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The irony is that Bitcoin was created in direct response to the perceived shortcomings of the traditional financial system (see the message in the genesis block

by astoor 3y ago

The irony is that Bitcoin was created in direct response to the perceived shortcomings of the traditional financial system (see the message in the genesis block), but since then the traditional financial system has cleaned itself up enormously, while cryptocurrency has had the exact opposite trajectory and is now nothing more than a magnet for actual or latent fraudsters.

pjc50 3y ago
Bitcoin addressed at most one issue in finance, without properly tying it to the financial crisis, and since then has reinvented all the others in a massive Chesterton's Fence speedrun. It's been nothing but "oh, so that's why the rules are that way" since then.
- freeAgent 3y ago
  I’d say that Bitcoin itself has been operating pretty well, minus the stupid decision to keep the block size cap in the single-digit MBs that has created tx congestion and excessive fee competition (BCH fixed that, thankfully). The problem with cryptocurrency is simply that it’s attracting to frauds, and is dominated by fraud and get-rich-quick gambling/speculation. It’s attractive to fraud for the same reasons why it’s attractive to people who take issue with legacy finance. Your “account” (wallet) can’t really be shut down or frozen, you can transact quickly and easily with only an internet connection and a phone regardless of borders or capital controls, and the currency itself can be audited and resists inflation. All those things continue to be true, but unfortunately the current largest, visible use case is fraud. The original use case for Bitcoin was right in the title of the white paper: P2P electronic cash. Unfortunately, that hasn’t taken off, and some governments like the US have done their best to kill it. See the IRS guidance for Bitcoin taxes from 2013 which made it practically impossible to use as cash in a legally compliant way. That was the first, and clearest, regulation of cryptocurrency I’m aware of. All other currencies are treated differently. Only Bitcoin/cryptocurrency was singled out for particularly onerous tax treatment.
  - tsimionescu 3y ago
    > All other currencies are treated differently. Only Bitcoin/cryptocurrency was singled out for particularly onerous tax treatment. Well, that's because Bitcoin is not a currency, by many reasonable definitions.
    - freeAgent 3y ago
      How is it not a currency? It is a medium of exchange, right? That is what its intention was, as laid out in the white paper.
      - mrguyorama 3y ago
        You can barter with anything you want, that doesn't make it a currency. In fact, bitcoin has a way harder path to being recognized as a currency explicitly because there is no army to enforce it as a currency. That means it can only really be a currency by consensus, and if walmart and kroger don't take it, good luck making people agree to it being a currency. Bitcoin does not meet the desires laid out in the whitepaper, not even close. Bitcoin isn't even a currency by it's own standards.
        freeAgent 3y ago
        Barter goods also serve a purpose other than as a medium of exchange. And Bitcoin is legal tender in El Salvador (not that I like El Salvador or their Bitcoin law), so it actually is a currency.
        bcrl 3y ago
        At least with barter exchange tends to happen in person so you can figure out if you're being scammed before you hand over your goods. Bitcoin gives you the worst of all worlds by making the exchange completely impersonal while lacking the ability to look your counter-party in the eye. The two are most decidedly not the same.
sph 3y ago
> the traditional financial system has cleaned itself up enormously I beg your pardon? Because we haven't heard of any Madoff or subprime loans lately, you are willing to say that with a straight face?
- worrycue 3y ago
  Is anything stopping someone from running a Madoff-like ponzi scheme with crypto?
gillesjacobs 3y ago
CeFi is not a cryptocurrency technology and thus is cannot solve shortcomings of the traditional financial system because it is the traditional financial system. Noone who is ideologically consistent with the crypto ethos would expect that ideology overrides greed.
psychlops 3y ago
What do you believe tradfi has done to clean itself up? Please address how the astonishing amounts of global inflation (which I assume will be in your answer) are a good thing for everyone.
- JumpCrisscross 3y ago
  > how the astonishing amounts of global inflation Bitcoin yo-yo’s between hyperinflation and hyperdeflation. Unchecked inflation is a problem. But a currency as volatile as Bitcoin is obviously not the solution.
  - psychlops 3y ago
    Bitcoin has neither hyperinflation or hyperdeflation. It does have volatility[0], but has gotten better. It is about as volatile as the British Pound[1]. [0] https://buybitcoinworldwide.com/volatility-index/ https://buybitcoinworldwide.com/volatility-index/ [1] https://www.bloomberg.com/news/articles/2022-10-20/uk-pound-is-almost-as-unstable-as-bitcoin#xj4y7vzkg https://www.bloomberg.com/news/articles/2022-10-20/uk-pound-...
    - JumpCrisscross 3y ago
      > Bitcoin has neither hyperinflation or hyperdeflation Measured against a basket of goods, Bitcoin’s value soars and free falls. Using a 17th-century definition of inflation, which in modern parlance is called money supply, Bitcoin is simply inflationary, but that definition swap concedes that it is a curiosity, not a currency.
      - psychlops 3y ago
        You are confusing inflation with volatility. Prices may rise and fall without changes in a money supply. Bitcoin's supply is well documented.
        JumpCrisscross 3y ago

by astoor 3y ago

pjc50 3y ago

Bitcoin addressed at most one issue in finance, without properly tying it to the financial crisis, and since then has reinvented all the others in a massive Chesterton's Fence speedrun. It's been nothing but "oh, so that's why the rules are that way" since then.

freeAgent 3y ago
I’d say that Bitcoin itself has been operating pretty well, minus the stupid decision to keep the block size cap in the single-digit MBs that has created tx congestion and excessive fee competition (BCH fixed that, thankfully). The problem with cryptocurrency is simply that it’s attracting to frauds, and is dominated by fraud and get-rich-quick gambling/speculation. It’s attractive to fraud for the same reasons why it’s attractive to people who take issue with legacy finance. Your “account” (wallet) can’t really be shut down or frozen, you can transact quickly and easily with only an internet connection and a phone regardless of borders or capital controls, and the currency itself can be audited and resists inflation. All those things continue to be true, but unfortunately the current largest, visible use case is fraud. The original use case for Bitcoin was right in the title of the white paper: P2P electronic cash. Unfortunately, that hasn’t taken off, and some governments like the US have done their best to kill it. See the IRS guidance for Bitcoin taxes from 2013 which made it practically impossible to use as cash in a legally compliant way. That was the first, and clearest, regulation of cryptocurrency I’m aware of. All other currencies are treated differently. Only Bitcoin/cryptocurrency was singled out for particularly onerous tax treatment.
- tsimionescu 3y ago
  > All other currencies are treated differently. Only Bitcoin/cryptocurrency was singled out for particularly onerous tax treatment. Well, that's because Bitcoin is not a currency, by many reasonable definitions.
  - freeAgent 3y ago
    How is it not a currency? It is a medium of exchange, right? That is what its intention was, as laid out in the white paper.
    - mrguyorama 3y ago
      You can barter with anything you want, that doesn't make it a currency. In fact, bitcoin has a way harder path to being recognized as a currency explicitly because there is no army to enforce it as a currency. That means it can only really be a currency by consensus, and if walmart and kroger don't take it, good luck making people agree to it being a currency. Bitcoin does not meet the desires laid out in the whitepaper, not even close. Bitcoin isn't even a currency by it's own standards.
      - freeAgent 3y ago
        Barter goods also serve a purpose other than as a medium of exchange. And Bitcoin is legal tender in El Salvador (not that I like El Salvador or their Bitcoin law), so it actually is a currency.
        bcrl 3y ago
        At least with barter exchange tends to happen in person so you can figure out if you're being scammed before you hand over your goods. Bitcoin gives you the worst of all worlds by making the exchange completely impersonal while lacking the ability to look your counter-party in the eye. The two are most decidedly not the same.

sph 3y ago

> the traditional financial system has cleaned itself up enormously I beg your pardon? Because we haven't heard of any Madoff or subprime loans lately, you are willing to say that with a straight face?

worrycue 3y ago
Is anything stopping someone from running a Madoff-like ponzi scheme with crypto?

gillesjacobs 3y ago

CeFi is not a cryptocurrency technology and thus is cannot solve shortcomings of the traditional financial system because it is the traditional financial system. Noone who is ideologically consistent with the crypto ethos would expect that ideology overrides greed.

psychlops 3y ago

What do you believe tradfi has done to clean itself up? Please address how the astonishing amounts of global inflation (which I assume will be in your answer) are a good thing for everyone.

JumpCrisscross 3y ago
> how the astonishing amounts of global inflation Bitcoin yo-yo’s between hyperinflation and hyperdeflation. Unchecked inflation is a problem. But a currency as volatile as Bitcoin is obviously not the solution.
- psychlops 3y ago
  Bitcoin has neither hyperinflation or hyperdeflation. It does have volatility[0], but has gotten better. It is about as volatile as the British Pound[1]. [0] https://buybitcoinworldwide.com/volatility-index/ https://buybitcoinworldwide.com/volatility-index/ [1] https://www.bloomberg.com/news/articles/2022-10-20/uk-pound-is-almost-as-unstable-as-bitcoin#xj4y7vzkg https://www.bloomberg.com/news/articles/2022-10-20/uk-pound-...
  - JumpCrisscross 3y ago
    > Bitcoin has neither hyperinflation or hyperdeflation Measured against a basket of goods, Bitcoin’s value soars and free falls. Using a 17th-century definition of inflation, which in modern parlance is called money supply, Bitcoin is simply inflationary, but that definition swap concedes that it is a curiosity, not a currency.
    - psychlops 3y ago
      You are confusing inflation with volatility. Prices may rise and fall without changes in a money supply. Bitcoin's supply is well documented.
      - JumpCrisscross 3y ago