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Comment by wpietri | Hacker News Reader

I think it's appropriate you open with Star Wars, as this is mainly fantasy.

> burdening 8 billion law-abiding Citizens with impossibly complex and arduous KYC/AML requirements

Not sure if you read the article, but they just aren't a significant burden for most people. They could be better, sure.

And I think the "driven to use Cryptocurrency" example does not pair at all well with FTX. The massive wave of cryptocurrency failures from Mt Gox to FTX demonstrate beautifully why an unregulated financial system is a terrible idea.

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No, you aren’t burdened. The bulk of humanity is, though.

The compliance costs in terms of effort/time/money expended per dollar of revenue affected is probably 10x to 100x for them, as it is for you. This has been my experience, and my observation across many life stories. I taught basic finance to hundreds of mid- to low-income families in the 2000’s.

So again - a “let them eat cake” admonishion.

And FTX was just a massive, traditional fraud. Literally nothing to do with Cryptocurrency, other than as the medium of the fraud.

Random charlatans stealing money from gullible and trusting marks.

The bulk of the legitimate cryptocurrency platforms continue working. A few that were obvious mathematical impossibilities implode - much like fraudulent businesses have for ages past.

> No, you aren’t burdened. The bulk of humanity is, though.

I look forward to somebody demonstrating that. The author of the article, a domain expert, thinks otherwise.

> And FTX was just a massive, traditional fraud. Literally nothing to do with Cryptocurrency, other than as the medium of the fraud.

Other than the medium, the culture, the community, the domain, and the regulatory vacuum of cryptocurrency. So a great deal to do with it. And it's not as if it's an outlier for the space.

If it's really the burden you are concerned about, you might look again at cryptocurrency. The burden just to use it is relatively high. Then there are the higher caveat emptor burdens. And then we get to the vast, vast sums lost through volatility, exchange costs, user error, incompetence, fraud, and theft. Being upset about KYC/AML and not about that is a situation of motes and beams.

Well, there was that entire huge NFT crypto scam bubble.

To a first and probably second approximation, crypto is only good for getting scammed and scamming others. There's a lot of overly credulous people in the field, which just attracts crime like a moth to a flame.

Ah, I think I’m beginning to understand…

Selling worthless copies of GIFs to people by claiming they’re totally gonna appreciate in value: Crypto

Immutable, unforgeable and universally provable transmission of proof of ownership of real valuable consideration/property: Crypto

Perhaps one of these is a scam, and the other is a valuable business transaction?

Nah.

It can't be proof of ownership if it's all of those things because ownership is decided by eg judges and not what's written in a random database somewhere.

Contract law. If we agree that what is scrawled on a napkin is a contract, it is.

As we've seen with the reactions of prominent crypto figures who've gotten robbed, approximately nobody really believes that the ledger is the final determiner of ownership. They don't say, "Well, other people own that money now," and move on. They tend get mad and call the cops, just like everybody else.

And as we're seeing in the great raft of crypto-related bankruptcies, judges don't take it seriously either. Just because somebody happens to hold the keys for tokens means very little to them. Something that appears quite palatable to the people who might get some of their investment back.

So in practice, it looks like digital ledgers are more of a "fantasy football" version of ownership tracking: taken very seriously by people who play the game while they're playing it, but not by anybody else, and also not when the game's over.

Contracts can be written on napkins but they're not suicide pacts and judges can edit them after the fact.

Not sure why you're getting downvoted. Are there possibly some uses of crypto that are a) value creating, b) socially positive, and c) not more easily/cheaply solved with other technologies? Sure. But it's got to be a small fraction of total money put in.

From MtGox to FTX it's been more than a decade of incompetence and fraud. I'm sure there are sincere people who were just excited about the technology who are devastated that the grifters and criminals rushed in to take advantage of their regulatory vacuum. But if they are truly sincere, they can't deny the massive problems in the space.

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