It is difficult to get a crypto proponent to understand something, when their crypto wealth depends on them not understanding it.
EDIT: If you steal my gold or other metal store of value, I can pursue you in court and recover my loss (either the actual materials lost or fiat value). If you steal my single named security, I can pursue you in court and recover my loss (or the clearinghouse will reverse the transaction). Crypto cannot be both an investment accessible to everyone, governed by nation state regulators, and a wild west where you can lose everything at a drop of a hat due to an opsec slip and there is no recourse. That is incompatible with the law.
https://www.cnbc.com/2021/11/19/over-10-billion-lost-to-defi... (Criminals have made off with over $10 billion in ‘DeFi’ scams and thefts this year) <-- This won't fly with the folks who write and enforce the law. Their job is to protect people (investors!) from the folks who believe those who owns the keys and crypto owns the property regardless of how it was obtained.
Fun fact but the gov basically stole gold from ppl b4 in the good ole USA. They made it illegal to hold - if you were caught having gold it was a 10k fine. PPL were forced to go to their banks and sell their gold at a loss.
That article uses the term hoarding but don't be fooled they made holding any relevant amount of gold for investment illegal. You were still allowed to have gold necklaces and the like though
These same folks allow regular people to do options trading, invest in any individual stock and other forms of wild gambling all from the convenience of their phones (complete with fun animations!)
It's also rather difficult to actually recover losses in court in a civil case unless you're rich enough/the amount at stake is large enough to eat the losses in court fees/collections measures and still make a profit (winning a judgement does nothing if the losing party simply refuses to pay, at which point you have to engage the Sherrif/place liens on property/hire collections agencies/etc). Whether it should be that way or not, that's the reality. These same folks allow that system as well.
I'm more inclined to think the regulators will go the way of rich/those who make campaign contributions/those who can lobby. I wish we didn't live in that world, but we do. The evidence that we do has been unmistakable since 2008. So some of the scammier micro-cap coins might get regulated out of existence, but with Wall St taking an interest and plenty of wealthy people on board, crypto as a whole is going to stick around IMO.
While I agree that crypto is not compatible with financial legislation as written, in the sense of having a third party (the state) back up your assets, it's not necessarily incompatible with law itself. It wouldn't be shocking to me if a government explicitly circumscribed parts of crypto as an unregulated space, where they legally provide no guarantees about asset protection. But I doubt the US government would do something a little risky like this.
> If you steal my gold or other metal store of value, I can pursue you in court and recover my loss
Stolen property is stolen property. Not all stolen property is recoverable. Even stolen property with a paper trail may not be recoverable (ask Bernie Madoff fraud victims who have expensive lawyers) or may not be compensate-able. Cars, bikes, phones, etc. get stolen every day. If I meet someone to buy something for $1000 cash and they just run off with it, I've little recourse.
I'm a crypto proponent, and I'm pretty pro regulation.
The reason is because integrating current legal systems with crypto actually makes it more powerful and valuable. Existing legal frameworks can be used to link a purely digital world to the physical world; ex. for us to reliably trade tokens in physical assets (house, painting), we need courts and systems we can leverage for confidence and rule of law.
Therein lies a tradeoff and irony, by mixing such systems. You might say "just build it on a centralized system", and in an ideal world that would be great. The problem is that bureaucracy and politicization of systems make it impossible for innovation to occur: simply look at the friction facing car sharing (Uber), online betting/gambling, housing sharing (Airbnb), etc. Those things can't be the wild west, but society is clearly better off and wants those services.
I suspect some jurisdictions will be friendlier to crypto and more willing to explore those spaces. Innovation will flock there, and eventually everyone else will just follow.
How much value has been lost to inflation this year? Why is that acceptable but coding errors are not? I am not a crypto-currency enthusiast but I remember the Bitcoin whitepaper arguing against centralized currency. So it was critical of the Federal Reserve.
I think people should be allowed to choose. If they don't want regulation then fine.
Who's being protected if I'm fully aware of the risks? I feel like education is much more valuable than dictating what is "too risky" for an individual investor.
But agreed, what you've described is the most-likely outcome.
Crypto's price has been driven by the increase in crypto allocation in the total world investment portfolio. Right now crypto is at 2.6T, gold 11T, stocks are 122T.
The percentage of crypto in the world portfolio can't grow forever though. Once it reaches its limit, the harsh reality will very slowly start to settle in. Crypto doesn't generate any value (unlike stocks, bonds, real estate) and doesn't have any intrinsic value (unlike gold). Its value is entirely based on faith.
The best case scenario would be growth proportional to total wealth growth. But why hold something more risky and with lower returns compared to stocks?
There are crypto networks that does betting. The natural next thing is insurance, which can be considered a special case of betting.
The "harsh" truth might very well be, that a lot of industries that have been governed by priviliged organisations will turn into algorithmically governed DAOs.
A lot of people in the financial sector will probably loose their job, as cheaper alternatives for financial products will occur in self regulated algorithmically governed systems.
The "bitcoin is the crypto definition" view should be abandoned. And it should be understood that crypto means algoritgmically governed economies for now. Later it will be algorithmic governance.
Ie. Cryptos market cap is at least equal to the financial sector. And probably we are only scratching the surface with that statement.
I don't understand this push for regulation of cryptocurrencies. Just let the mathematics govern. It'll either work on its own, or as people lose their money to trickery and/or carelessness, there will be less and less to regulate as people stop participating.
That's a rather heartless take. You could make the same argument regarding the need to protect any vulnerable members of society. Say, people who are immunocompromised during a global pandemic. Oh wait...
It's never just pure mathematics. You always have a human layer on top, and that means that there is an attack surface for self-interested people to take advantage of others. The purpose of regulation is to minimize the damage those people can do.
I suppose in a future where all the humans are extinct, and monolithic AI's rule the planet, your comment would hold more water.
Can you elaborate on this further? I seem the market cap of Tether being quite tiny compared to BTC and ETH. Also Solana is nearly as large and will probably be much larger than Tether in a few months.
Crypto doesn't seem much different from other technologies facing regulation - there seems to be a tendency to fit square pegs (new technologies) in round holes (existing regulatory frameworks), hence the worries that regulators will mess things up.
Isn't the entire appeal of crypto is that it's not regulated? Why the hell would I want it if it's controlled just like a fiat currency. That means it's susceptible to idiotic government decisions right?
The only reason our regulatory masters every say this shit is because they want a piece of the pie for themselves. You see it in every industry where they're not getting a cut.... oh gambling very very bad! Regulate the hell out of it and now it's fine to have sports betting and all sorts of other "sin" pleasures available.
Then there's always this "guarantee" that the tax dollars will go to the children except they pull the rug out on other money that was previously going there.
> That means it's susceptible to idiotic government decisions right?
That's the point. I'm not sure why people think that crypto is just going to be allowed to exist outside of government control. Of course government is going to want to get their hands in it. And while the technology might be resistant to that, there are still other things the government can do, just like they do with fiat, to gain control of crypto. For example, putting you in jail I you don't do what they want. Exactly like they do with taxes in the US.
I would bet the explosion in cryptocurrency values over the past 5 years has been more from "everyday people" who care less about the philosophical underpinnings of cryptocurrencies and more about investing the best performing asset of the past few decades. so when they start getting scammed and raising ire about it, of course regulators will step in - that's their job
1. Initial Exchange Offerings (IEO) are specifically excluding US participants, and sometimes Canada and China based participants.
2. The US regulations are inadequate for legitimate smaller companies that want to bootstrap, requiring time-consuming legal applications to the SEC that may not get final approval - not a trend really, but more of a reinforced reality.
It makes more sense for an entrepreneur to bootstrap a company outside the US and avoid any US touchpoints, if you want to bypass the mechanics of VC capitalization, SEC friction and address a market need that will not result in a unicorn.
This indeed seems reasonable in the eyes of the contemporary understood society, which is only a couple of hundreds years old anyways.
A counter argument could be that Crypto is regulation.
Crypto economies encode all sorts of incentive structures to promote an inhibit various behaviors of its users.
The only difference is that these regulations are not governed by the elected government but by algorithms.
And yes, some modern networks have included mechanisms for handling financial stability. Eg. the Maker coin that have a lever for shutting everything down in case of an emergency.
The SEC has already proven that they can't keep up with crypto. I don't think crypto will survive if it becomes regulated. While there is a lot of manipulation happening in crypto, there is a lot of organic grassroots efforts as well for people that value privacy and true decentralization. I can only imagine how quickly they'd work to destroy both of those things and target cryptocurrency that promotes those ideals. There is nothing stopping them from regulating exchanges as is.
It is probably impossible to regulate Crypto altogether, as it is merely a term with no sound definition.
Regulations would probably also hit, eg., in-game economies, that are essentially the same as crypto economies, just them being controlled by a central agent.
The joke is that the only reason crypto wouldn't "survive" if unregulated is because they (the feds) would un-regulate it out of existence.
...
This is kind of philosophically interesting in light of Giorgio Agamben's discussion of sovereignty and law, in which the prime act of the sovereign is to enact the "ban", i.e. deciding who or what is excluded from the law, which is itself still a status in relation to the law, specifically one of exclusion. So people who trade crypto can be unregulated in the sense of gray area, yet-undecided legality, or they can be "unregulated" in the sense of "explicitly excluded from the legal realm", banned (abandoned), removed from any sort of legal relationship with the state. The USA isn't China, where the idea of someone being "unpersoned" for trading crypto seems like an act that the state could choose to make, but that's the sort of thing I thought would make a good joke.
I’m not going to pretend I know the future or anything, but I will say that, while this is a common series of events, #4 can absolutely go two different ways. Everyone loves a good underdog story, but I also wouldn’t say that winning is the most common outcome.
A useless generalization which you could apply to a lot of things or people. First, they ignored Trump, then they mocked him, then they fought him, then he won.
[+] [-] toomuchtodo|4 years ago|reply
EDIT: If you steal my gold or other metal store of value, I can pursue you in court and recover my loss (either the actual materials lost or fiat value). If you steal my single named security, I can pursue you in court and recover my loss (or the clearinghouse will reverse the transaction). Crypto cannot be both an investment accessible to everyone, governed by nation state regulators, and a wild west where you can lose everything at a drop of a hat due to an opsec slip and there is no recourse. That is incompatible with the law.
https://www.cnbc.com/2021/11/19/over-10-billion-lost-to-defi... (Criminals have made off with over $10 billion in ‘DeFi’ scams and thefts this year) <-- This won't fly with the folks who write and enforce the law. Their job is to protect people (investors!) from the folks who believe those who owns the keys and crypto owns the property regardless of how it was obtained.
[+] [-] asmos7|4 years ago|reply
https://en.wikipedia.org/wiki/Executive_Order_6102#:~:text=E....
That article uses the term hoarding but don't be fooled they made holding any relevant amount of gold for investment illegal. You were still allowed to have gold necklaces and the like though
[+] [-] scottLobster|4 years ago|reply
It's also rather difficult to actually recover losses in court in a civil case unless you're rich enough/the amount at stake is large enough to eat the losses in court fees/collections measures and still make a profit (winning a judgement does nothing if the losing party simply refuses to pay, at which point you have to engage the Sherrif/place liens on property/hire collections agencies/etc). Whether it should be that way or not, that's the reality. These same folks allow that system as well.
I'm more inclined to think the regulators will go the way of rich/those who make campaign contributions/those who can lobby. I wish we didn't live in that world, but we do. The evidence that we do has been unmistakable since 2008. So some of the scammier micro-cap coins might get regulated out of existence, but with Wall St taking an interest and plenty of wealthy people on board, crypto as a whole is going to stick around IMO.
[+] [-] Nav_Panel|4 years ago|reply
[+] [-] twox2|4 years ago|reply
[+] [-] coralreef|4 years ago|reply
Stolen property is stolen property. Not all stolen property is recoverable. Even stolen property with a paper trail may not be recoverable (ask Bernie Madoff fraud victims who have expensive lawyers) or may not be compensate-able. Cars, bikes, phones, etc. get stolen every day. If I meet someone to buy something for $1000 cash and they just run off with it, I've little recourse.
I'm a crypto proponent, and I'm pretty pro regulation.
The reason is because integrating current legal systems with crypto actually makes it more powerful and valuable. Existing legal frameworks can be used to link a purely digital world to the physical world; ex. for us to reliably trade tokens in physical assets (house, painting), we need courts and systems we can leverage for confidence and rule of law.
Therein lies a tradeoff and irony, by mixing such systems. You might say "just build it on a centralized system", and in an ideal world that would be great. The problem is that bureaucracy and politicization of systems make it impossible for innovation to occur: simply look at the friction facing car sharing (Uber), online betting/gambling, housing sharing (Airbnb), etc. Those things can't be the wild west, but society is clearly better off and wants those services.
I suspect some jurisdictions will be friendlier to crypto and more willing to explore those spaces. Innovation will flock there, and eventually everyone else will just follow.
[+] [-] kobalsky|4 years ago|reply
who says? that premise seems to operate on the idea that justice only works on stuff that can be returned to its previous state.
if anything crypto has proven that big heists don't pay off because naughty wallets get immediately blacklisted by exchanges.
[+] [-] onetimeusename|4 years ago|reply
I think people should be allowed to choose. If they don't want regulation then fine.
[+] [-] rodiger|4 years ago|reply
But agreed, what you've described is the most-likely outcome.
[+] [-] p0nce|4 years ago|reply
[+] [-] RivieraKid|4 years ago|reply
The percentage of crypto in the world portfolio can't grow forever though. Once it reaches its limit, the harsh reality will very slowly start to settle in. Crypto doesn't generate any value (unlike stocks, bonds, real estate) and doesn't have any intrinsic value (unlike gold). Its value is entirely based on faith.
The best case scenario would be growth proportional to total wealth growth. But why hold something more risky and with lower returns compared to stocks?
[+] [-] madsbuch|4 years ago|reply
There are crypto networks that does betting. The natural next thing is insurance, which can be considered a special case of betting.
The "harsh" truth might very well be, that a lot of industries that have been governed by priviliged organisations will turn into algorithmically governed DAOs.
A lot of people in the financial sector will probably loose their job, as cheaper alternatives for financial products will occur in self regulated algorithmically governed systems.
The "bitcoin is the crypto definition" view should be abandoned. And it should be understood that crypto means algoritgmically governed economies for now. Later it will be algorithmic governance.
Ie. Cryptos market cap is at least equal to the financial sector. And probably we are only scratching the surface with that statement.
[+] [-] overview|4 years ago|reply
[+] [-] throwvirtever|4 years ago|reply
[+] [-] notpachet|4 years ago|reply
It's never just pure mathematics. You always have a human layer on top, and that means that there is an attack surface for self-interested people to take advantage of others. The purpose of regulation is to minimize the damage those people can do.
I suppose in a future where all the humans are extinct, and monolithic AI's rule the planet, your comment would hold more water.
[+] [-] FredPret|4 years ago|reply
[+] [-] Havoc|4 years ago|reply
[+] [-] sneak|4 years ago|reply
[+] [-] DamnYuppie|4 years ago|reply
[+] [-] unknown|4 years ago|reply
[deleted]
[+] [-] vbo|4 years ago|reply
[+] [-] CountDrewku|4 years ago|reply
The only reason our regulatory masters every say this shit is because they want a piece of the pie for themselves. You see it in every industry where they're not getting a cut.... oh gambling very very bad! Regulate the hell out of it and now it's fine to have sports betting and all sorts of other "sin" pleasures available.
Then there's always this "guarantee" that the tax dollars will go to the children except they pull the rug out on other money that was previously going there.
[+] [-] spiderice|4 years ago|reply
That's the point. I'm not sure why people think that crypto is just going to be allowed to exist outside of government control. Of course government is going to want to get their hands in it. And while the technology might be resistant to that, there are still other things the government can do, just like they do with fiat, to gain control of crypto. For example, putting you in jail I you don't do what they want. Exactly like they do with taxes in the US.
[+] [-] ausbah|4 years ago|reply
[+] [-] JaggerFoo|4 years ago|reply
1. Initial Exchange Offerings (IEO) are specifically excluding US participants, and sometimes Canada and China based participants.
2. The US regulations are inadequate for legitimate smaller companies that want to bootstrap, requiring time-consuming legal applications to the SEC that may not get final approval - not a trend really, but more of a reinforced reality.
It makes more sense for an entrepreneur to bootstrap a company outside the US and avoid any US touchpoints, if you want to bypass the mechanics of VC capitalization, SEC friction and address a market need that will not result in a unicorn.
Cheers
[+] [-] madsbuch|4 years ago|reply
A counter argument could be that Crypto is regulation.
Crypto economies encode all sorts of incentive structures to promote an inhibit various behaviors of its users.
The only difference is that these regulations are not governed by the elected government but by algorithms.
And yes, some modern networks have included mechanisms for handling financial stability. Eg. the Maker coin that have a lever for shutting everything down in case of an emergency.
[+] [-] encryptluks2|4 years ago|reply
[+] [-] madsbuch|4 years ago|reply
Regulations would probably also hit, eg., in-game economies, that are essentially the same as crypto economies, just them being controlled by a central agent.
Essentially it would mean a ban on ... platform?
[+] [-] londons_explore|4 years ago|reply
[+] [-] SubiculumCode|4 years ago|reply
[+] [-] unknown|4 years ago|reply
[deleted]
[+] [-] kaycebasques|4 years ago|reply
[+] [-] frockington1|4 years ago|reply
[+] [-] kaycebasques|4 years ago|reply
[+] [-] fallingknife|4 years ago|reply
[+] [-] authed|4 years ago|reply
[+] [-] Bud|4 years ago|reply
Guy In Charge Of Regulation Says Regulation Is Good
[+] [-] hippich|4 years ago|reply
[+] [-] Nav_Panel|4 years ago|reply
...
This is kind of philosophically interesting in light of Giorgio Agamben's discussion of sovereignty and law, in which the prime act of the sovereign is to enact the "ban", i.e. deciding who or what is excluded from the law, which is itself still a status in relation to the law, specifically one of exclusion. So people who trade crypto can be unregulated in the sense of gray area, yet-undecided legality, or they can be "unregulated" in the sense of "explicitly excluded from the legal realm", banned (abandoned), removed from any sort of legal relationship with the state. The USA isn't China, where the idea of someone being "unpersoned" for trading crypto seems like an act that the state could choose to make, but that's the sort of thing I thought would make a good joke.
[+] [-] foolzcrow|4 years ago|reply
[deleted]
[+] [-] guscost|4 years ago|reply
2. They mock you
3. They fight you <- You are here
4. You win!
[+] [-] buddylw|4 years ago|reply
[+] [-] sumeno|4 years ago|reply
[+] [-] class4behavior|4 years ago|reply