[HN Gopher] How the Feds bounced Binance: Crypto isn't "incentiv... ___________________________________________________________________ How the Feds bounced Binance: Crypto isn't "incentive compatible" Author : haskellandchill Score : 18 points Date : 2023-12-16 21:39 UTC (1 hours ago) (HTM) web link (www.programmablemutter.com) (TXT) w3m dump (www.programmablemutter.com) | jfengel wrote: | _Binance will not only help the US government monitor the money | flows (the argument of our book), but plausibly act act as a | regulatory super-spreader, transmitting "know your customer | rules" across the ecoystem like an epidemiological contagion (the | argument of an important academic article on 'viral governance' | by Gregoire Mallard and Jin Sun)._ | | Or, people will flood out to someone who hasn't been hit by that | "contagion", because the entire point is to have unregulated | money. | mjr00 wrote: | > because the entire point is to have unregulated money. | | For some vanishingly small percentage of crypto-faithful, | maybe. For the vast majority, the point is to turn (regulated) | fiat money into more (regulated) fiat money. Or lose it all | trying. | toomuchtodo wrote: | Chainalysis monitors all public chains for law enforcement and | regulators. Monero, Zcash, and other privacy focused crypto can | be squeezed out under money laundering, KYC, AML laws and | regulations. Interestingly, violations of law have a permanent | record on an immutable blockchain. You simply need someone | technical to perform data analysis and hand it over to | enforcement. | | TLDR there is always a throat to choke in meatspace. | | https://en.wikipedia.org/wiki/Chainalysis | dsugarman wrote: | I don't really understand how any crypto is "unregulated money" | and it's intrinsically the most tracable money store | | [Edited for some horrible mobile autocorrect attrocities] | kzrdude wrote: | There are fully anonymous transactions in some of the | cryptocurrencies, like in Zcash I believe. I thought such | innovations would overtake and make the original bitcoin | obsolete, but I've been very wrong, because bitcoin is still | popular. | I_Am_Nous wrote: | I think this fact points out the disparity between people | using crypto for ideological reasons and them using it for | investment reasons. Most people don't care about the | whitepaper, just that "stonks only go up" and buy | accordingly. So small, good projects aren't as reliable an | investment vehicle as a larger, more established coin that | is almost guaranteed to be sellable if needed. | jMyles wrote: | Obviously there are different points of view on this point, | but I view transparency and regularity as orthogonal | features. | | Crypto is easy to make both transparent and regular. | block_dagger wrote: | Traceable via otherwise anonymous addresses. It's the de- | anonymization that's hard. | jongjong wrote: | My understanding of crypto (having worked in the industry for | years) is that it's not about decentralisation so much as it is | about reliability and transparency. | | The decentralization aspect was mostly necessary in the early | days to avoid being shut down by government. Now that crypto is | widespread, it is not as important. What is important though are | things that are missing from our current fiat monetary system; | transparency and reliability. | | While the fiat monetary system appears to be very reliable for | the individual, it is in fact extremely unreliable due to its | lack of transparency. Governments can easily manipulate the | supply (and therefore the true value) of currency behind the | scenes without your knowledge and that is one of the primary | mechanisms via which it steals wealth from individuals and | deprive them of opportunities. | | Arguments against cryptocurrency are essentially saying that | these individuals who are being robbed and deprived of | opportunities don't matter because the system only needs to work | for rich people and fool the poor into thinking that it doesn't | harm them. | | Unfortunately, many poor people understand exactly how the system | robs them. | | - It devalues our salary contracts via inflation of buying power. | | - Centralized currency creation centralizes opportunities due to | the Cantillon Effect and this creates an asymmetric playing field | which unfairly benefits corporations and large organizations. | | - Given that income tax is levied against each transfer between | individuals, newly issued currency cannot travel very far from | the government money printers as each hop away from the printers | incurs a significant additional tax in the remaining untaxed | amount which keeps shrinking. This exacerbates the Cantillon | Effect and punishes regional areas and individuals who are far | from the centers of money printing. | dale_glass wrote: | > My understanding of crypto (having worked in the industry for | years) is that it's not about decentralisation so much as it is | about reliability and transparency. | | None of those have panned out. Reliability and transparency | aren't there either, because the state of crypto so far is that | people keep on falling for scam after scam and getting screwed. | | No, just like with the original concept of "Peer-to-Peer | Electronic Cash System", there's very few true believers that | are into it for any such reasons like decentralization, | reliability or transparency. | | The vast, vast majority just wants to get rich. It's that | simple. The technical merits or characteristics of the | underlying system are completely unimportant to the vast | majority. | bragr wrote: | It is going to being very interesting to see all the prosecutions | that result from this. The feds know how to make good use of the | access they're about to have based what they've been able to do | with other exchanges' records. | dale_glass wrote: | > But the blockchain's entire purpose is political. If crypto is | no longer about teh magic of decentralization, then why would | anyone want to use it? | | Making big $$$, obviously. | | It's very clear that the whole decentralization tech angle failed | a long time ago. I had a passing interest, but completely lost it | around 2017-ish, when BTC blocks started filling up. | | It seemed completely clear to me that a "Peer-to-Peer Electronic | Cash System" couldn't tolerate such dysfunction. Usage as cash | wasn't working. In the end capacity had to be promptly increased, | or obviously there'd be huge problems for everyone. | | The first nail in the coffin was that blocks weren't expanded. | The second one was that while there were plenty alternatives, BTC | retained dominance, and that even forks that theoretically were | superior because they did what they were supposed to do far | better, BTC still won out. | | So clearly I was wrong, BTC wasn't functioning as a "cash | system", and this obviously didn't matter to the BTC users, and | didn't matter to the world at large either. | | Thus eventually it dawned on me that there were maybe a few | people out there that had some interest in a "Peer-to-Peer | Electronic Cash System" and the "tech", but the vast majority out | there were only interested in a world-wide game of hot potato, | where the only point is to accumulate coins early, then sell them | to some fool on the top, and cash out. | dist-epoch wrote: | When will Tether implode? | | I've been reading about how that is imminent here for 3 years | now. | mgaunard wrote: | In practice people use the blockchain to move assets between | accounts tied to some of the many competing centralized trading | markets (of which Binance is only the biggest one). | | They also use it for OTC transactions, which are typically also | hedged on centralized markets due to their uncertainty. | | The centralized markets also function as banks, where you can | borrow or cross-margin your positions. | | So it works, it's just that only using blockchain is not good | enough to deal with speculation needs and market volatility. ___________________________________________________________________ (page generated 2023-12-16 23:00 UTC)