Under SEC logic, this action is meant to protect the users of Binance US who. According to SEC logic, those users the victims of malfeasance by Binance US and it's decuitful, fraudulent actions.
I would ask: is there even a single Binance US user that wants the SEC to take custody of their assets? instead of sticking with Binance US?
I’m sure many long-term customers of Bernie Madoff secretly hoped his scam could have kept going because they had been enjoying those nice pyramid returns for years, and it stung that the money flow stopped.
The SEC enforces the law. It’s not some kind of poll where you ask the victims whether they’ve been mostly enjoying the law-breaking activities and would like to see them continue.
SVB went down due to the Fed’s aggressive interest rate hikes that left their loan portfolio underwater. “Management” or Any other explanation is pure propaganda, especially considering how it happened to FRB and how the government responded by implicitly guaranteeing every depositor in the banking system. Is every bank mismanaged? It was Kremlin levels of double talk.
SVB was told by the fed that they were over-exposed to interest rate risk after audits in 2021 and 2022. SVB fired their chief risk officer (presumably for saying the same thing) and didn't fill the position during the same timeline.
The government created a special guarantee for all depositors precisely to prevent runs on banks.
JP Morgan was granted a special waiver to buy FRB.
It’s pretty obvious that what happened was that SVB and FRB management teams were set up as scapegoats to save face while the government worked in the background to halt the sector from unwinding.
I happen to agree that this was the right thing to do.
I don't see how you can call them scapegoats and that someone else is "saving face". That implies someone else did something wrong, and they're taking the blame for it, so someone else doesn't look bad. What is that and who is that someone?
The management of SVB and FRB gambled and lost. They have no one to blame but themselves. Events that followed seemed like reasonable steps to take to clean up their mess.
When SVB failed, the deposits were guaranteed at 100%, for accounts that were far beyond the $250,000 limit. The money to guarantee those deposits came from the FDIC Insurance Fund. A special assessment -- a fee -- was charged to all other banks in the entire Federal Reserve system to refill the insurance fund.
The Biden administration claims that this was not a bailout because taxpayers didn't pay to cover these deposits. Technically, he's right. Instead, bank customers ultimately performed the bailout. It's just the case that 99% of American taxpayers are also Federal Reserve bank customers.
So, let's go back to your "gambled and lost" argument. SVB and FRB gambled, but I lost. You lost. Your neighbor lost. That person that doesn't have a bank account and the folks that had $400M USD in their SVB accounts didn't lose.
The solution to force you and I to pay higher fees to fund a not-a-bailout for SVB depositors to prevent broader contagion was the right call, but to explain it away as merely affecting a small number of executives and shareholders is a lie.
Was there concentration risk? Yes, absolutely. It was completely gaping failure of regulators to not force SVB to address that previously.
But when you look at the scale of the bailout: how it fell to other banks to pay a special assessment to refill the FDIC insurance fund to cover 100% of deposits, you have to recognize that this event was far beyond the mismanagement at a single institution. Then, it happened again at FRB.
The solution that the government came up with to solve the issue —- creating a moral hazard by implicitly guaranteeing 100% of deposits —- undermines the claim that it was merely mismanagement.
One wrinkle is that the SEC is ordering Binance to honor customer withdrawals so at least customers won't be stuck in a multi-year limbo as with Celsius and others.
It's a rabbit hole around the word "repatriate" in the article. The U.S. subsidiary appears to have entrusted the funds to someone else. The SEC apparently wants the U.S. subsidiary to repatriate those funds, the details of course being very important.
I wished to see some analysis by smart people on HN if this is a lawful request, can they do it and what are the local/global consequences. So far not that much discourse in that regard.
As the saying goes, this is good[1] for Bitcoin... As people are buying it, presumably in order to be able to flee their Binance positions. Nothing breeds confidence in the ecosystem like the world's largest exchange getting its funds frozen.
[1] When it'll drop in price, I'll be here to provide different post-hoc justification for why that market swing happened. Tune in tomorrow, as the SEC keeps unraveling this rat's nest.
To be fair, this has been allowed to grow into a rat's nest by a decade of ignorance and inaction on something that obviously needed attention and action by these authorities that have, only as a result of the FTX, Celsius, Voyager, and BlockFi debacles, been woken from their hibernation-deep slumber.
I'm perplexed that BTC's price dropped 5% yesterday and bounced right back today. How does the market not care that the biggest exchanges keep collapsing?
It's no more illogical than, say, the progression of the SPX500 and Dow Jones Industrial stock market indexes between 2019-2020-2023.
"How does the market not care vis-a-vis the gruelling recent pandemic, ongoing supply shocks, mounting climate change disasters, population curve declines, military instability ....... ?"
In Bitcoin's case, it needs be remembered that:
* Bitcoin as the original (and, in some ways, least sullied) crypto asset will have the greatest resilience
* Despite these exchanges having the greatest Trade Volumes, they are each only involved with a minority of the total global assets. That is, most Bitcoin that exists, has never touched Binance. Even more, most Bitcoin that exists, existed before Binance did.
* Markets aren't that predictable - attempting to trade a market in a buy/sell manner based upon whether today is a seeming Good News Day or Bad News Day ... well, if it was that easy, we'd all be doing it trivially
* The previous point is also adjunct to the fact that, for example, "obvious selling time" is most often leapt upon (with leverage) by amateur traders - whom the market then liquidates with a sudden contrary movement. A cynical manipulation certainly not unique to crypto markets, but yes absolutely ripe for them.
> It's no more illogical than, say, the progression of the SPX500 and Dow Jones Industrial stock market indexes between 2019-2020-2023.
> "How does the market not care vis-a-vis the gruelling recent pandemic, ongoing supply shocks, mounting climate change disasters, population curve declines, military instability .....
The progression was completely logical. Central banks deployed trillions in QE. Market participants decided that betting against institutions with so much money was not wise and joined the bull ride. We are now paying with inflation.
Remove the double-negative in my phrase "no more illogical", and my argument is that there is logical cause-and-effect in both situations, despite the easy potential for assuming a different outcome based upon select, surface assumptions.
Because BTC aren't stocks in Binance? Even if binance and many other exchanges close, there'll always be at least a few exchanges to operate, it's not like you won't be able to sell your BTC.
Also some people that had USD balances in Binance might have bought BTC so as to withdraw their funds to their wallet.
Bounce back is actually logical conclusion. If withdrawing BTC is faster it makes sense to buy it with dollars(in SEC's reach) and then moving them elsewhere and taking the money.
I think it's sort of priced in already. I expect certain cryptos will outlive even the biggest exchanges. That statement has been repeatedly over the last 12 years anyway.
Please don't post tedious flamewar repetitions to Hacker News. It's not what this site is for, and destroys what it is for. We want curious conversation here.
Yeah, back in my day when we used cash, it was never used by criminals ;)
As I get older I want the anonymity or immediacy without a paper trail for normal day-to-day small transactions. For big transactions maybe not. Also, just try and walk in nowadays to a car dealership and hand over $35k in cash for a car. See what happens.
$35k cash makes the dealership to file a currency transaction report with FinCen. For that matter, any entry/exit of untraceable monetary instruments(cash, money orders) > $10k is filed as a CTR. This is not a big issue; people get panicked, then structure their transactions(multiple cash transactions each < $10k, but > $10k in total over time), thereby leading to a SAR(suspicious activity report).
Mandatory reporters(banks, dealerships, remitters, etc) are obligated to file these reports. These can be used under Beria’s law ‘show me the man and I’ll show you the crime’.
I have some inheritance cash that I received when my grandma died.
Right now, it is soaking up some nice 4.9% apy, but eventually I'd like to buy a car (waiting for the prices to crash a bit more). It is what she would have wanted (she bought me my first car).
I can't wait to walk into a dealership, with cash, and find out what sort of criminal I am.
The way things work like this (based on court filings publicly available). Imagine some madam is involved in sex trafficking in the states. She comes under the radar of police and other investigative agencies. These agencies gather all circumstantial evidence, but still this evidence doesn't pass muster to convict this madam. However, she goes around and deposits at various ATMs of different banks (say, Chase, PNC, USBank). She thinks that she is smart by depositing $6K (split across three banks) every week. Over the time, AML algos at these banks look at the sliding window of her cash deposits: $10K every five weeks at every bank, and her profession doesn't match up to the story. All three banks file SARs with Fincen. Now the prosecutors dig through FinCen database, and convict her on the structuring charges, instead of sex trafficking. That's what Beria's law is: "Show me the man, I will find you the crime".
There's no reason you would be a criminal, if they're comfortable taking so much cash (you didn't specify how much, dealers may vary in how willing they are to accept very large cash purchases) they will doubtless be comfortable filling out the mandatory reporting.
The investigators are looking for patterns, and latchkey having one dead grandma and buying one car isn't a pattern. They can't see patterns if the data which would make up the pattern isn't recorded, so that why the data is collected.
Or even just index it to inflation. $10k in 1970 is $80k today. One of those could be first & last month's rent in a major city or functional 3rd hand car, the other is at least adjacent to an interesting cash transaction.
Car dealers' comfort is proportional to governmental scrutiny and control of their finances and transactions, so I think this is still a big deal as we move further and further away from the ability to independently transact among ourselves without controlling middlemen (government, banks, etc.) centralizing and controlling this ability. Not to mention the big banks and governments moving to blockchain financial vehicles they sanction and ultimately control. Soon you will have to be fingerprinted for a SIM card here like in Saudi Arabia. I've lived in SE Asia where you can buy a SIM card from a convenience store. To get one in KSA, I would have had to have had a government ID or number, and they fingerprint you to get an account. You know, because only criminals, drug dealers, and others use "burner" phones; it's not about trying to track and control you ;)
Technically, ETH is no longer mined on GPUs. Bitcoin stopped being mined on GPUs a decade ago. There are still plenty of other cryptos that are mined on GPUs, but their market share is tiny.
The interesting thing is that ETH switching to PoS, completely decimated the GPU mining market. This had the side effect of lowering cryptos power usage significantly and also countering all of the anti-ESG arguments against ETH.
“a” use case that is indistinguishable and unquantifiable from use cases you respect
which is a major difference from “the” use case
and just a use case for that company, which in any other industry we would talk about the company’s behavior not the entire asset class and industry, I find it disingenuous to have that “use case” auto reply on any article that happens to be about crypto but is really about a company
That was an "ok" argument maybe 5-8 years ago, now there's too much evidence that no legitimate use case exists, and every alleged one turns out to be a fraud or a get-rich-quick scheme.
BTC has been around since 2008. Today in 2023 BTC is like $27k. Does the longevity, ubiquity, price and liquidity of BTC fit the pattern of a useless get rich quick scheme? Has any such scheme existed this long, despite so much scrutiny and hostility, based on hype and confidence alone?
If no useless speculation scheme has ever thrived as long and as much as BTC, and it keeps on going, at what point do you have to ask if your opinion just doesn't fit with reality?
The shady exchanges and shitcoins muddy the waters but have fundamentally nothing to do with BTC and a handful of other top cryptos.
> BTC has been around since 2008. Today in 2023 BTC is like $27k. Does the longevity, ubiquity, price and liquidity of BTC fit the pattern of a useless get rich quick scheme? Has any such scheme existed this long, despite so much scrutiny and hostility, based on hype and confidence alone?
Yes, Bernie Madoff's Ponzi scheme famously ran for decades, with everyone invested calling doubters idiots and pessimists.
> Yes, Bernie Madoff's Ponzi scheme famously ran for decades, with everyone invested calling doubters idiots and pessimists.
As an aside, I can think of exactly one person who benefitted from Madoff's scheme: former New York Met Bobby Bonilla, who is set to receive about USD$1.2MM from the team every July 1 through 2035. Bonilla's contract was bought out by the Mets in 2000, and instead of paying him the USD$5.9MM he was owed, the team offered a deferred payment scheme (with payments starting in 2011), as they were looking at double-digit returns from their Madoff investments in the deferred decade.
everyone goes through a disillusionment phase with crypto
from my perspective, there is simply a lack of coverage of things that function without incident, which are very numerous and solve frictions for a lot of people, whether you’re in the market for that or not
like construction sites that showed “how many days since an incident”, because people only heard about the incidents
> Where are these mystical things that function because of crypto that wouldn't function with <existing other thing>
that's not my standard.
cater to a market because the market exists.
there are many people in the crypto space now and they have frictions and pay to reduce those frictions, and are not defrauded in the process.
its just too late to care about your standard. you can search for it if you want, but its at the expense of so many other opportunities that have nothing to do with fraud.
its the entertainment sector, its the collectibles sector, its the financial services sector..... and the crux of most arguments and moving goalposts are that all those sectors in aggregate are worth zero when crypto is involved (or that crypto is worth zero because you're not the market for any of those sectors? lol? its a paradoxical antiquated argument)
when the only trend is that crypto-versions just begin catering to even more sectors and pulling in those audiences, or crypto-natives begin being interested in those sectors.
That's like saying effective cryptography is destruction of evidence.
"Laundering" is a bullshit concept invented to legitimize total surveillance of financial transactions. This KYC/AML stuff is just the financial arm of global mass surveillance. We must resist it vigorously for the exact same reasons we resist warrantless dragnet data collection.
I see the misunderstanding: I used "laundering" to describe a method of obscuring a trail of exchanges, not a crime.
I can exchange gold, or textiles or something, and not expect surveillance of those transactions. I do live in a country that requires some reporting of those for tax purposes, but not tracking of the assets the way crypto does.
The moment I pick up a monetized piece of paper that the government printed with a serial number and all that, which is guaranteed by the full faith of the government, and is standardized by the government in a global financial system, I accept some side effects, such as the government's expectation of tracking and standardization.
Similarly, the moment I pick up a crypto currency, I accept all the technical limitations / requirements of complete ledger accessibility, and methods of circumventing that are no more sophisticated than laundering.
In effect, with gov-backed money and crypto, you are forced into a system of surveillance. I don't see the privacy angle one bit.
I was asking for examples of applications that are enabled by crypto in the first message that you quote.
Next message someone listed features, not example applications. I had two responses: that's not an application, and in addition I somewhat sloppily said that even that feature (privacy) does not exist (because it's just laundering which is defeatable).
Is there some scheme past asymmetric cryptography that I'm not aware of? Because one of the fun drawbacks for criminals of having a distributed public ledger has been their immediate connection to all of their transactions once their public key is associated with them.
Ring signatures. Every monero transaction is signed by the source of funds plus N other keys. The effect is that nobody can prove which key actually signed the transaction.
Monero has numerous privacy features. It mixes in multiple transactions into one so that amounts, sources and destinations can't be correlated. To an outside observer, it looks like everyone is constantly transacting with everyone else. Maximizes the anonymity set.
This Motte & Bailey argument using cryptocurrency and cryptography is so old, so stale, and it was never very convincing to start with. A whole field of mathematics doesn't compare to digital pet rocks.
It absolutely does compare. Especially when people start talking about how cryptocurrency was "made for crime". They sound a lot like those tiresome politicians complaining about pedophiles and terrorists "going dark" for the nth time.
I'm with you on this one. It was a solid argument in 2017, but even by 2018 the writing was on the wall for crypto. John Oliver recently did another segment on crypto and he absolutely nailed it in saying that the only real currency in crypto is confidence, and that tends to attract a certain kind of individual, namely scammers/fraudsters.
It's "the" use case because of the scale. There are all kinds of niche use cases that constitute $0 billion of turnover, and thus don't contest that fraud is the use case.
or the US government is just afraid of not being able to easily track all monetary transactions legal and illegal. Big brother needs to see all in order to control all.
And the market cap for monero is tiny compared with the ones that are easy to track. Which implies that the nefarious actors are smaller than portrayed in the news.
i feel like the move towards cashless, all transactions are tracked, society is real and if you don't see maybe you are not looking around. This is happening agnostic to crypto anything.
I think this may be sarcasm, but I also think it's literally true. Part of what I find interesting about the whole debacle is how many people really "told you so" well before the wheels started to come off (if that's indeed what's happening over the last year or so, will be easier to tell after the fact).
There are people who claim they “told you so” all along, who had heard about bitcoin in 2011[1]… and it’s still up 100x since then.
”But you could say the same of a legit Ponzi scheme or fraud!” No, not really. Those crash after the details emerge and everyone knows the truth. Here, the full “details” have been out for a very very long time.
[1] the year the infamous /r/buttcoin sub was formed, btw
Were those people saying crypto would not take off as an alternative currency, or did they claim the value of crypto as a speculator asset would not increase?
Exactly, nobody needs encryption anyways. Cryptography is a waste of energy and is bad for the environment. All it’s used for is planning terrorist attacks and Russian military invasions. We should simply use state communication channels and require third party messengers to provide KYC documents to the government. We as a society decided on taking away communication privacy, so even if you voted against it you still consent.
Unless you just woke up from a deep coma and think "Crypto" in this case means "Cryptography" and not "Cryptocurrency"... I don't know what to tell you.
The entire basis of how the internet works is based on cryptography, and while everything has the potential to be misused, it's impossible to argue that the primary use of cryptography is criminal, unethical, or wasteful.
I remember fondly participating in the hype around crypto in 2017 and going in on btc/eth and also building a mining rig etc. The discourse on HN back then is quite different from today. These days we've seen scam after scam, fraud after fraud, failure after failure. From a technology perspective it's neat, but the kinds of individuals it tends to attract make it seemingly not actually all that useful in wider society. These days I'm ultra skeptical of anything crypto.
I don't know what "discourse" you are talking about. I've been reading about crypto on hacker news before bitcoin hit one dollar. Other than r/buttcoin and yahoo groups, this site has been one of the most anti crypto places you can visit, to the point of being an absolute embarrassment.
It has been a lesson to me about humans and intelligence since that time.
Still love the place though, but I learned never to let comments be the source of the things I need to investigate.
Could it be that a tech savvy community like hn largely understands the implications of, the actual utility of and can see through the hype of crypto currency? I would put my money on hn understanding crypto currency over any other community. It should probably be a red flag to true believers that hn is generally suspicious of it.
On the contrary. "Normies" were very positive about crypto, mostly because they were used by the crypto people from the early days, as fodder for their various get-rich-quick scams.
The "anti-crypto sentiment" that was the unwavering average sentiment on HN is, to me, a point of pride, and I'm thankful for it, because it inoculated me when I was most vulnerable - early on, where it wasn't obvious yet what type of people are promoting crypto and for what reasons.
Anticrypto arguments like "it can be used for crime", "you have nothing to hide", "it's easier to give my credit card to the merchant" are obviously aligned with normie mentality.
Ignoring the fact that there is massive amounts of fraud and room for crime in the crypto currency space by denigrating the opposing viewpoint doesn't progress the conversation and just keeps the tribalism and fighting at the same levels. If you truly believe in crypto currency, why not try to address the concerns and push crypto currency in a direction that would ensure wider adoption?
I guess concerns must be addressed perfectly. Otherwise solution won't stand criticism. For example ransom, if paying ransom is legal, then it's legal, if it's illegal, then it should be reasonably stoppable with police resources as an easy meatspace crime. ICO scam - if you think you can get it wrong, then stay away from it just like you stay away from gambling. Investing everything in a risky asset - this absolutely happens on fiat market, but it's okay there just because.
"massive" is a subjective term. That statement cannot be a 'fact'. Besides, you could apply the same sentiment, as it relates to 'fraud' and 'room for crime', to the Internet in general.
Why do you think that the people that understand the technology generally have a negative view about it? Are "normies" just dense? Or do you think everything is based on jealousy?
What community that wouldn't have confirmation bias would understand crypto currency better? And what are their thoughts on it?
The folks that I'm referring to as normies in this case, even though they might be technically literate, suffer from a lack of creativity. That's what makes them normies.
Personally, I'm fully against promoting crypto as an end all be all solution to economic problems the way that many scammers do. I'm even against trying to onboard the masses.
However, I see in crypto and smart contracts a green field of opportunity to experiment with unique forms and formats of human interaction using the medium of programmable money.
For example, I like how NFTs (despite many shortcomings) play with the concept of digital ownership. I also like how defi brings us unique financial instruments like flash loans, etc.
I think draconian regulation in this space will effectively squeeze a lot of these experiments out from under legitimate actors. It's a technology that is worth playing with. I think it's better to punish bad actors rather than raise the barrier to entry for the tech.
Of course you are right that enthusiasts of the technology would have a confirmation bias, but the opposite is also true. The confirmation bias here is that this is de facto bad.
I thought I understood the technology after reading the Bitcoin paper, but later realized that there's a lot more to it. See the ZeroCash/Zexe papers, ZK rollups, optimistic rollups, BFT literature like HotStuff, or scaling research like Block-STM.
Some HNers just aren't that interested in the use cases, which is fine. But others tend to critique decades-old technology, and don't seem interested in learning about modern solutions, since their minds are made up.
Yea, I'm not sure what proportion of the negative camp is negative because of issues in early iterations like power consumption used by bitcoin which is solved with newer tech and what proportion is negative due to the use cases themselves. I do think that a lot of the tech itself is pretty elegant but I'm less certain on whether it's the right solution. I also think the fact that many in the pro camp have investments in crypto currency can muddy the waters some and it's not clear whether a person in this camp believes it can be a proper technology that can benefit humanity or if they like it because it's a historically high growth investment where they are trying to make money currently.
At least for me, my main concerns are with the seemingly short sighted libertarian implementations that don't take into account the bad actors of this world. I think there are definitely some issues with our current financial system, but I think its like democracy in that it seems to be the least bad solution. I wouldn't want to live in a world without regulation of our financial markets. It is too easy for people to defraud the little guy and for criminal organizations to prosper. Do you think there are solutions in newer technologies for those concerns?
I feel like both sides should be able to agree that there are pros and cons to the different technologies and use cases, that there are some that are better for the pro camp and less negative for the against camp. Maybe pushing harder to make the cream rise to the top could make these conversations less tribal and divisive?
> like power consumption used by bitcoin which is solved with newer tech
To be clear, that is absolutely not solved for Bitcoin, which still wastes energy at a disgusting rate. Some crypto things have shifted to non-proof-of-work approaches, usually proof of stake, but Bitcoin is still pumping out more CO2 than many countries.
Regulation would be the least bad approach I think. The current crypto currency direction is untenable currently with the massive amounts of fraud present.
I can't understand this sentiment at all. I feel like HN was absolutely part of the hype cycle.
It wasn't as bad as some forums, since some skeptical voices were present too, but there absolutely was a ton of breathless hype over the years.
Here's just one example, when stripe added bitcoin support [0]
I personally feel like HN sentiment finally "turned" on crypto only after some of the more egregious scams started going really mainstream - in the months leading up to and during the pandemic.
I distinctly remember the opposite to be the case -- that there was a positive eariy adopter hype cycle on this site for crypto in the early years.
I went back a decade and randomly clicked on a discussion and found most of the comments constructive and matter of fact. Perhaps I got lucky, but it lines up with my memory of the period.
Human nature is a funny thing, and the kind of intelligence that attracts someone to the quality of discussion on HN doesn't appear to exclude them from some of the baser, competitively animalistic instincts still present down there in the basement of human DNA.
Personally, I think I can reason through a great number of things. But I still get depressed, angry, jealous, happy, enthused, etc. in ways that reason has to catch up to, before the instinctive emotion makes itself public - and sometimes reason does not or cannot catch up.
(Generally the positive ones I leave to run wild, but sometimes they need to be suppressed too).
Almost on the actual topic, I think cryptocurrency has proven it's use case in the global transfer of value without a centralised third party. And that, in itself, is pretty amazing. All the rest is the application of this technology having to work itself out.
The whole argument about criminal activity or porn or whatever is just proof of the use-case. The internet itself was accused of just being a conduit for porn not really that long ago.
Because it's related to "value (transfer)" means it should have been considered inevitable that it would attract, well, the kinds of people it has obviously and very publicly attracted. And that nicely ties off the loop of human nature...
It's a sobering moment when you realize that a lot of tech is actually net negative to you - not the least because it outsourced to you the work that previously was done, much more efficiently, by specialized labor.
Exactly my way of thinking. I do appreciate cryptocurrency innovations, but so many scams and frauds made it unappealing. I ignore almost everything related to crypto now. I think the breaking point for me was Ledger leak.
Even by 2017 we'd seen plenty of scams and failures. My intro to crypto watching was the late progress and collapse of the Trendon Shavers Ponzi scheme in 2011/2012, followed by the collapse of MtGox in 2014. Heady days; current crypto collapses lack the same sense of drama. It's all a bit repetitive now.
HackerNews was weirdly credulous about this stuff for a weirdly long time, but it does seem to have shifted in the last few years.
I feel like there should be enforcement against scams, and those people need to be punished harshly. But if you want to spend your money on something useless, that's not the government's business.
Wait till you read about the characters, early failures, and ultimate "success" of the central banking "too big to fail" ponzi scheme. My favorite character is Jonh Law:
Great point- these are reasons why we have the regulation we have today in our current banking system, and why any financial system that doesn't have any ability to be regulated (i.e. crypto) is massively problematic and ends up with 99% of people being fleeced out of their assets (as we've seen in the crypto space).
The number is clearly an exaggeration, and it's a bit embarrassing that I have to point that out. One of the few benefits of crypto is that it's difficult to trace (although certainly not impossible except for unique cases like XMR), so obviously nobody has the data to attest what percentage of people definitively have fallen victim to scams. However, what is known for certain is that people lost $14 billion to crypto scams last year (globally), with the average amount lost per person likely much higher than many other types of scams, considering the entire US lost $10 billion to all other types of scams last year, and the number of people in the crypto space is a small fraction of the US population. Keep in mind that the two numbers are globally vs the US alone, but I would presume the majority of the $14 billion lost were from US investors. I found more targeted studies that have numbers like 33% of people in crypto have fallen victim to scams, but I can't find the original study so I've omitted referencing it directly.
I take issue with something about crypto "causes us to lose our minds?". Couple points:
1. At this stage of the game, there is not a lot new under the sun to discuss that is likely to alter people's opinions. I would say that I did think there were some good comments in some of the other posts about what constitutes a security by the legal definition, and helped me understand better the specific points of the SEC's argument. This story, though, is just about the SEC wanting to freeze Binance US's assets. To be frank, I don't think there is a lot of substantive things to discuss about this particular story.
2. I feel the need to roll my eyes whenever I see the "Well, it's well known HN hates crypto..." lamentations. I will only speak for myself, but I don't "hate crypto". On the contrary, I remember reading the Bitcoin whitepaper early on and thinking how brilliant it was. As time has gone on, however, I've simply come to the conclusion that most crypto technology has very little actual utility. I believe the primary thesis of crypto enthusiasts, that it can somehow "escape" the legal frameworks of human beings (the "code is the law" stuff), is just fundamentally wrong and misguided. I think things like NFTs are just dumb. All this coupled with the fact that the crypto "ecosystem" has drawn in the scummiest set of characters I can think of, and that I think its net utility over the past decade has been negative, just leads me to believe that most crypto technologies deserve to die. This isn't some irrational "I hate crypto" take. This is my (fair, in my opinion) assessment that crypto has little overall utility. I also think this is highlighted by the fact that the amount of real crypto utility that its backers can point to is extremely limited.
In general, I think the HN community is by-and-large quite rational when it comes to evaluating and discussing new technologies. I'm not saying it is always "right", and of course you always have fan boys on all sides, but I do think that reasonable, insightful comments about crypto still bubble to the top.
All I know is I gambled away more BTC than Elon Musk is worth in today's dollars, so there is that. Instead of being a trillionaire I am broke because of gambling.
It's a fallacy. The predisposition to gambling that led you to speculate in the first place in Bitcoin also caused you to lose the asset. You should consider these traits as a pair, and recognize that everyone has similar pairs of traits. I did not gamble and never had much Bitcoin to lose in the first place. Those opposite pairs of traits led to similar results. What would be rare and truly remarkable is to have precisely the right traits to the situation, at all the right times.
Which boils down to the fact that it's entirely rational to be negative about crypto.
Crypto is interesting as a kind of libertarian pseudo-oppositional secular religion that flatters itself that it's edgy and non-conformist but is actually dead-centre mainstream in a capitalist culture with consistent shades of criminality dedicated to making money at any cost.
No, the meme goes: "Even Bitcoin?" / "Especially Bitcoin".
The tech is interesting, it was still embedded in and made to promote an ideology that's frankly just immature fantasy. You can't separate the symbol from the religion it was born in, and born to promote.
> And yet multibillion dollar companies whose entire business is illegally running hotels or taxis get nowhere near the vitriol?
I have perturbed many electrons around here on both illegal taxi companies and shitty world-burning cryptography. I contain the capacity to think more than one thing is awful society-corroding trash.
Yes, Uber and Airbnb should not have been allowed to get away with it either. That doesn't mean we should allow new companies to run the same "break the law and try to grow as fast as possible so by the time the government catches up, you're already entrenched" playbook for the sake of foolish consistency; just the opposite: it increases the urgency with which companies trying to do that should be rapidly brought to heel. Which is exactly what is happening.
Sure, but Airbnb isn't trying to replace a core societal institution and subvert hundreds of years of financial law. While also if you're American violating the constitution...
Make it at least five; I've been calling Uber and AirBnB all kinds of things for at least as long, and I was neither the first nor the most vocal one here.
I think it’s because many people are quite deeply invested in crypto, and the result is that they can be extremely emotional and irrational. Efforts to regulate crypto and make it “not a scam” essentially means they will have wasted tens/hundreds of thousands of dollars and that is embarrassing and shameful.
They’re locked into irrationally promoting crypto because it’s the only way to protect their “investments” and their dignity.
Lot of assumptions and leaps here. Besides generalizing a group of crypto owners, you are assuming regulation would devalue crypto. Has there been less or more regulation around crypto in the past 10 years? and how has the value of BTC, Ether fared during the past 10 years?
There are a great many people who chose to see crypto as an existential threat to the earth because proof of work requires energy and energy is derived from fossil fuels and therefore any expansion of its use exacerbates climate change. Proponents of crypto are frequently corralled into a “climate change denier” corner by this faction.
The other large contingent, myself included, sees the never ending scams, shady dealings, and blatant money laundering. Some of these projects, like Bitcoin Lightning Network, are like honey pots for smart people that have no idea how serious the government is about sanctions.
> There are a great many people who chose to see crypto as an existential threat to the earth because proof of work requires energy and energy is derived from fossil fuels and therefore any expansion of its use exacerbates climate change. (...)
Don't miss: and energy costs grow much faster than linear with that expansion, and the incentives are all wrong - with traditional financial systems, energy expenditure is waste, upkeep, something you need to pay but want to minimize; with PoW, it's value generation and something everyone wants to maximize.
Long-term, fossil fuels don't even matter here. Even with 100% clean energy derived from a Dyson sphere or something, it's still pure waste of energy, done for the sake of not having to ever trust each other. What crypto people missed is that trust is a feature, not a bug.
The First Law tells you can't create or destroy energy, but you can transform it. The Second Law tells you that this transformation always reduces the amount of useful work you can extract from it. This is how energy is "used up" - it's transformed from a high-grade form (e.g. electricity) to a lower-grade form (e.g. waste heat). Per the Second Law, you can't then go back the opposite direction.
(For a hands-on example, compare the utility of an egg vs. that of a smashed egg, and the amount of effort required to convert one into the other.)
So no, Proof of Work isn't destroying energy, but it's wasting it. It's literally the whole point: you're meant to burn high-grade energy down to waste heat in order to prove you can afford it - there is math to show that trying to make it not wasteful (by e.g. doing some useful math like protein folding, instead of brute-forcing a random hash) creates incentives that defeat the whole system that PoW is supposed to establish.
The trouble with describing PoW as "wasting energy" is that it's relative. There's only a sliver of the Sun's light that reaches the orbital plane, and the rest is wasted blasting off in other directions. Then there's all those trillions of stars in galaxies far far away wasting their hydrogen.
Waste as a rationale depends on the assumption that the Earth's atmosphere heats up as a result of any excess power generation beyond equilibrium solar radiation, and so there is a limited power budget available to humanity for "useful" work.
Asking the question of whether someone finds it acceptable for PoW to be performed in space or on the Moon is a useful way to discuss crypto when someone just wants to make the climate change argument because it separates the concerns.
It's simpler than that. For a PoW blockchain based digital economy, the energy waste would scale much faster than the growth of said economy. There's lots of energy in space, but only so much of it is accessible at any given level - I would not like 99%+ of that to be dedicated to keeping the blockchain going.
Today, this may be increasing fraction of energy generation on the planet. In 50 years, this may be dedicated space satellites beaming energy from the sun. 500 years later, a Dyson swarm constructed for the sole purpose of keeping the blockchain going.
Ok, “Nah” noted. But for the past billions of years, the same resources have been “wasted” throughout the entire uncountable universe. Dismantling a few planets around a few stars to build Bitcoin mining infrastructure is not remotely problematic for a K3 civilization, for instance. The argument that because humanity is wasting it it’s bad seems faulty.
The argument is that Bitcoin mining will asymptotically approach to taking all resources your civilization can access. Always stuck at 99.999...%, and only adding more 9-s.
So with K3 civilization, we're not talking about dismantling a few planets - but rather dismantling the neighbourhood galaxies.
> What is it about crypto that causes us to lose our minds?
There may simply not be that much that is novel to be said about this. The SEC's complaint was discussed at length yesterday. This order is a prophylactic procedure tied to the complaint. It seems even the best of us fill vacuums with tribal genuflection.
tl;dr: frustration towards people in the cryptocurrency scene, feeling they've gained wealth through luck rather than skill or hard work. Also a disdain for how some cryptocurrencies are overzealously promoted.
It was the top comment of a 640 comments thread, so it presumably had a lot of up votes and is representative of how HN feels about cryptocurrency.
Unfortunately, the low quality discussion on crypto related threads dates back a long time and some of us just got tired of always correcting the same misinformation and low effort criticism.
Thanks for pointing that out. Clearly, the only people who hold anti-crypto views are just jealous and spiteful people. There totally doesn't exist any group of people who are just sick and tired of people propping up an almost totally useless technology as the savior of all financial, political, and social woes. /s
Please, point out one single application of blockchain that is useful and more efficient, beneficially transparent, and faster than a different implementation that doesn't utilize blockchain. Being somebody who is a big fan of blockchain yourself, surely this should be a very straightforward thing to point out.
> tired of people propping up an almost totally useless technology as the savior of all financial, political, and social woes
If that's how you feel then you're not going to like startup culture in general. Every second SaaS founder thinks that they're changing the world with the launch of their crappy CRM #3432.
While I actually found your comment pretty funny, and do certainly find it tiring how people pretend as if some cookie cutter SaaS start up will change the world (personally made me think of the very first episode of Silicon Valley on HBO), I honestly don't think there's a parallel between people being overzealous and/or naive in thinking some basic productivity app will change the world and the subset of the cryptocurrency fans who honestly present blockchain as a solution to just about every problem that exists around the world.
See above for the typical coiner response to anybody who brings up counterpoints. I mention that people might not like how crypto is posited as a miracle-drug to all world issues- low effort. You add a comment which doesn't address my comment at all and just comes across like a wannabe reddit zinger- not low effort? The irony is palpable. Just go back to /r/bitcoin or whichever echo chamber you prefer.
The problem IMHO is that it is so well-known that HN hates crypto that anyone who wants to voice a reasonable opinion is likely to avoid doing so in order to not get piled on with downvotes, hatred, etc.
- At least for me that's it, it would be stressful to deal with that so I go elsewhere to discuss the technology.
And this is probably precisely how an echo chamber can be created even without recommendation algorithms.
The "in-group" harasses the "out-group" until all of them leave - or not dare to speak anymore - and only the "in-group" is left.
> anyone who wants to voice a reasonable opinion is likely to avoid doing so in order to not get piled on with downvotes, hatred, etc
I think refraining from posting due to fear of downvotes is a massive disservice to HN. People should be exposed to views of all kinds. It wouldn't be very interesting if we all agreed. I actively try to post and reply even when downvoted. In the course of doing so I often discover that I'm not alone. Posting freely seems to somehow embolden others to reply as well.
Besides, I've got what 17k HN points? I can't even keep track of them anymore anyway.
Not at all. It tells you someone didn't like your post. Don't think it's possible to infer anything other than that. Many times I've had posts oscillate between negative and positive scores. It's very likely there are people who agree out there.
There is no consistency. I have a comment at -2 right now. Over the past few days it oscillated between positive and negative scores. Someone replied to it and my response is currently +6.
In those cases its multiple people consistently disliking your posts. This doesn't necessarily make their downvotes any more valid or intelligent, or the post not worth seeing.
None, but downvoting because of a disagreement makes you an asshole, so that still tells you stuff about the community, or at least those active in certain threads.
> I think refraining from posting due to fear of downvotes is a massive disservice to HN. People should be exposed to views of all kinds. It wouldn't be very interesting if we all agreed.
No evidence for this, but I think more commonly people refrain from posting because if you have a controversial opinion you don’t get one thread of posts to reply to suddenly everyone piles on and you’re “discussing” it with 50 different people.
This is a fundamental flaw in link aggregator style social media where the community is large.
Yeah I’ve experienced it myself, and am aware that I am often on the other side too…
It’s debilitating to have people throwing their 2c in to a growing tree thread and bounce! At least with linear vbulletin forums of old people would have to scroll past the conversation or look like idiots when they reply something totally out of context.
I think we've all done it at some point. It's usually a low hanging fruit phenomenon. Someone posts something with an obvious mistake, lots of people notice it and proceed to point it out at nearly the same time. Between refreshes of the page, it looks like you're the first one replying. Most vivid memory I have of this is someone here inadvertently telling the creator of the D programming language he didn't know enough C to comment.
> At least with linear vbulletin forums of old people would have to scroll past the conversation or look like idiots when they reply something totally out of context.
Alternatively, they'd recreate threads via extensive quoting, leading to massive in-line quote trees... Socializing is a messy affair no matter what we do, I guess.
The haves and have nots in the HN karma game is precisely the set of people who submit stories and the set of people who merely leave comments. A mediocre story submission trumps a great comment.
So, you have to consider that when talking about downvotes being discouraging— for people that don’t submit stories it can feel very real.
My karma is almost entirely from comments. Karma is a function of time and participation. If you comment a lot, you'll get points because chances are someone somewhere will like what you said.
I care a lot more about the names of people than internet points. I've commented on threads here only to realize days later I was interacting with the creator of a major programming language. Some people are interesting enough that I've bookmarked their comments page.
This is really the only way that a discussion can become "settled": one group is driven from the field. Otherwise it's just endless trench warfare of rehashing talking points.
Especially as none of this is new. It's been obvious since the mtgox collapse, nearly a decade ago, that offshore unregulated "institutions" run by small teams of opportunists were going to be extremely risky places to put your money. It's been obvious for a long time that selling tokens to people with the expectation of profit later that could only materialize from selling to others (no fundamentals) was fraudulent, which the SEC is gradually catching up on enforcing.
The remaining questions are political, and as such unresolveable. Delusional people who thing the US dollar has been on the verge of collapse since 1932 vs people stuck in actual collapsed currencies who want access to pseudodollar banking. Europeans annoyingly pointing out that regular bank transfers can be free and quick vs Americans insisting this is impossible.
I feel like this is a weak point. There are countless spam/scam websites out there, because anyone can spin up a page and publish something. That’s why you exercise a bit of caution and skepticism.
That’s the tradeoff of an open web. When you have a limitless design space, you get lots of trash.
But saying “websites are a scam” is just disingenuous to the fact that some websites are very legit and very useful.
'heavily linked' is a subjective phrase. It cannot be a 'fact'. Is the Internet 'heavily linked', 'lightly linked', or just 'linked' to scams? Your research would be appreciated.
But it was hyped up to be the future, cure cancer, end poverty etc.
And now none of that has materialised it is just being hyped "down".
People are understandably disappointed or disillusioned. But unbridled pessimism is no more realism that unbridled optimism.
You see the same basic "roller coaster" with other "phenomenon". Elon Musk was a god, now he is the devil. Obama had the same Hope->Disappointment thing. Self driving cars, fusion (and fission) power, various climate accords, there are many examples. AI is the current biggest bubble.
To speculate wildly: I think it is caused by a mix of the same bubble-forming forces you see in financial markets AND a sort of In-Group psychology of humans where they value "being on the right side" (where popular=right) very highly.
Crypto is a strong example but not unique I think.
It's concerning that people on HN are not introspective enough to see what their own psychology is doing to them, but the same applies to me some times. Minds are slippery...
Some topics just automatically make people turn their brains off and speak purely out of emotion – crypto, Apple, Elon, immigration, "woke culture" etc. You are never getting meaningful discussions on them here or anywhere else.
The same thing about housing that causes us to lose our minds. Under capitalism, investments (risky and otherwise) are commonly working people's only hope for a taste of freedom. If you don't like it, you have a friend in me.
This is a typical sort of projection I see from crypto-owners. They can't seem to contemplate the fact that there are people that think crypto is a bad idea _regardless_ of how much profit they might or might not have made by buying or selling at various points in history.
Nor that cryptocurrency doesn't create value out of nowhere -- for every person who "built generational wealth" (gag) by speculating on cryptocurrency, there's probably quite a few people who lost money. It's a zero-sum system.
If people can somehow keep cryptocurrency values high, they can take USD margin loans out of their Bitcoin holdings, which increases the amount of total dollars laying around. That’s what happened in 2021 that bumped crypto asset prices due to extremely low USD interest rate and quantitative easing. In terms of USD it is really not zero-sum, though you may take it in other ways.
Worse than that, it's actively undermining a system of laws and fair play that do create stability and value. It's strip-mining a rainforest for kicks. I came to Bitcoin naiively as a libertarian curiosity and after examining it fairly closely I'm convinced Satoshi was a black market kingpin and Bitcoin was conceived as a money laundering vehicle.
Yup, it's a version of telling critics "Enjoy being poor", which is an incredibly lazy, unfalsifiable argument. "You disagree with my position because you are broken" is not a sound argument, but has many variations (including "You dislike Apple/Elon because you are poor")
It's really not. How would a self proclaimed technology enthusiast react to missing out on one of the greatest tech investment opportunities of their lifetime? I suspect that they would react exactly the way hn's crypto haters do now.
No, you didn't make a huge mistake. It's crypto that's wrong.
Counterview: those who made gobs of money who transpose that outcome to "gosh, crypto must be great and I don't know why everyone is bashing it so much".
Lots of older generations felt that way about housing price increases as well -- are they right too?
> those who made gobs of money who transpose that outcome to "gosh, crypto must be great and I don't know why everyone is bashing it so much"
Most of us can profit off something while decrying it as dumb. I’ve made money from crypto, and I think I did so ethically. But the whole thing is stupid, and I think we have a civic responsibility to ensuring that is understood.
They're right in that, seeing how it turned out, everyone who could have bought a house really should have bought a house. The thing about bitcoin is that EVERYONE could have bought in, either with cash or through mining. You didn't need to save a large deposit or get approved for a loan. It was an opportunity that was right there for everyone.
I regret not investing more or mining. I can only imagine how those who missed the boat completely feel.
The posts and comments you're talking about aren't coming from new users and there hasn't been a surge of new users. I think it's just the usual stochastic flux.
There's some kind of bias against crypto here on HN. I've seen people here who revel in rubbing it in whenever the market crashes just because some so called "crypto bros" were smug about their profits.
I would agree if the bias was against the shitcoin casino game where you play to see who can rugpull the fastest. The truth is HN hates even proper cryptocurrencies like BTC, ETH, XMR.
Yes, there are. Actual cryptocurrencies: BTC, ETH, XMR. They have an actual blockchain and serve a purpose. Improper cryptocurrencies are tokens built on top of actual cryptocurrencies. All those shitcoins are just tokens implemented as Ethereum Virtual Machine code.
Bitcoin theoretically serves a purpose (if you can stand its delays in settling transactions, which rules out in person stuff) but let’s be real: the vast majority of cryptocurrency use is speculation, not purchase transactions.
> the vast majority of cryptocurrency use is speculation, not purchase transactions
That doesn't deny its purpose though. I've gotten paid via XMR for programming tasks. Anonymously, even. The fact people treat cryptocurrencies like stocks doesn't nullify that.
The truth is the true source of all problems in this space is the exchanges themselves. They are literally unregulated banks in disguise. Cryptocurrencies should not be regulated at all but exchanges definitely should be.
Leviticus is a part of the Bible/Torah. It's just a joke obviously, implying that crypto technology is simply against both nature and the writings of thousands years old religious texts.
Thanks for explaining that. was also jokingly implying that the technical foundations of crypto must be disgusting, via Leviticus being associated with purity laws.
HN discussion quality has been declining for years, ever since dang took over and changed the moderation priorities (though it's not necessarily causal). Crypto is just the leading edge of that.
I think the position of the SEC is that these companies should comply with the law. Which is what is said just a few seconds later. And that's the problem with slogans: we lose track of the wider issues.
The statement cracks me up. Without these exchanges, crypto would still be a small blip on the radar. It would continue to be nothing but a hobby for techies, libertarians, and techie libertarians, forever.
If it's ever going to become more than a playground for scam artists, the industry needs real leadership that doesn't just brush every scam away with a meme.
Why crypto will never be mainstream. Be dependent on storing a private key that can get lost or stolen. Need to store a hard copy at a bank in a safety deposit box. Can’t even trust the hardware wallets you buy off Amazon since it could have been returned with malware loaded.
It's really not any different than traditional cash. "Not your cash, not your money" also holds true. Storing lots of cash at home is even more difficult and risky. Keep your money at the bank? The govern can simply turn off your money for any reason. You're literally posting in a thread about the US government seeking to freeze Binance's accounts.
Happened in the 90s where I live. Hyperinflation set in and government just froze everybody's accounts in a desperate attempt to stop it. It's 2023 and people are still afraid it might happen again, especially with a literal communist in power.
Cryptocurrency is absolutely valuable as a defense against government idiocy. That fact cannot be denied.
And an easy way to lose everything because you sent tokens to the wrong address, forgot your passphrase, lost your hardware ledger, fell prey to some scam or another, house burned down, etc.
I would ask: is there even a single Binance US user that wants the SEC to take custody of their assets? instead of sticking with Binance US?