Coinbase is a public company and heavily regulated, I don't see them suspending USD bank transfers out of the blue. Binance has always been a shady exchange, so this isn't a very surprising move.
How soon we forget companies like Robinhood that trade on the real dollar stock market did precisely that--disabled bank transfers, put in strict limits, etc.--during the GameStop/wallstreetbets fiasco a few years ago and they got away without any warnings, harm or investigation.
Coinbase wins and losses seem to correlate with big swings in bitcoin price, which suggests they may be taking more directional bets than one would imagine an exchange to do.
The 2008 financial crisis centered on public companies that were nominally heavily regulated. As long as Coinbase's liquidity depends on a synthetic safe asset rather than actual insured deposits, it's perfectly capable of having its own Lehman or Bear or Merrill moment.
Because the entire crypto ecosystem exists to defraud its users and eventually that fraud catches up to you?
I'm still shocked that I hear non-tech people claiming they should put their extra cash into crypto. I guess there's still suckers out there to extract money from.
I know this comment will likely be downvoted/flagged by someone who still has some money to make from this con, but there hasn't been a coherent justification of the current crypto ecosystem is years. All of the early hopes have been repeatedly demonstrated not to pan out in reality and all that's left is grift.
Millions of people in nations with severe currency and asset issues (inflation, access, or otherwise, often in third world countries) disagree.
But yes, I am glad to see these shady institutions taken down. Only once they are gone, and SEC puts proper regulations in place, the industry will likely thrive.
We already have Pix (Brazil), UPI (India), M-Pesa (Africa) and now the US is beginning to roll out FedNow in the US.
The legitimate and regulated solutions are already being built and have been proven as it has been in India at scale to the tune of hundreds of millions of users.
Crypto or blockchain cannot and can never scale at all.
Pix is 100% controlled by the Brazilian government, which does not have a trustworthy track record in taking care of its citizens' money. Buy they do apologize... 30 years later [1].
I know two people from Argentina and Colombia, and both of them use USDC to get their hands on US Dollars. Apparently, crypto dollars are popular among countries with massive inflation.
I really have no idea about the countries you mentioned (Brazil, India, Africa), but I assume those apps introduced there don't offer the option for foreign exchange? When a currency is under massive inflationary pressure, policymakers will introduce heavy restrictions on FX. This would happen to any app like those you mentioned in countries like Argentinia and Colombia, rendering those apps worthless like Pesos.
And this is also the very reason, why those countries have a parallel black market currency like Dólar Blue [1].
Crypto hasn’t changed the reality on the ground all that much in any of those places.
In all instances I’m aware of, what matters is the ability to get your hands on dollars. Crypto, at best, ends up being an intermediary for that exchange, and at worst ends up being a scam for people who aren’t technical enough to understand how it actually works.
It helps to research this stuff in depth a bit. USD is definitely still very much desired in many many parts of the world, but there are many instances where people still need to send "value" across borders. Bitcoin is, in a lot of places, the only way to do this. That's just one of many use-cases for people where there are massive asset and currency restrictions.
I’m speaking from directly reported experiences of people I know who live in such countries.
They’ve dabbled in crypto, gotten scammed, successfully used it for a bit, but now moved away from it entirely.
At the end of the day, the only reason why you’d _need_ to use Bitcoin for this is to evade the law, which, if you’re living under an unstable government with a collapsing currency, may not be the best course of action.
> Millions across the world in nations with severe currency and asset issues (inflation, access, or otherwise, often in third world countries) disagree.
Oft repeated but not actually true. The people living in the places you describe often don't have the luxury of access to stable electricity, internet, capable technology, technical knowledge etc. More importantly, people living in these places can't afford to tie up their money in useless crypto tokens, they need real money they can use to buy goods and services.
Also - if regulations don't allow them to have stocks & dollars - then either the regulations are there for good reason, or we should change the regulations - not just skirt them.
Nuking KYC/AML rules (the biggest issues) would certainly help bank large swathes of the population that currently are excluded.
If you think that is a good thing or a bad thing depends a lot on various highly polarizing religious and political discussions that are unlikely to be solved... well, at all, frankly. Maybe ever.
Based on the human history I've been able to find and read, anyway.
I like to tell the story of the time I was moving from one state to another and did not have housing yet.
The bank refused to open an account. With a passport, plus license with outdated address. Said it violates KYC w/ no proof of address. Meanwhile, with no documentation (no id, passport, etc) I could legally conceal carry a gun in the bank.
I can't believe it's gotten to the point where you can be trusted to legally have a gun in the bank but considered too dangerous to hand over $5.
There's no bill of rights amendment to give you access to a bank account. Also, a lot of people think it would be stupid and not good to bring a gun into a bank, but if you try to codify that in any way, including a sign on the outside of the bank that says "please don't bring a gun in here", certain really angry people get even angrier and will publicize such a thing to fellow very angry people as if it isn't a perfectly normal thing to not want a gun in your bank.
I would argue the bill of rights, specifically the 4th amendment, should protect you from a government imposed search of your papers to open an account.
It's hard to imagine that standing up to the situation that is required, which is someone must provide gov't issued identification to have a bank account (because terrorists). After all, I don't think anyone has a right to privacy from the gov't regarding gov't issued IDs.
Maybe 10th amendment/interstate commerce clause overreach? (Why is the federal gov't mandating what my local branch requires for acceptance of ID?!?)
But then the Gov't would pull out the whole 9/11 patriot act justification, national security, blah blah blah, and chances are the supreme court would give them even more justification.
> There's no bill of rights amendment to give you access to a bank account.
Interestingly, the EU does take this exact approach, having a directive that mandates that everyone has the right to a basic bank account and banks can't refuse opening one just because you're a refugee or a convicted fraudster or a homeless unemployed drug addict. Access to financial infrastructure is a key part of participating in modern society and interacting with the state (e.g. receiving any benefits), so it is imperative that everyone, including the most downtrodden, can access it.
In developed countries very few legitimate customers are unable to open bank accounts due to KYC/AML rules. You can probably find a few examples where people were turned down due to identity theft or procedural errors but those cases are rare and temporary.
In the real world when banks reject customers it's because they have negative items on their credit reports or a history of fraud (like bouncing checks).
Or for unexplained reasons. There are numerous examples from early crypto where well known banks froze individuals accounts merely for getting a transfer from coinbase.
also, gun retailers, porn companies, marijuana dispensaries, etc. all have a LOT of experience having account applications denied or accounts frozen.
Sure, if someone happen to be a citizen of a repressive dictatorship - then either it's for a good reason, or we should change the dictatorship! Sounds easy!
But which one is it? Are those regulations there for a good reason, or should we just change the regulations, presumably e.g. via military intervention to topple their governments?
Here's me. I use crypto to help my relatives. Btw, your stats apparently should have a source, and definition of what "investment" is in the context. Why not to show it?
The vast majority of inflows into crypto happen in USD (>85%).
So - ballpark - a max of 15% of crypto inflows can come from people without access to dollars.
JPY, EUR, and KRW aren't much easier to access and make up almost all of the missing 15%.
The amount of inflows from North Korean Won, Zimbabwean Dollars, etc are virtually zero.
Sure, maybe people like you are using crypto as a way to transfer money to people somewhere like North Korea (which would be illegal in dollars).
That's a tiny, tiny insignificant portion of crypto usage & investment.
It's almost like saying - Elon Musk donated $X billion dollars in stock to charity (mostly to avoid taxes). Don't tell me stocks exist to invest in companies! Other people are using stocks to transfer money to charities!
The vast majority is of fiat inflow is coming from the US, Japan, and the EU - and it's mainly for speculation (or, as crypto people claim "investment").
Your reasoning seem to be based on a very wrong assumption that people from poorer countries, or sending to poorer countries would not buy BTC with dollars or euro. Just for starters, USD is the first currency of choice for major (relative to relevant economy, buying a small fridge can fall in such category) operations in such regions, with EUR being second. Inhabitants of poorer countries do a lot of cash transactions in USD, EUR, and I'm not even sure what do you mean by "access to USD" in such context. And majority of those shadowed migrant remittances comes from US/EU, not vice versa. So there's no inflow in Zimbabwean dollars, and many other unstable currencies because they are unsuitable, at times to the point of being useless.
You clearly haven't done much research on these topics (world wide adoption of internet, mobile banking, electricity, and crypto). Hilarious way to end your useless paragraph with an emotional, rather than logical, statement about your view on what "crypto" is.
Poorer part of the world is absolutely not like you might saw it in cinema. There are plenty of places where it's hard to obtain safe drinking water, but mobile connection is pretty decent, and one can find a "BTC exchange" in a local market.
A sizeable portion of Ukrainians live(d) in Russia. Which is easier / lower risk for them, a wire from their Russian account or a crypto transfer? I would be surprised if it even went through.
Also, there are a lot of things you can do that fall under "legal but the less explicitly obvious the better." Frequent wire transfers to Russia by some random Joe probably falls under that one.
Have you ever actually wired money to someone before?
Gotta have an account number. The routing number for Bank of Ukraine is 222382221. Easily found via google. Any bank in the US isn't going to look these things up for you, you walk in and say "I wanna wire money" and they're going to ask for the account and routing numbers.
Or failing that, search for "Ukraine Charity" and several of them have options for paypal and other ways to donate money. Like, literally just 30 seconds on google. I bet plenty of them will take wire donations, and most of them, probably, will make it to someone in the Ukraine.
I can donate money to the US government. I'm sure Ukraine is different, but there's no particular reason I'd be skeptical of the existence of some means to send money directly.
I can do the same with good old USD, EUR, GBP and other regulated currencies to send to Ukraine.
How is the price doing with BTC and ETH today since then?
I wouldn't be surprised if Ukraine hasn't cashed it out yet, and even if they did, i'm betting they are completely in drawdown which obviously makes crypto completely useless as a currency.
USDT, UST and other unregulated stablecoins are not even stable at all which defeats the point of them, not to mention the massive ongoing issues at Tether which will inevitably cause a huge crash in the crypto industry.
> The fact the tweet exists disproves your premise.
No.
You would like to think that, however after seeing what happened since 2022 (FTX, Luna, low NFT usage, crypto rugpulls, crypto layoffs) i'm afraid these examples cement crypto as completely useless.
In fact, nothing that crypto does is entirely novel nor it is a legitimate significant improvement to the current financial system, in fact it is even worse since it isn't even regulated.
You asserted "[t]here really and objectively is no reason for cryptocurrencies to exist at all." Evidence was provided demonstrating the assertion is false. Burying your head in the sand won't change that.
> And I provided an example that I can donate to Ukraine directly with just regular fiat which is fast, easy and secure.
I must have missed it -- can you link it here?
> What is exactly new here that crypto is legitimately offering that is better than the current system?
Bitcoin has no middleman taking a cut. My bank changes me 40 USD for outgoing foreign wire transfers. That's 40 USD that I'd prefer go to Ukraine over bankers.
> Since there is nothing new or novel that crypto is doing, your 'evidence' is completely moot.
So why exactly did the government of Ukraine tweet about accepting Bitcoin on their official Twitter account if it has no purpose?
Very simple, quick, easy and secure no complicated strings of garbage that doesn't burn up the planet or lose half of your donation due to volatility which is what Bitcoin, Ethereum does.
> So why exactly did the government of Ukraine tweet about accepting Bitcoin on their official Twitter account if it has no purpose?
Simple.
Marketing, hype and grifting. Crypto is perfect for this especially if you want to offer useless airdrops for other crypto grifters to profit off.
The fact they offered this is already a red flag to stay away from crypto as I would strongly assume that they have been completely hacked as most normal people already assume.
It is also laughable that a computer game raised more money than crypto did for Ukraine, shows how much of a non impact crypto is.
It's great that you were able to donate without barriers or middlemen, but the 1.7 billion unbanked people in the world don't have the same access to financial institutions like you think they do. A significant chunk of their finances are taken by bankers for remittances and other fees.
And rather than conceding there might be legitimate use cases, you're now in the position of asserting these three things simultaneously:
1. The gov of Ukraine is using crypto donations for illegitimate purposes, but only the crypto donations.
2. The non-Bitcoin donations are legitimate.
3. Even if the crypto donations are legitimate, unless it's 10x what was donated in crypto (~ 14M USD), it still has no reason to exist.
> It's great that you were able to donate without barriers or middlemen, but the 1.7 billion unbanked people in the world don't have the same access to financial institutions like you think they do. A significant chunk of their finances are taken by bankers for remittances and other fees.
You mean innovations such as UPI, Pix, PromptPay, PayNow and MPesa that are used by more than 1BN+ real people collectively and growing?
My point is what is crypto doing significantly differently that makes it better than the current financial system?
Donating via crypto is completely moot point since I mentioned I can do the same thing without middlemen.
You are describing centralized and walled-garden services run by middlemen. The significant difference of a blockchain is that it is a decentralized protocol that any individual or state can build upon, much like HTTPS.
Pix, for example, is managed by the central bank of Brazil. Ethereum, on the other hand, is not managed or controlled by a single state actor.
I personally have no interest in buying any crypto, and I find the whole ecosystem super sketchy, but to say that there is “zero” use case or rationale is just as unreasonable as the hodl-zealots… Replace “zero” with “limited” and you’re back in reasonable territory IMO.
There is no solution crypto has legitimately solved that isn't already solved by the current system that has hundreds of millions of users that is not pure speculation, fraud, ransomware or complete gambling.
Seriously, crypto, blockchains and all the rest of it has no legitimate use case.
I will add to this: The oracle problem prevents crypto from having any useful interaction with the real world, and prevents crypto from having any useful purpose that isn't just playing around with money.
I think one may say "there really and objectively is no reason for me to use cryptocurrencies at all." And that's totally fine. But your statement is out of place in a free society, in my opinion. It resembles what I see in authoritarian regimes.
Why is it out of place in a free society to point to questionable value based donations? If you want to send someone something that you believe has value that they can convert to dollars or regular fiat currency, like tether or magic the gathering cards you can. The question is really is this a good way to do it. Bitcoin has value of billions of dollars currently, it has convertible value to dollars, just like the supposed crypto dollar coins. But they fluctuate a lot. After the next few huge crypto exchanges die, will there be any left? Bitcoin will still "work" because the blockchain exists, but the value would probably be reduced.
Questioning the value is fine, refusing to acknowledge others' point of view is the authoritarian bit. Like I'm not going to use magic the gathering cards as a store of value, I think they're dumb, but I recognize others think differently and I wouldn't rejoice in a magic the gathering card broker going out of business. It's existence does no harm to me or anyone else.
> There really and objectively is no reason for cryptocurrencies to exist at all.
Are we just destined to loop over this argument `while True`?
Without byzantine-fault tolerant decentralized currencies, how do you deprecate state control of economies?
If the answer is "you don't", then you are positioning yourself outside the extremely obvious long-term evolutionary path of the internet. Why would the internet, and AI, continue to abide rent-seeking central banks?
A simple litmus test is this: can you buy prohibited plants and compounds over the internet with a given currency and its ecosystem of marketplaces? If the answer is "no", then you that currency probably has more state control than the internet is likely to tolerate in the long-term.
People are so blinded by their hatred for crypto that they do not understand that yes, crypto has been mainly been used to transact scams and ponzis and whatever it is, but we're still talking about an absolutely insane amount of value being transacted with no middleman.
How is that useless? What even is your definition of useless?
There's also a lot of value being transacted in WoW gold, FF14 Gil and other such coins - not to mention the hundreds of billions of Monopoly money being exchanged every day all around the globe, in a fully decentralized system.
My point is that "amount being transacted" is a completely irrelevant metric for the usefullness of something to society.
Not to mention, the actual transaction rates (the interesting tech part) are several orders of magnitude smaller than any form of fiat money, for the bigger chains at least, with the only solution in sight being things like Lightning, also known as "let's give up all the guarantees that the blockchain offers".
Finally, WoW gold at least is actually quite decentralized, since anyone can stand up their own bootleg WoW server and start transacting it. And even on the official servers, transactions are happening separately on each different server, they don't need a single centralized ledger like BTC or ETH.
>Finally, WoW gold at least is actually quite decentralized, since anyone can stand up their own bootleg WoW server and start transacting it. And even on the official servers, transactions are happening separately on each different server, they don't need a single centralized ledger like BTC or ETH.
Thanks for confirming that you have no idea what you're talking about.
That was mostly tongue-in-cheek, to illustrate that "decentralized" can mean many very different things. In some senses, and especially if we include bootleg WoW servers, the WoW gold economy really is decentralized.
Of course, it's actually just made up of many centralized communities, with 0 access to each other, and each being entirely ruled by 1 central authority - essentially the opposite in every way of blockchains.
> absolutely insane amount of value being transacted with no middleman
The miners are the middleman. They literally take a cut.
The only reason there’s “less delay” is because they have zero qualification or filtering process to handle any KYC/AML/Anti-fraud/Anti-scam situations and blindly accept any valid transactions.
I dislike having liabilities: whether that's cash in a precarious financial system, or physical assets that I have to protect from theft. Cryptocurrency is the answer IF it was reliable, stable, and ubiquitous. It is none of those things for me.
Only SWIFT USD transfers are suspended. ACH are still allowed which is what most US users use and Euro SEPA are still ok which what all of EU uses. Other countries uses their own currencies. So this only affects a small portion of 0.01% of their userbase.
Depending on how you look at it, either both wire transfers and ACH, or neither are international.
Both are transactions between US financial institutions, but can be used as the first or last leg of an international transfer (SWIFT or otherwise) through correspondent banking.
1) ACH transactions are potentially refundable/reversable for quite a long period of time. I think the official period is only 30 days, but it's not unheard of for ACH transactions to be approved a year+ later. Wires are (generally) not reversible, and doing so requires intervention of someone manually at the Fed.
2) ACH transactions are 'pull' by their nature. ACH stands for Automated Clearing House, and it was created for checks. Unless denied by the bank being pulled from, all someone needs to withdraw or deposit funds in an account is the routing number and account number. If someone is playing games, that really doesn't require anything. Someone could print checks with that info and just start writing them, for instance, until they get arrested.
Wires are send only, direct bank to bank (through the Fed), and are heavily controlled by the banks.
3) Send/Receive limits for ACH (because these are checks) can be arbitrarily low, at the banks discretion. It's not uncommon for it to be $100k/$250k or lower to help limit fraud, and often automated. Wire limits (if any) can be very high, and are generally more a matter of bank policy around authentication, and it's not that unusual for 8 or 9 digit wires to be happening regularly without problems.
If someone is going to be liquidating $10 mln in something, 99.99% of the time it will be handled via wire.
Besides ACH debit, there's also ACH credit transfers, which are "push" payments. I'd assume that this would be what a crypto exchange would use to pay out customer funds.
Wire info can only be used to send money OUT. It's sender initiated. You can't initiate a debit of funds from someone's account using the mechanism.
So you can safely give someone wire information without having to worry about someone draining your account with it (and then have to deal with your bank's fraud department trying to claw it back).
Also, if someone receives funds via wire, they can be 99.9%+ sure the funds are theirs and will stay there indefinitely.
Reversing it would require either a major bank error (which happens, but is usually pretty obvious to the recipient), or something like a high profile wire fraud investigation throwing you in jail, or a major court decision to change that.
If someone receives an inbound ACH transfer, the guarantees are much, much lower, since the sender can just send a reverse transaction and get it back unless the bank stops them.
What do you mean by "wire info"? Both wire transfers and ACH payments are addressed by account number and routing number, which are the same for both transfer methods at almost all banks.
Whether your bank automatically honors ACH pull payments is a different matter, but given the above, I don't see how providing only your "wire info" would help with fraudulent ACH pulls.
> Also, if someone receives funds via wire, they can be 99.9%+ sure the funds are theirs and will stay there indefinitely.
If somebody hacks my bank account, I don't see how it would be that hard for them to initiate a fraudulent wire transfer. In fact, it's arguably the other way around: Many banks do not even allow their customers to initiate outbound ACH payments to third parties.
> If someone receives an inbound ACH transfer, the guarantees are much, much lower, since the sender can just send a reverse transaction and get it back unless the bank stops them.
I take it you haven't actually dealt with wires or this scenario with ACH much?
Most banks (by funds/size) use different wire routing numbers, and sometimes provide deposit only or different account numbers for wires (for high net worth accounts anyway).
Bank of America, Wells Fargo, and several others I can name off the top of my head. Only smaller operations don't usually.
Wires (inbound and outbound) have their own departments, and outbound wires require manual confirmation and validation with the account holder for all but a small set of whitelisted individual accounts. For commercial accounts, usually dual release consent (a minimum of two individual accounts with release privilege's must consent before a wire is sent), and/or verbal confirmation with a staffer on the team dealing with wires. If it's a verbal confirmation, they'll confirm all details of the destination, including account #'s and amounts + validate who the confirming party is and that they have appropriate spend authority.
That will often require something like sending corporate charter and the appropriate board consent documents over to the bank beforehand, for example. For larger amounts, expect in person validation.
Your link to the ACH rules there doesn't say what you think it says. It mostly covers attempts at backdating transactions, and 'egregious violations' - aka 500+ bad transactions or transactions adding up to $500K. None of those cover yanking back $50k over a 'dispute'.
Additionally, lawsuit concerns about ACH clawbacks like I described have been handled by adding 'You consent to reversal of transactions we consider done in error' or the like in their TOS or agreements, which covers almost all scenarios.
Really common uses are things like 'oops, we paid you too much - yoink!' in payroll, or 'oh, we didn't mean to actually send you that money just yet - yoink!' then company goes bankrupt, good luck getting your money this year. It used to be not uncommon for some random utility company to bill 10x the right amount from autopay and then spend months returning the money too.
Even more irritating, most banks (especially BofA) will have no problem throwing overdraft fees on your account while sending the money back too.
You can of course always sue the offending party, but that can take awhile, and they might be bankrupt (and no money left) or flat out impossible to find depending on how little they care about felony warrants.
Which, surprisingly, some people don’t seem to care about as much as you’d expect. And felony warrants are not nearly as effective in getting ahold of someone in a timely fashion as one would prefer.
> Most banks (by funds/size) use different wire routing numbers
These are public information you can find on the bank's website, i.e. that's an inconvenience for account holders, not a security feature. For my bank, they're also identical.
> and sometimes provide deposit only or different account numbers for wires
If they can do that, they can provide account numbers with ACH pull deactivated just as easily.
It seems like most of the ACH pain points, as well as wire transfer security features like two-party sign-off etc. you describe, revolve around bank policies, not the actual ACH or wire transfer rules.
Since wire transfers don’t allow externally initiated withdrawals (unlike ACH) and wire transfers can be initiated (and accepted) at accounts that cannot accept or initiate ACH transfers, that’s false.
I merely tried to point out that ACH push exists and is practically very similar to wire transfers (in that it's both reasonably final/irreversible, and that an account being set up to receive inbound ACH push/credit payments does not automatically need to honor incoming debit requests).
In any case, it seems like you are comfortable with your views about ACH and wire transfers and not really interested in at least entertaining the ideas I've tried to present, so I'll leave you to it.
ACH push is not reasonably final or irreversible. It’s trivially reversible, and I gave many examples of when it is actually reversed all the time in practice, which wires cannot be.
And I have yet to see an account which can take ACH credits but won’t take ACH debits, as ACH debits are the normal anyway.
Reversing ACH credits is not trivial, no matter how often you claim it! Or can you show me any bank or service provider that offers it as a "trivial" feature (i.e. not something to be used only in case of double bookings or similar)?
It‘s also only possible within five days after an incorrect credit, so if you‘re very concerned about that remote possibility, you can always just wait that long before you consider any incoming "untrusted" funds final.
And if you think that wires can‘t be reversed you should look into the concept of "hold harmless". The practical difference is that many banks automate ACH reversals, while wires need to be manually sent back. But if you think that you can e.g. just keep funds accidentally or fraudulently transferred to your account simply due to the way in which they are sent, you are mistaken.
> And I have yet to see an account which can take ACH credits but won’t take ACH debits
Then you just haven‘t looked. Googling for "ACH debit block" yields several business accounts that support this feature, including Chase.
> So this only affects a small portion of 0.01% of their userbase.
I feel like this is definitely a lot more than that. Local banks in many countries, along with many online banks allow USD wire transfers that do not get converted. In countries like Sri Lanka, where the local currency is rapidly depreciating, many people actually never withdraw funds to local currency accounts to protect against this.
I doubt these kinds of countries represent more than 0.01% of users. Sure sucks for these tho they could use other exchanges to cash out or local OTCs.
It's funny to hear someone say the quiet part loud.
Wasn't servicing exactly those customers (people without recourse to stable currencies and the international banking system) always the answer to "what do crytocurrencies do well besides speculation and crime?"
What’s the quiet part? It’s sort of helping some people, mostly as a side effect, and not particularly well, all while generating massive negative externalities for everyone else.
I think he means "the quiet part" because cryptoenthusiasts were very loud about the idea of 'uncensorable' financial inclusion for the developing world being a major use case until it was "does it matter? they're a tiny fraction of users anyway". If there were many people in the developing world countries whose currencies Binance doesn't support using the service, I suspect they relied on wire transfers in USD....
This implies these specific people in the developing world have access to a US bank, in which case they aren't exactly the people meant when referring to "financial inclusion".
Instead the international transfers are generally done via crypto (one thing it does well) and then you "know someone" who will give you cash on the other side (usually in US Dollars).
Over the last few years in Lebanon this has become pretty common:
n absence of a formal framework, traders use a peer-to-peer swapping system, contacting one of a handful of established crypto-to-cash brokers in Lebanon or finding a buyer through social media.
> This implies these specific people in the developing world have access to a US bank, in which case they aren't exactly the people meant when referring to "financial inclusion".
No, it implies they (or a person they're informally swapping their crypto for cash with) have access to a bank which accepts inbound wire transfers in USD, which is pretty common in economies with weak local currencies, as pointed out above with the example of Sri Lanka. That's a larger, less rich and less American set of people than those with access to a US bank account (who appear to be able to continue to use ACH for withdrawals for now).
Or to put the "quiet part" yet another way, cryptoenthusiasts were suggesting quite different things about numbers of developing world people using crypto (USDT even!) as a store of value when a platform wasn't rugpulling a major cashout route for them...
>Wasn't servicing exactly those customers (people without recourse to stable currencies and the international banking system) always the answer to "what do crytocurrencies do well besides speculation and crime?"
And that's exactly what crypto does. As far as I'm concerned, the ability to store, send and receive crypto without the consent of a 3rd party is the greatest utility of crypto. Using a 3rd party like Binance or FTX to store, send or otherwise manage your crypto entirely defeats the purpose of crypto. The failures we seen haven't been failures of crypto, they have been spectacular failures of exchanges and 3rd party platforms that frankly nobody with any brains would use. I find the common argument that it is "too complicated" for "normal people" to manage their own wallets ridiculous. If someone isn't willing to put forth the extremely minimal effort to learn how to set up, manage and secure their own wallet then I have very little sympathy when obvious scams like Binance or FTX separate them from their money.
Always been a bit perplexed by the anti-blockchain attitude here. One would think that the "hacker" in "hacker news" would imply a certain affiliation with (or at least respect for) Cypherpunk ideals. Maybe I'm letting the aesthetics of this place get to me though, it is literally a venture capital messageboard...
I think it's because most blockchain articles are just pushing weird scammy stuff. From a technical perspective the blockchain is an interesting concept, and I'd love to see some articles about things that aren't just scams, but there just hasn't been much of that.
The early web was precisely like this - from scam sites that were for stealing your cc to criminal sites that openly sold illegal stuff. Beyond that, user generated content in the community forums and sites on the fringes of the internet were seen as 'littering' the Internet and a waste of space because they weren't generating any economic value, hence they did not have any 'use case'.
Then everything suddenly changed when a few large-scale use cases appeared. User-generated content now drives the Internet. Those small sites, shops, forums evolved into giant outlets, businesses, communities.
Same with the blockchain - we do see that we can do stuff with it. We do see that it gives the technical capabilities to do more stuff. But the actual use cases are scarce and small, mostly due to the technical infrastructure not being able to support large scale activity and the crypto space and apps still not being user-friendly enough to allow the public to use anything at large.
Precisely the situation with the early web in which only those who knew could get to the forums on the fringes of the internet and use them for anything while the non-technical users were left to use the corporate sites that they would find in the 'portals' that fired up when they clicked on 'the Internet' (IE, Firefox etc - the browser icon was 'the internet').
When the infrastructure improves and/or someone finds an easy to use use case with large scale appeal, everything will turn around in a second.
I was around before the web days so I quite remember that time well. While there may have been scam sites, it was a significant minority to the main usage of the web at the time (mostly hobbyist pages and early corporate usage in addition to a lot of porn).
Blockchain is a solution looking for a problem. Maybe some day someone will figure out a legitimate usage that isn't a cover for all the stuff I mentioned. It will be very interesting to see what survives after the end of QE/ZIRP.
> it was a significant minority to the main usage of the web at the time
It wasn't. Your perspective seems to be skewed just like the other commentators who think that the early internet was a 'nice place' because their usage was specifically shaped by academic research, corporate and government usage and their tech-savviness.
The public Internet was a pretty wild and dangerous place for the non-tech savvy masses. Which is one reason why the Internet did not take off to become what it is now until after mid 2000s and many business practices and trust-generating systems and services were established, along with mobile devices enabling everyone to access it.
> Which is one reason why the Internet did not take off to become what it is now until after mid 2000s
Are you and I from different universes? Are you forgetting about the .com boom (and subsequent bust in 2001)? Internet was mainstream well before 2005.
You also seem to be convinced that it was dangerous - it honestly wasn't. The concept of doxing, credit card fraud and integration with modern crime simply weren't there until after it became mainstream. Got any actual citiations or data?
That was an event specific to the 'more corporate' web as it existed then. Big company sites and big company services were involved in that web. The Internet was limited to tech savvy people and it did not reach the masses yet. The economic activity within that space being big enough for its time does not mean that the Internet was a society-wide event, less, it was global across societies.
The user-driven blogosphere, community forums on the fringes of the internet and what little economic activity that was there did not get affected from the .com bust for example. It was something specific to a very narrow segment of the society and the economy.
> The concept of doxing, credit card fraud and integration with modern crime simply weren't there
Wow. You really dont seem to have much experience or insight (less alone having to have done actual work in) the early user-driven Internet. No surprise since how you think that .com bust was something that affected 'the Internet' - that was your perspective.
Back in the day, if you gave your credit card to a 'wrong' site, it was gone. They'd rack up debt up until your limit within a day or even hours, and you wouldnt be able to get the funds back from that 'no name' country where they used it from and transferred the funds to. People feared that a lot - that's why a lot of 'reassuring' badges and references were used at the footer or carts of any website, from BBB to 'certified' Paypal, 2checkout (then a thing) and other services. While making an ecommerce site for any client, the first thing that they would be concerned with would be that and it would take a considerable time of the project to minimize that fear factor in the clients. And it was universal - the Open Source or private installable cart or ecommerce software that originated in that era still may have 'Secure checkout' or 'This checkout is secured by SSL' etc in their uis even in their latest iterations today. Now you wont see any of that anywhere thanks to Paypal, Stripe, Amazon and plethora of others.
This fear factor made most of the economic activity limited to those 'big sites' that people could trust. The public-driven ecommerce only became a thing towards mid 2000s.
But no, I dont have any data handy. The early user-driven web wasnt something that 'serious' and 'important' institutions would care about. Im sure that someone somewhere has some statistics about early fraud, that's certain. But someone must dig and find it.
...
Our perspectives are too different due to them originating in the different parts of the early Internet. A more institutional, 'big' corporate perspective versus user-driven, chaotic, 'fringe' perspective. Having come from the latter background and now working in both sides of that divide, I can easily say that that separation of perspectives still exists today and it is the problem that causes the 'big tech' to be unable to understand larger internet user base - especially the emergent 'creator economy' - as can be seen from how every single tech giant flopped majestically in that space.
But this is a long, big discussion that I neither have time nor the enthusiasm for. So, I'll bail out. Cheers.
There was fraud but there were useful things happening on the early web, building communities was one of those that crypto has done inadvertantly, but there were actual useful things happening with the web in the early days, it wasn't all fraud - I see hardly any use for crypto other than people benefitting (and others hurting) from the ponzi scheme aspects of it.
There is still a lot of useful things happening on the web. The quagmire of social networks or how various state and private actors anywhere on the planet (including the 'free' world) abusing the internet or the extreme fringe socioeconomic segments which were formerly invisible now becoming visible thanks to the Internet do not make the Internet a place in which less useful things are happening. All of those existed before. Its just that they were out of your sight.
> I see hardly any use for crypto other than people benefitting (and others hurting) from the ponzi scheme aspects of it
It already facilitates easy transference of funds, an investment tool, citizen-governed, transparent organizations in the form of DAOs from everywhere and anywhere on the planet - which is likely the most important thing at the moment -, impossible to censor apps and publishing on distributed databases and many other things.
Especially the DAOs are something new in human civilization's history, and them being away from your sight or you not having much insight into them does not make it any less important than online credit card payments. Which were originally invented and used by - surprise - porn sites on the early Internet.
So again it comes to the same thing that I stated in the original comment: The early Internet was similar to the blockchain space that exists now - a space that was dangerous for the ordinary non-technical citizen to enter even while it enabled many things that were at the time seen as 'useless' and 'detrimental' to the society.
I reiterate that even the user-generated content, now celebrated as the democratization of content with all its benefits and ills, was seen as 'useless spam' back then. Major publications, newspaper sites did not have any comment section. Corporate sites did not have any kind of user feedback, less, any consideration for users aside from them being able to buy whatever they were selling at the time without making any noise - after all, who were us, the plebs, to be able to comment under the article of a 6-figure/year columnist or give product feedback to an illustrious company. It took a decade for them to come around and have to submit to such democratization of content and the Internet in general after blogosphere, user-driven forums and whatnot changed the landscape. Even today NYT still doesnt permit anyone commenting under its articles.
Its absolutely the same with blockchain today - if you know about it, being savvy enough, if you follow the right stuff, you will find a lot of good stuff. If you aren't, and instead, if you see it as how old people saw the Internet back then, you will see all the bad stuff and it will be a dangerous and unnecessary place for you.
The blockchain is just a hard to use DB. Sure, it's "trustless", but there really isn't value in that for any kind of social interaction. The more you understand this tech, the less interesting it becomes.
The more I think about it, the more conceptually profound a trustless database (and in the case of more sophisticated chains like ethereum, execution environment) seems.
Except it wasn't. The "early internet" was ARPANET in like the 60s, and it was already being used by researches and US government agencies to coordinate and share information and cooperate. The internet was already decades old by the 90s, with an extensive track record of being useful. The 90s weren't an early age of the internet, it was the early age of internet security that allowed you to use your credit card through the internet and be sure it wouldn't be stolen.
Pretty much right away after that was possible, Sears had an integration to buy stuff from them over the internet. Shortly after that, Amazon was founded.
The early days of bitcoin was the 2010s, and several companies tried to integrate with it, including web stores and Steam, and they all eventually removed their integration because crypto makes terrible money, so nobody was using it.
> Except it wasn't. The "early internet" was ARPANET in like the 60s
'Early Internet' as in public usage. Not its research roots.
> The 90s weren't an early age of the internet, it was the early age of internet security that allowed you to use your credit card through the internet and be sure it wouldn't be stolen
That must be an alternate internet in an alternate timeline. From mid 90s to mid 2000s the Internet was a pretty dangerous place for any non-technical folk to use their credit cards anywhere. You must be looking from a tech-savvy person's perspective just like how you took the 'early Internet' to be ARPANET.
> crypto makes terrible money
If your understanding of crypto is limited to that, its no wonder you have the perspective that you have. Just like how many people said that the community forums back in early 2000s were 'plebs' spamming the internet.
> Except it wasn't. The "early internet" was ARPANET
While the Web may be the face of the internet most people are familiar with, the “early web” is not the same thing as “the early internet” which, in turn, is not the same thing as “precursors to the internet”. It wasn't the internet, or even an internet, until non-ARPANET networks were connected (e.g., CSNET), and there wasn't a world wide web until HTML & HTTP & browsers were designed and deployed on the internet.
The implicit claim here is that one can claim that the internet, in some legitimate continuous sense, is 60 years old, and that it started being useful to the general public circa Y2K.
Going by that standard, decentralized blockchains have been around for about a decade... and should get two more to develop "an extensive track record" of practical applications.
I don't actually think this is a useful comparison — but it is hardly one that does a disservice to blockchain.
Binance is (likely) just a ponzi scheme built on crypto like FTX. All of this financial speculation on Bitcoin is what true crypto diehards and fanatics loathe. The goal of crypto is not for people to be rich off speculation. For the real enthusiasts the goal is to replace every dollar bill in their wallet and bank account with Bitcoin or similar currency. Every transaction--food, rent, etc.--all paid in crypto. No one really cares about a company built solely to speculate on crypto imploding.
I disagree on why people are into crypto, at least based on my own experience as a vendor (https://blog.shodan.io/accepting-crypto-a-vendor-perspective...) and every time there's a survey about why they're in crypto on Reddit. Most of them are in it for the speculation and to get rich. I'm sure there's a small contingent of Bitcoin users that are truly in it for the concept but most of them see it as their lottery ticket to get rich.
And it's still not widely understood that they're synonymous.
Ideological adherents of crypto deal with this fact by denying it. But ultimately you either have laws and stability, which require restrictions and regulations, or you have a scammy free-for-all that attracts opportunists and speculators who will prey on others.
There is no chance whatsoever that an unregulated system of exchange will not head in that direction. Opportunists and predators gonna opportune and prey.
TBF mainstream markets have the same issue, and the official financial industry is hardly a model of good behaviour.
But at least it's somewhat controlled, even if not by much, as opposed to not being controlled at all.
> Freedom to defraud others through complex pump-and-dump, ponzi, or rugpull schemes is bad.
Sadly, HN seems to think Crypto is only about that. HN's loss, I'd suppose. Though YC, the real motivation behind HN, seems to get Crypto[1]. So probably not that big of a loss really.
Not the flex you think mon ami. All you're proving is that a lot of people who wagered a lot of money have every reason to flex on crypto, and force it down people's throats.
There was a reasonably punk book called Cryptonomicon which came out in the 1999. Spoiler alert: it follows a group of people loosely based on real figures who worked on cryptography in WWII, and their fictional descendants' quest to eventually create a cryptocurrency.
Thing is, the book's cryptocurrency had two important features:
* It was backed by real assets (recovered WWII gold bars).
* It did not insist on radical decentralization as a hedge against meddling by institutional powers. Instead, the currency was headquartered in an oil-rich nation which was too economically important to be invaded, and which knew that it would eventually need an alternative to oil.
The point is, cyberpunk is not the same thing as anarchy. Blockchains and defi are concepts which are being pushed by corpos. The sudden deregulation gives them a quick, easy, and arguably legal way to participate in illicit markets while bilking money out of suckers.
That book so brilliantly covered the pre-Satoshi crypto world. I love that book, which has so many interesting stories about the history of computers and the impact of technology. I always thought there should be more consideration of whether that book's author, Neal Stephenson, could have been involved in the Satoshi saga.
I’m a big fan of his work, but now that you mention it, the story of cryptocurrency in our timeline does have a Stephensonesque quality to it: brilliant world building at the start, a wild ride in the middle, and a messy and controversial ending at the finish.
Also, despite obviously sympathising with the cryptography nerds minting their own currency and going on a side quest for lost gold, Stephenson sets up his ending by having another key character rant about the ills of stored wealth versus people getting up to do stuff every day...
I’m sure the majority of the users on this platform believe (at least subconsciously) that they are the smartest person they know. Many of them likely know about bitcoin since it cost less than a hundred bucks. So here’s this thing that they themselves don’t see any value in, that still _somehow_ manages to have a market cap of billions. And this _despite_ the worse economic conditions in decades.
So it’s the classic case of reality not corresponding to what one has decided it _should_ be. And this invokes defensiveness and strong emotions.
Note that if bitcoin goes to zero, there would be a lot of hodlers experiencing the same.
Currency is not one of those use cases. But some people keep trying to pretend otherwise because they are technically incompetent, or have a financial interest in doing so.
I don't think the NIST paper actually acknowledges ANY use cases. It does a fair job of pointing out the Oracle Problem, which is overlooked or underestimated by many, many crypto enthusiasts (and, IMHO, investors).
Currency is a real use case (there's an existence proof), and NFTs could be considered a use case, if being a "digital collector" could be considered useful and not just another way to perform pump-and-dump scams.
This is extremely disingenuous. When I made that comment there were three others, all to the effect of "I hope the government steps in and squashes all the work being done on this utterly useless technology."
Cryptocurrency is a particular implementation of blockchain. Those comments gave me no reason to think they were only talking about that subset (I'm also perfectly comfortable moving the goalposts anyways so the point is moot).
I'm not anti-blockchain, although I have to say that so far the blockchain has not really been useful for anything other than crypto.
I am anti-crypto, because I know some history, and I know that the situation that existed before state-backed fiat currency and regulated banking was worse in many ways for normal people. Many crypto enthusiasts are essentially extreme financial libertarians and view crypto as the enemy of those good things, are they are trying to drag us back into a situation that is like the 1890s but with computers.
On top of that, many bad actors, scams, and manias (e.g. NFTs) have come out of the crypto movement, but few real benefits have been realized.
I used to wonder this a lot as well. It struck me as odd that a crowd of people with whom I'd often share a lot of the same values and beliefs, would be pretty much point blank against a whole industry that I've been so heavily involved with for many years. On a few occasions, it even shook my confidence and made me wonder if I'm doing the right thing. If so many smart people are against crypto, am I the crazy one?
I have since learned to live with it. In the same way that I live with the fact that crypto is full of grifters, I've learned to live with the fact that majority of the world has a very narrow view of what the space is about. The only thing that I find unfortunate now-a-days is how quick people are to turn towards radical thoughts and approaches, without even considering that they might not know what they are talking about.
> it is literally a venture capital messageboard...
Venture Capital is about sorting through good ideas and bad ones, and finding the diamond in the rough, or persevering when no one else thinks an idea is good -- and being proven right.
Crypto has been a thing for a while now, and is mostly imploding. A few folks made a lot of money and laughed all the way to the bank. But a lot of people are eating it, hard. I had my hopes before, but after losing $2k and watching a lot of folks around me lose more, with no hope of a real system or change coming out of this, it's hard to see what's left to support.
Furthermore a lot of blockchain use cases and opportunities are absolutely unrelated to currency. The chain may yet have uses, but at this point I'll stick to EUR, USD, or maybe Yuan.
Well, the hackers actually know what is going on, and the general sentiment among them is that more people are being scammed that value being delivered.
And as hackers in the positive sense of the word, this bothers us.
Having said that, I am personally hoping against hope that something will still come up that justifies at least part of the scams.
"We're suspending withdrawals" reads to me as "we don't have money to cover withdrawals" which implies they don't have enough liquidity or are insolvent.
It means Binance is running low on USD reserves and is buying more by preventing large USD outflows while continuing to allow USD inflows.
It's worth noting that Binance operates BUSD, a stable coin pegged to USD which according to their website saw a 25% reduction in net asset reserves between Nov 2022 to Dec 2022 (https://www.binance.com/en/busd) - if that trend has continued that may be why they need a short-term supply of USD.
> "In the interim, all other methods of buying and selling crypto remain unaffected, including bank transfer using one of the other fiat currencies supported by Binance (including euros), buying and selling crypto via credit card, debit card, Google Pay and Apple Pay and via our Binance P2P marketplace," the spokesperson added.
Title is misleading given primacy of USD. They're not freezing all outgoing transfers to fiat currency, just to US banks in USD. Apparently you can still cash out.
I can't seem to be able to close the account with Binance. They received multiple GDPR-related requests, forced me to give them more PII than they already had (like handwritten and signed requests) and now their DPO team responses arrive about a month after my emails.
I'm in Poland. For a long time, the only way to cash out USD from Binance to Poland, was a Russian service which was receiving crypto from Binance and making a wire transfer to Poland. All Polish banks refused USD/EUR wires or card reverse payments from Binance.
After Putin's Ukraine invasion, I closed the account with the Russian entity and since there was no longer a way to get fiat from Binance - I decided to close the account with them, too. It's still not closed to this day, despite multiple hoops they forced me to jump.
I would open a case with a local GDPR body already, but they're dysfunctional in my view[1] as well.
How is it not? Their relationship with banks is a direct result of their willingness to demonstrate regulatory compliance, and that appears not to have been a priority for Binance until just a few days ago.
When offering financial services in a country, it behooves the vendor to set up a relationship with a local bank. Any legitimate money services business will do this, because otherwise they wouldn't get a single customer.
Crypto exchanges don't seem to have this issue because they know their customers are trying to dodge taxes anyway, so they can claim that obstacles to off-ramping to fiat (like having no banks to work with) are a feature.
I don’t fully get it so I’ll throw this out there and someone will inevitably correct me:
My understanding is that the happy path doesn’t typically involve US dollar transfers, but it exists as a “see, you can check out any time you’d like.”
Bringing up “0.01%” seems like a deception.
Almost nobody withdraws <large amount> from their bank in a given week. But imagine if banks said tomorrow that you can’t do that anymore, but don’t worry because almost nobody does it anyways.
FDIC tops out at $250 000 per bank (depending on exactly what you've got and in which accounts you might get to claim this limit more than once though). This is similar to schemes in the UK or the EU. They're protecting smaller individual savers etc. not corporations, not rich people. People who will be hurting the day after the bank fails, not a week later or a month later and so need money ASAP.
But that doesn't mean rich people need to be scared of a run on a conventional bank. Suppose you've got 10M in Big Bank, and it fails. FDIC will hand you $250 000, but your $9.75M doesn't vanish, it's just that you need to wait for administrators to take the bank to pieces, figure out what it owned and sell it for a good price, then they'll pay you some fraction - often 100% - of your $9.75M depending on what they recovered. Eventually.
Landsbanki (in Iceland) for example failed in the aftermath of the global financial crisis, it's own government couldn't afford to pay to fix this because Iceland's banks had become larger than Iceland's own economy (oops), and the Icelandic people refused to allow their government to legislate to pay the money back over time, but eventually the bank's liquidators sold enough of the assets Landsbanki had owned for enough money to pay creditors like the UK government the billions of dollars owed. Took almost ten years.
The thing that's a concern for a crypto institution is: Are there real assets?
Even for a failed investment bank, where assets are sometimes more dubious in reality when administrators try to sell them than they seemed on paper (e.g. a NINJA house loan) those are assets, they do have value. If you default on your mortgage the bank takes the house. The mortgage "failed" but it doesn't magically have zero value. On a $1.5M mortgage is that house worth $1.5M? Probably not. But it's also not worth $0.
Whereas there's a good chance many crypto outfits own few real assets and so there is nothing for administrators to sell, it just evaporates.
FYI, there are widely used commercial services which provide higher (insured) saving limits by creating a virtual checking/savings account and then setting up individual sub-accounts among a huge number of FDIC banks and maxing them out. The person involved doesn't deal with the sub-accounts directly, they handle everything.
They even issue ATM cards, if I remember correctly.
I forget the name, but I think it does up to $10 mln pretty easily. That's kind of a dumb amount to keep liquid, but I guess if it's sub 1% of your net worth, it's worth the convenience?
One thing I'm surprised the US hasn't done - maybe the trust in Congress and thus in the US Federal Government is too low to make it worth attempting - is what the UK did by owning a consumer bank. As well as the Bank of England, the UK owns several other banks but one of them is a more or less ordinary retail bank except it has no lending business, National Savings & Investment or NS&I.
Money you save at NS&I is just money the British government doesn't have to borrow on commercial terms via issuing gilts. They pay interest on it, because that's what they'd have to do if they borrowed it on the international markets, and it doesn't need an insurance scheme or whatever since if that money can't be repaid then the country is bankrupt, which means the currency the savings are denominated in is now worthless anyway.
Americans can buy gilts, but there doesn't seem to be a way to just keep your kid's birthday money invested in the United States of America as a concept.
[[One of the cute products NS&I has which does seem like it'd appeal is the Premium Bond, the Premium Bond is an investment in which you give up a small fraction of the interest rational people would receive in exchange for more fun. Instead of interest you get proportional chance to win larger tax-free cash prizes. So instead of £51 interest maybe it's 0.25% chance to win £20 000. If you like scratch-offs but wish you hadn't thrown away all that money buying scratch-offs this feels appealing.]]
There is a non-trivial faction in the US that hates anything being government run (except the military, apparently), ESPECIALLY if it’s somewhat successful.
The United States Postal Service has been attacked from so many angles over the last several decades, it’s mind boggling it still exists.
A national bank would likely not fare better.
A cynical person would suspect it’s because they’d rather a private company do it instead, as the private company could send them campaign contributions.
> Landsbanki (in Iceland) for example failed in the aftermath of the global financial crisis, it's own government couldn't afford to pay to fix this because Iceland's banks had become larger than Iceland's own economy (oops), and the Icelandic people refused to allow their government to legislate to pay the money back over time, but eventually the bank's liquidators sold enough of the assets Landsbanki had owned for enough money to pay creditors like the UK government the billions of dollars owed. Took almost ten years.
It's worth noting that the reason the UK government was the creditor was because they guaranteed UK depositors' savings regardless of the official limit on the UK's FDIC-like scheme. And I think there's an implicit social expectation that governments will do this.
Yes, which is why, prior to the development of the FDIC and other deposit insurance systems, every 20 years or so a whole bunch of banks would fail, all at once, and destroy the country or even the world's (depending on exactly how many failed) economy for a while. This is why deposit insurance is so important, and their absence is so striking in things that want you to believe that they are a bank and treat like a bank, but are not regulated or insured like a bank.
Deposit insurance became necessary because the government started forcing banks to replace the highly commercial bills in their balance sheet with illiquid government bonds (cf. The National Banking Acts of 1863 and 1864). When merchants realized this, they revolted by withdrawing their funds from the banks in question.
Remember: back then, the only users of bills were merchants (not consumers) since bills were a highly liquid earning asset where businesses could park their capital while they didn’t need it themselves. Consumers paid in coin — silver or gold.
> Deposit insurance became necessary because the government started forcing banks to replace the highly commercial bills in their balance sheet with illiquid government bonds
Deposit insurance started (like reserve requirements, though initially in different states) as a state-level mandate during the Free Banking era before the 1863 Act; the need for it was not driven by the 1863 & 1864 acts.
> Remember: back then, the only users of bills were merchants (not consumers) since bills were a highly liquid earning asset where businesses could park their capital while they didn’t need it themselves.
No, the reason consumers would not prefer to use banknotes included risk (due to lax regulation and rampant outright fraud) and limited practical liquidity for consumers (since they would generally only be redeemed by the issuing bank, and the banks then were not giant conglomerates where you could go to a branch of the right bank wherever you were, though this was in some places mitigated somewhat by interbank arrangements like the Suffolk system in New England.)
> Deposit insurance became necessary because the government started forcing banks to replace the highly commercial bills in their balance sheet with illiquid government bonds (cf. The National Banking Acts of 1863 and 1864).
I'm sorry, but this is some flat-earth nonsense. It sounds like you have a particular ideological axe to grind and are trying to make the facts fit your narrative.
Deposit insurance in the US arose in the 20th century in response to consumer bank runs. The original deposit insurance schemes arose in the wake of the panic of 1907, and the FDIC was established in 1933.
Even taking everything you say at face value, the world economy grew massively without the need for federal deposit insurance, and there were plenty of banks then too- real banks. They were just banks without federal deposit insurance
Sure - but there were also plenty of regular folks losing all their savings. And that was an era when it was a lot more practical to keep cash yourself and use that for everyday living.
> the world economy grew massively without the need for federal deposit insurance
You make it sound like other countries have never had banking crises identical to those in the US, and responded to them by also establishing deposit insurance (and a host of other regulations for commercial account holders).
Also, I don't understand the relevance of "world economy grew massively without deposit insurance". The point of deposit insurance is to give peace of mind to depositors and establish trust in the banking system, not make GDP go up.
From looking around the internet I am starting to believe I might be the only person holding crypto strictly because I just happen to think it's neat.
I think it's interesting that via Ethereum, I can spend Ether to perform distributed computations on nodes across the globe and that this also serves as a store of value. I find Iota's Tangle interesting as an application of a DAG for financial and data transactions. I think it's interesting that I can send Nano to someone instantly and without any gas fees while still using blockchains.
It would be nice if this technology was given a larger purpose, but I think any possibility of that quickly went out the window once someone realized they could get rich. I understand and agree with a lot of the hate crypto gets and a significant amount of the use cases are nothing more than pipe dreams (or just outright scams,) but from a theory perspective I can't help but think it's at least a little bit fascinating to see people try to apply data structures this way.
100% agree. I was a big believer in the usefulness of crypto before all the "HODL" and "investment" mentality took over. Its value as a currency is eroded with the dramatic price fluctuations.
Well yeah, the US government couldn't stand having an actual currency to compete with so they relabeled all of crypto as investements. Suddenly all of those rules, tax implications, etc are more important than the tech itself.
We just watched FTX implode and fleece thousands of people, including many of their own investors. Plenty of other exchanges and currencies tanking hard the last few months, too.
These regulations exist for a reason, and it's why actual investments work.
If you think they're a bad idea then I have a bridge in the Bahamas to sell you...
It brings a tear to my eye when i read through well crafted ERC proposals [0] and then remember these developers are awash in a sea of scammers, blind hatred, vitriolic ignorance, and of course the traditional systems that fight against any sort of distributed ecosystem that they cannot control.
It bring more of a tear to my eye when hard earned dollars are lost by incompetence or mismanagement -- crypto or otherwise.
> blind hatred
I assure you -- The hatred you see is not blind -- especially not after the collapse of FTX. Most of it has cause. And there are vitriolic ignoramuses on both sides.
because i don't know you, is that the part that makes you say you think it's neat?
i personally resonate with your last paragraph: i also feel that it's definitely interesting exploring the possibilities of the ideas, with reserved contemplative enthusiasm.
In my haste I guess I didn't make this clear enough, sorry. By "blockchains" I was trying to emphasize the fact in Nano that we are talking about many blockchains as opposed to one main chain. Every account has its own blockchain which all get connected via a DAG that they call a block lattice.
The interesting part of this to me back when I was investing in 2017 was that I previously didn't think it was possible to get instant, feeless transactions on a blockchain due to the fact that transactions on the chain still had to be verified somehow.
> Instead [of miner fees], participants on the nano network are driven by external incentives, such as helping maintain an instant payment network they can use without fees.
"From looking around the internet I am starting to believe I might be the only person holding crypto strictly because I just happen to think it's neat."
I'm holding crypto because I think it's neat, but I'm also holding it because there's little I can do with it... i.e., lack of general utility, yet.
There's definitely a lot that's interesting to me in it. It's a tricky programming environment, which I find personally fun, but it's an entirely public global database with stored procedures and custom row level security. Every stored procedure can call others written by anyone and there's a strong direct push towards open interfaces and interoperability.
Unfortunately one of the easiest things to make with it is a new "currency" because it fits so well with the security model.
I'm in the same camp. I think a bunch of distributed technologies (like Ethereum) are really neat from a technical perspective and fun to tinker with, but I don't live under any delusion that the global financial system will ever build itself on top of anything that even somewhat resembles the cryptocurrencies we see today. I remember years ago it felt like the community was mostly comprised of people with our perspective, but that feeling has basically disappeared.
We need to continue to seek each other out. Finance people swarmed this space like locusts but they aren't who makes it special. It's the p2p ethos that makes it special.
> I think it's interesting that via Ethereum, I can spend Ether to perform distributed computations on nodes across the globe and that this also serves as a store of value.
I find this "value proposition" highly dubious. You can already rent compute globally and perform computation in an environment orders of magnitude faster than on the EVM. Distributed compute on its own doesn't confer any points as a "store of value." The nature of the compute needs to be something that can be done strictly in the blockchain domain, and as we've seen, the result is a system that's easy to manipulate by spinning up new shitcoins, insider trading, wash trades, and worse - not to mention the loss of privacy given how effective on-chain analysis is. The features that make up a cryptocurrency make it decidedly unsuitable as the basis of a modern financial system. Some of the underlying principles are "neat," but that's as far as the tech goes for me.
> You can already rent compute globally and perform computation in an environment orders of magnitude faster than on the EVM
True, but Ethereum also has the benefit of having a globally agreed upon state that is transparent and traceable when a change occurs. Not saying this setup couldn't be done any other way, but the fact that all you need to enable yourself to make those changes is a digital token is what I find interesting about it. The use of this token combined with the fact that people arguably care about the state of this system is what I feel gives it intrinsic value.
For ENS - yes, for JPEG or whatever else - definitively no. There is literally nothing stored inside the token to describe who owns a digital or physical artifact outside of blockchain and it is technically impossible to store such info in the blockchain, while keeping even a current sham of decentralization, transaction throughput and gas price.
Placing control of the world’s compute under a small handful of powerful megacorps is not exactly ideal. Imagining a future where we can use and participate in (as stakers/validators) decentralized compute, storage, transactions, contracts, etc is pretty interesting.
There are innumerable companies you can rent cloud resources from - bare metal to “serverless”. Ethereum, on the other hand, is severely limited in what you can achieve for any amount of rent.
The article cites a tweet, which cites Ethernodes. According to that site, 63% of hosted nodes are run by Amazon, or about 39% of all nodes. The next largest host is Hetzner at 7% of hosted (far lower than it was a few months ago, because they announced they are no longer supporting Ethereum) which accounts for about 4% of all nodes.
Not that surprising, since Amazon runs a huge percentage of all hosted compute in the world. Luckily, Amazon owning a large share of nodes doesn’t mean they own or can control Ethereum. But they certainly do pose a risk to the overall network security and health, and validation-at-home can and should continue to be made easier.
This blog post has a bunch of citations "showing that some assertion about the cryptocurrency ecosystem that crypto-bros make can't be true". And unfortunately decentralizing away from a small handful of powerful entities is one of these things. Below is one example.
"3) Impossibility of Full Decentralization in Permissionless Blockchains by Yujin Kwon et al (1st September 2019) provides a different formalization of the idea that economies of scale drive centralization by introducing the concept of the "Sybil cost":
the blockchain system should be able to assign a positive Sybil cost, where the Sybil cost is defined as the difference between the cost for one participant running multiple nodes and the total cost for multiple participants each running one node.
...
Considering the current gap between the rich and poor, this result implies that it is almost impossible for a system without Sybil costs to achieve good decentralization. In addition, because it is yet unknown how to assign a Sybil cost without relying on a TTP [Trusted Third Party] in blockchains, it also represents that currently, a contradiction between achieving good decentralization in the consensus protocol and not relying on a TTP exists."
In the Ethereum PoS model, those with money perpetually own the network by definition.
At least with AWS, Amazon doesn’t also control the US dollar and the euro. If their service starts to suck, I can take my business elsewhere. But if Ethereum were to actually become a global standard, there would be no escape from the Ether plutocrats.
Any participation you and I can have in a system like Ethereum is table scraps from the overlords.
> If their service starts to suck, I can take my business elsewhere.
This is an extraordinarily good point.
Centralization of Etherium means a centralization of both the VM and the currency. It would be as if the Fed and US Mint also owned AWS.
If Amazon sucks, as you say, you can take your dollars elsewhere. If Ethereum sucks, your Ether is going to be worthless, even if you could bridge it to another chain.
I’ve sometimes thought that Ethereum represents the kind of computing network that 1950s Soviets would have appreciated. Massively inefficient, every operation needlessly repeated across every node only for the pretense of equality and democracy, and ideologically obsessed with a rhetorical illusion of immutability and permanence even though data can be wiped by simple agreement of the Politburo that controls the network.
“Now that the next five-year plan will be implemented as a smart contract on the Sovgosethereum, we’ll be mathematically guaranteed to meet our economic goals.” — Makes as much sense as the guaranteed crypto lending yields of 2021.
What you are describing does exist in some blockchains, like Tezos. But Ethereum's governance is social: not driven by token stake or "coin voting." In Ethereum PoS, users do not cede control of the protocol to validators - the users who run nodes and decide what software to run effectively own and control the protocol.
If the protocol starts to suck, users can change or fork the protocol (this has already happened multiple times, PoS being the latest example).
The ethereum DAO fork showed that the moment the "big ones" are hit there is not much stopping them from violating the "immutability" promise for their own gains.
Instead of few big banks there are few big mining pools deciding the fate, distinction almost without difference. And in both cases you need money to get in to the inner circle
There are no mining pools in Ethereum today. The chain is "immutable" only up to the point that the social layer wants it to be; majority users can change the protocol as they see fit (see EIP 1559, PoS, and other forks).
I think it's worse. If you ask AWS for 1000 distributed machines, you can run 1000 different calculations and then somehow aggregate the results.
In the Ethereum network, if you ask for a calculation then all the miners must do it, and then all the validators must do it. So you acually have a repeated calculation, not a distributed calculation.
The only distributed part was calculating the next block with POW, but IIRC they switched to POS.
I agree it’s worse on any measure that can reduced to “distributed computation”.
But that’s not what it’s doing. Not really. The only distributed computation is the one establishing trust that there has been no Byzantine failure of consensus.
Everything else is non-distributed non-parallel computation within a framework that statistically guarantees faithful and accurate processing.
It’s a competitor to trusted computing. One specifically designed against the single entity root of trust that underpins intels offering eg.
That kinda doesn't matter when the amount of compute is trivially reproduced by '90's CPUs
You can just have a bunch of notes and vote out bad results. You can say "how do you know that 20 different machines you run that do not have hardware backdoor but how do you know software running ethereum is not backdoored ? There is no protection for the compute engine being backdoored, just the fact you'd need to get that backdoored software to most nodes.
In order to convince one honest node you’d have to backdoor every node they talk to.
Multiple independent implementations co-exist on the network including many private implementations.
Perhaps the best defense is the vigilance of the community as they regularly build consensus around the head blocks hash which is hard to forge if the ledger contains any material impacts of an exploit.
Trivial detection of malicious acts is the feature.
It’s true it’s not perfect but your analysis trivializes the effort to compromise even one honest node.
Or you can get your raspberry pi, some desktop from the 90s and random used laptop and get 1000x the "secure computing power" that couldn't be reasonably hardware-backdoored too.
This thread is the only rational, technically informed discussion of crypto I’ve ever read. Both sides being polite to each other while making technical or philosophical arguments
The interface to the globally available computation is a bit different and I think novel.
In order for my application and yours to interact we had to both chose the same ecosystem and invest in it to some minimal degree.
It’s easy to frame that negatively.
But there are some positive aspects to that mutual agreement to invest. Similar to how you may deploy an open standard of authentication inside your infrastructure, the expectation is that the community will improve tools and share innovations over time even if you aren’t directly interacting with any of them. It’s not required. It’s just an expectation.
Ethereum is like that. There is a community of developers extending the ecosystem and it’s exclusively people who invest in and use the platform.
We can mince words over the value prop of cryptocurrency and a decentralized ledger but, I don’t get the same belonging to a community on AWS or GCP.
FWIW most of the people I work with in the community dislike the same scammers that you do.
Give it a few years, the scammers will move on to greener pastures and the nerds will keep tinkering. I remember people acting the same way about ecommerce in the early 00s.
>> I am starting to believe I might be the only person holding crypto strictly because I just happen to think it's neat.
I'm here with you. Put $100 bucks in last year and have been tinkering here and there. Unfortunately my $100 is now worth $23, but I'm going to hold it and keep tinkering and wait for everything to sort of pan out.
I still see the potential, but am exploring what else I can do with it.
> From looking around the internet I am starting to believe I might be the only person holding crypto strictly because I just happen to think it's neat.
I also think a lot of the distributed systems work and technological achievements are neat.
But I don't have to hold crypto to appreciate it, or even to use it. It's trivially easy to log in to an exchange and buy crypto whenever I might need it to do something.
The concept of holding (or HODLing) isn't related to the underlying technology. It's a speculative investment.
I also hold a token amount of crypto from back when I was playing around with the neatness of it, but it's just that: A token amount. You don't need to invest in it or make the number in your wallet go to an arbitrarily high number to experiment with the technology.
I’m genuinely curious to hear this from someone who’s clearly more in that world than I am - is anyone at all using Ethereum’s distributed nodes to do calculations for anything that isn’t some sort of abstract financial instrument? I ask because people constantly seem to tout the fact you can build anything with blockchains, and they’ll change the world, but I’ve never seen anything actually useful made with it beyond the dubiously valuable ability to transfer currency around the place.
I'm with you on this. The overfinancialization of this tech bums me out hard. I stay away from conversations where people use words like bearish and bullish or talk about prices and gains and losses. That shit is so boring and uncreative I want to cry.
I like peer to peer tech with no gatekeepers and no intermediaries. I like encryption and the ability to control how my data is used. I don't like the corporate cloud and I don't like gambling.
Not everyone is focused on "number go up". Some teams actually care about making distributed systems that serve communities around the world, and prefer to see people not have to trust centralized middlemen. Blockchains are not the best infrastructure for this, but they're good enough (Polygon Edge for instance), for many applications:
Having said that, blockchains are going to go the way of mainframes and vacuum tubes eventually. Here is the roadmap of what has to happen for Web3 (smart contracts) to go mainstream:
I see a lot of use cases for it. Unfortunately many activists on HN love to comment how useless smart contracts are, while also silently downvoting any comments that disagree with that position.
I think the profit motive really did derail a lot of Web3 -- but also the same can be said for Web2, it's just that VCs were the only ones who could invest (until the JOBS act, at least). So Web2 got stuck in near-monopolies, buying up competition, and extracting rents, while completely dominating our public forums.
It didn't have to be this way. Mark Z was an open source bro who turned down Microsoft's $1M offer in high school, and put his software online for free. Even after he coded facemash and facebook, he was going to build a decentralized, open source file sharing system called Wirehog -- but then Sean Parker and Peter Thiel "put a bullet in that thing"[1]. They killed Mark Z's decentralized visions and turned him from an open source bro who loves hacking things together into a corporate golden boy who loves acqui-hiring competition (WhatsApp, Instagram, Oculus[2] etc.) and then trying to turn them into corporate teams, until they bounce when their golden handcuffs vest (founders of those companies).
The people who did this to Zuck were themselves peculiar. Sean Parker himself used to be for open sharing (Napster) but rentseeking corporations in that sphere (RIAA, MPAA) sued and destroyed it. He learned a lesson and started Plaxo, and other VC-backed companies to basically lock up people's data in giant centralized server farms. It was he who told Zuck to basically cut out the decentralized open nonsense. And Peter Thiel with Clarion Capital had a far more radical vision: Competition is for losers! Build a monopoly.[3].
The result in our society is that Big Tech oligopolies have totally captured Web2 and own all our public forums. Elon and Zuck own our largest public forums and messengers. TikTok, WeChat and others have had a meteoric rise but they are even more closely tied with the government of China than FB and Twitter are with the US government. You'd think We the People should have an open source alternative. But HN loves Web2 and hates Web3.
The problem with "serving communities around the world" with radically de-centralized systems is that in order to interact with the real world you need to have trusted parties. And with blockchain, once you have a trusted party, you might as well have them host a database. So you get to choose: either you have your trustless, radically-decentralizable system that only is relevant in its own small ecosystem (like cryptocurrency) or you have trusted parties and thus have no need for the trustless, decentralized system, and would be better served with a federated system of trusted parties (like "real" money).
A lot of the software we need to transact, to self-organize as a community etc. can have its business logic on a smart contract. Voting. Governance. Contests. Investments. Enforce the decision making with rules that no one can violate.
You can run an election like stackexchange sites - trusting that the admins don't mess with the votes - or you can do it with a blockchain. (You don't need blockchains, you can use Merkle trees etc. but the point is, people should be able to check the Merkle branch and know their vote is counted properly)
And that's just one example of many. Just like HTTP, the network is global. You could say in the real world you need magazines, newspapers, radio to get the word out -- or a closed network like AOL or MSN, but then the open, permissionless Web put the lie to all that. It was an open protocol, whether it's Web with HTTP and Email with SMTP etc. Open beats closed. People just need the software and the protocols.
That was my view on it back in the early 2010's when Bitcoin was just taking off. Back then, the only people interested in it were either geeks looking at this new weird thing, or drug dealers. And frankly, the drug dealing was "healthy" for the ecosystem as whole: because people were actually using it as a medium of exchange, there was a dampening force opposing changes in value, and so while it was volatile compared to real currency, it was nothing like it is today.
Frankly, the fact that the takedown of the Silk Road didn't kill the entire market is still surprising to me. I'm not sure at what point the speculation bubble started, because I had well and proper lost interest at that point, but the idea that people willingly were/are pouring money into an system that has fundamentally broken its own economics is baffling to me. Transactions take too long and cost too much for it to be useful as a means of exchange, and if everybody is going through big exchanges than the anonymity factor doesn't exist either.
Long story short, it was an interesting experiment while it lasted. If we could stop wasting the carbon footprint of a mid-sized country now to prop up an ecosystem of scams and baseless speculation now, that would be great.
So many good points made in your post. It makes me think of what could have been if bitcoin remained a layer of exchange. I had high hopes for bitcoin cash, but even that has had it's own challenges. (although it does work pretty well)
You're not the only one. It's just that's i recognized this "neat" feeling for what it was: the same one I got when I went to Vegas and won actual cash from the games.
I didn't truly know that seductive feeling until then, the feeling that will ruin you.
I didn't like that I liked it.
And that feeling i got LARPing with cryptocurrencies too.
Yeah, I get where you're coming from. I agree that this technology is really neat. I love the creative computer science.
I think this may be the ultimate driving force behind krypto. It's inspiring. It has poetry and romance. It's weird and intriguing. Those are not pointless things!
The money of course resonates a lot more for most people, which is why all that weirdness has mainly been applied to fleecing suckers.
You're definitely not alone. Despite costing me more thanks to binance's ridiculous "fees", I go out of my way to buy crypto to just to spend on services and charities that accept it - thanks mullvad, gandi*, fsf, and many more! I plan to continue doing this as long as even a single org continues to accept it.
Payments don't need to go through a centralized and unaccountable processor anymore and, given the track records of the likes of visa and paypal, I argue they shouldn't. It's one thing for them to follow the law, but to destroy livelihoods of many people or to deny transferring money when both the sender and the receiver are in agreement for arbitrary subjective reasons is simply unacceptable.
May those who accept crypto continue to prosper.
* I haven't been able to pay gandi yet because they require me to use their weird payments platform, but I'd happily start paying them in crypto once they drop this silly requirement.
"You know, it's funny; when you look at someone through rose-colored glasses, all the red flags just look like flags." - Wanda the Owl, BoJack Horseman
Yes, just as white or many non-red flags would. The idea is that other flags are indiscernible from red flags because everything is rose-tinted, and more amusingly the playful combining of two common English expressions.
It helps to have a giant red herring that isn’t directly related to a liquidity or solvency problem. In Binance’s case, it’s their incredibly dubious USD banking arrangements. It’s not a secret, and it’s a great distraction for Binance to point at if they don’t want to move real USD at any given time.
"CryptoKremlin announces Layoffs of 20% of Workforce" by ChatGPT
CryptoKremlin, a leading Russian crypto company powered by OpenAI's GPT-3, has announced plans to lay off 20% of its workforce due to challenging market conditions and a need to restructure. The CEO acknowledged the difficult decision but emphasized its importance for the company's long-term sustainability and success.
CryptoKremlin was known for leveraging Rust programming language to attract top talent and build superior systems. The company's utilization of Rust, known for its performance and security features, allowed them to create highly reliable and secure solutions. This focus on engineering excellence with Rust technology was a key factor in the company's success and helped set it apart from the competition.
The crypto industry has faced challenges during the pandemic, but CryptoKremlin had managed to perform well, largely due to its investment in GPT-3 technology. The model has revolutionized the natural language processing space, allowing the company to build highly scalable and secure solutions.
The crypto community was disappointed by the layoffs, but CryptoKremlin remains optimistic and confident in its ability to drive innovation and growth in the space. The restructure is expected to position the company for continued success in the years to come.
It’s funny how every so many years there’s a crypto bubble and then a subsequent “crypto is failed/dead” sentiment and now we see big exchanges failing and other failures of integration into more traditional systems.
What people see as a failure I see as a success. The more bitcoin continues to function and the more attempts to wrangle and centralize it that fail, the more it proves itself as something that can stand alone, explicitly without some institution taking it over and managing it.
The fact that it persists despite the market swings and frustrated attempts to leech onto it by profit-seeking platforms is a really good sign in my view.
The true test may be if it can withstand attempts to regulate it, even though that’s one of the biggest fears in crypto! My opinion is that if they can’t succeed at regulating or even banning it then that makes it even more viable as a decentralized currency system.
Since this doesn't include US users, who would be on binance.us instead, and is only temporary, it's not very interesting from my perspective. From the headline I assumed it would include binance.us.
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