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The most interesting thought to me right now is how the situation will develop if or bitfinex/tether crashes the market hard. I am not a fan of the SEC getting

The most interesting thought to me right now is how the situation will develop if or bitfinex/tether crashes the market hard. I am not a fan of the SEC getting involved. Taking crypto as an experiment, I think it is better for the market to take a hit and then find organic solutions. If the SEC gets involved and busts bitfinex/tether, the community loses the opportunity to become 'unbailable'. Yes , people will lose the money, but if you create the expectation that the sec will protect you as a consumer from the scams, then we will not be sophisticated to actually organically ignore scams. What will happen next, FDIC and too big to fail institutions?

kadenshep 9y ago
>and then find organic solutions. I don't understand this perspective. You have a proven, verifiable, simple solution right in front of you. Then you ignore it with some skimpy platitude to dive right into economic mythology. Regulation is the correct solution.
- stinkytaco 9y ago
  > Regulation is the correct solution. I once read (here, perhaps) that Bitcoin is a long demonstration in how regulation comes to exist. I think many in the Bitcoin community conflate "regulation" with "monetary policy". They assume if bitcoin is treated like money, with laws that protect people from fraud, that must somehow lead to restrictive monetary policy, which the community tends to abhor.
  - theptip 9y ago
    > Bitcoin is a long demonstration in how regulation comes to exist. Or perhaps a short demonstration, given that BTC appears to be recapitulating the entire history of currency in a few years?
  - saosebastiao 9y ago
    Exactly. It boggles my mind that people can't grasp the difference between the two. I hate the fed and the department of the treasury, and think QE is a horrible policy just like our permanent deficit. But I happily welcome the SEC and FINRA getting involved in cryptocurrency.
- conanbatt 9y ago
  I disagree. If the state wants to offer some certification of regulation and an exchange is willing to go through that process to capture consumers, let them be. Thats not bitfinex nor tether. Let people choose. If the SEC had its way, bitfinex would have not existed and millions of people wouldn't have been served.
  - Daishiman 9y ago
    History has shown that in certain matter people will, over and over again, commit systemically wrong choices. So no, in some things we're all in this ship together and as long as that's the case I want people to not collectively fuck things up.
    - conanbatt 9y ago
      Thats what you want. Why do you feel entitled to make other people do what you want?
      - simias 9y ago
        Why do you think seat belts are mandatory? Apply the same reasoning to your question.
        conanbatt 9y ago
        For the wrong reasons. I dont think they should be mandatory at all. Apply the same reasoning: check. But this case is even worse. Its the sec regulating a foreign exchange that has foreign investors. You think the SEC can go and try to do that on alibaba?
      - kadenshep 9y ago
        The only thing that makes him entitled is learning from history and being able to reason about pretty elementary models in his head. Why do people with your types of opinion always make it wholly personal, just to try to weasel their way around a subject? Like, here's another comment you made: >I like to compare Bitcoin to Land. Just stop. There is so much fundamentally wrong with that analogy at face value it beggars belief that you are being sincere.
jonknee 9y ago
> but if you create the expectation that the sec will protect you as a consumer from the scams, then we will not be sophisticated to actually organically ignore scams. Why have laws at all if you're unwilling to enforce them?
- conanbatt 9y ago
  Why have a gun if you are unwilling to pull the trigger, amirite.
elif 9y ago
coinbase already FDIC insures USD holdings, and 3rd party insures crypto holdings. risk variability is already organically controllable, and can be observed in the disparity of price movement between different exchanges (gdax is always lagged/dampened)
- root_axis 9y ago
  > coinbase already FDIC insures USD holdings Which is totally irrelevant to the cryptocurrency. > 3rd party insures crypto holdings. Yes, approximately 2% of their crypto holdings, so effectively nothing from the perspective of a customer who loses funds if their cold wallets are attacked.
monktastic1 9y ago
You could say that humanity has repeatedly and organically come to a solution broadly known as government and regulation.
- acct1771 9y ago
  Worked great in 2008.
  - celticninja 9y ago
    It's like people assume the current financial system is perfect and bitcoin is not. Bitcoin never pretended to be, it's still an experiment 10 years in, but its a fun expierment.
    - IntronExon 9y ago
      It’s fun while it’s worth a bucketload. When people start losing their shirts and dumpster loads of ASICS are being burned for cooking fires... less fun. (Some hyperbole engaged above)
      - conanbatt 9y ago
        There's a massive difference in crypto over fiat. In the US, if you have a debt they can take back your home, you can get harassed and taken to court. The stakes are not that high for crypto wealth. Its unenforceability makes the stakes a lot lower for tragedy.
  - luckydata 9y ago
    You know what? It did. You still have running water. Government employees like cops and firefighters and teachers are getting paid (sometimes not enough). So yeah, it worked great.
    - acct1771 9y ago
      "People in Africa are starving, so you're having a great day!" Bullshit argument, I'm sorry.
ttul 9y ago
The SEC has instilled a level of trust in the financial markets that has enabled humanity’s most spectacular century. Why is that a problem?
- aje403 9y ago
  The magical "beat the man" ethos is now gone, some dystopian bureaucracy allusion, the ride's ending, prohibition is over
- conanbatt 9y ago
  Or in spite of it. This is a startup website, where thousands of software engineers get paid in lottery tickets that are not regulated, because they cannot sell the lottery tickets (THAT is regulated). There has been nominally more money coming in to ICO's which are terrible investments than startups in the bay area. Thats how bad SEC regulations are: all that money could have gone to way more promising ventures, but it cant because it is blocked. There is no problem if you want that level of protection, but rich people dont have it and profit from not having it. You go pay your poor mans tax and let the people that don't want to pay it roam free.
  - bby 9y ago
    Where are those numbers from? That nominally more money going into ICOs than startups in the Bay Area.
api 9y ago
I wish people would find organic solutions, but history shows that people reliably fall for the same scams over and over and over again. Gambling is one of the oldest economic activities and remains as profitable as ever. I've been shocked before at how little due diligence large investors sometimes do, especially when a mania is in effect. These are professionals whose job it is to invest wisely. What do you think the average person who is ignorant of the depth and complexity of finance is going to do? Are they even qualified to evaluate complex financial products?
- conanbatt 9y ago
  "They" or "We"?
Spooky23 9y ago
It’s an experiment that is repeated time and time again, and people refuse to learn. Without the disincentive of prison and financial ruin, people will always find ways to use leverage and information asymmetry to defraud the public. Always. HN is often very innocent and naive about people and their motivations. Unfortunately, there are assholes in this world, and the law is what protects us from them.
- pithic 9y ago
  What the law does is transfer the power to defraud the public from the common grifter to a central authority. In doing so, it adds another, more sinister tool to the ones you mention: forced participation.
Aunche 9y ago
Your overestimating the financial intelligence of the average person. Think about the billions people waste on actual pyramid schemes. These are the same types of people who will be screwed over the most by a cryptocurrency crash. Is a slightly more efficient cryptocurrency market really worth the hardship of thousands of people?
- mdpopescu 9y ago
  Either (most) people are stupid and they need to be protected for their own good - in which case we have the problem that the same people are nevertheless somehow capable to democratically choose their representatives. Or (most) people are fine taking more risks than you would like them to, and - because you believe you know better - you want to prevent them from doing so.
- conanbatt 9y ago
  Sure, you also have bernie madoff that made the biggest heist in history under the alledged supervision of the SEC. Or worse, the 2008 bailouts, which were the equivalent of today the US government saying they will buy all the tethers on parity from bitfinex so their insolvency doesnt affect the market. I say let the chips fall where they may. If bitfinex is insolvent it should go down, and the lawsuits on fraud should put the people in charge in jail. Nothing else needed.
s73ver_ 9y ago
I fail to see the need for such "experimentation" considering that this has all happened before, and those lessons were learned. That, and generally those who advocate that something should "take a hit" are usually not the ones who are going to be harmed by it.
- conanbatt 9y ago
  I would argue the exact opposite, the ones that propose regulation are often benefited by it. For example, who could benefit from regulation of bitfinex? You? Or Coinbase?
  - s73ver_ 9y ago
    Both. Unless you are trying to insinuate that having protection against obvious scams is a bad and selfish thing.
    - conanbatt 9y ago
      Are you asking the protections for yourself or the protections for other people? Because i never asked for the SEC to protect me. We can live in a world with both. You have coinbase with way more backing that bitfinex, and people still choose bitfinex. Let people choose, and if they mess up they mess up.
      - s73ver_ 9y ago
        Yeah, no. Again, you're arguing for the "freedom" to scam people. Not gonna happen. And you don't live in isolation; you are not an island. Those people that get scammed? They're not going to do so in isolation. That's going to have a ripple effect on the rest of society.

kadenshep 9y ago

>and then find organic solutions. I don't understand this perspective. You have a proven, verifiable, simple solution right in front of you. Then you ignore it with some skimpy platitude to dive right into economic mythology. Regulation is the correct solution.

stinkytaco 9y ago
> Regulation is the correct solution. I once read (here, perhaps) that Bitcoin is a long demonstration in how regulation comes to exist. I think many in the Bitcoin community conflate "regulation" with "monetary policy". They assume if bitcoin is treated like money, with laws that protect people from fraud, that must somehow lead to restrictive monetary policy, which the community tends to abhor.
- theptip 9y ago
  > Bitcoin is a long demonstration in how regulation comes to exist. Or perhaps a short demonstration, given that BTC appears to be recapitulating the entire history of currency in a few years?
- saosebastiao 9y ago
  Exactly. It boggles my mind that people can't grasp the difference between the two. I hate the fed and the department of the treasury, and think QE is a horrible policy just like our permanent deficit. But I happily welcome the SEC and FINRA getting involved in cryptocurrency.
conanbatt 9y ago
I disagree. If the state wants to offer some certification of regulation and an exchange is willing to go through that process to capture consumers, let them be. Thats not bitfinex nor tether. Let people choose. If the SEC had its way, bitfinex would have not existed and millions of people wouldn't have been served.
- Daishiman 9y ago
  History has shown that in certain matter people will, over and over again, commit systemically wrong choices. So no, in some things we're all in this ship together and as long as that's the case I want people to not collectively fuck things up.
  - conanbatt 9y ago
    Thats what you want. Why do you feel entitled to make other people do what you want?
    - simias 9y ago
      Why do you think seat belts are mandatory? Apply the same reasoning to your question.
      - conanbatt 9y ago
        For the wrong reasons. I dont think they should be mandatory at all. Apply the same reasoning: check. But this case is even worse. Its the sec regulating a foreign exchange that has foreign investors. You think the SEC can go and try to do that on alibaba?
    - kadenshep 9y ago
      The only thing that makes him entitled is learning from history and being able to reason about pretty elementary models in his head. Why do people with your types of opinion always make it wholly personal, just to try to weasel their way around a subject? Like, here's another comment you made: >I like to compare Bitcoin to Land. Just stop. There is so much fundamentally wrong with that analogy at face value it beggars belief that you are being sincere.

jonknee 9y ago

> but if you create the expectation that the sec will protect you as a consumer from the scams, then we will not be sophisticated to actually organically ignore scams. Why have laws at all if you're unwilling to enforce them?

conanbatt 9y ago
Why have a gun if you are unwilling to pull the trigger, amirite.

elif 9y ago

coinbase already FDIC insures USD holdings, and 3rd party insures crypto holdings. risk variability is already organically controllable, and can be observed in the disparity of price movement between different exchanges (gdax is always lagged/dampened)

root_axis 9y ago
> coinbase already FDIC insures USD holdings Which is totally irrelevant to the cryptocurrency. > 3rd party insures crypto holdings. Yes, approximately 2% of their crypto holdings, so effectively nothing from the perspective of a customer who loses funds if their cold wallets are attacked.

monktastic1 9y ago

You could say that humanity has repeatedly and organically come to a solution broadly known as government and regulation.

acct1771 9y ago
Worked great in 2008.
- celticninja 9y ago
  It's like people assume the current financial system is perfect and bitcoin is not. Bitcoin never pretended to be, it's still an experiment 10 years in, but its a fun expierment.
  - IntronExon 9y ago
    It’s fun while it’s worth a bucketload. When people start losing their shirts and dumpster loads of ASICS are being burned for cooking fires... less fun. (Some hyperbole engaged above)
    - conanbatt 9y ago
      There's a massive difference in crypto over fiat. In the US, if you have a debt they can take back your home, you can get harassed and taken to court. The stakes are not that high for crypto wealth. Its unenforceability makes the stakes a lot lower for tragedy.
- luckydata 9y ago
  You know what? It did. You still have running water. Government employees like cops and firefighters and teachers are getting paid (sometimes not enough). So yeah, it worked great.
  - acct1771 9y ago
    "People in Africa are starving, so you're having a great day!" Bullshit argument, I'm sorry.

ttul 9y ago

The SEC has instilled a level of trust in the financial markets that has enabled humanity’s most spectacular century. Why is that a problem?

aje403 9y ago
The magical "beat the man" ethos is now gone, some dystopian bureaucracy allusion, the ride's ending, prohibition is over
conanbatt 9y ago
Or in spite of it. This is a startup website, where thousands of software engineers get paid in lottery tickets that are not regulated, because they cannot sell the lottery tickets (THAT is regulated). There has been nominally more money coming in to ICO's which are terrible investments than startups in the bay area. Thats how bad SEC regulations are: all that money could have gone to way more promising ventures, but it cant because it is blocked. There is no problem if you want that level of protection, but rich people dont have it and profit from not having it. You go pay your poor mans tax and let the people that don't want to pay it roam free.
- bby 9y ago
  Where are those numbers from? That nominally more money going into ICOs than startups in the Bay Area.

api 9y ago

I wish people would find organic solutions, but history shows that people reliably fall for the same scams over and over and over again. Gambling is one of the oldest economic activities and remains as profitable as ever. I've been shocked before at how little due diligence large investors sometimes do, especially when a mania is in effect. These are professionals whose job it is to invest wisely. What do you think the average person who is ignorant of the depth and complexity of finance is going to do? Are they even qualified to evaluate complex financial products?

conanbatt 9y ago
"They" or "We"?

Spooky23 9y ago

It’s an experiment that is repeated time and time again, and people refuse to learn. Without the disincentive of prison and financial ruin, people will always find ways to use leverage and information asymmetry to defraud the public. Always. HN is often very innocent and naive about people and their motivations. Unfortunately, there are assholes in this world, and the law is what protects us from them.

pithic 9y ago
What the law does is transfer the power to defraud the public from the common grifter to a central authority. In doing so, it adds another, more sinister tool to the ones you mention: forced participation.

Aunche 9y ago

Your overestimating the financial intelligence of the average person. Think about the billions people waste on actual pyramid schemes. These are the same types of people who will be screwed over the most by a cryptocurrency crash. Is a slightly more efficient cryptocurrency market really worth the hardship of thousands of people?

mdpopescu 9y ago
Either (most) people are stupid and they need to be protected for their own good - in which case we have the problem that the same people are nevertheless somehow capable to democratically choose their representatives. Or (most) people are fine taking more risks than you would like them to, and - because you believe you know better - you want to prevent them from doing so.
conanbatt 9y ago
Sure, you also have bernie madoff that made the biggest heist in history under the alledged supervision of the SEC. Or worse, the 2008 bailouts, which were the equivalent of today the US government saying they will buy all the tethers on parity from bitfinex so their insolvency doesnt affect the market. I say let the chips fall where they may. If bitfinex is insolvent it should go down, and the lawsuits on fraud should put the people in charge in jail. Nothing else needed.

s73ver_ 9y ago

I fail to see the need for such "experimentation" considering that this has all happened before, and those lessons were learned. That, and generally those who advocate that something should "take a hit" are usually not the ones who are going to be harmed by it.

conanbatt 9y ago
I would argue the exact opposite, the ones that propose regulation are often benefited by it. For example, who could benefit from regulation of bitfinex? You? Or Coinbase?
- s73ver_ 9y ago
  Both. Unless you are trying to insinuate that having protection against obvious scams is a bad and selfish thing.
  - conanbatt 9y ago
    Are you asking the protections for yourself or the protections for other people? Because i never asked for the SEC to protect me. We can live in a world with both. You have coinbase with way more backing that bitfinex, and people still choose bitfinex. Let people choose, and if they mess up they mess up.
    - s73ver_ 9y ago
      Yeah, no. Again, you're arguing for the "freedom" to scam people. Not gonna happen. And you don't live in isolation; you are not an island. Those people that get scammed? They're not going to do so in isolation. That's going to have a ripple effect on the rest of society.