[HN Gopher] Binance's books are a black box, filings show, as it... ___________________________________________________________________ Binance's books are a black box, filings show, as it tries to rally confidence Author : joenathanone Score : 251 points Date : 2022-12-19 17:48 UTC (5 hours ago) (HTM) web link (www.reuters.com) (TXT) w3m dump (www.reuters.com) | joenathanone wrote: | I think these Bitcoin exchanges need to be regulated the same way | banks are, or we are going to see a repeat of the early days of | banking where banks would disappear overnight along with people's | life savings. | dragonwriter wrote: | > I think these Bitcoin exchanges need to be regulated the same | way banks are, or we are going to see a repeat of the early | days of banking where banks would disappear overnight along | with people's life savings. | | What is the gift of predicting events that have already | occurred called? | AnimalMuppet wrote: | > What is the gift of predicting events that have already | occurred called? | | Retroactive precognition? | EamonnMR wrote: | Recognition | worik wrote: | > What is the gift of predicting events that have already | occurred called? | | Learning from your mistakes. | jacquesm wrote: | Why use the future tense when you can use the past and the | present? | notRobot wrote: | We could even call it something else! Like, uh, cash! | _the_inflator wrote: | This is part of the fraud: Convert fiat into something | virtual, steal the virtual stuff, convert it back into money. | Rinse and repeat. | | So everybody can say: Hey, it was crypto, not money. | kodah wrote: | Having something cash-like that's digital I think would be | good. Bitcoin ain't it though. | Aaronstotle wrote: | Monero does the job fairly well, the only issue is that the | floating exchange rate can make it difficult. A stable-coin | with Monero's properties would do well I think. | tsimionescu wrote: | A stable coin requires proof of who owns the actual | coins, so that the clubs can be redeemed for real | dollars. That would defeat the whole point of Monero. | There is no way to make an anonymous stable coin, as long | as owning and transferring dollars requires KYC and AML. | Kranar wrote: | Doesn't require it no. DAI is a stable coin that has held | its peg to USD for something like 5 years now and there's | no proof of ownership involved. | | https://coinmarketcap.com/currencies/multi-collateral- | dai/ | [deleted] | twblalock wrote: | We already mostly have that. | | Most of the US dollars that exist are already digital -- | numbers in a bank account, only some of which is backed by | actual dollar bills. It is trivially easy to use them to | pay for things or transfer them to other accounts, and they | can easily be converted to/from paper money in reasonable | amounts. | | What we have now is fine. I don't see any benefit to making | our existing currencies more "digital" than they are. | mypastself wrote: | The commenter you're responding to was specifically | talking about digital cash, not digital currency. | Properties of cash are distinct from other forms of money | in specific ways. "Ease" of conversion from one to the | other doesn't make them identical. | twblalock wrote: | I haven't yet seen anyone demonstrate a _meaningful_ | distinction between "digital currency" and "digital | cash" that actually matters for how people use money. | mypastself wrote: | Anonymity (or pseudonimity) is a key appeal of cash as | opposed to other forms of money. Combined with the ease | of use of digital payments, I can completely understand | the attraction that the original comment was referring | to. | LatteLazy wrote: | The fact the SEC simultaneously insists it has the right to | regulate crypto AND refuses to do the basic, vanilla, widely | supported stuff like require brokers to segregate funds is | pretty damning. | TedDoesntTalk wrote: | How can they do that when these exchanges are based outside | the US (except for Coinbase) | joenathanone wrote: | Correct me if I am wrong, but as I understand it as long as | they do business in the US then they are accountable to US | laws/regulations. | AlexandrB wrote: | Using the example of FTX, only FTX.us _officially_ | operated in the US (and was supposedly run more like a | real bank), but there was always a "wink, wink, nudge, | nudge" hint that if you want the _good stuff_ you should | go around the geoblocking and deal with FTX proper. | | The other interesting element is that the most vocal | crypto backers, often for ideological reasons, _want_ to | deal with this completely unregulated system that crypto | has created. If the SEC had intervened before FTX | collapsed, I 'm sure you would hear cries of | "authoritarianism" and "fiat banks are scared" from the | usual suspects. Perhaps we should let these people have | what they want - consequences and all - and just limit | the ability to buy Super Bowl commercials in regulated | markets for unregulated products. | danaris wrote: | Correct me if I'm wrong, but haven't we _already_ seen a bunch | of cryptocurrency companies of various types do exactly that? | | (It's possible none of them have been exchanges; I admit I only | pay peripheral attention to that sphere.) | artursapek wrote: | It literally just happened with FTX, which was off-shore | exchange that wouldn't have been under the jurisdiction of | American regulators. | | Ironically, a lot of Americans were using VPNs to trade there | and lost their savings. Why? Because FTX.US is regulated so | heavily that it isn't as attractive of a product. | dragonwriter wrote: | > It's possible none of them have been exchanges | | There have been exchanges, as far back as MtGox, and as | recently as FTX and FTX.US. | KrakenEng wrote: | Exchanges aren't banks and shouldn't act like banks. Banks are | allowed to take deposits and lend then out, ie they don't need | 100% reserves. Exchanges should be required to hold at least | 100% reserves. | | FTX collapsed, in part, because they weren't maintaining | reserves. Instead they gambled with customer money. | jacquesm wrote: | FTX collapsed, in part, because they were acting _like banks_ | by lending out the funds they were entrusted with and | leveraging them. | LatteLazy wrote: | I mean... We already knew they were a black box. And anyone | keeping assets on-exchange this soon after FTX frankly only has | themselves to blame. | seydor wrote: | > The Reuters analysis | | The "investigative" part is public data that any of us can view. | If there was something remarkable there, crypto bros would have | found it without waiting for reuters to "review" things. | | Obviously since binance is not based in the US or EU, its users | don't expect the same level of transparency that banks have. If | reuters wanted more transparency maybe it should ask some country | to allow it to base itself there. But given that they have been | effectively on the run for most of their existence, it's not | strange that they are keeping their secrets to themselves. I | think reuters is trying to be sensational but none of the news it | reports are. | arcticbull wrote: | > If reuters wanted more transparency maybe it should ask some | country to allow it to base itself there. | | They are welcome to base themselves in any jurisdiction however | they would rather not because they have no interest in | complying with the kinds of financial regulations that underpin | a modern and functional economy. | | Why on earth would we want to compromise on these regulations | and onshore these bucket shops? Just look what happens when you | let them do as they will. | [deleted] | seydor wrote: | > They are welcome | | Are they? They are not unless they transform to another | boring bank which defeats the purpose of the exchange. | Banking is not why their users joined | arcticbull wrote: | > Are they? They are not unless they transform to another | boring bank which defeats the purpose of the exchange. | Banking is not why their users joined | | Sure, but if their users joined to participate in an | unlawful offshore casino then my point remains. They can | comply with regulations, or not. It's not the | responsibility of the states to bow down to binance and | allow this silliness, but on binance to conform to a state | regulatory framework. | seydor wrote: | > but on binance to conform to a state regulatory | framework. | | Which is not something they want. That was my comment | about actually, Reuters article implies that binance must | comply with some state. | lottin wrote: | If binance wants to sell their services in a particular | market they must comply with the rules that are in place | in that market. Is that controversial? | seydor wrote: | Afaik they do already, binance.us exists | freejazz wrote: | Reuters article is implying that Binance's unwillingness | to show what many regulations would require is because it | is a fraud. | corv wrote: | How is it the responsibility of an offshore company to | conform to some states regulatory framework - and which | states anyways? | | If people want these products and they are regulated out | of the market, offshore is where these companies will go | to provide them. | warkdarrior wrote: | If _US_ people want these products and Binance wants to | sell these products to US people, Binance should conform | to the US regulatory framework. Otherwise it is on | Binance to ensure they do not sell their products to US | customers. | corv wrote: | It is US customers who are circumventing the technical | measures set in place to prevent them from trading on | these platforms with VPNs and fake PII. | jacquesm wrote: | That line of reasoning worked so well for BetonSports. | | https://en.wikipedia.org/wiki/BetonSports | | And hey, what's 33 months in prison? | JumpCrisscross wrote: | > _since binance is not based in the US or EU, its users don 't | expect the same level of transparency that banks have_ | | I am not a Binance user. My tax dollars will be used to clean | up this mess once it implodes. I am also not too keen on it | playing piggy bank to Iran and North Korea. | seydor wrote: | > My tax dollars will be used to clean up this mess once it | implodes | | Really? have they been used to clean up the mess of some | other offshore company imploding? | JumpCrisscross wrote: | > _have they been used to clean up the mess of some other | offshore company imploding?_ | | Investigating FTX, extraditing SBF and putting people in | jail isn't free. | stickfigure wrote: | The US government gets a bulk discount. | seydor wrote: | That's because sbf was a US citizen. And presumably this | is all paid by the recovered money, not the taxpayer. | Otherwise, why even bother | SideQuark wrote: | >That's because sbf was a US citizen. | | Nope, that's incidental. If he were foreign, and had | committed the fraud he did against the US, he would | likely also be extradited to here to stand trial, the | same as, e.g., these three Nigerian nationals [1] or this | Jamaican [2] (or, if you search for a moment, hundreds of | other cases). | | >And presumably this is all paid by the recovered money, | not the taxpayer. | | It's paid by the taxpayer, through the budgets of the | DOJ, the same way things like Enron, Madoff, and other | massive frauds are not paid out of recovered money, which | is used to pay off creditors. | | You can check the line item in the federal budget that | pays the DOJ, so that's not a question that taxpayers pay | for these legal enforcements. If you want to claim | "presumably" please show the valid source where this | entire criminal cost will be paid for by the recovered | money. | | [1] https://www.justice.gov/opa/pr/three-nigerian- | nationals-extr... | | [2] https://www.justice.gov/opa/pr/jamaican-national- | extradited-... | jacquesm wrote: | That's a pretty naive view. Him being a US citizen makes | a bunch of stuff easier and some other things harder but | none of those would ultimately stand in the way of him | going to trial. And even if you hide in a place where | there is no extradition you are _still_ going to be tried | but in absentia. And good luck moving around after that. | ceejayoz wrote: | Binance is already being investigated by US law | enforcement; American taxpayers are already incurring | these costs. | | The FBI isn't gonna get the recovered money from FTX | (what's left of it). That'll go to the bankrupt entity's | creditors. | jacquesm wrote: | It's time to go find a nice juicy head of lettuce I think. | helloworld11 wrote: | I think it's amusing as hell how the founder of Binance had a | spat with SBF and was partly responsible for hurrying along the | collapse of FTX (though that dumpster fire was doomed anyhow), | and is now reaping the whirlwind of his own backstabbing of | another major crypto bro. | | Note: I personally believe in the utility of crypto and think | much of the hate for it on HN is downright idiotic and ignorant, | but giant shenanigans like these are are a separate matter of | natural human greed, fraud, lies and self destructive | foolishness. | | https://www.theguardian.com/technology/2022/nov/11/binance-f... | deebosong wrote: | I'm sure you've fielded this Q many times. | | I don't wanna be a full-on hater of crypto. And I do wanna hear | of use-cases that are relevant and intuitively understandable | or at baseline, usable, to laymen. | | What utility do you see - through all the noise and chaos and | human flaws that taint all things - from crypto, that to you | just makes sense and will prevail in light of all the deserved | and undeserved criticism? | danielvf wrote: | Two good articles from the last few weeks on what has made | the cut over the last few years and proven to be useful : | | https://vitalik.ca/general/2022/12/05/excited.html | | https://astralcodexten.substack.com/p/why-im-less-than- | infin... | | I won't summarize, beyond agreeing with the second that a lot | of the view that "all of crypto is a scam" is driven by the | fact that essentially all public facing crypto advertisements | are for scams. However behind the scenes there are open | decentralized system that do move billions of dollars | smoothly and safely for millions of people. | corv wrote: | Very much agree, the post by Scott Alexander is nuanced and | well worth the read | jeffreyrogers wrote: | In most of the cases Scott cites the underlying thing | being facilitated can be done via a normal financial | system, some countries just don't have one that functions | very well. So I don't see the benefits of crypto as much | as I see the benefits of having a well functioning | financial system. Crypto just outsources that from local | regulators, banks, etc., to crypto developers. Might be a | good tradeoff for those countries. | | The personal example Scott gives of sending money to | Russians is probably illegal and circumvents currency | controls that the Russian government has deliberately put | in place, so not really a demonstration for crypto as | much as it is an example that people find these types of | transactions useful for various reasons. | wmf wrote: | It would be interesting if the US set up some kind of | Freedom Bank specifically for people in China, Russia, | Venezuela, Argentina, Nigeria, etc. to access US dollars | and dollar-based investments. Those countries wouldn't | appreciate it though so I'd expect a lot of diplomatic | blowback. Until then, there's crypto for better or worse. | | [Insert conspiracy theory here about Tether being a CIA | op to dollarize the developing world.] | AbrahamParangi wrote: | Having a normal, working financial system isn't really a | global or historical norm. Very arguably we're on an | isolated island of relative economic calm in both time | and space, and that we should not assume these conditions | will just continue forever. | JoshTko wrote: | If you disagree with your govt. either financial policies | (taxation, currency controls etc.) or political. You can use | Bitcoin to maintain control your assets. For example, if the | government suddenly decides to restrict capital leaving the | country, BTC would be free from that restriction. If your | govt. decides your political activity is now criminal and | wants to freeze all your assets domestically as well with | international partners, BTC would not be frozen. This is not | a problem that most people in the US will face. But if you | are a Russian or Chinese citizen then BTC's utility would be | much more real. | cduzz wrote: | That's an interesting theory. | | In practice, maintaining anonymous ownership of your assets | on BTC is excruciatingly hard, because it's a public | record. | | The organizations that monopolize violence ("governments", | typically) have ways of compelling people that simply | ignore some magic number in a distributed database. Please | do a thing or we'll do a thing to someone you care about. I | suspect even Satochi would happily give up the private keys | to avoid a visit to Lubyanka... | | That's not to say that there's no value to these things, | but real life violence trumps imaginary freedom. | valcron1000 wrote: | Well, I use crypto to bypass currency controls so there's | your "imaginary freedom" | cduzz wrote: | I'm not sure what is imaginary here. | | You believe you've done a thing in contravention of your | government's laws. Perhaps you've done it and will not be | caught. Perhaps you've done it and they haven't gotten | around to asking you politely not to do this. Some crypto | currency obviously leaves a paper trail for all to see; | some states it doesn't and perhaps doesn't, but perhaps | does. | | Autonomy to break a law and not get immediately punished | for it isn't really freedom from that law. | | To clarify -- breaking a law is not imaginary. Maybe | you've broken the law and haven't immediately faced any | repercussion, but that doesn't mean that bypassing money | laundering controls renders those money laundering | controls or punishments for breaking the controls | imaginary. | | (edited to add the clarification) | Bilal_io wrote: | the idea boils down to: If the government can see what's | your bank account in details, and can seize it, and the | government can see what's in your Bitcoin wallet but not | with full transparency and cannot seize it, which is | better? | enraged_camel wrote: | I don't know about Russia, but I think if China decided to | restrict capital from leaving their country, they would | definitely crack down on crypto since escaping capital | controls is crypto's primary use case and China knows that. | | You might ask "what does such a crackdown look like?" And | the answer is, they would simply round up and throw in jail | prominent crypto people, make it a crime to do anything | with crypto (buy, sell, use as currency etc.) and put the | fear of god in everyone else so that nobody dares touch | crypto. | coffeebeqn wrote: | Besides if you control the whole network, how hard would | it be to filter the Bitcoin network calls and then arrest | the people making them? | melenaboija wrote: | That sounds like an empty argument to me. Besides that the | only use I see so far for crypto is speculation (with fiat | currencies) if you disagree with the government never ever | trade these assets with fiat currencies that are backed by | governments. | | Do the deals between your crypto things that are not | controlled by governments and taxations and leave the rest | of us and our economies alone. | LatteLazy wrote: | (not op) I stayed with a friend in Zimbabwe at the height of | their hyperinflation. | | His house was filled with petrol (gas) because he'd been paid | and he had to buy something the same day that would keep for | a month and hold it's value or his money would evaporate. So | we sat in his house praying there wasn't a fire. | | That's the use case for Bitcoin: currency of final resort. | It's the same as gold only better (can't be faked, hard to | steal etc). | | I think in countries with stable currencies and after 2 | decades of low interest and inflation, that's underrated as a | use case... | | I also believe (forgive the digression into my weird | conspiracy theories) that one reason the US has made so much | progress on legalised weed is because crypto and the dark web | basically mean you can get whatever you want delivered right | to your door. But that's just my own weird world view. | greenthrow wrote: | Considering how few world currencies are less stable than | BTC this doesn't make a lot of sense. | | Plus if you have the ability to turn arbitrary currency X | into BTC, you can certainly change it into USD, which is | far more stable than BTC. So, nope. This is not a good use | for BTC. | stickfigure wrote: | How does a Zimbabwean convert ZWR to USD? How does a | Venezuelan convert bolivars to USD? | maria2 wrote: | They usually go to a black market currency dealer and | keep the money under their mattress, or at least that's | how they did it in the USSR. | rdtwo wrote: | Bitcoin does not solve that problem. The reason he has a | ton in gas is that it was government subsdised and sold a a | fixed rate to worthless currency. So to get paid you needed | to trade worthless paper for gas and then for something of | value. Obviously gas is hard to store so there is a | negative premium for selling a large amount at the same | time | tkmunzwa wrote: | > His house was filled with petrol (gas) because he'd been | paid and he had to buy something the same day that would | keep for a month and hold its value or his money would | evaporate. So we sat in his house praying there wasn't a | fire. | | I'm guessing the friend sold the petrol for USD, right? | | Zimbabwean who lived through this checking in - let me add | context and help deconstruct this for HN: People (and | banks) were converting Zimbabwean dollars to _anything_ | that could hold value and could be easily resold (in US | Dollars) ASAP - this could be petrol or petrol vouchers, | groceries, cookies - anything at all that could be bought | with Zimbabwean dollars and flogged for USD. One of the | retail banks got in trouble with the central bank after | adding masonry bricks to their commodity portfolio[1]. | Petrol was definitely a risky. Bitcoin would not have | solved this because the using Zimbabwean dollars to | purchase of commodities was only the first step to | procuring US dollars while arbitrating the delta between | the official exchange rate that formal businesses had to | use, and the much higher real exchange rate as determined | by the market. The hypothetical bitcoin:Zimbabwean dollar | exchange rate in 2008 would have always tracked the market | rate with no opportunity for arbitration. | | 1. Not brick futures or other fiscalised instrument: the | bank bought and took possession of piles of bricks for | resale later to hedge against inflation | strangattractor wrote: | So our Zimbabewe friend buys bitcoin at $60K and 6 months | later has bitcoin worth a third of that. Or he puts it in | FTX and has it all disappear. Not seeing how it solves his | problem. | maria2 wrote: | The friend could have purchased a stablecoin. For | instance, as of writing right now, he could have bought | USDT and had the same amount of money after 6 months. | Obviously, the stability of USDT is rightfully | questioned. But the stability of storing many liters of | petrol in your house should also be questioned. | arch1e wrote: | My country is cracking down on civil liberties (I'm not | talking the ability to not take certain vaccines), I'm | talking about religious freedom among other things and crypto | like XMR gives me a way to make sure I am able to buy stuff | like Mullvad VPN (again for privacy) without going through a | centralized payment processor. This is just one instance | though, I even get domains from njall.la now with XMR/crypto | and enjoy a lot of privacy benefits (coming from godaddy) | m00dy wrote: | you are not alone... | chollida1 wrote: | > civil liberties (I'm not talking the ability to not take | certain vaccines), I'm talking about religious freedom | | Interesting framing. | | I would have thought the ability to control what goes into | a person's body, ie bodily autonomy would have far outweigh | religious freedom. | | If I had to give one up, and I don't think anyone should | have to give up either, I would give up religious freedom | long before having to give up control over my own body. | | I guess that goes hand in hand with the abortion debate, | you're either in the religious freedoms camp or the bodily | autonomy camp. | | it's good to see there are other's who think the opposite. | | I appreciate the differing opinion. | klyrs wrote: | Freedom _from_ religion is a prerequisite for bodily | autonomy, for at least half of us. | dbfx wrote: | He is probably trying to stop the inevitable derailment | once someone mentions(or believes is referring to) | vaccines in any way that is not unequivocal and blind | support. | chollida1 wrote: | Ah, that makes sense. Appreciate your help!! | hudon wrote: | > you're either in the religious freedoms camp or the | bodily autonomy camp | | An abortion kills a baby by directly attacking his or her | body (dismemberment, lethal injection, etc.). You can | firmly be in the bodily autonomy camp and in the | religious freedoms camp at the same time. | cpgxiii wrote: | You can't claim to be in the "bodily autonomy" camp and | believe in compelling actual living people to use their | bodies to carry a fetus to term. | anikom15 wrote: | Considering the most popular religions fundamentally | reject bodily autonomy, it shouldn't be a surprise. | okasaki wrote: | Ah ok, the use case is breaking the law. | dnissley wrote: | Yes | keyme wrote: | Yes. Or, in other words, maintaining morality despite | laws. | andrepd wrote: | Yes, it may surprise you that the women in Iran, for | instance, are breaking the law. And so did the people who | founded the USA, in another example. | | Law [?] moralityb | AlexandrB wrote: | > Yes, it may surprise you that the women in Iran, for | instance, are breaking the law. And so did the people who | founded the USA, in another example. | | Sure, but plenty of bad actors have broken the law as | well - the examples of these are far more numerous. While | there are hypothetical moral use cases for crypto, some | of the most common _actual_ uses are greed (yield | farming, speculation), scams (rug pulls, pump and dumps, | wash trading, ransomware), tax evasion, and as currency | for contraband like drugs. What ratio of moral to immoral | use cases is acceptable to the crypto community? 1:10? | 1:100? Or is anything ok as long as _someone_ out there | is using it to escape repression? | mbg721 wrote: | The more frequently breaking the law coincides with good | morality, the weaker the law becomes, and the less | legitimacy the state holds. That's why setting everything | up for selective enforcement is so destructive. | Karunamon wrote: | I question whether the daily flouting of laws like the | speed limit on the highways has a measurable impact on | the "legitimacy of the state". | okasaki wrote: | It's beautiful when people you like doing things you | approve of are breaking the law. Let's say someone uses | crypto to buy weapons or explosives and your loved one | dies in the attack. Are you still going to support it? | dbfx wrote: | yes | zoklet-enjoyer wrote: | Yes. The way it's paid for isn't the problem. | smcn wrote: | That's quite the response. Are you suggesting that | weapons or explosives can only be bought with crypto? | brookst wrote: | I read it as maintaining privacy while doing legal things | that a corrupt government might punish despite their | legality. | | What led you to think laws are being broken in those | scenarios? | andrepd wrote: | It's pretty telling that Monero, a project with actual | utility, underperforms in terms of value/attention compared | to pump and dump scams or useless NFTs / tokens. | dogman144 wrote: | Technical: | | - transfer of provably discrete (and sometimes fully private) | values between machines, without a central intermediary. It | takes what HTTP/S, FTP, all the information protocols that | opened up the internet to what it became, and adds the | ability to know that packet_a is the _only_ packet_a out | there. | | - it's on the back 30-40 years of research of the same | computer scientists that brought you consumer cryptography, | Tor, and many other consequential innovations. As in, it | didn't just pop out of SBF's head. | | - Think of what non-discrete digital information transmission | did to _everything_. Now we have discrete digital information | transmission. This is where the "money of the internet" | terminology comes from IMO. | | - "but we have Google/ApplePay, Venmo, etc!:" look at the | protocols that govern the internet and similar examples like | linux. how many of them are "owned" by a central party like | digital payments currently are? yes, some have heavy | influence, and ICANN, DNS, etc are somewhat centralized when | you really get down to it. But there is no vendor-specific | HTTPs. | | Not technical: | | - simply put: people, governments, financial institutions, | and on and on are using it. The opinion pieces and select | loud voices in government and HN would make you believe that | only criminals or techies putting the dotcom bubble to shame | are using it. However, hand on the bible, it has penetration | across quite a lot of use cases as a digital, international | currency, beyond NFTs and moonCoins. Bank of International | Settlements just let member banks deposit 2% of their | holdings in BTC. This is not a small event, and its one of | many out there. While Senators, ECB, and coworkers in HN are | shaming it, it's getting adopted by their peers. And normal | folk who don't know better see it as an open question still | or fraud somehow. | | - payment censorship: The largest capital outflows from CN | where when crypto was legal there, and then subsequently | banned. Ok though, "it could never happen here" is often | thought if you live in the West. People saw Julian Assange's | cut off from payment rails and rightfully so perhaps | dismissed it. But then what about OnlyFans last year almost | having to change its entire product because someone didn't | like porn and pressured enough investors/payment providers in | the West to cut them off? Mindgeek (Pornhub) lost payment | providers access as well last year. Ok though, "well that's | porn." When you combine the march of digital payment | censorship based on the values of the day, combined with the | digitization of cash and limitations around paper currency, | that's a trend to note. What about abortion? What about pro- | life funding? What about...? What about Equifax selling your | compensation history to competitors, and your lack of opt-out | from that system because you get paid in USD via digital | banks? In short, digital currency is not currently trustless | and censorship-less in the same way paper currency more or | less is and has been for centuries, crypto is the only | (perhaps imperfect!) alternative out there right now. | | - inflation: 8% inflation in the US is one thing, but I know | for a fact restaurants where I live (normal town, US) have | faced 100% raw ingredient prices YoY. money printing == | inflation is irresponsibly simplifying it, but where is your | right to have a currency backup that at least has some | boundaries around the monetary policy of the day, enables to | you exist and spend online, and aligns with your incentives | to spend or not spend? Dgital currencies built in CN have | test trial "expiration dates" on them to spend for instance. | The US is in the middle of similar tech. "It could never | happen here" but if you dig in and read some Keynes which our | monetary policy is based on... it certainly could. | coffeebeqn wrote: | > inflation | | There are better bets out there against inflation. Dollar | is "down" 8% because of inflation but BTC is down 65%.. | Just buy gold if you want a hedge that is not correlated | with the general stock market. Crypto is just a proxy for | tech stocks | digitaltrees wrote: | The ledger. I think people are so caught up with it being a | currency or investment asset that they miss the real | revolutionary ideas. Triple entry bookkeeping. When double | entry accounting emerged in the renaissance it revolutionized | commercial activity. I think there are use cases where being | able to publicly verify transactions and history would be | immensely beneficial. | | I worked as a lawyer in NYC unwinding many of the 2008 | financial crises bankruptcies and can tell you that billions | of dollars of mortgages, home deeds, commercial loans, etc | are traded with bankers sending each other excel files. Which | means that the property ownership is literally a spreadsheet | (often with a date in the file name). It was shocking but how | it was done. | | There are massive third party organizations that are tasked | with tracking those transactions MERS. The commodities | exchanges etc but they weren't much better organized. Lots of | excel files. | | So if there could be a common accounting ledger that could be | verified it would be a big improvement. The question is | though would that be 10x better? Or rather enough to get the | various stakeholders to adopt the ledger. So far. No. | uberdru wrote: | Ironically, perhaps not so much so, that's precisely why | the blockchain was invented in 1992. A simple notary | service. | rwmj wrote: | Couldn't that be more efficiently solved using a public | database maintained by a trusted third party? We don't need | a blockchain to know who owns shares for example. | floober wrote: | Efficiently? Maybe. Providing the same type trust and | guarantees? Probably not. A public, append-only Merkle | tree just has a lot of interesting properties and I think | there are spaces where they are useful. | grp000 wrote: | I'm just an engineer with no background in finance, but | didn't a fair part of the 2008 collapse come about by | trusted third party risk auditing that went bad? Rather | than maintaining a centrality of trust at some level, it | seems intuitive that if there is a public database with | trust decentralized among all the participants, there is | less of a chance for that trust to be abused. | blowski wrote: | Financial transparency and integrity is a wonderful goal. | However, I am yet to understand why any kind of | blockchain is necessary or sufficient, or even a good | solution. If you want to cook the books you can do it | with or without blockchain. Same if you want to be | honest. Blockchain seems like a very complex and | expensive way of persisting transactions in a database. | coffeebeqn wrote: | It's just a fundamental naivete about how the world | works. If I'm dodging taxes or hiding profits then I'll | just enter false numbers on the blockchain. Now what good | is the blockchain? Unless the whole world runs on the | super inefficient blockchain system then there is always | a potential for gigantic drift between the actual state | of the world and the blockchain. | bart_spoon wrote: | Not in a way that would have been impacted by a | blockchain ledger. Third party risk auditors were giving | financial products risk ratings that were far out of | touch with their actual risk levels. But this was due to | flawed logic, financial incentives, and corruption, and | not because of a lack of transparency. The data of the | mortgages comprising these financial products was | available to those interested in those looking to fact | check, but no one was. | SideburnsOfDoom wrote: | The "risk auditing" was the bad part, and that's a human | problem; writing those decisions to a different kind of | database wouldn't have helped in the slightest. | strangattractor wrote: | I would agree. The whole currency thing is a sham. It has | enabled some horrendous criminal financial activity. But | when I think of state and local gov't making there ledgers | public and preserving some anonymity of the payees. I see | some really exciting prospects for transparency. | formercoder wrote: | Why can't we just have a better, trusted, third party? Any | use case for Blockchain that does not use the phrase "zero | trust" is not a real use case. | acover wrote: | The merkel tree can be separated from the block creation. | See aws qldb. | | https://aws.amazon.com/qldb/ | nepthar wrote: | Any potential trusted third party is corruptible whereas | the type of "block chaining" that is used can be quickly | verified as correct by anyone. | digitaltrees wrote: | Because separation of the record from the record keeper | means the system will be endowed with new attributes such | as accuracy, verification. distribution, longevity etc | that result in a more robust and valuable system. | | Imagine you run a fast food franchise with 10 | restaurants, each keeping their inventories in a local | database, how do you coordinate global restocking? Manual | reconciliation across each database. Ok move to the | cloud. Now you have a global picture where state is | adjusting in closer to real time and reconciliation is an | inherent property of they system rather than a process | implementation operationally. Well as I have described | elsewhere in this thread. A lot of financial transactions | are managed in an equivalent process of local databases | with manual reconciliation. | | I am oversimplifying because there are a number of road | blocks that prevent a solution like "implementing a cloud | database" and also conflating what happens within a | company (using the franchise analogy) rather than a | market (where every single franchise had a common | inventory and ordering system not tied to a third party | supplier). By my point is that a block chain ledger would | solve many of these problems without users even being | fully aware of the problem in the first place. | peter422 wrote: | There is no reason you can't mix the cryptological | security of the Bitcoin Blockchain without the proof of | work part. | | If I (a trusted third party) maintained a giant public | database that anybody could append to, it would be | trivial to release checksums or hash values at specific | intervals to prove that nothing in the past was altered. | comte7092 wrote: | >Which means that the property ownership is literally a | spreadsheet (often with a date in the file name) | | Are you implying that the spreadsheet is/was itself a legal | document signifying ownership? Because that is radically | different for my understanding of home ownership. I have | never owned property, but to my knowledge ownership is | conferred by way of a deed that is registered with the | government. | | Which leads to the main issue with the crypto hype that I | see. The majority of the space is taken up by two | overlapping camps: get rich quick shills and techno | libertarians who believe we'd have utopia if not for the | pesky government. | TheOtherHobbes wrote: | If there's a mortgage the deed is held by the mortgagee. | Or at the very least there will be a formal legal claim | on the deed (in the UK it's called a lien or a charge - | not quite identical but similar) which isn't satisfied | until the mortgage is paid off. | | Worse, there were instances in 2008 of banks stealing | homes out from under people - who sometimes didn't even | have a mortgage - by getting fake paperwork waved | through, because it was impractical for all the competing | claims on a loan to be properly validated. | | https://www.salon.com/2013/08/12/your_mortgage_documents_ | are... | | Would blockchain fix this? No. The problem wasn't | tracking the transactions, it was the fact that banks and | the financial industry fraudulently hid the true risk of | various loan bundles. | | Blockchain would only have solved this problem if the | loan _context_ - creditworthiness, payment history, and | so on - was included with every loan transaction, and | could easily be accessed and summarised for all the | transactions in all of the loan bundles. | | Which blockchain doesn't do. | | Coincidentally, this is exactly the same problem that | blockchain hasn't solved for FTX, Binance, Mt Gox, etc. | Blockchain does not provide an objective assessment of | risk, value, or corporate credibility. It's just a | ledger. | | Even if you can't manipulate the ledger, you can still | manipulate the _perceived meaning_ of the numbers in the | ledger. Especially if you 're a trusted party in the | cryptoverse. | | In fact it doesn't just fail to fix these problems, it | creates new opportunities for spectacular frauds. | markwkw wrote: | Home deeds, loans, mortgages are not accounting concepts, | but more in the ... contract(?) land. | | When a loan is made, a loan document exists; and accounting | entries exist somewhat separately. A contract can be | entered without writing, a contract can result in complex | accounting treatment which may be investigated, rules | clarified, decided, corrected when methodology errors were | made. | | Do you mean that the blockchain is supposed to help with | the accounting side, or with the contract side, or both? | ElevenLathe wrote: | I think the dream is something like making a single | commit that updates your code and the documentation that | is kept alongside it in the same repo. A blockchain | transaction would represent the entire transaction | including the mortgage agreement, the deed, the asset on | the lender's books, and the liability on the borrower's | books. I say dream because there's no real path to this | ever happening, and it's definitely not happened yet. | belter wrote: | https://aws.amazon.com/qldb/?nc1=h_ls | elliekelly wrote: | What about triple entry accounting requires the blockchain? | Or how does triple entry accounting benefit from being on | the blockchain? Or a distributed ledger in general? The | shitty book keeping you encountered will _always_ be | cheaper, faster, and easier than the "better" alternative. | The people like SBF with a black hole of excel nonsense as | their "accounting system" aren't going to be persuaded to | take up triple entry accounting-- on the Blockchain or | otherwise. | RC_ITR wrote: | Everyone loves cryptography and the chain of blocks | structure because they are _good things_ | | Neither of those things are the defining feature of | cryptocurrencies, decentralization is. | | Decentralization is one of the most pointless endeavors | in technology, because it's so hard to scale anything | decentralized (case in point, how expensive on-chain | BTC/ETH transactions are). | strangattractor wrote: | I don't think is does - but exposing too much data is a | problem. The block chain can be public and still maintain | a certain anonymity. If people see a lot of money going | into a particular wallet they can ask the city to clarify | where/why the money if being spent. It might be nice to | see exactly how money is being spent for schools | (payroll, facilities etc) for example. Block chain seem | made for such a thing is all. | digitaltrees wrote: | I am not aware of any other triple entry accounting | system or proposal other than the block chain ecosystem. | But I have been a crypto curmudgeon and skeptic so I | don't follow it closely. Honestly it was the only idea | that didn't make me throw up a little when I would talk | to crypto fans. It was my little tactic to find common | ground. | | Excel may be cheaper and faster for companies but | governments care about legitimacy and could probably end | up forcing implementation. So imagine that instead of | county deed offices that have physical books dating back | hundreds of years with title info, they had a blockchain | ledger then the third party systems the evolved on top to | make title transfer lowers friction will technically not | being a true legal transfer could have a middle ground | where the transaction has the certainty and legitimacy of | a public record and the low friction of a digital | transaction rather than physically having to go to each | county to record the transaction. | | Similarly all large banks now have to submit stress tests | to the federal reserve and one of the hardest things to | do is trace asset transfers and liabilities to get at | contagion risk. If regulators were smart they would | mandate a blockchain or time series database so that | unwinding transactions didn't have to happen through | junior attorney and bankers manual review of transfers in | bankruptcy court. | marcus_holmes wrote: | I still don't understand why this is better on a | blockchain than a database. | | Transactions are harder to do, they take longer, they're | massively more inefficient, etc. And what do we gain from | this? Blockchains are not immutable (as we've seen), | they're usually controlled by a single entity or group of | entities (as we've seen), they're public but in a bad way | - as soon as the connection between a person and a key is | revealed, that person's entire transaction history is | revealed. And so on. | | I know that "all these problems are being solved" but you | could solve them all in an instant by just using a | database and having sufficient oversight over who gets to | manage it. I don't understand the enthusiasm to use a | blockchain here (or anywhere) | legutierr wrote: | If two rival businesses are transacting with each other, | and they don't really trust each other fully, which one | hosts the database? | | Whoever hosts the database is in a position to manipulate | data to the disadvantage of the other. Which entity gives | in and gives up that power to the other? Why should | either party agree to take on that sort of counterparty | risk when they don't have to? | | Also, what instances of non-immutable blockchains are you | referring to? Blockchains by definition are immutable | post-finality. | laserlight wrote: | > which one hosts the database? | | Both? | | > manipulate data to the disadvantage of the other | | How is this even possible? Don't they other sign their | transactions? | pr0zac wrote: | While running transactions on a distributed blockchain | would provide some additional resilience here, I'm unsure | if I can picture any situation where the added protection | provided over current contract and civil law would | outweigh the issue of having your financial transactions | publicly available for review by all other actors to most | businesses. | | It also doesn't really do much for most real world | transactions because of the oracle problem. Unless both | businesses only care about entities that exist on that | blockchain as well having the transactions there doesn't | provide any additional benefit since the blockchain | cannot verify nor enforce anything outside of it. | Regardless of whether the transaction of you sending me | money is immutable I can still just not send you what you | paid me for. | nradov wrote: | The clearing house hosts the database. There's no need | for a blockchain. | | https://www.cfainstitute.org/en/advocacy/issues/central- | clea... | legutierr wrote: | What if there is no clearinghouse operating in that | particular market? | RC_ITR wrote: | You build one because it's _way_ easier _and_ cheaper to | build a clearinghouse than it is to build a massively | decentralized network of trust-less computers? | cduzz wrote: | The two rivals write a contract? The contract involves a | 3rd party that's mutually agreed upon by the rivals? | | If the two rivals can't abide by a contract, a blockchain | wouldn't resolve the scenario either. Imagine "bug vs | boot" or "shooting war" kinds of contract violations | where overwhelming force is in play; why would a | blockchain make a difference? | | Human history has lots of "people don't trust each other" | scenarios, and they've been resolved in the past, with | reasonable efficiency, without blockchain. | eldenwrong wrote: | >"Blockchains by definition are immutable post-finality." | | This is the greatest misunderstanding. Immutability is | NOT a property of blockchains. Its a property of Bitcoin | and possibly Ethereum through PoW/PoS | chaostheory wrote: | A database is great for one entity. A blockchain is | useful for situations with multiple actors with an | inherent lack of trust, but with a need for a shared | truth | PKop wrote: | 3rd party trust and central point of failure. I don't | agree that we've seen Bitcoin be controlled by a single | entity or that anyone has power to modify it against the | will of market. I would argue the things you don't see a | need for are necessary, if not sufficient, to have a | sufficiently decentralized ledger. Network effect might | be the other ingredient. | streb-lo wrote: | Blockchain also only works the way people intend in | entirely digital domains. | | As soon as you tie it to real-world assets it's no | different than an Excel sheet because you must validate | everything manually anyways. | lamontcg wrote: | Would it make sense to put those transactions into | something like git or does a conventional database sound | more appropriate? | | Why do internet companies not use blockchains like git | for all their transactions and instead use some form of | database? | | And git doesn't prevent software developers from pushing | bad/hostile code/data into their repos. A blockchain | wouldn't prevent financial institutions from publishing | incorrect/fraudulent transactions into the blockchain. | | What you theoretically gain out of a public blockchain is | just that it is permanent and public. You could try to | pass laws to require permanent and public access to a | companies books instead and be technology agnostic. This | law would be highly unlikely to ever pass. But you don't | need a blockchain to do it. | | And if it isn't public and immutable then the company can | change the ledger whenever they like and throw away the | old chain and commit fraud, there's nothing magical about | the word "blockchain" which prevents that. It is the | public nature of it which makes it immutable. If you want | to make it private and immutable a normal database with a | public, published cryptographic hash of the entire | contents published at intervals would make that possible. | What you need then is an append-only database where | incorrect prior data is fixed not by throwing away the | bad data, but by publishing new records which update the | old data, and then a way of publicly validating that the | old data hasn't been tampered with. That can actually be | solved without blockchain. It definitely can be solved | without public blockchain, you just the company to | periodically "publish" its bookkeeping hashes to an | agency (or the public) that tracks them. | | That doesn't fix fraud, though, those records could all | be bullshit the first time they're entered. Just makes it | harder to go back and commit fraud. And if the company | never opens it books and is never audited then none of it | really matters, blockchain or not it just becomes a | private diary of lies. | jerrygenser wrote: | Could these ledger be a log data structure in a single | database that is run by a trusted entity like a government? | Why does it need to be decentralized? | hyperman1 wrote: | I see 2 core parts to cryptocoins: The Merkle tree for | honesty and the Proof of work for value. | | I'd agree the Merkle tree is good as the ledger. AFAIK it | is also used in certificate transparancy logs: Every block | of log entries contains a cryptographic hash to a previous | block, so you can't rewrite log entries, only append them. | This is what guarantees honesty in the certificate world, | and is I assume the only aspect you need for your proposal. | | But the Proof of work is basically a race to do as much | computation as possible. This is the part that wastes so | much energy and resources, the part that slows things down, | but also the part that provides value to cryptocoins by | proving that someone wanted to waste/spend the resources. | | Do you see value in a system that has both aspects? | er4hn wrote: | I'll chime in here that Merkle trees are best used to | tell you if something changed in the historical records. | Certificate Transparency (CT) provides you with an easy | to verify way to generate a single identifier that tells | you the current state of a set of information. You can | then incrementally add onto it while checking that none | of the past information was changed during that addition. | This is a pretty similar concept (and motivation) to Git. | | Where this becomes interesting is that someone can just | change the past data, then go through and update all the | subsequent additions to come up with a the new final | value. CT handles this by having multiple other entities | check that the CT root values are not changing over time. | Git handles this by allowing for similar mechanisms - if | you believe Linus he memorizes the root hash of his local | repo before bed each night. A post-it note would work | just about as well for the Linus/Git case, but I am | getting off topic. | | I don't see value in proof of work because it assumes | that any system would have more entities (where each | entity has some amount of computing power..) watching | than there is computing power attempting to rewrite it. | That doesn't really scale up across most industries use | cases. A set of say, mortgage companies, could just | exchange data in a merkle tree format and raise an alarm | if it looks like the values changed from the prior root. | This is very fast and cheap to compute and doesn't | require proof of work calculations. | Quarrelsome wrote: | Crypto is really good for buying drugs given that most | traditional payment systems do not tend to cater for the | black market. | darawk wrote: | I'll give this a shot. I've written variants of this comment | a billion times on HN, but I sort of enjoy trying to create | the perfect articulation of what it is that I like about | crypto, so I'll try again: | | Crypto is an alternative financial system. Financial systems, | on their own, are castles in the air. They provide no value | to anyone. Financial systems derive their fundamental | economic value by being wired to the real world in some way. | That is, efficiently allocating capital to productive | enterprises, cheaply translating capital between different | forms (e.g. currencies, but also product <-> currency), and | transferring risk from those who don't want it to those who | do. This is why finance exists, and what it is for. | | The cryptocurrency financial system as it exists now is only | very weakly connected to the real economy, and only in a few | places of marginal or possibly negative social value (e.g. | drugs, gambling, prostitution, ransomware). However, there | are a few places that actually use crypto fairly heavily for | legitimate, socially useful transactions, such as Vietnam, | Ukraine and Venezuela. Most people here tend not to find | those examples particularly convincing, and neither do I - | but they are important to mention. | | But what crypto represents is an _alternative_ model for how | a financial system could operate. It is a financial system | that offers many of the same features that our existing | system does, but is different in some ways. Asking "What | good is crypto?" is a bit like asking "What good is Linux | when we already have Windows?". They both do very similar | things, but they do them differently, and most critically, | they imply _different distributions of power_. | | If you build your business around Microsoft products, that's | fine, but in several important senses that makes you beholden | to Microsoft. If you want to build a financial business in | the traditional financial economy, you will probably have to | go to one of the major money center banks, hat in hand, and | ask them to let you do whatever it is that you want to do (or | an intermediary that has done this). Depending on what it is | you want to do, you may have to go to _all of them_ and ask | this. | | Crypto is different. If you want to build a financial | business in crypto, you simply write the code and deploy it. | You don't ask anyone for permission, and there is nobody on | earth that can tell you "no". Even the US Treasury hasn't | shut down Tornado cash, they've merely sanctioned it. The | drawbacks of this approach should be obvious, but so too | should the benefits. Whether you like the approach crypto | offers is simply a question of values. But it is, in my | opinion, undeniable that it is _meaningfully different_ while | being capable (in principle) of offering most of what | traditional finance does. | | The fact that crypto has not yet been wired to the real | economy is the reason that it has not yet provided much in | the way of concrete utility in most developed markets. The | reason it hasn't been wired to the real economy is that | regulators and lawmakers mostly have not allowed it. And I | agree with them! I would like to see a little more | experimentation in that direction, but crypto is fairly | obviously not ready for prime time in this sense - not yet, | and maybe never. Many things would need to happen first. | However, don't mistake the absence of this connection for the | theoretical inability to create it. It hasn't been created | because people are cautious about things this important, as | they should be. | | There is nothing in principle right now preventing anyone | from tokenizing a house, or a corporate debt instrument. And | even if you think "nobody has done those things because | they're stupid and crypto is just worse than traditional | finance", you may be right! But it should be obvious that | there are enough crypto believers out there that this would | have been done if it were legal to do so, _even if_ it were a | bad idea. Hence, given their total non-existence, it should | be clear that the reason it hasn 't happened is regulatory, | not fundamental capability. | | You will know crypto has failed if and when there are a few | real estate titles, car titles, equity shares, bond | instruments, and other assorted things from the traditional | financial realm that have been tokenized, but nobody cares | about them. Assets placed there by a few true believers, | traded for a bit, and then forgotten. _That_ is how you will | know crypto has nothing to offer. But for now nobody has done | those things, because the traditional legal system | (correctly!) won 't respect them sufficiently. | | EDIT: To extend the Linux metaphor a bit, Linux was created | in the early 90s, but I would argue it didn't become clearly | economically significant until the late 2000s. Prior to that | it was a toy for nerds and anyone serious used "real | products" built by "real companies" and purchased for | money[1]. Crypto is FOSS for finance, and maybe the | traditional world is right this time, and when it comes to | money walled gardens and closed ecosystems are best. But it's | not the world that I personally want to live in. | | [1] The exact timelines here are obviously fuzzy and | certainly you can argue with whether it was late or mid or | early 2000s, but what is inarguable is that Linux went | through a long "just a toy" phase in the minds of most people | criddell wrote: | > I personally believe in the utility of crypto | | That seeing utility in crypto requires faith is telling. | cokeandpepsi wrote: | the real utility in being able to play HFT-arbitrage trader | at home without all the rules and regulations tied to other | markets | | i'm not a fan personally having worked for a time with people | invovled in crypto, it just feels like the condensiation of | everything wrong with technology | | eitherway imo the rise of legal gambling apps will probably | kill the industry since that scratches the itch most people | went to cryptocurrency to remedy | MomoXenosaga wrote: | "Believe" means faith which is inherently non rational. Nothing | ignorant about not sharing someone's religion. | FormerBandmate wrote: | And it was over Twitter of all things. This is the history of | 19th century banking repeating itself as a giant farce | corv wrote: | Of course letting everyone print their own money is a farce | and doesn't actually generate any value for society. | | In that sense Binance is guilty here with their BNB token, | having also set the example for FTX' FTT token. | YawningAngel wrote: | To be fair to Binance, they have thus far honoured their | wildcat dollars. | mrguyorama wrote: | Wildcat banks always honor their receipts. | | Until they suddenly don't | cuteboy19 wrote: | A lot of the journalism is being done by coindesk on this | topic. Coindesk is owned by the same company who owns Gemini, a | rival exchange. So it is indeed poetic | cactusplant7374 wrote: | I think you have made a mistake. | | DCG owns CoinDesk but not Gemini. | | https://www.reuters.com/technology/crypto-exchange-gemini- | tr... | onecommentman wrote: | Who makes these changes? I shoot an arrow right. It lands left. | I ride after a deer and find myself chased by a hog. I plot to | get what I want and end up in prison. I dig pits to trap others | and fall in. | | I should be suspicious of what I want. | | - Rumi (13th C Persian poet, tr. Barks) | oneoff786 wrote: | There's a lot of human systems that would be great if not for | the humans! | throwaway23597 wrote: | Binance and Tether will not become insolvent, and that is | precisely the issue. They have an essentially endless supply of | laundered funds, criminal money, and international backing. It's | essentially a financial weapon aimed at the West, and adversaries | of the West will not let it fail. Major regulation is the only | way that these beasts will be slain, but they have donned the | cloak of "an exciting new fintech industry" and are lobbying like | hell, so I'm not terribly optimistic. | corv wrote: | No, Tether and their banking partner Deltec have very little | international backing, nor are they the same entity as Binance. | | Strange to call Tether and Binance, "weapons aimed at the | West", when their implosion would surely do more to damage | cryptocurrencies than global US Dollar hegemony. | | Of course one would be smart to use other platforms rather than | creating single points of failure.... | __derek__ wrote: | > Tether and their banking partner Deltec have very little | international backing | | Isn't Tether based in Hong Kong? | JumpCrisscross wrote: | > _their implosion would surely do more to damage | cryptocurrencies than global US Dollar hegemony_ | | Crypto never threatened the dollar. What is creating issues | is crypto's risks causing losses to Americans and, possibly, | the American financial system. | corv wrote: | This crypto and asset bubble was of their own making! | | Quantitative easing directly lead to inflated asset prices | and inflation. | | Then VCs jumped on the bandwagon and pushed FTX to | unsustainable heights. | | Now people all over the world are suddenly supposed to sit | in cash while everything is crashing with high inflation to | boot? | rvnx wrote: | This is why God created I-Bonds. | fredgrott wrote: | also strange wording given US banks are for the most part | prevented from offering banking services of crypto exchanges. | concinds wrote: | Why "the West"? Crypto is anti-state power generally, not anti- | West (most repressive countries crack down on its use). | | And I doubt the North Korean or Russian governments are using | Binance. | arcticbull wrote: | Crypto only benefits those states shut out of the orderly | financial system, like Syria, North Korea, Russia and Iran. | | North Korea has amassed a veritable crypto fortune, hundreds | of millions worth, that they're using to finance their | illicit nuclear weapons programs. They don't need to use | binance, but binance continued existence props up the value | of the crypto space and their holdings allowing their games | to continue. | | [edit] To be clear I'm not saying that NK or any other state | actor is propping up binance or Tether (I just don't know) | however it's pretty clear IMO that they benefit from its | continued existence. | ahtihn wrote: | > North Korea has amassed a veritable crypto fortune, | hundreds of millions worth | | Hundreds of millions isn't a fortune for a state. Certainly | financing a credible nuclear program costs way more than | that every year. Let alone everything else a state needs to | finance. | corv wrote: | So the Russian and Iranian people who are not at fault for | their governments misgivings are supposed to be shut out of | the global financial system too? | | Thank Satoshi for true net neutrality. | vkou wrote: | > So the Russian and Iranian people who are not at fault | for their governments misgivings are supposed to be shut | out of the global financial system too? | | ... Yes. Just like how the former are currently being | conscripted to fight their relatives in a stupid war, | started by their government. | | Life isn't fair, and people generally suffer when they | allow bad governance to ruin their country. Ultimately, | any government, even a repressive one can only function | when the people it governs believe it to be legitimate. I | hear that this sort of thing is being protested in | Iran[1] these days. | | [1] The thing they are protesting has little to do with | the cause of the sanctions, though, but that's another | story. | horsawlarway wrote: | > So the Russian and Iranian people who are not at fault | for their governments misgivings are supposed to be shut | out of the global financial system too? | | Speaking objectively here: obviously yes. | | There is no government on earth that does not function | without at least tacit consent of those governed. That | consent may be obtained in all sorts of manners (many | coercive or brutal) but fundamentally that matters very | little from the perspective of an external nation. | | The entire point of cutting a nation out of the financial | system is to generate internal pain among the population | that removes consent for their government that is | currently committing atrocities. | | If they want back in... the options are clear and simple: | Choose a new government (through any of several means - | up to and including rebellion or civil war). Stop the | actions of your current government. | mardifoufs wrote: | Are europeans responsible for the deaths and slavery in | libya? And americans are responsible for the deaths in | the middle east? When do we cut those populations out? | carlob wrote: | > Are europeans responsible for the deaths and slavery in | libya? | | Very much so, but as far as I can tell nobody cares | enough. Just to give an example: in my city Ukrainian | asylum seekers get free public transportation, whereas | those who escaped war in Africa ans went through the | Libyan lagers we help finance don't. And don't get me | wrong I would really like to see everybody get treated | like a human, I'm not advocating for any mistreatment of | Ukrainians... | CoastalCoder wrote: | > Are europeans responsible for the deaths and slavery in | libya? And americans are responsible for the deaths in | the middle east? When do we cut those populations out? | | Speaking as an American, I'd say "yes". At least for the | citizens who were adults at the time and were aware. | | I'm suspicious of any moral framework that's hand-tuned | to paint some persons as upright. | | I think we just shy away from the fact that we _are_ in | fact culpable, so we look for rationalizations. | horsawlarway wrote: | When there's a global structure that has decided that | those countries are not worth doing business with over | the actions of their government. | | That's the whole point... | | You seem to be implying a value judgement I'm not making. | I'm not making some random condemnation of | Russia/Iran/Whoever, or extolling the virtues of western | countries - I'm telling you the point of sanctioning | those countries is that it's a path towards adjusting | behavior by removing consent of those governed. | | If the Russian/Iranian/Whoever people are happy, content, | well-fed, and have easy access to luxury items... what | the hell is their incentive to change how their | government is acting on the international stage? | | The sanctions serve to show those people providing | consent that the rest of the group of nations they are | interacting with are not happy. | | It's a feedback mechanism that is not: "hey - we're going | to kill you now". Which Western nations are using 1) | because it's less expensive in terms of both capital and | bodies. 2) because it's arguably more humane. 3) Because | nuclear weapons have made countries averse to full war. | | There's no value judgement about whether the sanctions | are good or bad, or some prescriptive judgement that the | west is better. It's just the clear intent of the | sanctions is to make life harder for the citizenry | without having to kill them. | | Whether the countries making the sanctions are moral or | not (in my opinion, your opinion, or that of anyone else) | has fuck all to do with the functional manner in which | they are being used. | | Sanctions are a tool, whether that tool is being used | justly has zero relation to how the tool itself | functions. | potatototoo99 wrote: | There's also the matter of whether or not sanctions work, | and judging by their track record, they do not. | horsawlarway wrote: | Sure - the tool itself may not be particularly effective. | No argument here. | | It's essentially a signaling mechanism - how strong that | signal is received can vary a lot. | | In the case of Russia at least - it's dampened quite a | bit because both India and China are not participating. | While they're not outright supporting Russia - they don't | find the current government so unpalatable that they're | willing to break off economic activities (and again - | this is not a value judgement either way... simply a | statement of efficacy). | | In my opinion - I don't really think sanctions are going | to be terribly effective (I also think the price cap on | oil purchases will not be effective), but people don't | seem to grasp that a very real possible alternative is | outright war. Which, at least personally, I'd like to | avoid. So I'm willing to let sanctions ride for a bit and | see. But I'm also in favor of providing more arms and | weapons systems to Ukraine in the meantime. | | that said... I also have a bunch of duct-tape, plastic | sheeting, water, and some iodine pills in my basement - | because while I tend to hope that all the nuclear powers | involved here will act with some restraint, those items | will be very difficult to acquire in the 15 minutes when | I might really need them, and they're relatively cheap to | buy right now. So picking between that and sanctions... | again - I vote for sanctions right now. | europeanguy wrote: | > There is no government on earth that does not function | without at least tacit consent of those governed. | | One thing I've noticed visiting Russia (multiple times) | is how politically indifferent the average Russian is. | (Or more precisely the average big city Russian). There's | this idea everywhere that, you know politics is really | complicated and you don't really understand it, so let | the people in charge make decisions. | | So yes, Russian people have exactly the government they | want. | arcticbull wrote: | > So the Russian and Iranian people who are not at fault | for their governments misgivings are supposed to be shut | out of the global financial system too? | | If it helps exert pressure then financial sanctions are | strictly better than kinetic war. The ability to end | around those sanctions can lead to significantly more | death and suffering - both there and potentially | elsewhere. It's not about fairness it's about minimizing | harm. If you disagree, vote. | | > Thank Satoshi for true net neutrality. | | No thanks man. Seems like an interesting cult y'all have | there. | | [edit] Nobody has the right to trade. If you want to not | conform to social norms and pose a risk, fine - but you | don't have a fundamental right to exchange with foreign | powers whom you detest. If you want to go down that path | you better be prepared to be self-sufficient. | corv wrote: | Cryptocurrency proponents have taken on an almost | religious stance, I'll give you that. | | Then again fanatical users speaks to good product design | somewhere | AlexandrB wrote: | > Then again fanatical users speaks to good product | design somewhere | | Or to a conflict of interest. Unlike consumer products, | crypto usually ends up being worth more if more people | are using it. Most crypto proponents hold some crypto and | have a financial incentive to get more people into it. | corv wrote: | The same is true of the telephone, smartphones, the | internet, etc. | | Metcalfe's law applies here as the utility of the network | rises with the number of participants. | Jensson wrote: | No the same isn't true, I can't sell my telephone for | more just because there are more other people with | phones. | notahacker wrote: | It was founded in China, and the West being relatively | reticent to crack down on it is kind of the point. | | (Not buying the theory though; if Binance does have access to | unlimited funds they're not doing a great job of propping | their coin up) | canadiantim wrote: | Why does Binance need to be slain? Seems aggressive... | ineedasername wrote: | They're not big enough to be a weapon. Keep in mind the Cold | War was as much an economic war as the other aspects. That was | countless $billions. The space race alone through 1973 cost a | quarter $trillion and that was a minor bit of spending compared | to military and intelligence agencies. | | The US recently during the Covid shutdowns rapidly spent and | extra $trillion, then did it again 3 more times roughly a year. | This is essentially done via minting fiat money. | | The US also has too many strategic interests in Europe to allow | an economic attack there either, although all of crypto is | still too small to bother the EU to any high degree in terms of | an economic attack. | | Finally, Binance may be filled with criminal gains but | criminals frown on people taking their money so if anything | Binance, to the extent it's resources have criminal origins, is | constrained in deploying them beyond a certain point to defend | their business. | | No, Binance is far from immune to collapse, it's just that if | they start down that pathway then the criminals will be pretty | insistent on being first in line to get their money out. | jacquesm wrote: | Will you make everybody that believes you and that may end up | holding the bag in case you are wrong whole? If not then this | is content free. | | Agreed on the regulation front though, that may well - and | should - happen. | femto113 wrote: | In fiat terms, unless you really believe there is over $60BN | sitting in a bank account that they just choose not to show for | "reasons", Tether is already insolvent. Since most of Binance's | non-self-issued reserves are in the form of Tether they, by | extension, are insolvent as well. The open question is how long | can they can keep the game going, thus the current rescue | fund/proof of reserves/transparency audit circuses. | oc852 wrote: | Why even give these guys any legitimacy by regulating them? As | some experts opined, just let them burn. Regulating them will | end up bringing risk to actual financial markets. | helloworld11 wrote: | Binance and Tether are nowhere near big enough to be major | financial weapons against the west. They also have nowhere near | the sort of supposed major government or criminal support from | anyone interested or powerful enough to stop their possible | collapse. That you're claiming they do is odd compared to many, | many other more mainstream financial systems that have been | used as tools by governments and criminals for a lot longer | than crypto has even existed. People could have claimed | something similar to what you say about FTX just months ago, | and would have, as we now know, been very wrong. | | Edit: Just the daily trading volume of, say, the forex market, | completely dwarfs both the total market cap of tether or the | daily volume of Binance. The total value of global equity | trading worldwide is also insanely bigger than these two | combined. | einszwei wrote: | > It's essentially a financial weapon aimed at the West, and | adversaries of the West will not let it fail. | | An interesting way to phrase it but do you have any sources to | back your claim? | | I know that Binance is being investigated for money laundering | and sanctions violations. But this could just be a consequence | of corporate greed and operating in unregulated markets (not | some conspiracy against west). | spamizbad wrote: | I mean, that's basically the pitch I've personally received | from various web3 founders trying to recruit me. It's overtly | political and is some flavor of "Boy howdy the US dollar | hegemony sure is a big problem. It sure would be nice if we | had true economic freedom. Want to be part of the solution?" | rvnx wrote: | In Europe, wire transfers work exceptionally well since the | introduction of SEPA Instant Credit Transfer. | | You have the choice between a free, transparent, technically | stable, instant payment system (< 10 seconds until 100'000 | EUR), using a stable currency. | | or | | an unregulated system where unknown people create and control | the currency, that is generally slow, often with high payment | or exchange fees and where you need to trust a lot of unknown | parties (software, tools, network, coins, etc), where you can | lose your key, that is falsely transparent (you see | transactions, but you don't know who control the network). | | Mhhh... | superjan wrote: | True, but how is it relevant to the comment you replied to? | rvnx wrote: | It's to say that "West" has a quite established and | efficient transaction platform. | | Because of that, as part of the "West", I hardly see any | benefit of crypto, unless you are in some other camp | (aka: "anti-West"). | | This is what I meant. | m00dy wrote: | Oh cool, | | We all know what happened to Jews in the 2nd WW in | europe. I think it is now the time for "anti-West" people | that you decide. | JumpCrisscross wrote: | > _what happened to Jews in the 2nd WW in europe_ | | Bitcoin is now a solution to a second Holocaust? | m00dy wrote: | Jews had to swallow precious metals like gold, | diamonds... This time all I had to remember 24 words in | order... So, no Bitcoin is not a solution or could be. | I'm not sure but self-custody is... | TchoBeer wrote: | Making it marginally harder to steal wealth from Jewish | people would have only slightly abated the negative | effects of the holocaust, but it would not at all solve | any of their problems. | superjan wrote: | I think I read the parent comment differently: when | crypto is claimed to be a weapon against the west, it is | not because it is in any way an alternative, it is a | weapon as a system supporting illicit activities against | the west (money laundering, sanction evasion, state | sanctioned ransomware). The fact that it slow, unscalable | and expensive does not matter for those type of | activities. So I thought it does not really matter that | our banks are efficient. | corv wrote: | SEPA only works within the EU whereas what you are | comparing is a global payments system. In Europe it is also | necessary to report any transactions over 10,000 EUR which | causes more friction than you imply. | | It is not transparent as to how much currency debasement is | taking place, nor does anybody outside a small group at the | ECB have any control over it. | | It is quite clear who owns decentralized networks - the | participants. Are they perfectly equal? No but they are | more egalitarian than what they seek to replace. | | Decentralized networks are more resilient to outages than | the electrical supply of some countries. It may not make | sense for you to use but millions around the world have | found a use for it. | lottin wrote: | What a whole lot of nonsense. Blockchains operate on the | basis of one dollar one vote. There's nothing egalitarian | (not to mention democratic) about this. A central bank, | on the other hand, is a public institution with a public | mandate. | | By the way, currency debasement is not an economic term. | The only people who use it are conspiracy theorists and | crackpots, as far as I know. | corv wrote: | You're so close to an ad hominem that I can hardly be | persuaded to reply but your confusion has taken the | better of me. | | Proof of stake blockchains operate on the basis of more | dollars = more votes, for this to be true for proof of | work blockchains one would first need to spend that | capital for mining equipment. | | It is very egalitarian since everyone can participate on | an equal footing, everyone can run a node and get a | complete copy of all transactions and verify correctness. | It is challenging and expensive to get the same kind of | insight into the stock market. | | The European Central Bank has arguably failed its mandate | of keeping price stability within the eurozone when some | countries have more than 20% inflation. | | Currency debasement is more commonly known related to | coins but I'll leave the term as is | yokem55 wrote: | > Proof of stake blockchains operate on the basis of more | dollars = more votes, for this to be true for proof of | work blockchains one would first need to spend that | capital for mining equipment. | | Just to clarify - this really depends on which chains you | are talking about. Some proof of stake chains implement | direct on chain governance, in which stake does directly | translate into explicit voting power to implement policy | changes. Polkadot in particular does this. But Ethereum, | does not have anything resembling on-chain governance. | Ethereum validators have no more say in what makes for | valid ethereum blocks then what proof of work miners had | to say. The folks that really matter is everyone running | non-validating nodes and the people who choose to | interact with those nodes for their transactions or | inspecting the chain history. | lossolo wrote: | > The European Central Bank has arguably failed its | mandate of keeping price stability within the eurozone | when some countries have more than 20% inflation. | | It's not that simple. They could rise interest rates more | but Italy and Greece would probably default on its debt, | which would make euro a lot more unstable than keeping | 20% inflation rate in three very small eastern european | countries which corresponds to 3.6% of the whole EU | population. Current inflation in euro zone is ~10%. | FridgeSeal wrote: | > It is very egalitarian since everyone can participate | on an equal footing, everyone can run a node and get a | complete copy of all transactions and verify correctness | | I have friends that can pay rent but don't have much left | over. There are people in my city that live hand to | mouth. I know plenty of people who are well off enough, | but aren't ever going to (or have the technical | inclination, or sore cash to) run a node. | | > get a complete copy of all transactions and verify | correctness | | I'm sure this is a real benefit for all the single | parents struggling to feed and cloth their kid. | | The reality is, most people don't have the resources | (time, technical or monetary) to participate in | "egalitarian" crypto currencies. Moreover, even if they | all did, it still wouldn't be egalitarian, because they'd | still be out-purchased by those with capital. So we're | back to where we started, except with more e-waste, | energy bills and more exaggerated hyper-capitalism. | corv wrote: | Well exactly, had these single parents bought Bitcoin or | Ethereum years ago they wouldn't be struggling now. | | One doesn't need to run a node to use the system but it | is accessible to everyone, just as the code is there to | be scrutinized publicly. | | The entire point was to reform currency where economic | policy is more predictable and the currency less | susceptible to kleptocracy. | | Interestingly enough the inflation rate of both Bitcoin | and Ethereum is now lower than that of major world | currencies. So while volatility still needs to trend | lower for day to day usage, the case for a store of value | has already been established in the past decade and | anyone can see the price history and number of wallets | increasing exponentially. | lottin wrote: | > It is very egalitarian since everyone can participate | on an equal footing | | Errr, no. One dollar one vote is not equal footing. If | you have more dollars you can buy more votes. That's the | opposite of egalitarian. | m00dy wrote: | > public institution with a public mandate | | Fed's Powell begging people to quit their jobs atm. So, | it this the public mandate you are talking about? | JumpCrisscross wrote: | > _Powell begging people to quit their jobs_ | | Out of curiosity, where did you read this? | SamReidHughes wrote: | Probably meant to say begging for people to get laid off | (the economy to cool down). | sbolt wrote: | From a legal perspective do Crypto transfers over 10k | have to be reported too? | corv wrote: | According to newly announced regulations crypto transfers | over 1000 Euros are to be scrutinized. How exactly this | will be enforced is not clear to me. | | Also noteworthy, cash payments are limited to 10,000 | Euros (1000 Euro in Spain) | patrickaljord wrote: | > You have the choice between a free, transparent | | Transparent you say? Could you point me to the SEPA | explorer where I can inspect every single transaction and | account balance please? Here is the one for ethereum | https://etherscan.io/ and for bitcoin | https://blockchair.com/bitcoin/transactions | JanSt wrote: | SEPA is transparent for authorities though. | | Ethereum and Bitcoin are transparent on transactions but | intransparent on beneficial owner. Who is Satoshi? | patrickaljord wrote: | So SEPA allows the government to spy on us while being a | black box to the rest of us while Ethereum and Bitcoin | are fully transparent while protecting our privacy. Not | sure how this is a good point in favor of SEPA but ok. | mopsi wrote: | You forgot to mention UX. SEPA payments have horrible user | experience. The "modern" way of receiving money in | automated manner in Europe and using SEPA is through | payment providers. On checkout, customers get redirected to | payment providers with strange startup names they've never | heard about to initiate a transaction, and then redirected | to their bank to log in and approve the initiated | transaction. This is basically training people to accept | phishing and MITM attacks. | | Checkout via Paypal or debit/credit cards is much more | straightforward and user-friendly, which is why they are | still widely used (along with local services like Swish). A | crypto wallet app that just requires scanning a QR code is | even better, and miles ahead of anything SEPA/PSD2 offers | in terms of user experience. | MomoXenosaga wrote: | Absolutely true and I use it daily however some people want | to dodge taxes or pay for child prostitutes. In which case | the official banking channels are unusable. | FormerBandmate wrote: | There are no sources to be found because no one even knows | what country Binance operates out of. They're deliberately as | opaque as possible | rchaud wrote: | > managing director, Pierre van Helden, said Cape Town-based | FiveWest receives a "minimal yearly license fee" from Binance to | facilitate crypto derivatives trading for Binance's South African | users. "How Binance operates globally is unclear to us," van | Helden said. He added that Zhao's company was "cooperative" on | compliance and said FiveWest has regular meetings to ensure | requirements are met. | | I was wondering how an audit for a company moving billions of | dollars ended up in the hands of a South African branch office of | an accounting firm (Mazars). | aaroninsf wrote: | "Box" is a funny word for something that has the silhouette of a | tetrahedron? | yalogin wrote: | We got really lucky that the crypto industry is not regulated. If | it were, the politicians would have gotten the opportunity to | bail SBF out. Of course they wouldn't want all the job losses! | JumpCrisscross wrote: | > _exchange said it dealt with net outflows of around $6 billion | over 72 hours last week_ | | Has anyone tried to verify this? | chollida1 wrote: | https://cryptoquant.com/asset/btc/chart/exchange-flows/excha... | | its measurable on chain if you know what wallet addresses to | watch, which can be crowd sourced by people taking money off | exchanges. | rsanaie wrote: | I cashed out of binance and the funds were wired into my | account within 48hrs, thank god! | kepler1 wrote: | Ahem. According to this story, we're supposed to use the term | "flight recorder" now, not "black box": | | https://news.ycombinator.com/item?id=34039816 | quesera wrote: | There is more than one kind of black box. The article refers to | one of the kinds that is not a flight recorder. | | Aside from that, your comment is not likely to generate | constructive conversation. | greenyoda wrote: | In particular: | | > _In science, computing, and engineering, a black box is a | system which can be viewed in terms of its inputs and outputs | (or transfer characteristics), without any knowledge of its | internal workings. Its implementation is "opaque" (black). | The term can be used to refer to many inner workings, such as | those of a transistor, an engine, an algorithm, the human | brain, or an institution or government._ | | https://en.wikipedia.org/wiki/Black_box | ericpauley wrote: | Sibling comments aside, flight data recorders are (by design) | not black, so the name really doesn't make any sense. ___________________________________________________________________ (page generated 2022-12-19 23:00 UTC)