped,
That without regulation [crypto] can’t inject the trust and stability which a financial system at scale needs.
It's especially ironic because of the ongoing rhetoric of the value of bitcoin &co being independence from the store of trust that is centralised government and regulations. If they are truly that unstoppable, I'd expect them to not waste their time lobbying the old system and simply build the glorious new crypto economy that's been around the corner for the last 13+ years. But no, instead we are making sure that the money inflow and cash out options stay secure, and keep trying to worm a redundant at best and useless at worst technology into as many use cases as possible in order to show potential and keep the line going up. I'm sure, once there is a decentralised Blockchain Startup talking some municipality of doing their barbers license applications or municipal bonds via NFTs both the value and the democratising effects will kick in.
Human-in-the-loop is costly. Twitter, Youtube and card payments can't manage fraud mitigation well with all-kinds-of-humans-in-the-loop. Can't hurt to give the blockchain folk some space and time to innovate on cheaper, irreversible transactions.
https://floexplorer.net/address/f6shpgd8zrmhhpbe4lot2nzxlxqv...
Also, the first transaction to this address (115f93d1e...) contains its private key.
EDIT: Looks like one of the signatures is from Tim Bray, I think he lives in Vancouver.
Besides, tech experts aren't really the ones we should be asking about crypto. The ramifications of the technology blockchain has allowed us to build actually creates new paradigms in finance and human coordination, As a result, economists, sociologists and political scientists who are educated on web 3 technology are probably best placed to evaluate what crypto has to offer society.
Email ended up with voluntary-but-effectively-central anti-spam efforts like SpamHaus and the RBL as a result.
Coinbase led the effort with 26 lobbyists and $1.5mn spent on lobbying in 2021