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It's almost like unregulated financial institutions have a tendency to screw over their customers... No one could have predicted this in the consistently solven

It's almost like unregulated financial institutions have a tendency to screw over their customers... No one could have predicted this in the consistently solvent, regulated, and trustworthy cryptocurrency market. It's too bad bitfinex got ripped off by a surely unrelated entity. /s Have we learned our lesson yet?

mhluongo 7y ago
> It's almost like unregulated financial institutions have a tendency to screw over their customers... Regulated institutions are great at it too.
barrkel 7y ago
Don't you know, the government is no better than a drug dealer, we'd all be better off without them.
- deleted 7y ago
  [deleted]
zik 7y ago
Those guys actually are regulated. The axe falling on them was inevitable, it's just taken a long time.
MadSudaca 7y ago
As long as there's value in a 1-to-1 USD-backed crypto, more tethers will created. The barriers of entry are relatively low and someone is bound to get it right eventually.
- bhaak 7y ago
  There are other, better audited stablecoins now that have been growing for a while now. The trust in tether has always been questionable, this will hopefully accelerate the move away from tether.
- LandoCalrissian 7y ago
  They are literally making those tethers out of thin air, you know that right? It's not backed 1 to 1 at all and this report clearly calls it out.
themagician 7y ago
The lesson will never be learned. The Ponzi scheme is as old as money itself. It’s never gone away. The one thing that crypto currency truly has revolutionized is the Ponzi scheme. You can do it any number of ways, add any number of twists, and do it over and over again. With crypto you don’t even have to be subtle. When the pot gets big enough you just outright steal it. It’s possible that Satoshi himself will try to liquidate his stake at some point, crashing BTC itself and make off with a cool billion. Who knows. That might have been the plan all along.
- therein 7y ago
  > It’s possible that Satoshi himself will try to liquidate his stake at some point, crashing BTC itself and make off with a cool billion. Who knows. That might have been the plan all along. Not quite possible with the auditing capabilities Bitcoin provides. The moment any amount from those accounts is moved, Bitcoin would probably tank.
  - WrtCdEvrydy 7y ago
    I wonder what the maximum leverage you could short with if you had access to those coins... Break the private key, do a 30x leverage short and move the coins!
    - lamontcg 7y ago
      It is that last bit where it gets sticky. If you tank the market and create systemic insolvency then you might hold $1B of short contracts at an exchange where the operators have packed up and fled to anonymous sandy beaches, and for all your cleverness those contracts and $10 might buy you lunch tomorrow.
      - omarchowdhury 7y ago
        > It is that last bit where it gets sticky. I understand we're doing thought experiments here, but I'd say the really tricky part is breaking the private key.
orblivion 7y ago
No way. This stuff was created to be the wild west. Let it keep failing until people come to actually understand the risks and learn the appropriate amount of trust, and then for companies find ways to become trustable.
- h1d 7y ago
  It's funny people complain about regulation until they get screwed over.
shawnz 7y ago
What's the lesson? That cryptocurrencies have different risks than other kinds of financial technologies? I think that is pretty commonly understood already.
- kadendogthing 7y ago
  In the same way that eating raw meat has "different risks" than eating cooked meat.
- bdcravens 7y ago
  Among the crypto currency enthusiasts, sure. But each wild bull ride there are new investors/victims who are following the headlines, not the industry.
- csa 7y ago
  > That cryptocurrencies have different risks than other kinds of financial technologies? These are known risks that have regulations that significantly reduce the chance of them happening in regulated currency markets and banks. Cryptos took the Wild West approach due to... something... and somehow think that the scams that people have used in the past with banks will not be used again with crypto. SURPRISE!!!
  - nonbel 7y ago
    > "Cryptos took the Wild West approach due to... something... and somehow think that the scams that people have used in the past with banks will not be used again with crypto." The point is that people who make bad decisions will fail before becoming too big to fail. This is in the genesis block of bitcoin.
  - shawnz 7y ago
    > somehow think that the scams that people have used in the past with banks will not be used again with crypto. SURPRISE!!! But nobody thinks that. That's the point I was just making.
- atomical 7y ago
  Fraud is a risk with other financial technologies too.
keyle 7y ago
Greed begets greed. The sad part, really, is that the ideology of cryptocurrency at the start was never about greed.
- for_i_in_range 7y ago
  Pretty sure it was. A demented genius needed a way to sell drugs on the dark web. He was annoued with merchant accounts shutting him down. He needed a better way to funnel drug money to his pockets. Satoshi bounced the second Gavin Andresen mentioned the word CIA.
nonbel 7y ago
Nah, looks like it was governments confiscating the funds rather than a ponzi: https://bitcoinexchangeguide.com/cryptocapital-co-may-be-cryptos-black-swan/ https://bitcoinexchangeguide.com/cryptocapital-co-may-be-cry...
winter_blue 7y ago
I’m going to refer every libertarian who argues for the abolishment of all forms of regulation to your comment and this post.
Kinnard 7y ago
Do you think regulated financial institutions don't cause massive societal harm? Have you seen the big short? Systems have holes people will go through them
conanbatt 7y ago
Have you? If so, why do you need to invest in unregulated financial institutions?
willmadden 7y ago
I'm not sure that your assertion that regulated financial institutions are somehow safer checks out with recent history. Remember the Bernie Madoff ponzi? Bernie Madoff was literally the chairman of the NASD. The 2008 financial crisis occurred inside of heavily regulated markets, and it was so bad it nearly brought down the world economy. The effectiveness of regulation vs. the friction it imposes is what matters, along with how (and if) it is enforced.
Zarath 7y ago
Nope. If you don't like it, you don't have to deal with it and it isn't your problem. I, for one, like being able to spend my money as I please, even if it entails higher risk. I don't need to be coddled.

mhluongo 7y ago

> It's almost like unregulated financial institutions have a tendency to screw over their customers... Regulated institutions are great at it too.

barrkel 7y ago

Don't you know, the government is no better than a drug dealer, we'd all be better off without them.

deleted 7y ago
[deleted]

zik 7y ago

Those guys actually are regulated. The axe falling on them was inevitable, it's just taken a long time.

MadSudaca 7y ago

As long as there's value in a 1-to-1 USD-backed crypto, more tethers will created. The barriers of entry are relatively low and someone is bound to get it right eventually.

bhaak 7y ago
There are other, better audited stablecoins now that have been growing for a while now. The trust in tether has always been questionable, this will hopefully accelerate the move away from tether.
LandoCalrissian 7y ago
They are literally making those tethers out of thin air, you know that right? It's not backed 1 to 1 at all and this report clearly calls it out.

themagician 7y ago

The lesson will never be learned. The Ponzi scheme is as old as money itself. It’s never gone away. The one thing that crypto currency truly has revolutionized is the Ponzi scheme. You can do it any number of ways, add any number of twists, and do it over and over again. With crypto you don’t even have to be subtle. When the pot gets big enough you just outright steal it. It’s possible that Satoshi himself will try to liquidate his stake at some point, crashing BTC itself and make off with a cool billion. Who knows. That might have been the plan all along.

therein 7y ago
> It’s possible that Satoshi himself will try to liquidate his stake at some point, crashing BTC itself and make off with a cool billion. Who knows. That might have been the plan all along. Not quite possible with the auditing capabilities Bitcoin provides. The moment any amount from those accounts is moved, Bitcoin would probably tank.
- WrtCdEvrydy 7y ago
  I wonder what the maximum leverage you could short with if you had access to those coins... Break the private key, do a 30x leverage short and move the coins!
  - lamontcg 7y ago
    It is that last bit where it gets sticky. If you tank the market and create systemic insolvency then you might hold $1B of short contracts at an exchange where the operators have packed up and fled to anonymous sandy beaches, and for all your cleverness those contracts and $10 might buy you lunch tomorrow.
    - omarchowdhury 7y ago
      > It is that last bit where it gets sticky. I understand we're doing thought experiments here, but I'd say the really tricky part is breaking the private key.

orblivion 7y ago

No way. This stuff was created to be the wild west. Let it keep failing until people come to actually understand the risks and learn the appropriate amount of trust, and then for companies find ways to become trustable.

h1d 7y ago
It's funny people complain about regulation until they get screwed over.

shawnz 7y ago

What's the lesson? That cryptocurrencies have different risks than other kinds of financial technologies? I think that is pretty commonly understood already.

kadendogthing 7y ago
In the same way that eating raw meat has "different risks" than eating cooked meat.
bdcravens 7y ago
Among the crypto currency enthusiasts, sure. But each wild bull ride there are new investors/victims who are following the headlines, not the industry.
csa 7y ago
> That cryptocurrencies have different risks than other kinds of financial technologies? These are known risks that have regulations that significantly reduce the chance of them happening in regulated currency markets and banks. Cryptos took the Wild West approach due to... something... and somehow think that the scams that people have used in the past with banks will not be used again with crypto. SURPRISE!!!
- nonbel 7y ago
  > "Cryptos took the Wild West approach due to... something... and somehow think that the scams that people have used in the past with banks will not be used again with crypto." The point is that people who make bad decisions will fail before becoming too big to fail. This is in the genesis block of bitcoin.
- shawnz 7y ago
  > somehow think that the scams that people have used in the past with banks will not be used again with crypto. SURPRISE!!! But nobody thinks that. That's the point I was just making.
atomical 7y ago
Fraud is a risk with other financial technologies too.

keyle 7y ago

Greed begets greed. The sad part, really, is that the ideology of cryptocurrency at the start was never about greed.

for_i_in_range 7y ago
Pretty sure it was. A demented genius needed a way to sell drugs on the dark web. He was annoued with merchant accounts shutting him down. He needed a better way to funnel drug money to his pockets. Satoshi bounced the second Gavin Andresen mentioned the word CIA.

nonbel 7y ago

Nah, looks like it was governments confiscating the funds rather than a ponzi: https://bitcoinexchangeguide.com/cryptocapital-co-may-be-cryptos-black-swan/ https://bitcoinexchangeguide.com/cryptocapital-co-may-be-cry...

winter_blue 7y ago

I’m going to refer every libertarian who argues for the abolishment of all forms of regulation to your comment and this post.

Kinnard 7y ago

Do you think regulated financial institutions don't cause massive societal harm? Have you seen the big short? Systems have holes people will go through them

conanbatt 7y ago

Have you? If so, why do you need to invest in unregulated financial institutions?

willmadden 7y ago

I'm not sure that your assertion that regulated financial institutions are somehow safer checks out with recent history. Remember the Bernie Madoff ponzi? Bernie Madoff was literally the chairman of the NASD. The 2008 financial crisis occurred inside of heavily regulated markets, and it was so bad it nearly brought down the world economy. The effectiveness of regulation vs. the friction it imposes is what matters, along with how (and if) it is enforced.

Zarath 7y ago

Nope. If you don't like it, you don't have to deal with it and it isn't your problem. I, for one, like being able to spend my money as I please, even if it entails higher risk. I don't need to be coddled.