And there you have it. A stunning exit scam executed to perfection. So brilliantly executed, that even the CEO disappeared. The great Houdini would be proud. /s
As always, don't let your coins sit on an exchange. If you don't have the keys, it's not your coins.
People put them on exchanges because crypto is actively user hostile. You forget a word, you lose a scrap of paper, someone knocks over your bird bath - and boom you're broke. This is one of the many, many fundamental problems with crypto.
It's basically just a digital obstacle course to see who can keep hold of their coins lol. You make fun of people who forget their passwords, you make fun of people who get rekked when an exchange exit scams. You send the wrong Elon bitcoin (both the fake and real ones now accept bitcoin) it's SFYL. Ransomeware? Whoopsie poopsie. SFYL.
It's always the customer's fault, never the technology.
I do wish this Turkish gentleman best of luck building that orphanage in India with Gerald Cotton though. With the billions between them I'm sure the children will be well looked after.
Exactly. Apart from the intrinsic wastefulness of proof-of-work cryptocurrencies, the utopian evangelising on how The Algorithm is perfectly trustworthy and irreversible as an ultimate arbiter of truth is very far from what is desirable in the real world. It is not a feature, it is a bug.
The "marketing" of "everyone should keep their own wallet" is off, as it was initially only for the computer savvy. But that is also the main selling point. If you want to have it, you get full control.
The average user is better off keeping their coins in an online wallet/exchange. We wouldn't expect them to interact directly with bank/forex/stock back-end networks and not fuck something up. The main difference here is that they can if they want to.
> It's always the customer's fault, never the technology.
No, the field is still green and over-hyped, lots of gullible "investors" coming in, scammers follow. The regulations have not fully caught up.
Even with some regulations, I assure you, if you choose a shady bank or a broker for stocks you can lose your money just as easily. If you don't keep the coins yourself it becomes a question of who to trust. I really don't see what that has to do with "the technology".
> Even with some regulations, I assure you, if you choose a shady bank or a broker for stocks you can lose your money just as easily.
Can anyone even cite a single banking exit scam in the United States in recent history? The closest I can think of is Ponzi schemes like Madoff, but those were operated as businesses, not banks.
Meanwhile, we hear about multiple crypto exit scams per year. More if you include all of the suspicious coin disappearances that were blamed on hacks.
It would be nearly impossible for an actual bank owner in the United States to abscond to a foreign country with customer funds and avoid consequences, and even more unlikely that those customers wouldn't be made whole.
But with cryptocurrency banks, being able to abscond with funds and avoid traceability/consequences is almost a core feature.
I don't understand how anyone can think traditional, regulated, insured banks are in any way equivalent to unregulated, international crypto exchanges. The two couldn't be any more different when it comes to safety.
> Can anyone even cite a single banking exit scam in the United States
I'm from east EU so I can't comment on US, but we've had at least two major banks go under (that I can remember) due to some shady manipulations. A lot of people lost a lot of money.
> in recent history
Part of my point is that the regulations aren't here yet. We've had hundreds of years of experience with dealing with banks. They're so highly regulated precisely because there's been plenty of fraud.
> regulated, insured banks are in any way equivalent to unregulated, international crypto exchanges
Exactly! They aren't even near equivalent without the regulation. But I don't see why they couldn't come close with proper regulation.
Whereas cash is much better! You can't lose it, it can't catch on fire, it can't be blown away by the wind, it can't be stolen, you can't give it to the wrong person! So good. That's why everyone keeps all their money in cash at all times.
What's that? They put their money in a bank? What if the bank owner takes all the money and flees to Venezuela? "You should only use trustworthy banks", you say? Interesting.
Everyone keeps shifting the goalposts. Are we comparing cash to cryptocurrency? Are we comparing banks to exchanges? You can't say "Cash is better than cryptocurrency because banks". If you want someone to safeguard your cryptocurrency, find a trustworthy custodian for it. The fact that banks won't hold cryptocurrency for you isn't the cryptocurrency's fault.
The goalposts were mobile by design, that's how cryptocurrency promoters like them :). After all, it's not the skeptics that spread the idea that crypto should/will replace the whole fiat economy.
One important problem of cryptocurrencies is blockchain's immutable nature. This is, of course, by design, but it's not something you actually want for real money. When I fuck up when banking, I can get the bank to reverse it. If the bank fucks up, they can easily undo it, or I can compel them to undo it by proxy of the court (or threat of it). In the fiat world, unmaking a transaction is a relatively cheap operation. On the blockchain, not so much. While we can start piling up social and technological abstractions on top of crypto to allow for decent UX, this also erases the whole selling point of crypto (decentralization, anarchy) - at which point one has to ask, why burn all that energy just to reimplement fiat, poorly?
Smart contracts should really be called "dumb contracts", as they're strictly dumber than traditional, old-school contracts.
Here's something worth pondering: what happens if you trigger a bug in a smart contract? What options do you have to fix or undo it?
Smart contracts are all bug-ridden by definition - formally codifying intent is a General-AI-complete problem, and since we are nowhere near close to making a human-level AI, it follows that a smart contract is just a crude approximation of the most obvious aspects of what you actually meant it to represent (no different than any other program here). Traditional contracts are smart enough to not even try - they don't codify intent, they just help achieve mutual understanding and pin down shared context for further reference. Interpretation, execution and debugging are all left to the general framework of common sense, tradition, regulations and accumulated case law.
When I can use a major chain and execute a smart contract for <$1 (on say a $100 contract) I'll be reasonably stoked. How are people playing with these when the fees are so high?
A lot of liquidity is moving to L2 Ethereum already and you can definitely execute smart contracts there for way less than $1 (e.g. on Polygon).
As for why people are willing to pay high gas fees on L1 - have you considered the possibility that the opportunities and value that they're getting out of it are worth the cost?
> When I fuck up when banking, I can get the bank to reverse it.
No, you're comparing dissimilar things. Cryptocurrency is cash (with the benefit of not having to be close to someone for a transfer), and you can't "roll back" the giving of cash to someone (except compel them to give it back with the help of a court).
If you want to compare a bank to something, you need to compare it to another custodial/off-chain solution.
> Cryptocurrency is cash (with the benefit of not having to be close to someone for a transfer)
If not having to be close to the payee is the only benefit of cryptocurrency over cash, that problem has been solved for literally centuries by the concept of giro transfers.
> that problem has been solved for literally centuries by the concept of giro transfers
Tangential:
From Wikipedia, "A giro transfer (...) is a payment transfer from one bank account to another bank account and initiated by the payer, not the payee. The debit card has a similar model."
Maybe it's my European bias speaking, but how does that even deserve a weird name? Isn't this how normal paying works? Who else should initiate the transfer? The payee? Why?
That is if you don't consider the public blockchain and its nodes as a "third party". Can you make a cryptocurrency exchange without a third party ever knowing that it took place or leaving any trace of it? You can with cash.
> What's that? They put their money in a bank? What if the bank owner takes all the money and flees to Venezuela? "You should only use trustworthy banks", you say? Interesting.
Bank failures are indeed a problem of the banking system. That's also why developed countries impose strict regulations and depository insurance on their banks, so average people do not need to perform costly due diligence on their daily-use bank.
Cryptocurrency exchanges currently dis-favour government regulation, so I doubt they will be seeking a mandatory deposit insurance regime anytime soon. Nothing prevents an exchange from taking out voluntary insurance from a private insurer, but I imagine that the underwriting fees would be costly.
They may, but it again goes back to costs. Do any crypto exchanges in fact carry such insurance in a verifiable manner? (It's cheaper to _say_ they have a Lloyd's of London policy than it is to actually have one, after all).
I also didn't get into it in the parent comment, but deposit insurance also may not be suitable for those who are deliberately taking advantage of the pseudonymous nature of cryptocurrency. In the event of an exchange failure, the insurer or trustee would obviously need to know the personal details of the account-holder in order to remit payment. Keeping such contact information up-to-date and verified would replicate many of the same know-your-client rules that exchanges hate to follow.
The problem with banks isn't that they outright scam you, it's that they are mismanaged and are too eager to lend out money to borrowers who cannot pay their debts back.
Bitcoin reality: “Buy me because number go up; make the rich richer. Also, use a bank.”
Ledger Hack - What Happened with Pascal Gauthier:
«Peter McCormack: Yeah. Well, the point is, would you keep $20,000, $30,000, $50,000, $100,000 in your house? No, that would be crazy; you'd keep it in the bank. And, you have to consider your security is your own personal bank. I mean, I recommend, ever since I've been with Casa, I would recommend everybody who has a serious amount of Bitcoin to consider setting themselves up with that, because it does protect you in so many ways.
Pascal Gauthier: Just on this, you're right, because you asked me the question offline, but multisig is definitely -- this is why I'm saying today, like in the present.» —https://www.whatbitcoindid.com/wbd290-pascal-gauthier
Or more commonly lose them. I've got a friend who mined bitcoin back at the start and then the repair shop formatted the hard disk. Would probably be worth a few bob now.
Agree, I had 12 BTC mined back in 2010-2011, I just did it because I was being part of other distributed computing networks like SETI@home and Folding@Home. I mined for a while, accumulated them on a wallet on my hard drive and completely forgot about it until the boom in 2014. By then I had already erased 2 generations of hard drives from that machine, it was my NAS for a while, etc.
I don't feel bad about it at all, I never imagined or considered it would become what it is and it was just a toy app I ran for a while after SETI@home and Folding@Home got me intrigued with the concept of massively distributed computing.
I lost many bitcoin early and predicted them to be valuable.
The issue with someone security conscious like me is that, although you can make many backups, you have to secure each of those backups. The more copies you have the more opportunities for someone to attack, so every backup needs to be fully secure.
Eventually I did such a good job of securing them that I locked myself out.
A few years ago I had some Monero and went through software hell getting it to work properly with a Ledger. Eventually being that my entire crypto portfolio wasn't in the millions, I moved what was compatible (eth, ltc, a few others) back to Coinbase and sold what was then incompatible.
Lost my time and automated cost basis calculations. No thanks, digital wallets. Time > paranoia.
I know, "Not your keys, not your coins". However, most people have no idea about the technicalities of the crypto and because transfer fees range from not-zero to ridiculous, as long as the arbitrage between exchanges stays minimal there's no motivation to ever move crypto anywhere so for most people crypto currency is simply the number in their account on a website.
I reckon 95% of people are also in it for speculation, and then you must have your coins always at the exchange, cause you never know when Elon Musk decides to pump, or when the FED or China or the EU decide to make a move. To move coins takes hours last I tried it and as you say the fees are also ridiculous now.
I get all that, but it is a bit like having a perfectly good safe at home and still carrying your gold to the bank because opening it is a bit cumbersome and fidgety.
Kinda defeats the purpose of having a decentralized cryptocurrency.
Storing all your gold at home is your super secure safe is also not very smart though.
I am actually surprised we do not see more robberies of this kind targeting Bitcoin billionaires.
The chance that a Bitcoin billionaire has their private key held in a way that easily be robbed is pretty low. Most will be using additional cryptographic security. e.g. Shamir's Secret Sharing.
Bitcoin's market cap is currently around $1T. Killing someone with $1B in bitcoins would only increase the value of the remaining coins by 0.1%. That seems horribly risky for a very small gain.
Thats only true if you assume 100% of coins are actually accessible. The true market cap of bitcoin is always going to be less than the number of coins that have been mined would imply, due to losses.
Shamir's Secret Sharing could also be a solution to this, with parts distributed to your heirs and the threshold being the number of parts you distribute to others, keeping an additional part for yourself.
>Crypto is hard and cumbersome to secure ( paper keys, hw Wallets)
are hardware/paper wallets hard/cumbersome to use? I suppose they're less intuitive locking up a metal bar, but they're not exactly hard to use. If anything they're easier to secure because you can store multiple redundant copies, whereas you can't with gold.
That's about the security of bank vaults, not Bitcoin. Fiat savings (or gold, diamonds, whatever) stored in the bank vault would be just as hard to steal.
Irrelevant because I cannot (a) give the content of the vault from memory to save my life or (b) enter the vault accompanied (so there's an opportunity to alert bank personnel that I am under duress).
Well "irrelevant" to the safety of the wallet at least, not of my squishy bits.
Sure. I can hand you a handful of USB sticks about 20 paper wallets maybe a hard disk or two...and tell you, here are my keys. Now what you do? Do you put down your gun and start verifying which one is with actual funds or, do you know what is a usb drive and what is a hw wallet? Are you gonna ask me for my password too. How do you know you actually stole something worthwhile? How do you know I am not going to be faster transferring the coins to different wallets?
If the criminal is sophisticated enough to target cryptocurrency holdings, they'll probably transfer the coins to their own wallets right there on the crime scene. Exchanges won't help either: they can simply force their victims to log in and withdraw the money.
This also happens with traditional banks where I live. People are kidnapped and taken to ATMs where their accounts are drained.
I'd sit there with you and transfer them through some tumblers. I'd have brought a laptop and set aside time, and will threaten you on your life if you slow down or refuse.
It only sounds hard if you assume I'd take an unreasoanbly incompetent approach. It's like "rape is impossible because a women with her skirt up runs faster than a man with his pants down".
To be fair, because it is so easy to hand over access to crypto wallets vs a bank account (your bank will reverse fraudulent transactions) it would actually be possible to hand the robber a bait wallet with a small fraction of your net worth but enough to keep the robber happy.
Catch-22: To open a lightning channel, you need to make a transaction (and so pay the high fees), but to pay that fee, you'll need to already have coins in a wallet that you control - which you can only achieve by withdrawing some coins from the exchange.
So your 'solution' is for people to withdraw some coins, paying a high fee, then open a lightning channel (again, paying another high fee), make a lightning transaction (beta software, coins at risk, barely functional, better hope you're running the lightning software 24/7 to ensure you don't get ripped off!) and finally you have your coins in your own wallet. What a bargain! Currency of the future!
>Catch-22: To open a lightning channel, you need to make a transaction (and so pay the high fees), but to pay that fee, you'll need to already have coins in a wallet that you control - which you can only achieve by withdrawing some coins from the exchange.
I'm not sure whether any exchanges implement this, but theoretically they can withdraw and open a channel at the same time. ie. instead of withdrawing 0.1 BTC, they deposit 0.1BTC to a channel and send all the funds to you.
>beta software
It's used in production by various merchants so I'm not sure how relevant this is. Speaking of which, isn't bitcoin itself "beta" as well? ie. the version number is still 0.x.x
>barely functional
???
>better hope you're running the lightning software 24/7 to ensure you don't get ripped off
AFAIK the period is somewhere between 1 week or 2 weeks (don't remember which), and you can have third parties do the monitoring for you.
Beta software: http://lightning.network/docs/ reports that the design of the network is still only in draft form, never mind the software! (those pesky details like routing, which are a difficult problem, are mostly elided in the documents so far)
The main lightning daemon, https://github.com/lightningnetwork/lnd is still beta, with plenty of warnings in the docs about shortcomings and potential loss of funds. I'm sure people use it, but the developers are very clear that it it is not to be trusted: https://github.com/lightningnetwork/lnd/blob/master/docs/saf... says that it is 'considered reckless to put any life altering amounts of BTC into the network' - how can anyone consider this to be production quality?
you can have third parties do the monitoring for you
Not your keys/monitor, not your coins! We're back to square one, aren't we? With just some dodgy software and additional complexity papering over the critical flaws.
>reports that the design of the network is still only in draft form
last updated 2016
>(those pesky details like routing, which are a difficult problem, are mostly elided in the documents so far)
Can you elaborate on why routing is a difficult problem? Pathfinding and flowgraphs are solved problems in computer science.
>I'm sure people use it, but the developers are very clear that it it is not to be trusted: https://github.com/lightningnetwork/lnd/blob/master/docs/saf... says that it is 'considered reckless to put any life altering amounts of BTC into the network' -
it's considered reckless to put any life altering amounts of money into a volatile cryptocurrency (or for that matter, even a single stock)
>how can anyone consider this to be production quality?
it's considered production quality because merchants are willing to put hundreds of thousands of dollars into it.
It's a network of node operators but rather than operating as a network, they operate as individual hubs. It's also all offchain and you have no idea if they're playing by the rules.
There's a more recent documentary "The Bizarre Disappearance Of A Canadian CEO - An Unsolved Mystery" (Feb 2021 I think)
An interesting addition is his BlackHatWorld account shows as active in Aug 2019, a while after he was supposedly dead. https://youtu.be/NMDZcbkgpJA?t=1735
Other than the security of your coins, the problem with crypto IMO is liquidity.
If a bank sees a transaction from a crypto exchange they can freeze your account. Even if it is a good faith transaction where all the funds have documented sources.
The real reason banks hate crypto is because it takes their control away. Banks can create money easily via fractional reserve banking. They also collectively control money supply via the Fed.
They cannot do that with cryptocurrencies like bitcoin, so now they want to extend the power of the "US" (pronounced Fed) dollar to the digital world via "stablecoins" that are pegged to the dollar and have built in fractional reserve support, replicating the dollar system on top of a phony blockchain that offers none of the benefits of a real coin other than making banks powerful and happy. Only then they will embrace crypto, while banning every other crypto.
Whether you call it a fact or feature, it does attract people who have a distrust of institutions. Many of these people don’t understand how modern banking systems actually work or how protections like FDIC insurance are extremely valuable protections.
Every Bitcoin thread on HN attracts crypto proponents who try to compare cryptocurrency to storing cash under your mattress or keeping gold bars in your basement, when that comparison is useless for 99% of people who wisely choose to use modern banking systems and all of the protections they afford.
Cryptocurrency also attracts people who like the complexity and rituals of managing it all. Playing with crypto wallets and blockchains and different ways of moving numbers around is fun to a lot of people, and they don’t understand why the things they enjoy are actually a hassle to everyone else.
Finally, crypto enthusiasts love the scarcity of their crypto, so seeing other people lose crypto makes their own holdings more valuable. It financially benefits them each time coins are lost forever, because the market cap stays high but those lost coins will never be sold, removing them from downward price pressure.
Nothing wrong with these protections. Insurance is a good thing, exchanges should be insured as well.
We just don't like the costs typically associated with these nice things. We gain protections and stability but in exchange we are subjected to the whims of government: arbitrary freezing of accounts, invasion of privacy, erosion of freedom, abusive taxation, highly inflationary monetary policy... It's no wonder people like a system that lets them escape all of that if they want.
Are you comparing the most fundamental part of crypto currencies (being able to make transactions yourself) to software crashing? How does that make sense?
Yes, I am saying the fact that someone can take your keys and you have zero recourse to ever reclaiming that value is a bug. It's one of the "original sins" if you will. Because that's not what anyone actually wants. I've never met anyone who was thrilled by the prospect that if anything went wrong nobody could help them.
> Yes, I am saying the fact that someone can take your keys and you have zero recourse to ever reclaiming that value is a bug.
A bug is something unintentional. I guess you don't carry any cash or drive a car either, since 'anyone can take it and you have zero recourse'. Stealing cryptocurrency is still illegal.
> It's one of the "original sins" if you will. Because that's not what anyone actually wants.
It may not be what you want, but if you need to send money electronically to another person somewhere else in the world you might think differently. If you are tired of your credit card number getting passed around you might like being able to see a transaction, approve it and be done with it. If you live in a country with hyperinflation or banking controls it could be the separation between two very different lifestyles. I can guess ahead of time that you will move the goal posts here from 'no one wants it' to 'I don't see people doing that'.
> I've never met anyone who was thrilled by the prospect that if anything went wrong nobody could help them.
Even when people lose cryptocurrency it is either from losing access to the keys or being scammed. The idea that people actually get their own keys is much more rare. Modern banking solves some problems of reversibility, but the same could easily be applied to cryptocurrency. The reverse - being able to use money electronically, peer to peer, without a third party, is not something the modern banking system has given anyone yet.
> A bug is something unintentional. I guess you don't carry any cash or drive a car either, since 'anyone can take it and you have zero recourse'.
Yes, I literally do not carry cash, not more than $20, for exactly that reason. And neither does anyone else I know of not actively involved in a drug deal.
I do not however see why you mentioned a car, that's a tool, not a store of value. I don't transact car.
> Stealing cryptocurrency is still illegal.
Code is law. It's not stealing if you take it from a smart contract. Like a DAO. I'm sure the illegality of their actions is of big consolation to every Turkish person right now. I hear there was an exit scam.
> It may not be what you want, but if you need to send money electronically to another person somewhere else in the world you might think differently.
It's not what anyone wants. That's why Visa offers chargebacks and all issuers have fraud departments.
Let me ask you this: when was the last time you heard any customer gripe at the merchant, "man, I really really wish I couldn't charge you back in the event this product isn't as advertised and you refuse to help me out -- what a nightmare!" Chargebacks are the reason e-commerce is even a thing. The only way people trusted websites to pay for stuff is safe in the knowledge if shit hit the fan they had someone to sort it out.
> If you live in a country with hyperinflation or banking controls it could be the separation between two very different lifestyles. I can guess ahead of time that you will move the goal posts here from 'no one wants it' to 'I don't see people doing that'.
Do people in hyperinflationary countries use it? No, because they don't want their currency to drop 30% overnight like BTC did this week. That's just as bad if not worse than their home currency. Worse, in the sense it comes with a $50 transaction fee, which is a months salary in a lot of these places.
Not to mention the value of the crypto assets these Turks held dropped to 0 the second their bank fled to Thailand with them.
> The reverse - being able to use money electronically, peer to peer, without a third party, is not something the modern banking system has given anyone yet.
And yet it works great. Almost like it's not something people need. Or want! Because intermediaries add value. That's why we pay them.
> It's not stealing if you take it from a smart contract. Like a DAO. I'm sure the illegality of their actions is of big consolation to every Turkish person right now. I hear there was an exit scam.
What kind of goal post moving nonsense is this? First you were talking about basic general cryptocurrency, now you are on to exotic ethereum specific stuff for some reason instead of confronting what you said before.
> It's not what anyone wants.
I just explained why that isn't true. Repeating your assertions doesn't mean anything.
> That's why Visa offers chargebacks and all issuers have fraud departments.
Visa is not a currency. There are debit cards that can be recharged with cryptocurrencies. This has been explained to you many times.
> when was the last time you heard any customer gripe at the merchant, "man, I really really wish I couldn't charge you back in the event this product isn't as advertised and you refuse to help me out -- what a nightmare!
When was the last time you heard someone say they wished transactions would take a month instead of a few minutes? Also again, credit cards are not currencies. Credit cards are a service and they add 3% on to everything you buy from their transaction fees.
Crypto currencies and credit cards can both be used to make transactions electronically, that single overlapping use case does not make them 1:1 substitutions for each other.
> Do people in hyperinflationary countries use it?
Called it. Also, yes they do. For all the volatility of cryptocurrencies, in places like venezuela, argentina zimbabwe, russia and many other places that have had huge currency crisies, having something volatile is better than having something rapidly diminishing.
> Worse, in the sense it comes with a $50 transaction fee, which is a months salary in a lot of these places.
Bitcoin is useless at this point. Any cryptocurrency besides bitcoin and ethereum fill these roles. Bitcoin was intentionally crippled, the technology obviously works.
> Not to mention the value of the crypto assets these Turks held dropped to 0
I think even you understand that having the assets you have a claim to stolen is not the same as having those assets 'drop to 0'.
> And yet it works great.
It works great for you, but you don't live in a country with massive inflation or banking controls. You don't need to send remittances. You aren't trying to get paid by someone in another country for freelance work.
> Because intermediaries add value. That's why we pay them.
This is not an argument anyone made in a general sense.
> Almost like it's not something people need.
Someone in Greenland might say that no one needs air conditioning and someone in Malaysia might say that no one needs a furnace to heat their house. They would both be exceptionally selfish and myopic positions to take. It is also objectively not true.
> I don't transact car. - It could be taken from you with 'no recourse'.
Yeah, no, that's simply not true. There's lo-jacks, there's DOT owned cameras, there's the police. There's a ton of recourse afforded by the legal system. You know, with the police and the judges and the whatnot?
It's asinine to make this argument.
> Code is law. - No it isn't.
Well you should tell the Ethereum foundation lol.
> What kind of goal post moving nonsense is this? First you were talking about basic general cryptocurrency, now you are on to exotic ethereum specific stuff for some reason instead of confronting what you said before.
"Code is law" is a smart contract expression, I'm sure you know that. As for stealing crypto, it's a question of possession being 9/10ths of the law for an asset class designed to circumvent efforts to reclaim it or prevent its transaction.
> I just explained why that isn't true. Repeating your assertions doesn't mean anything.
You explained nothing.
> Visa is not a currency. There are debit cards that can be recharged with cryptocurrencies. This has been explained to you many times.
Because it's a really strange distinction to make for a unit that marries the two together. Sorry, if you build a hybrid of a currency and a transaction system you have to defend its role as both.
> When was the last time you heard someone say they wished transactions would take a month instead of a few minutes? Also again, credit cards are not currencies. Credit cards are a service and they add 3% on to everything you buy from their transaction fees.
I have no idea what kind of transaction you're talking about, and it's clear you don't either. Anything that takes a while is simply factored via lending. This is not a problem that exists in reality, just contrived.
That 3%, by the way, exists primarily in the US. Visanet takes about 0.1%, the rest is passed on to the issuing bank where it offsets the cost of loan origination and servicing, and paying rewards to customers. The interchange rate varies by card type. This also pays for insurances, and things like chargebacks. Things customers want.
In the EU it's 0.2% for debit and 0.3% for credit, and they just don't have rewards programs. Australia is also a capped interchange market.
By the way, acceptance of credit increases average ticket size for merchants about 20%, and reduces their costs associated with managing cash.
This is a disingenuous argument based on a total lack of understanding of the modern financial system.
> Called it. Also, yes they do. For all the volatility of cryptocurrencies, in places like venezuela, argentina zimbabwe, russia and many other places that have had huge currency crisies, having something volatile is better than having something rapidly diminishing.
I'm sorry but they don't. The countries with the largest crypto penetration are Nigeria (where it's now illegal and dropping) and the US. It's less than 5% in the US and less than 1% globally.
It's been 13 years. There's high school students younger than Bitcoin. Nobody in these countries is interested in paying a months salary in transaction fees for a coffee - or to dump their live savings into an easily scammable store of value that fluctuates 20% day over day. [citaiton needed] on your part.
> Bitcoin is useless at this point. Any cryptocurrency besides bitcoin and ethereum fill these roles. Bitcoin was intentionally crippled, the technology obviously works.
Competitors are only cheap because nobody uses them. This is the crypto way.
> I think even you understand that having the assets you have a claim to stolen is not the same as having those assets 'drop to 0'.
It is if the intrinsic characteristics of the currency are the reason you no longer have it. Trustlessness, censorship resistance, decentralization - this is why $2B could flee in the first place. And be fenced. You can't do that with traditional currencies.
> It works great for you, but you don't live in a country with massive inflation or banking controls. You don't need to send remittances. You aren't trying to get paid by someone in another country for freelance work.
Sure, I do, thanks to TransferWise Borderless, something thats "been explained to you many times" to borrow a turn of phrase.
> Someone in Greenland might say that no one needs air conditioning and someone in Malaysia might say that no one needs a furnace to heat their house. They would both be exceptionally selfish and myopic positions to take. It is also objectively not true.
And everyone would say we don't need to spend a country of power so some ancaps can trade spreadsheet cells :)
> Yeah, no, that's simply not true. There's lo-jacks, there's DOT owned cameras, there's the police.
And if someone steals the keys to cryptocurrency you can transfer your balance before. If someone scraps a car, you don't get it back. The asinine argument would be to pretend cryptocurrency is somehow unique here.
> Well you should tell the Ethereum foundation lol.
You brought up ethereum stuff as a diversion and a gish gallop instead of admitting that what you originally said was not just hyperbolic but a lie. This has nothing to do with anything except for you to ignore what contradicts everything you say.
> I have no idea what kind of transaction you're talking about, and it's clear you don't either. Anything that takes a while is simply factored via lending. This is not a problem that exists in reality, just contrived.
Once again, just because you don't know something, it doesn't mean that no one else does. How do you think charge backs work? Credit card transactions take a month to clear and make it to the vendor.
> That 3%, by the way, exists primarily in the US.
And? You were making an argument that credit cards somehow negate benefits of cryptocurrencies.
> By the way, acceptance of credit increases average ticket size for merchants about 20%, and reduces their costs associated with managing cash.
And? This isn't about credit cards, you said no one wanted anything that cryptocurrency does.
> I'm sorry but they don't. The countries with the largest crypto penetration are Nigeria (where it's now illegal and dropping) and the US. It's less than 5% in the US and less than 1% globally.
They do. Again, repeating your assertions isn't evidence. First you said no one uses it and no one wants it. Now you are back peddling into saying "it's only millions of people". Here is some actual information instead of hallucinated nonsense to try to shift around from your original claims - 106 million people are estimated to be cryptocurrency users.
> It's been 13 years. There's high school students younger than Bitcoin.
This means nothing.
> Nobody in these countries is interested in paying a months salary in transaction fees for a coffee -
No one is making an argument for bitcoin. I explicitly said that already and you copied and pasted it. Then you still argue against something you hallucinated.
> or to dump their live savings into an easily scammable store of value that fluctuates 20% day over day. [citaiton needed] on your part.
All of this is nonsense and reeks of desperate frustration to validate hating something instead of understanding it.
> Competitors are only cheap because nobody uses them. This is the crypto way.
Bitcoin Cash has more transactions that bitcoin and 32x the transaction throughput. Monero has a dynamically increasing block size with gradual penalties for outlier large blocks. What you are saying is completely disproven by these two examples alone.
> It is if the intrinsic characteristics of the currency are the reason you no longer have it. Trustlessness, censorship resistance, decentralization - this is why $2B could flee in the first place. And be fenced. You can't do that with traditional currencies.
They didn't really have it in the first place, just like paypal. They had a number and never touched cryptocurrencies. You should tell all the people with frozen paypal accounts that this "can't happen with traditional currencies". You should also tell the citizens of Moldova.
You should also tell the Bangladesh bank that was hacked and -used to make over $100 million in SWIFT transactions from the Federal Reserve in New York-. They would be pleased to know this can't happen with "traditional currencies".
That's interesting that you mention them, since they make heavy use of ACH, which takes 3-4 business days to clear, and receiving USD wire transfers costs $7.50.
Once again though, you said "no one wants" cryptocurrencies. 100 million people want them and your own anecdotes don't mean anything.
> And everyone would say we don't need to spend a country of power so some ancaps can trade spreadsheet cells :)
> All of this is nonsense and reeks of desperate frustration to validate hating something instead of understanding it.
I understand the system plenty, the difference is I look at it objectively, and you're not. You drank the kool-aid and got swept away.
tl;dr:
Cryptocurrencies are poor currencies because they're broadly speaking deflationary. That's not something we want in currencies, as it reduces the velocity of money and leads to a slower economy. They can't react to shocks, they can't react to population changes and hard currency exacerbates economic instability. Currencies only need to hold their value for as long as you possess them, be fungible (cryptos largely are not) and be cheap or free to transact anything else is a non-goal. Crypto prices are backed by Paolo's Bahamian money printer and enthusiasm. They're intrinsically inefficient because decentralization is inefficient. They're actively user-hostile because transactions are irreversible and they're super easy to lose. Not to mention they flail around wildly both up and down. Awful currency.
They're poor assets because Cryptocurrencies are negative sum vehicles. Any wealth generation is purely illusory. For every $1 you put into the system less than $1 can leave because miners extract the delta. This is simply a system to transfer wealth from new market participants to old market participants.
A business generates revenue which is used to repurchase shares, issue dividends or grow the intrinsic value of a business.
They're not actually better at anything than a classical implementation.
The actual issues in the traditional finance system can just as easily be solved within it. ACH is a great example. It's deprecated, on its way to being replaced with RTP, which settles instantly, no blockchain needed. Fedwires settle instantly and a number of US banks offer them free of charge.
If you understood a bit more about traditional finance you'd see your arguments really aren't relevant to people.
In exchange it facilitates money laundering at an unprecedented scale, and unprecedented frauds. It created a new type of crime - ransomware. And those fraud examples? Literally a rounding error on this exit scam right here. Thanks, Crypto!
> I understand the system plenty, the difference is I look at it objectively, and you're not. You drank the kool-aid and got swept away.
That's not an argument or information of any kind. Instead of confronting anything I said, your whole post is a text book gish gallop - a bunch of nonsense arguments about things you are hallucinating since everything you said so far has been wildly contradicted.
No mention of the 100 million cryptocurrency users after you said there were none.
No mention of all the use cases after you said there were none.
No mention of your claim of 'cheap because they aren't popular' being completely and obviously false.
No mention of all the bank hacks after you said it doesn't happen with traditional currencies.
No mention of the sources I gave to back up what I said while you repeat what you want to be true with no evidence.
Instead you forget all the things you said that were not true at all and move on to venting about some sort of tangents.
> They're not actually better at anything than a classical implementation.
You can come up with all the "you just don't understand" BS you want (with nothing to back it up) but the truth is there is no other way you could send me money in an hour without identifying information and a third party. I'm sure you will purposely miss the point and say "but I don't want too" instead of confronting that this is obviously not true.
> You can come up with all the "you just don't understand" BS you want (with nothing to back it up)
Just replying in kind to you haha.
In fact everything I said had basis, and is factually accurate, even if you choose to pretend otherwise. And of course no reply to any substantiation points I raised just complaining about other points I raised but set aside due to the conversation lacking focus.
You said no one uses cryptocurrency, I linked you an article with its own sources saying there are over 100 million users.
You said cheap transactions are because no one uses them, I linked you a graph of actual transactions showing bitcoin cash has more transactions than regular bitcoin even though it has 1/600th the transaction cost and I explained why. I told you how monero dynamic block size work, which is something you can verify if some day you want to learn.
You there are no uses, I pointed out multiple uses and you didn't contradict any. You just said you personally didn't want them.
You said you could do anything with some money transfer service, I pointed out the actual numbers which involve 3-4 business day transactions and a cost of $7.50 to RECIEVE a wire transfer.
Meanwhile you keep making assertions and thinking that repeating them is the same as explaining them. Then you ignore everything that directly contradicts what you say to try to talk about nonsense that has no relevance, then you say 'there is a lack of focus'.
This is what people do when they have their conclusions picked out ahead of time and are desperate to get their nonsense validated. It is everything people hate about political discourse - no reality, no sources, no evidence, no data and no accountability when someone lies.
I'm sure the victims from TFA don't see it as a feature, and as such: If crypto-enthousiasts have the right to victim-blaming, I certainly have the right to point out what's going on, no?
Yet another reason crypto will never become the de facto currency. Can you imagine if we treated other currency like that? If everyone had to protect their own cash, and if you put it in a bank you were considered foolish?
Although at least with cash most people would understand how to protect it. A vast majority of people in the world are never going to understand crypto well enough to be fully capable of securing it themselves.
Yes one of the big problems with cryptocurrencies is that they solve problems that nobody has, which in turn create problems nobody wants (for values of nobody < 0.0001% of population).
We don't need or want a trustless distributed consensus currency...
We don't need or want a fully public ledger...
We don't need or want to be in charge of their own keys...
We don't want to deal directly with other agents without a middleman to protect us from fraud and theft.
Slow transactions and distributed public ledgers are built into the design of something like bitcoin and are fundamentally tied to it - take away all those things by redesigning it or trying to augment it and you're left with a bad copy of a centralised transaction network. People need to trust their money and trust the agents they transact with, validation of identity (something bitcoin actively works to undermine) is key to financial transactions, it should be central to any network.
There really are some fundamental flaws in the design and in the aspirations of currencies like bitcoin which mean they will only ever be used by a tiny minority. Hence bitcoin has recently become a vehicle for pure speculation instead, which will end very badly when this bubble bursts.
> without a middleman to protect us from fraud and theft
The blockchain and smart contracts serve this purpose. Regardless, there's additional protocols and tools being created for decentralized insurance, escrow, custodians, etc.
> The blockchain and smart contracts serve this purpose.
They do not, and the bitcoin blockchain in particular eschews identity verification in favour of pseudo-anonymity and puts people in charge of their own anonymous keys - perfect for criminals (anonymous enough to evade police) and states monitoring citizens (not anonymous enough to evade states, lasts forever for retrospective enforcement), but terrible for normal citizens who just want to be sure who they are transacting with and be able to get compensation if they are defrauded.
Blockchains and smart contracts are no substitute for real-world contracts enforced by courts and regulators, and the cryptocurrency attempt to supplant state currencies and their legal supports actively undermines any attempt to get regulators to seriously go after fraud. So instead regulators have classed them as assets (so they can tax every transaction in theory) and washed their hands of them.
The blockchain only solves the trust problem ON THE CHAIN itself. However, everything useful is going to involve something off chain, at which point we are back to having a trust problem.
Take, for example, the simplest use of currency... I want to buy an item that someone else is selling. The blockchain can verify that the buyer has sent the seller money, but it can’t verify that the thing the person bought isn’t defective. It can’t even verify that that person even delivers the item to me. It can’t verify that the item isn’t stolen.
Credit cards can help remedy the situation for all of those things.
A large part of this is also just the immaturity of the industry as such.
Kraken now has a US banking license, Coinbase is not more likely to shut down or screw you over than any normal bank, etc.
The people saying "not your keys, not your coins" are in general applying the same logic to banks - so, yes, "not your cash, not your fiat" holds just as true in principle. Banks and government institutions can still freeze your funds for arbitrary reasons. In many places you also don't have any recourse in the event of, say a combined hacking + SIM-jacking attack resulting in loss of funds from your bank account.
Understanding how to protect your funds properly will continue to get easier to understand and do over time (and honestly, a hardware wallet like for example Ledger is in principle not more complicated or difficult to use properly than using the various 2FA systems banks utilize today).
It's not that hard today, and it will continue to get easier.
More secure ways to do custodial/multisig/etc that relies on a third party like a bank are being continuously worked on as well.
It's still early days. But at the end of the day, if you're happy to forfeit your independence for convenience, banks will be happy to fill that void for you.
The promise of cryptocurrency is that you have the choice. That choice does not exist in the legacy fiat economy.
> Coinbase is not more likely to shut down or screw you over than any normal bank
Coinbase literally just direct listed, had their executive team dump every single vested share on the open market, and then listed Tether. Not a mention of Tether in their regulatory filings under "OMG WTF ARE YOU THINKING". Hmmmm.
> AFAIUI this is not uncommon practice for IPOs in general
IPOs generally have a 180 day lockup, in part so that the market can begin down the path of price discovery. This is a solid anti-pump-n-dump mechanism. This is achievable because new shares are issued for folks to trade with. The rules were changed recently, by the way, so that direct listings could also issue shares instead of requiring insider selling.
I think some selling is fine, I do think selling almost 100% of vested shares by every executive on day 1 isn't a bullish indicator. Usually they sell over months/years with a 10b5-1 plan.
> Jumping on Tether seems very shortsighted in CBs position.
I think they direct listed before launching USDT specifically so they could avoid putting Tether in their disclosures.
> I think they direct listed before launching USDT specifically so they could avoid putting Tether in their disclosures.
That definitely explains the timing, but given that they probably prefer users to use their own USDC anyway, why do this when it's such a controversial asset?
Real banks are regulated and insured by government institutions like FDIC. If there were crypto exchanges with those properties, they’d be fine to trust too.
Current crypto exchanges are basically like holding your money in a gaming account in an offshore casino. The companies don’t submit themselves to anyone’s jurisdiction—so there’s no implied legal safety.
None of these are as good as the protection of your money in a bank. e.g. Coinbase's insurance covers just their 'hot storage', but that's only 2% of your currency. Plenty of exchanges have lost their supposedly secure cold wallets to hackers.
Coinbase is so large that if their cold storage was compromised, the ripple effects on the entire crypto market would destroy immense value everywhere.
Returning coins to users would only be part of the problem. Everyone’s coins would be worth less from the fallout alone.
What does that even mean? Cryptocurrencies are currencies; there’s nothing fundamentally different about holding them for investment purposes vs. doing regular ForEx trading, save for the fact that the existing ForEx infrastructure hasn’t caught up to support crypto yet.
That's why I said ForEx. People don't tend to hold their own currency as an investment (except in the form of treasury bonds); but they do tend to hold (a portfolio of) currencies
other than their own — or bonds from the governments that issue those currencies — for investment purposes.
The exact kind of trading that crypto people already do all day, is called ForEx trading when applied to fiat currencies; and (investment) banks know how to do it very well. Those banks just haven't built the infrastructure to allow them to manage a BTC or ETH holding through the same ForEx account that they use to manage fiat holdings.
If they did build that infrastructure, most of the crypto exchanges would go extinct overnight. Why would I do my (crypto) ForEx trading on a crypto exchange, if I could trade it with my bank instead?
(There are benefits to using a DEX over a hypothetical crypto-enabled investment bank for crypto-trading; just no real benefits to using a regular centralized exchange over said bank. Centralized exchanges are investment banks — just fly-by-night ones compared to real investment banks.)
Internet was pretty complicated in the 90s as well, example: "What is the internet, anyway?"[1]. Things are becoming more and more intuitive by the day and I expect that to continue.
In my country there is an official government warning to not click on links in fake package delivery SMS that are going around and are impersonating DHL to get you to download an app. People click them regardless and supply the spammers with more and more phone numbers linked to real names.
Will be fun when all the people clicking on these links lose all their currency.
But we already had viable money and a working banking system. Crypto is a step back in usability. It had a long way to go before it reaches parity with the existing solution that everyone already uses.
It’s not like the Internet, which was an all-new solution.
Not only that, but if you send your (Bit)coins to the wrong wallet address, there is no verification that the address even exists, and the coins could be permanently destroyed.
At least with all other assets classes, there is some verification of the transaction and receiver by the exchange, and the possibility to reverse an error.
Wasn't GP talking more about valid but non-existent addressed? I'm guessing this is essentially the same as sending it to an address for which the key has been lost.
Yes, but that's pretty uncommon in practice. Why would anyone ask you to send money to a valid address that they don't own? It can't be a transcription error because the checksum would catch that
It's like sending gold over snailmail to a random address
Bitcoin and Bitcoin Cash (possibly doge coin and lite coin) all have checksums. If you are sending to an address a single character off will not work because the checksum won't line up and the address will not be valid.
If you are sending to an address you did not create, then you are sending to an address where you don't have the key anyway. If you are sending to a specific address (given by someone else or generated by you) the checksum will only line up if it is unchanged.
I wonder what the statistics say: what’s the likelihood of a Bitcoin residing with a custodian being stolen or lost versus the likelihood of a Bitcoin directly held by the end user being stolen or lost?
My guess educated guess is that the Mt. Gox and various darknet market exit scams alone account for the majority. Those alone probably make stolen from personally managed wallets pale in comparison. Don't know about lost wallets though.
Why? There are so many ways to store them, why is this such a pain? I don't get it but everyone here says so but in meatspace I never hear anyone complain about it.
I'm in Istanbul, currently working on a couple of projects in crypto. Let me know if you're also in Istanbul (or not) and want to work on something fun together in crypto, betting or similar. Address in profile.
As always, don't let your coins sit on an exchange. If you don't have the keys, it's not your coins.