I first learned about blockchain years ago talking to some middle eastern clients who had implemented something with it. After looking at the technology from a data & software engineering pov, I thought it was basically useless and incredibly niche. I said as much, but they didnt believe me; they also thought ML was where you "fed data to a machine and it did everything" because that's what some lecturer had told them.
For years I was mostly just confused that "crypto" was anything at all, and latterly it seemed pretty clearly insane. The pitch to replace governement-back currencies with deflationary tokens clearly a fever dream of some political moron. Then it became very clear that it was just a scam: the dream was the hook. And "tokens" fit the collectables mould, in which assets with only ephemeral value to collectors boom in speculative bubbles.
Two years ago a friend wanted to get into the industry, and I said that soon it'll be a black mark on a CV and everyone will be hiding it.
What is interesting is that amongst professional finance much of this has been apparent the whole time. I've spoken to senior people in UK banking and they've confirmed as much. And as much is clear by reading the FT.
What is interesting is how much "elite tech" has captured the elite and silenced professional finance. The Economist article cited above, for example (and on HN the other day), was absurdly pro-crypto giving the scam-sales-pitch verbatim.
Some documentary is no doubt in the works on this, and I can see an Adam-Curtis style one on "how silicon valley beat the financial elites and captured the political imagination of a generation"
Fintech and swinging for the fences is not a bad thing per se. As long as you aren’t an executive for a scam or something; I have never seen in my career experience being treated as a bad thing. Might perhaps get some added questions to get you, but it is also a unique selling point.
Crypto essentially allows you to make trust less systems with tokens, what those tokens mean or not depends on the situation. Writing that off as purely speculative isn’t necessarily fair. Utility tokens are a thing after all.
Most of the highly technical software engineers I've spoken to have felt similarly. Blockchain is a neat solution to some very niche problems. However, there seems to be a middle ground of perhaps less technical people (the tech bros) who are attracted by the easy money and don't think too deeply about the underlying technical realities.
> I thought it was basically useless and incredibly niche
Quite, I tried on and off for years to imagine a single use case for the real world. Always came up dry because the Blockchain Oracle problem is unsolvable.
> What is interesting is that amongst professional finance much of this has been apparent the whole time.
It is important to note, that even if from looking from far outside, finance looks like one thing, in reality there is a big divide within finance regarding how "value" is defined. On the other hand, there is a simple notion that value of a thing is whatever someone is willing to pay for it. And on the other hand, there is a bit more complex idea that if you somehow know the value of a cash flow, then if you are able to create the same cashflow in some other way, then the other cash flow must have same value.
The first one is the home of powerpoints, VC capital and crypto. (It's also easy to recognize these professional financiers once you start to discuss whether sweat equity should be valued similarly to cash equity. They are completely appalled with the idea, because reasons.)
The second is home of financial regulation, really fancy maths and modern banking risk management.
The failure modes are different here. The first one, typical failure model is scam. The second, well, you can google LTCM for that.
And what comes to crypto, there is a clear and obvious difference. The first ones see no reason why not investing into crypto, after all, someone is paying 60k for a BTC, its value is thus 60k, what more do you want? The second ones scratch their heads. They see no positive net cash flows anywhere, thus the value must be negative. And this is the reason (in addition to regulation) why banks and professional bankers for the most part keep clear from crypto and struggle seeing value, while VC money is/was pouring in.
Bitcoin solves what is called the double spending problem without a central authority. Any other existing digital cash system, including the present-day fiat currencies and payment infrastructure relying on them as well as other digital currencies, require a central authority to maintain and dictate the true history of a monetary ledger, to make sure that the same units of money are not spent twice. Bitcoin instead decentralizes the bookkeeping and uses a proof-of-work system to maintain consensus between independent bookkeepers about the true history of the ledger.
I really don't understand what place your bank has telling you where you're allowed to send money. If I want to throw a small percentage of my net worth into a hugely speculative investment then fine, why are they stopping me? Are they stopping me from using my bank card down at the dog tracks or at a casino? Can I withdraw cash for Poker but not blackjack?
Having said that, it's weird because I definitely have sent money from one of the banks that aren't crypto-friendly to Binance in the past, so who knows how strong these bans really are.
There are various guarantees and payment codes of conduct that UK banks have signed up to. The intent of these is to give some protection if you've made a payment to a scammer.
What I presume is happening is that some banks are seeing a significant increase in applications for that protection from crypto transactions. Or are expecting to see such.
It doesn't apply when you withdraw cash as you have no recourse to protection from the bank if you subsequently lose that money. And you might be restricted from using you card at a casino if your bank has seen significant claims from said casino.
One can, of course, argue whether or not such protections should exist. As in, run the retail banking system on a caveat emptor basis. But that's not how it works in the UK and, whilst it doesn't, it's not unreasonable for the bank's to limit their liability.
This isn't about sophisticated investors wanting to bet 1% of their net worth on a speculative investment. It's about preventing ordinary people wiring their life savings to scams like OneCoin (https://www.bbc.co.uk/news/technology-49826161).
> 47% of UK banks don’t allow customers to interact with crypto exchanges
And yet the state asks you to pay your taxes when you make added-value on crypto.
There are literally people who have taxes on added-value made on crypto due but are unable to pay them because their banks are refusing their money.
Take 10 K EUR out: easy. Take 1 million+ EUR out: it's extremely difficult.
The hypocrisy here is phenomenal: "cryptos are scams" / "cryptos are only for money laundering and drug dealing" / etc.
But then: "don't forget to pay your taxes to the nanny state on your crypto winnings".
And it's really vicious for the state says: "Oh, crypto went up 10000%, you hence have lots of taxes due to the state!" but the bank goes "Oh, you have a 7 digits sum in crypto, you must be a fraudster".
I don't understand the argument. 99% of UK banks don't allow customers to buy barrels of salted pork. But the state will ask you to pay your taxes if you make added-value selling barrels of salted pork
> There are literally people who have taxes on added-value made on crypto due but are unable to pay them because their banks are refusing their money.
If they have taxes on added-value, it means they sold tokens, so they can take that money out fo the exchange and use it to pay tax
> The hypocrisy here is phenomenal
you can be prosecuted for not declaring your drug earnings, on top of the actual crime of dealing drugs
Actually, that is perfectly normal in many tax systems, e.g. in Germany. Afaik the tax law doesn't care where the money comes from – it could be from a completely illegal activity, and you still own taxes on gains.
Is it really much different from the UK attitude to prostitution? Illegal to solicit but the actual act of exchanging money for sex is totally legal as long as it’s declared on taxes.
A lot of mainstream banks felt uncomfortable about getting involved with crypto. But at the tail end of a monetary bubble when everyone is chasing yield, the pressure from your board, your major investors, and your trend-following employees can be impossible to resist. It's just easier to go with the flow. But after FTX, the hype is dead and they can quietly shelve their projects and move on.
Worldly wisdom teaches that it is better for reputation to fail conventionally than to succeed unconventionally. — John Maynard Keynes
Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, one by one. ― Charles MacKay
People can do what they want with their money. In this case, they can move their money to one of the many banks who don't place restrictions on transactions.
The beauty of the free market is that people are free to move their custom. And businesses are free to set the limitations necessary for profitable enterprise.
Some banks have decided that the risk to having to support customers who engage in risky behaviour is too high. There are literally dozens of free banks in the UK, and it is incredibly easy to switch provider.
Society picks up the bill when mom and dad bet the pension savings on crypto and they have to take public money into retirement. The banks are trying to essential provide a cooling off period so regular people don't get obliterated. The same people that complain about the impinging government are usually the first to ask for a handout the moment something goes wrong etc etc.
This may be true but some banks also do a lot to prevent it, such as a need to specifically request betting transactions to be allowed on your account.
I also think that people losing money from betting actually know what they are getting into though. The same can not be said for some other transactions.
Does the cryptocurrency industry also allow banning yourself from betting on it (and respect this ban by ensuring you don't create multiple accounts)? That's just one of the controls in place in gambling industry.
Gambling is a lot more regulated though. And it doesn't have the tendency to say "hey bet all of your life savings with us, you can't lose!" like crypto does.
Will be interesting to see how former finance minister now PM reconciles the banks' hesitancy with his own grandiose plans of making the UK a crypto capital
"White is also sceptical about solutions purporting to show which crypto companies represent a risk for banks and their customers. “It’s hard to individually predict which companies might later become a problem because, if banks knew a project was fraudulent, then people wouldn’t really be putting money into it,” she says."
and this quite validating:
"As financial institutions and the crypto industry continue to grapple over the right amount of regulation, others in the private sector have begun questioning the longevity and relevance of the industry itself after back-to-back scandals. Earlier this month in The Economist, the FTX collapse was described as a ‘catastrophic blow to crypto’s reputation and aspirations’ while a Reuters podcast similarly declared that the incident ‘consigns crypto to fringes of finance’. "
> This crypto ban by Starling comes off the heels of Santander’s decision to limit customer deposits to crypto exchanges to £1,000 per transaction and a monthly limit of £3,000
This, ironically, validates the argument for crypto that banks cannot be trusted to let you do what you want with your own money.
I don't really understand this. I'm very, very bearish to all things crypto, but how is banks stopping their customers transferring money to crypto businesses meant to prevent risk to the banks itself?
UK financial industry brings $100 billion dirty money a year into the country. If the banks support the crypto they can double that amount in short span of time.
> UK financial industry brings $100 billion dirty money a year into the country.
Official estimates says, depending on the source, that from 1.5% up to 5% of the world's GDP is tied to criminal activities.
The GDP is about 100 trillion.
Cryptos are a complete insignificant drop in the bucket. Even if 100% of cryptos were linked to crime, it's still be absolutely nothing compared to the actual criminal activities ongoing (like drug trafficking) and the percentage of the worldwide GDP they represent.
If this policy expanded to all UK banks, it could plausibly make the UK a less interesting target for ransomware and similar cryptocurrency-backed extortion schemes.
I believe Australia is moving towards making it illegal to pay crypto ransoms. Cybercrime has gone absolutely wild over the last few years and cutting off the money tap should do some good.
How transacting through a bank to move money on/off crypto exchanges could be "risky" for the bank? Unless banks don't want account holders to spend (or lose) their money, to keep better balance sheets.. but banks shouldn't dictate what customers do with their cash. Exactly the reason customers want to be less dependent on high-street banks and keep their money/investments in a self-custody.
Self-custody is the largest appeal of crypto currencies.
Looking at the actual report, only Monzo and Revolut (yes, I haven't heard of them either) are "crypto friendly". The others could best be described as wary and watchful.
While Monzo is cryptocurrency friendly [0] they don't allow payments to binance [1] however thats down to a Consumer warning on Binance from the FCA [2] so I think thats basically a industry wide thing not just a Monzo thing. Silly enough, if you have a paypal account and a PayPal debit card you can use that card on Binance.
Monzo has been known for freezing accounts at the drop of a hat in the past, possibly for cryptocurrency related reasons if /r/Monzo is to be believed.
This is a dangerous precedent of "legal, but harmful" creeping in, where you cannot spend _your own money_ on something authority thinks is not in your best interest.
It's like as if people commenting here want CBDCs and would love the banks to impose savings limits on their accounts and pretend that they know best what you should be spending your digital cash on. [0]
UK Banks have always been very wary of crypto. It was always a worry that your account might get suddenly closed if you interacted too much with the crypto ecosystem
A friendly reminder that all the recent drama has zero to do with crypto, rather 100% to do with corruption at a human scale by 3rd party services which are not in any way crypto, they are traditional financial services peddling cryto wares.
Get your keys off banks and 3rd parties, thats the whole point of why this started ... Exactly because of crooks like ftx and those peotecting them.
[+] [-] mjburgess|3 years ago|reply
For years I was mostly just confused that "crypto" was anything at all, and latterly it seemed pretty clearly insane. The pitch to replace governement-back currencies with deflationary tokens clearly a fever dream of some political moron. Then it became very clear that it was just a scam: the dream was the hook. And "tokens" fit the collectables mould, in which assets with only ephemeral value to collectors boom in speculative bubbles.
Two years ago a friend wanted to get into the industry, and I said that soon it'll be a black mark on a CV and everyone will be hiding it.
What is interesting is that amongst professional finance much of this has been apparent the whole time. I've spoken to senior people in UK banking and they've confirmed as much. And as much is clear by reading the FT.
What is interesting is how much "elite tech" has captured the elite and silenced professional finance. The Economist article cited above, for example (and on HN the other day), was absurdly pro-crypto giving the scam-sales-pitch verbatim.
Some documentary is no doubt in the works on this, and I can see an Adam-Curtis style one on "how silicon valley beat the financial elites and captured the political imagination of a generation"
[+] [-] htkibar|3 years ago|reply
Fintech and swinging for the fences is not a bad thing per se. As long as you aren’t an executive for a scam or something; I have never seen in my career experience being treated as a bad thing. Might perhaps get some added questions to get you, but it is also a unique selling point.
Crypto essentially allows you to make trust less systems with tokens, what those tokens mean or not depends on the situation. Writing that off as purely speculative isn’t necessarily fair. Utility tokens are a thing after all.
[+] [-] leoedin|3 years ago|reply
[+] [-] automatic6131|3 years ago|reply
Quite, I tried on and off for years to imagine a single use case for the real world. Always came up dry because the Blockchain Oracle problem is unsolvable.
[+] [-] beefield|3 years ago|reply
It is important to note, that even if from looking from far outside, finance looks like one thing, in reality there is a big divide within finance regarding how "value" is defined. On the other hand, there is a simple notion that value of a thing is whatever someone is willing to pay for it. And on the other hand, there is a bit more complex idea that if you somehow know the value of a cash flow, then if you are able to create the same cashflow in some other way, then the other cash flow must have same value.
The first one is the home of powerpoints, VC capital and crypto. (It's also easy to recognize these professional financiers once you start to discuss whether sweat equity should be valued similarly to cash equity. They are completely appalled with the idea, because reasons.)
The second is home of financial regulation, really fancy maths and modern banking risk management.
The failure modes are different here. The first one, typical failure model is scam. The second, well, you can google LTCM for that.
And what comes to crypto, there is a clear and obvious difference. The first ones see no reason why not investing into crypto, after all, someone is paying 60k for a BTC, its value is thus 60k, what more do you want? The second ones scratch their heads. They see no positive net cash flows anywhere, thus the value must be negative. And this is the reason (in addition to regulation) why banks and professional bankers for the most part keep clear from crypto and struggle seeing value, while VC money is/was pouring in.
[+] [-] z3phyr|3 years ago|reply
crypto is cryptography for me, a serious and posh discipline of applied mathematics, linguistics, analytics and computer science.
[+] [-] isthisthingon99|3 years ago|reply
There is value in being able to anonymously and stably transfer value uncensored.
But which state will stand aside while you realize this dream? Not a one.
[+] [-] tempera|3 years ago|reply
[+] [-] SilverBirch|3 years ago|reply
Having said that, it's weird because I definitely have sent money from one of the banks that aren't crypto-friendly to Binance in the past, so who knows how strong these bans really are.
[+] [-] lucozade|3 years ago|reply
What I presume is happening is that some banks are seeing a significant increase in applications for that protection from crypto transactions. Or are expecting to see such.
It doesn't apply when you withdraw cash as you have no recourse to protection from the bank if you subsequently lose that money. And you might be restricted from using you card at a casino if your bank has seen significant claims from said casino.
One can, of course, argue whether or not such protections should exist. As in, run the retail banking system on a caveat emptor basis. But that's not how it works in the UK and, whilst it doesn't, it's not unreasonable for the bank's to limit their liability.
[+] [-] rwmj|3 years ago|reply
[+] [-] TacticalCoder|3 years ago|reply
And yet the state asks you to pay your taxes when you make added-value on crypto.
There are literally people who have taxes on added-value made on crypto due but are unable to pay them because their banks are refusing their money.
Take 10 K EUR out: easy. Take 1 million+ EUR out: it's extremely difficult.
The hypocrisy here is phenomenal: "cryptos are scams" / "cryptos are only for money laundering and drug dealing" / etc.
But then: "don't forget to pay your taxes to the nanny state on your crypto winnings".
And it's really vicious for the state says: "Oh, crypto went up 10000%, you hence have lots of taxes due to the state!" but the bank goes "Oh, you have a 7 digits sum in crypto, you must be a fraudster".
Sneaky bastards.
[+] [-] namdnay|3 years ago|reply
> There are literally people who have taxes on added-value made on crypto due but are unable to pay them because their banks are refusing their money.
If they have taxes on added-value, it means they sold tokens, so they can take that money out fo the exchange and use it to pay tax
> The hypocrisy here is phenomenal
you can be prosecuted for not declaring your drug earnings, on top of the actual crime of dealing drugs
[+] [-] niklasd|3 years ago|reply
[+] [-] jarym|3 years ago|reply
[+] [-] esja|3 years ago|reply
Worldly wisdom teaches that it is better for reputation to fail conventionally than to succeed unconventionally. — John Maynard Keynes
Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, one by one. ― Charles MacKay
[+] [-] tibanne|3 years ago|reply
[+] [-] edent|3 years ago|reply
The beauty of the free market is that people are free to move their custom. And businesses are free to set the limitations necessary for profitable enterprise.
Some banks have decided that the risk to having to support customers who engage in risky behaviour is too high. There are literally dozens of free banks in the UK, and it is incredibly easy to switch provider.
[+] [-] gonzo41|3 years ago|reply
[+] [-] beardyw|3 years ago|reply
[+] [-] jasmer|3 years ago|reply
People can play Ponzi schemes as they like, banks probably should not be involved.
[+] [-] nxm|3 years ago|reply
[+] [-] dazc|3 years ago|reply
Those who don't want banks involved in their lives are free to adopt some other form of exchange. This may be considered irony.
[+] [-] malermeister|3 years ago|reply
[+] [-] bluescrn|3 years ago|reply
[+] [-] dazc|3 years ago|reply
I also think that people losing money from betting actually know what they are getting into though. The same can not be said for some other transactions.
[+] [-] throwaway290|3 years ago|reply
[+] [-] gambiting|3 years ago|reply
[+] [-] rajman187|3 years ago|reply
https://www.cnbc.com/2022/11/01/what-rishi-sunak-as-pm-means...
[+] [-] rwmj|3 years ago|reply
[+] [-] docmechanic|3 years ago|reply
"White is also sceptical about solutions purporting to show which crypto companies represent a risk for banks and their customers. “It’s hard to individually predict which companies might later become a problem because, if banks knew a project was fraudulent, then people wouldn’t really be putting money into it,” she says."
and this quite validating:
"As financial institutions and the crypto industry continue to grapple over the right amount of regulation, others in the private sector have begun questioning the longevity and relevance of the industry itself after back-to-back scandals. Earlier this month in The Economist, the FTX collapse was described as a ‘catastrophic blow to crypto’s reputation and aspirations’ while a Reuters podcast similarly declared that the incident ‘consigns crypto to fringes of finance’. "
[+] [-] TT482|3 years ago|reply
[+] [-] zarzavat|3 years ago|reply
This, ironically, validates the argument for crypto that banks cannot be trusted to let you do what you want with your own money.
[+] [-] petesergeant|3 years ago|reply
[+] [-] throwawycrptp|3 years ago|reply
I think UK could do it.
[+] [-] TacticalCoder|3 years ago|reply
Official estimates says, depending on the source, that from 1.5% up to 5% of the world's GDP is tied to criminal activities.
The GDP is about 100 trillion.
Cryptos are a complete insignificant drop in the bucket. Even if 100% of cryptos were linked to crime, it's still be absolutely nothing compared to the actual criminal activities ongoing (like drug trafficking) and the percentage of the worldwide GDP they represent.
[+] [-] amluto|3 years ago|reply
[+] [-] Gigachad|3 years ago|reply
[+] [-] richardwhiuk|3 years ago|reply
[+] [-] vizzah|3 years ago|reply
Self-custody is the largest appeal of crypto currencies.
[+] [-] beardyw|3 years ago|reply
[+] [-] mathieuh|3 years ago|reply
[+] [-] Crosseye_Jack|3 years ago|reply
[0]: https://monzo.com/help/payments-getting-started/monzo-crypto... (basically just says yes they are)
[1]: https://monzo.com/help/payments-getting-started/binance-bloc...
[2]: https://www.fca.org.uk/news/news-stories/consumer-warning-bi...
[+] [-] selfhoster11|3 years ago|reply
Revolut is not a good bank.
[+] [-] shapefrog|3 years ago|reply
[+] [-] varispeed|3 years ago|reply
[+] [-] rvz|3 years ago|reply
[0] https://reclaimthenet.org/digital-euro-spending-saving-limit...
[+] [-] throwawayben|3 years ago|reply
[+] [-] frank_bb|3 years ago|reply
[deleted]
[+] [-] pibechorro|3 years ago|reply
Get your keys off banks and 3rd parties, thats the whole point of why this started ... Exactly because of crooks like ftx and those peotecting them.