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This isn't a crypto failure. Crypto works. This is a human failure. FTX didn't collapse because of the technology. It collapsed because of human error. The fi

This isn't a crypto failure. Crypto works. This is a human failure. FTX didn't collapse because of the technology. It collapsed because of human error. The fix is rather simple. If an organization looks like a bank and quacks like a bank; it should be regulated like a bank.

hestefisk 4y ago
Indeed. Beyond the failure of human greed in the crypto Ponzi schemes, FTX is also a massive regulatory failure. These firms have been allowed to play with people’s money for too long.
- JamesianP 4y ago
  I think the new laws and regulations are coming out as we speak. Since it's such a new area they have been slow. The SEC just hired a bunch of new people. They have been busy prosecuting people too. I also think FTX has been violating plenty of them already from the sounds of it. They probably thought they were being clever, but wouldn't pass the "duck test".
- tenpies 4y ago
  It's probably no accident that SBF made substantial donations to one of the major US political parties. And by substantial, I mean that party's second biggest donor in the '20-21 cycle.
foogazi 4y ago
> This is a human failure Is there any crypto out there without humans ? Is there an undo button to reverse the transaction? All financial systems involve humans
- miguelmota 4y ago
  > Is there any crypto out there without humans ? What OP is referring to is that you don't need to trust people if the dex is on-chain and verifiable. FTX was a non-transparent and insolvent centralized exchange which wouldn't be possible if it was on-chain because anyone can see the funds that are available and the protocol would not allow leverage backed by non-existing collateral. > Is there an undo button to reverse the transaction? No there isn't. This is a double edge sword. > All financial systems involve humans To a degree, but centralized exchanges have more knobs controlled by humans while an on-chain dex and just be deployed once and require no human intervention. A dex can be audited fully on-chain and anyone can see if the contract has any master holder keys. The FTX fiasco is because they own all your crypto because they have the master keys. The future of finance is people being in charge of their own money and where no unexpected entity can arbitrarily inflate the supply, which is only possible with crypto.
  - blueblisters 4y ago
    What foogazi was perhaps suggesting is that no financial system can work if it doesn't account for fundamental human behavior - we make mistakes and we are greedy if not held accountable "off chain". The blockchain is perfect when everyone acts in good faith and makes no mistakes. In the real world, that's not the case. Unfortunately, you need centralized institutions to regulate financial transactions, control the supply of money and enforce laws when they're broken, reverse mistakes when they happen. > The future of finance is people being in charge of their own money and where no unexpected entity can arbitrarily inflate the supply, which is only possible with crypto. This is not the future, and it'll almost certainly never happen with crypto.
    - miguelmota 4y ago
      Then what is the future? Certainly not the government going haywire with the printer. It’s impossible to trustlessly verify the exact number of US dollars in circulation, but it’s trivial to do with cryptocurrencies.
  - lottin 4y ago
    Removing the possibility for human intervention doesn't make things more resilient quite the contrary. Removing human control of public policies, such as those involving the management of public resources, is downright anti-democratic and dumb. If you people intend to build a monetary system, you need to educate yourselves about monetary systems. The money supply must be managed (i.e. inflated and deflated in your unconventional parlance) in order to keep prices stable. An currency in which prices are not stable will never be used as currency by businesses because it would put them in danger of going out business due to price swings. Restricting the issuance of currency doesn't make the supply of such currency fixed. Look up how money is created by the banking system. Only a small part of the money supply is money created by central banks.
    - miguelmota 4y ago
      The money supply managed by an on-chain protocol where it’s fully open, trustless, and predictable is 100% times better then a small group of people at the treasury deciding to print money and inflate peoples savings always.
- imgabe 4y ago
  There is the same undo button that exists for every other financial institution that commits fraud: lawsuits.
  - Thorrez 4y ago
    And if you can't find the person to sue because the person is an anoymous hacker? With fiat the court will tell the banks to reverse the transactions.
    - imgabe 4y ago
      That isn’t the case here. Anyway, people get defrauded through banks all the time with advance fee fraud, 419, and other scams and banks don’t reverse those.
      - Thorrez 4y ago
        >That isn’t the case here. What do you mean? Are you saying FTX wasn't hacked by an anonymous hacker? Banks reverse transactions sometimes. It sounds like in many cases the reason they can't be reversed is because the money got converted into cryptocurrency. >Wire Fraud Recovery is Difficult, but Possible[1] >When the stolen funds arrive in the fraudster’s bank account, they engage a network of money launderers who immediately withdraw funds in cash, wire the money to a number of different accounts and/or convert it to cryptocurrency.[1] >A full recovery of lost funds was only possible in 29% of cases. In 40% of the cases, less than 10% of the funds were recovered.[2] That means that 60% of the time at least 10% of the money is recovered. >Cyber perpetrators are moving stolen funds between bank accounts and cryptocurrency wallets at a rapid rate.[2] [1] https://www.certifid.com/article/how-to-recover-from-wire-fraud https://www.certifid.com/article/how-to-recover-from-wire-fr... [2] https://blog.alta.org/2021/04/survey-title-professionals-targeted-for-wire-fraud-in-a-third-of-all-transactions.html https://blog.alta.org/2021/04/survey-title-professionals-tar...
    - miguelmota 4y ago
      If someone sends physical cash to a person across the world, is there an undo button?
- hestefisk 4y ago
  Spot on. Money is a social construct after all and thus subject to human fallacy.
threeseed 4y ago
> it should be regulated like a bank And how would they implement KYC/AML regulations which are fundamental to banking ?
- TEP_Kim_Il_Sung 4y ago
  By force, if necessary.
  - threeseed 4y ago
    No technically. There are seemingly endless ways to move funds anonymously.
    - MacsHeadroom 4y ago
      There's endless ways to move cash. If/when the movement of cash/crypto is peer-to-peer or interacting with a machine only (a machine that gives quarters for dollar bills or a DEX, for example) KYC is entirely unnecessary.
      - threeseed 4y ago
        Dealing with large volumes of cash is very difficult. It's physically large so you can't move it between countries with drawing attention from customs and security. You can't exchange it between currencies easily since brokers are required to implement KYC/AML. Banks have automatic triggers on their internal systems to notify regulators if you deposit/withdraw large sums. And if it's being tracked then washing it requires you having to go through exotic means like poker machines since all simpler options have been locked down over the decades. It's one of the reasons crypto is so popular with states like North Korea, Iran etc because it's scalable enough to allow them to move billions.
YossarianFrPrez 4y ago
I agree that the algorithms powering crypto are sophisticated pieces of technology. Just look at the zero-knowledge proofs. The thing is that "not being regulated like a bank" is exactly what many people like / liked about it. (Yield farming, using DeFi for mortgages, etc.) What I'm saying is that Crypto seems to be headed to being taught alongside, if not the Therac-25, then the Mars Climate Orbiter (which was lost to some people working in metric vs standard.)
- jl2718 4y ago
  A CEX is "like a bank" because it's a human that takes custody of assets, not because it does trades and loans. Smart Contracts, however, can't be regulated the same way that human custodians can, but they are also designed not to be able to do unexpected things.
  - threeseed 4y ago
    There have been plenty of examples of Smart Contracts doing unexpected things because all of the myriad of edge cases were not anticipated for. It's one of the reasons the classic financial system works so well because it has the flexibility of manual fail-safes in cases where mistakes have been made. Smart Contracts will never really work unless it has the same.
    - pksebben 4y ago
      I don't really have a dog in either kennel, but something about the idea that a human absolutely must be in the control loop for a currency to work feels... not wrong, but maybe "not wrong so far". We've managed to get computers to do some really batshit stuff. Drive cars, make art, algorithmically trade to a level of success a human could never dream of, etc. I don't know if a solution to the problem of managing the stability of a currency is around the corner, but I'm fairly sure somewhere in the future it exists. And then, I can't help but think of how just about every disaster we've had in the financial system was a result of the humans with their hands on the economic knobs being knobs themselves. The solutions we provide when in crisis wouldn't be necessary if we didn't have such a strong tendency to drive ourselves off cliffs - not to mention that our current financial system has gotten so complicated I'm not sure there's anyone out there who truly, thoroughly, groks it without being reductive.
croes 4y ago
So bank regulation worked in 2008, is was just a human failure? Communism works, it's just human failures? The measure of whether something works is whether it prevents human failure.
- dmichulke 4y ago
  You forgot: Regulation works but it was just human failure: https://en.wikipedia.org/wiki/MF_Global https://en.wikipedia.org/wiki/MF_Global
- hestefisk 4y ago
  Socialism to some extent has been successful in some countries. Sweden is a good example.
  - vinay427 4y ago
    I agree with your statement, perhaps with a very loose sense of “socialism to some extent”. However, socialism is not communism, which is what the GP comment mentioned.
  - BlueTemplar 4y ago
    No it isn't. Pretty sure that they have a lot of private entities owning the means of production in a free(ish) market, and not mostly the government ?
- pksebben 4y ago
  We had gotten rid of bank regulation, which caused 2008. https://www.federalreservehistory.org/essays/glass-steagall-act#:~:text=The%20Glass%2DSteagall%20Act%20effectively,Roosevelt%20in%20June%201933 https://www.federalreservehistory.org/essays/glass-steagall-....
  - croes 4y ago
    Pretty US centric view. Banks in other countries were affected too, despite regulations.
albertopv 4y ago
All crypto currencies are a ponzi scheme. Change my mind.
- px43 4y ago
  Ponzi schemes by definition use opaque ledgers. Ponzi schemes are custodial. Ponzi schemes guarantee returns. There exist Ponzi schemes which have disguised themselves as cryptocurrencies, but the idea that all cryptocurrencies are Ponzi schemes demonstrates a complete ignorance of what a Ponzi scheme is.
  - polygamous_bat 4y ago
    > Ponzi schemes by definition use opaque ledgers. Why? To me a ponzi scheme is where the earlier "investors" get paid out with the money of later "investors". That's it. By that definition it's quite the "decentralized", somewhat stochastic ponzi.
    - px43 4y ago
      Ponzi victims are told on paper that their "investments" are increasing in value, and that they can withdraw at any time, when in reality, the assets don't actually exist. Also a key aspect is that their balance only ever goes up.
    - cdiddy2 4y ago
      your definition includes stocks. I suppose you might be right that stocks are a ponzi
      - tehjoker 4y ago
        they weren't back when the reason people bought them were dividends, now the only real exit is if the company goes bankrupt or is purchased. The intervening time is hard to describe as anything other than pure speculation and piling dupes on top of each other
    - someguydave 4y ago
bmitc 4y ago
People keep saying this, but I don't follow. FTT was a token manufactured out of thin air. Crypto works as a concept, I suppose, but people saying crypto works is like the people that say Agile works. How long do we have to wait to see crypto working? Where are the success stories of crypto? There's a long laundry list of hacks, scams, company failures, "tokenomics", NFTs, <x> on blockchain, etc. Saying crypto works as a technology base is not enough. Currencies and tradeable "assets" are a social thing. It isn't just a technology.
- netheril96 4y ago
  Lumping diagonally opposed things (centralized coins like FTT or decentralized coins like BTC) under the same category (crypto) is quite misleading. > How long do we have to wait to see crypto working? BTC (on chain) is still working as intended, after all these years.
  - bmitc 4y ago
    > Lumping diagonally opposed things (centralized coins like FTT or decentralized coins like BTC) under the same category (crypto) is quite misleading. Crypto generally means digital currency, does it not? I think leaving them out would be actually misleading. > BTC (on chain) is still working as intended, after all these years. Working in what sense?
    - wsc981 4y ago
      > Working in what sense? That you can securely and cheaply transact value without a third party being involved? That governments can’t directly block your account the way Trudeau blocked protestors bank accounts? Probably a few other ways as well ...
      - Stention314 4y ago
        Bitcoin fees are often not cheap at all. Just a week ago someone got cought and the fbi took his 3 billion dollar worth of BTC. Sending crypto to someone in Iran or Russia is against the law independent of how you do it. And just because you can send BTC to Iran someone in Iran also needs to exchange it to something real again. While banking is more restrictive, when you go to your bank with your passport, you actually can recover your account. I know someone who lost 10k because he lost his key. For most people it's saver and easier and they are not affected and don't care about all those BTC/crypto benefits at all
Thorrez 4y ago
If a bank gets hacked, generally the transactions get reversed. If a cryptocurrency exchange gets hacked, that generally can't be reversed. Regulation can make things more secure, but I don't think it can realistically stop all attacks. Regulation is slower than attackers. The ability to reverse transactions is what's really needed to prevent attackers from getting away with money.
- lottin 4y ago
  Who will be in charge of deciding which transactions need to be reversed and when? It seems to me that the ability to have reversible transactions is at odds with the descentralised nature of blockchains.
  - iamacyborg 4y ago
    Tell that to the folks who forked Ethereum.
  - Thorrez 4y ago
    I agree with you. There doesn't seem to be a good way to allow transactions to be reversed while keeping decentralization. My point is that this decentralization is bringing in a risk that traditional banks don't have. So saying "regulating it like a bank will make it as secure as a bank" is incorrect.
me551ah 4y ago
Crypto works for what use case exactly? Crypto payments take much longer time than traditional credit card ones , are barely supported by most websites and in many cases cost more in transaction fees than credit cards. And with a lot of people storing their money in these major crypto banks , what we now have is a fairly centralised structure which kind of defeats the purpose of crypto. Worse, these banks also hold each other’s tokens similar to what your normal banks do. And if that’s not enough some of them even do fractional reserves and use the real money they get for investing.
- rabite 4y ago
  Perhaps for the use case of the underbanked, which is the majority of the world. That I need to wait for confirmation on the blockchain for a crypto payment is orders of magnitude faster than my other option, which is wait for someone to manually bring in foreign currencies by train. My country is not on SWIFT. My passport will not allow me to get a bank account in any country that would let me process credit cards. I am not allowed to use Paypal. This kind of comment is the epitome of the Western privilege -- your governments cut off entire countries from the banking system, deny their own citizens access to banks because of their political beliefs, and then tout the alleged superiority of your credit cards, which are now denied to truckers and Kanye West by the same companies that were happy to do business with Pornhub when they were knowingly facilitating the monetization of child sex slaves. Credit cards and United States dollars are the tools of thieves, thugs, rapists, and warmongers. Bitcoin works for the use case of not staining your hands with the blood and tears of their victims, at the very least.
  - me551ah 4y ago
    I'm from India, one of the most populous countries in the world. And we have instant online transfers with no transaction fee and it's called UPI.
    - kevinak 4y ago
      Is everyone in India banked? How do you transfer money outside of the India? Can you do that insta fly with UPI as well? There are more countries than India, I’d suggest maybe taking a look at South America, Africa and Asia.
polygamous_bat 4y ago
> This isn't a crypto failure. Crypto works. This is a human failure. "Guns don't kill people, people kill people."
- mjburgess 4y ago
  A point no one who wants to ban guns would disagree with.
  - pksebben 4y ago
    the edge here being that if a tool is powerful enough to take someone's head off, we should probably do something to mitigate the risk of folks using it.
listenallyall 4y ago
This seems like a simplification. Crypto, like any currency, needs to be able to be easily converted to and from other currencies. I can walk up to thousands of money changers and exchange USD for Euros, Pounds, and plenty of small countries' currencies. Meanwhile it may be technically possible to do the same with crypto, virtually nobody is, and the places that do offer a conversion, like BTC ATMs, charge enormous fees.
baq 4y ago
The fraud going on in there was not human error. Reuters wrote about a backdoor sbf used to make transactions with ftx assets off the books, without alerting controls. If this is true, it’s oceans eleven stuff.
himinlomax 4y ago
Bad user interfaces have caused catastrophes (see for example Three Miles Island or the Mont Saint Odile Airbus crash) that have also been labeled "human error", but those catastrophes wouldn't have happened without the bad UI.
MrMan 4y ago
as SBF himself allowed in the Bloomberg interview, this system only works if humans, driven by FOMO and greed, bid up the tokens. that, more than the technology underpinning the system, is a necessary condition for defi or centralized crypto to "work." defi is rife with hacks theft and rug pulls. but a form of fraud that is built into the entire ecosystem are tokenomics that carve out allocations of tokens to early holders, so they front run every one else. this cannot be escaped - there is no refuge from the grift built in to the entire ecosystem. decentralized is a lie propagated to support a scam on everyone who got in later than early holders.
deleted 4y ago
[deleted]

hestefisk 4y ago

Indeed. Beyond the failure of human greed in the crypto Ponzi schemes, FTX is also a massive regulatory failure. These firms have been allowed to play with people’s money for too long.

JamesianP 4y ago
I think the new laws and regulations are coming out as we speak. Since it's such a new area they have been slow. The SEC just hired a bunch of new people. They have been busy prosecuting people too. I also think FTX has been violating plenty of them already from the sounds of it. They probably thought they were being clever, but wouldn't pass the "duck test".
tenpies 4y ago
It's probably no accident that SBF made substantial donations to one of the major US political parties. And by substantial, I mean that party's second biggest donor in the '20-21 cycle.

foogazi 4y ago

> This is a human failure Is there any crypto out there without humans ? Is there an undo button to reverse the transaction? All financial systems involve humans

miguelmota 4y ago
> Is there any crypto out there without humans ? What OP is referring to is that you don't need to trust people if the dex is on-chain and verifiable. FTX was a non-transparent and insolvent centralized exchange which wouldn't be possible if it was on-chain because anyone can see the funds that are available and the protocol would not allow leverage backed by non-existing collateral. > Is there an undo button to reverse the transaction? No there isn't. This is a double edge sword. > All financial systems involve humans To a degree, but centralized exchanges have more knobs controlled by humans while an on-chain dex and just be deployed once and require no human intervention. A dex can be audited fully on-chain and anyone can see if the contract has any master holder keys. The FTX fiasco is because they own all your crypto because they have the master keys. The future of finance is people being in charge of their own money and where no unexpected entity can arbitrarily inflate the supply, which is only possible with crypto.
- blueblisters 4y ago
  What foogazi was perhaps suggesting is that no financial system can work if it doesn't account for fundamental human behavior - we make mistakes and we are greedy if not held accountable "off chain". The blockchain is perfect when everyone acts in good faith and makes no mistakes. In the real world, that's not the case. Unfortunately, you need centralized institutions to regulate financial transactions, control the supply of money and enforce laws when they're broken, reverse mistakes when they happen. > The future of finance is people being in charge of their own money and where no unexpected entity can arbitrarily inflate the supply, which is only possible with crypto. This is not the future, and it'll almost certainly never happen with crypto.
  - miguelmota 4y ago
    Then what is the future? Certainly not the government going haywire with the printer. It’s impossible to trustlessly verify the exact number of US dollars in circulation, but it’s trivial to do with cryptocurrencies.
- lottin 4y ago
  Removing the possibility for human intervention doesn't make things more resilient quite the contrary. Removing human control of public policies, such as those involving the management of public resources, is downright anti-democratic and dumb. If you people intend to build a monetary system, you need to educate yourselves about monetary systems. The money supply must be managed (i.e. inflated and deflated in your unconventional parlance) in order to keep prices stable. An currency in which prices are not stable will never be used as currency by businesses because it would put them in danger of going out business due to price swings. Restricting the issuance of currency doesn't make the supply of such currency fixed. Look up how money is created by the banking system. Only a small part of the money supply is money created by central banks.
  - miguelmota 4y ago
    The money supply managed by an on-chain protocol where it’s fully open, trustless, and predictable is 100% times better then a small group of people at the treasury deciding to print money and inflate peoples savings always.
imgabe 4y ago
There is the same undo button that exists for every other financial institution that commits fraud: lawsuits.
- Thorrez 4y ago
  And if you can't find the person to sue because the person is an anoymous hacker? With fiat the court will tell the banks to reverse the transactions.
  - imgabe 4y ago
    That isn’t the case here. Anyway, people get defrauded through banks all the time with advance fee fraud, 419, and other scams and banks don’t reverse those.
    - Thorrez 4y ago
      >That isn’t the case here. What do you mean? Are you saying FTX wasn't hacked by an anonymous hacker? Banks reverse transactions sometimes. It sounds like in many cases the reason they can't be reversed is because the money got converted into cryptocurrency. >Wire Fraud Recovery is Difficult, but Possible[1] >When the stolen funds arrive in the fraudster’s bank account, they engage a network of money launderers who immediately withdraw funds in cash, wire the money to a number of different accounts and/or convert it to cryptocurrency.[1] >A full recovery of lost funds was only possible in 29% of cases. In 40% of the cases, less than 10% of the funds were recovered.[2] That means that 60% of the time at least 10% of the money is recovered. >Cyber perpetrators are moving stolen funds between bank accounts and cryptocurrency wallets at a rapid rate.[2] [1] https://www.certifid.com/article/how-to-recover-from-wire-fraud https://www.certifid.com/article/how-to-recover-from-wire-fr... [2] https://blog.alta.org/2021/04/survey-title-professionals-targeted-for-wire-fraud-in-a-third-of-all-transactions.html https://blog.alta.org/2021/04/survey-title-professionals-tar...
  - miguelmota 4y ago
    If someone sends physical cash to a person across the world, is there an undo button?
hestefisk 4y ago
Spot on. Money is a social construct after all and thus subject to human fallacy.

threeseed 4y ago

> it should be regulated like a bank And how would they implement KYC/AML regulations which are fundamental to banking ?

TEP_Kim_Il_Sung 4y ago
By force, if necessary.
- threeseed 4y ago
  No technically. There are seemingly endless ways to move funds anonymously.
  - MacsHeadroom 4y ago
    There's endless ways to move cash. If/when the movement of cash/crypto is peer-to-peer or interacting with a machine only (a machine that gives quarters for dollar bills or a DEX, for example) KYC is entirely unnecessary.
    - threeseed 4y ago
      Dealing with large volumes of cash is very difficult. It's physically large so you can't move it between countries with drawing attention from customs and security. You can't exchange it between currencies easily since brokers are required to implement KYC/AML. Banks have automatic triggers on their internal systems to notify regulators if you deposit/withdraw large sums. And if it's being tracked then washing it requires you having to go through exotic means like poker machines since all simpler options have been locked down over the decades. It's one of the reasons crypto is so popular with states like North Korea, Iran etc because it's scalable enough to allow them to move billions.

YossarianFrPrez 4y ago

I agree that the algorithms powering crypto are sophisticated pieces of technology. Just look at the zero-knowledge proofs. The thing is that "not being regulated like a bank" is exactly what many people like / liked about it. (Yield farming, using DeFi for mortgages, etc.) What I'm saying is that Crypto seems to be headed to being taught alongside, if not the Therac-25, then the Mars Climate Orbiter (which was lost to some people working in metric vs standard.)

jl2718 4y ago
A CEX is "like a bank" because it's a human that takes custody of assets, not because it does trades and loans. Smart Contracts, however, can't be regulated the same way that human custodians can, but they are also designed not to be able to do unexpected things.
- threeseed 4y ago
  There have been plenty of examples of Smart Contracts doing unexpected things because all of the myriad of edge cases were not anticipated for. It's one of the reasons the classic financial system works so well because it has the flexibility of manual fail-safes in cases where mistakes have been made. Smart Contracts will never really work unless it has the same.
  - pksebben 4y ago
    I don't really have a dog in either kennel, but something about the idea that a human absolutely must be in the control loop for a currency to work feels... not wrong, but maybe "not wrong so far". We've managed to get computers to do some really batshit stuff. Drive cars, make art, algorithmically trade to a level of success a human could never dream of, etc. I don't know if a solution to the problem of managing the stability of a currency is around the corner, but I'm fairly sure somewhere in the future it exists. And then, I can't help but think of how just about every disaster we've had in the financial system was a result of the humans with their hands on the economic knobs being knobs themselves. The solutions we provide when in crisis wouldn't be necessary if we didn't have such a strong tendency to drive ourselves off cliffs - not to mention that our current financial system has gotten so complicated I'm not sure there's anyone out there who truly, thoroughly, groks it without being reductive.

croes 4y ago

So bank regulation worked in 2008, is was just a human failure? Communism works, it's just human failures? The measure of whether something works is whether it prevents human failure.

dmichulke 4y ago
You forgot: Regulation works but it was just human failure: https://en.wikipedia.org/wiki/MF_Global https://en.wikipedia.org/wiki/MF_Global
hestefisk 4y ago
Socialism to some extent has been successful in some countries. Sweden is a good example.
- vinay427 4y ago
  I agree with your statement, perhaps with a very loose sense of “socialism to some extent”. However, socialism is not communism, which is what the GP comment mentioned.
- BlueTemplar 4y ago
  No it isn't. Pretty sure that they have a lot of private entities owning the means of production in a free(ish) market, and not mostly the government ?
pksebben 4y ago
We had gotten rid of bank regulation, which caused 2008. https://www.federalreservehistory.org/essays/glass-steagall-act#:~:text=The%20Glass%2DSteagall%20Act%20effectively,Roosevelt%20in%20June%201933 https://www.federalreservehistory.org/essays/glass-steagall-....
- croes 4y ago
  Pretty US centric view. Banks in other countries were affected too, despite regulations.

albertopv 4y ago

All crypto currencies are a ponzi scheme. Change my mind.

px43 4y ago
Ponzi schemes by definition use opaque ledgers. Ponzi schemes are custodial. Ponzi schemes guarantee returns. There exist Ponzi schemes which have disguised themselves as cryptocurrencies, but the idea that all cryptocurrencies are Ponzi schemes demonstrates a complete ignorance of what a Ponzi scheme is.
- polygamous_bat 4y ago
  > Ponzi schemes by definition use opaque ledgers. Why? To me a ponzi scheme is where the earlier "investors" get paid out with the money of later "investors". That's it. By that definition it's quite the "decentralized", somewhat stochastic ponzi.
  - px43 4y ago
    Ponzi victims are told on paper that their "investments" are increasing in value, and that they can withdraw at any time, when in reality, the assets don't actually exist. Also a key aspect is that their balance only ever goes up.
  - cdiddy2 4y ago
    your definition includes stocks. I suppose you might be right that stocks are a ponzi
    - tehjoker 4y ago
      they weren't back when the reason people bought them were dividends, now the only real exit is if the company goes bankrupt or is purchased. The intervening time is hard to describe as anything other than pure speculation and piling dupes on top of each other
  - someguydave 4y ago

bmitc 4y ago

People keep saying this, but I don't follow. FTT was a token manufactured out of thin air. Crypto works as a concept, I suppose, but people saying crypto works is like the people that say Agile works. How long do we have to wait to see crypto working? Where are the success stories of crypto? There's a long laundry list of hacks, scams, company failures, "tokenomics", NFTs, <x> on blockchain, etc. Saying crypto works as a technology base is not enough. Currencies and tradeable "assets" are a social thing. It isn't just a technology.

netheril96 4y ago
Lumping diagonally opposed things (centralized coins like FTT or decentralized coins like BTC) under the same category (crypto) is quite misleading. > How long do we have to wait to see crypto working? BTC (on chain) is still working as intended, after all these years.
- bmitc 4y ago
  > Lumping diagonally opposed things (centralized coins like FTT or decentralized coins like BTC) under the same category (crypto) is quite misleading. Crypto generally means digital currency, does it not? I think leaving them out would be actually misleading. > BTC (on chain) is still working as intended, after all these years. Working in what sense?
  - wsc981 4y ago
    > Working in what sense? That you can securely and cheaply transact value without a third party being involved? That governments can’t directly block your account the way Trudeau blocked protestors bank accounts? Probably a few other ways as well ...
    - Stention314 4y ago
      Bitcoin fees are often not cheap at all. Just a week ago someone got cought and the fbi took his 3 billion dollar worth of BTC. Sending crypto to someone in Iran or Russia is against the law independent of how you do it. And just because you can send BTC to Iran someone in Iran also needs to exchange it to something real again. While banking is more restrictive, when you go to your bank with your passport, you actually can recover your account. I know someone who lost 10k because he lost his key. For most people it's saver and easier and they are not affected and don't care about all those BTC/crypto benefits at all

Thorrez 4y ago

If a bank gets hacked, generally the transactions get reversed. If a cryptocurrency exchange gets hacked, that generally can't be reversed. Regulation can make things more secure, but I don't think it can realistically stop all attacks. Regulation is slower than attackers. The ability to reverse transactions is what's really needed to prevent attackers from getting away with money.

lottin 4y ago
Who will be in charge of deciding which transactions need to be reversed and when? It seems to me that the ability to have reversible transactions is at odds with the descentralised nature of blockchains.
- iamacyborg 4y ago
  Tell that to the folks who forked Ethereum.
- Thorrez 4y ago
  I agree with you. There doesn't seem to be a good way to allow transactions to be reversed while keeping decentralization. My point is that this decentralization is bringing in a risk that traditional banks don't have. So saying "regulating it like a bank will make it as secure as a bank" is incorrect.

me551ah 4y ago

Crypto works for what use case exactly? Crypto payments take much longer time than traditional credit card ones , are barely supported by most websites and in many cases cost more in transaction fees than credit cards. And with a lot of people storing their money in these major crypto banks , what we now have is a fairly centralised structure which kind of defeats the purpose of crypto. Worse, these banks also hold each other’s tokens similar to what your normal banks do. And if that’s not enough some of them even do fractional reserves and use the real money they get for investing.

rabite 4y ago
Perhaps for the use case of the underbanked, which is the majority of the world. That I need to wait for confirmation on the blockchain for a crypto payment is orders of magnitude faster than my other option, which is wait for someone to manually bring in foreign currencies by train. My country is not on SWIFT. My passport will not allow me to get a bank account in any country that would let me process credit cards. I am not allowed to use Paypal. This kind of comment is the epitome of the Western privilege -- your governments cut off entire countries from the banking system, deny their own citizens access to banks because of their political beliefs, and then tout the alleged superiority of your credit cards, which are now denied to truckers and Kanye West by the same companies that were happy to do business with Pornhub when they were knowingly facilitating the monetization of child sex slaves. Credit cards and United States dollars are the tools of thieves, thugs, rapists, and warmongers. Bitcoin works for the use case of not staining your hands with the blood and tears of their victims, at the very least.
- me551ah 4y ago
  I'm from India, one of the most populous countries in the world. And we have instant online transfers with no transaction fee and it's called UPI.
  - kevinak 4y ago
    Is everyone in India banked? How do you transfer money outside of the India? Can you do that insta fly with UPI as well? There are more countries than India, I’d suggest maybe taking a look at South America, Africa and Asia.

polygamous_bat 4y ago

> This isn't a crypto failure. Crypto works. This is a human failure. "Guns don't kill people, people kill people."

mjburgess 4y ago
A point no one who wants to ban guns would disagree with.
- pksebben 4y ago
  the edge here being that if a tool is powerful enough to take someone's head off, we should probably do something to mitigate the risk of folks using it.

listenallyall 4y ago

This seems like a simplification. Crypto, like any currency, needs to be able to be easily converted to and from other currencies. I can walk up to thousands of money changers and exchange USD for Euros, Pounds, and plenty of small countries' currencies. Meanwhile it may be technically possible to do the same with crypto, virtually nobody is, and the places that do offer a conversion, like BTC ATMs, charge enormous fees.

baq 4y ago

The fraud going on in there was not human error. Reuters wrote about a backdoor sbf used to make transactions with ftx assets off the books, without alerting controls. If this is true, it’s oceans eleven stuff.

himinlomax 4y ago

Bad user interfaces have caused catastrophes (see for example Three Miles Island or the Mont Saint Odile Airbus crash) that have also been labeled "human error", but those catastrophes wouldn't have happened without the bad UI.

MrMan 4y ago

as SBF himself allowed in the Bloomberg interview, this system only works if humans, driven by FOMO and greed, bid up the tokens. that, more than the technology underpinning the system, is a necessary condition for defi or centralized crypto to "work." defi is rife with hacks theft and rug pulls. but a form of fraud that is built into the entire ecosystem are tokenomics that carve out allocations of tokens to early holders, so they front run every one else. this cannot be escaped - there is no refuge from the grift built in to the entire ecosystem. decentralized is a lie propagated to support a scam on everyone who got in later than early holders.

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