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> U.S. Treasury Secretary Janet Yellen and other officials have warned about the use of cryptocurrencies for illicit transactions. Wait until you hear about ca

> U.S. Treasury Secretary Janet Yellen and other officials have warned about the use of cryptocurrencies for illicit transactions. Wait until you hear about cash. More seriously (and hopefully less reductionist) i feel nations who embrace cryptocurrencies early will see mixed results as the landscape matures. I am more confident that nations which turn their back on it, or shut it out completely, will see a loss of otherwise valuable businesses and mindshare. Whatever your stance on cryptocurrencies are, what is of little dispute is the business opportunities they have created. Binance and Coinbase are large, successful companies. Poloniex was sold for ~400M. Knowing the US has soured on cryptocurrencies doesn't make me any less interested in them, it just makes me less interested in holding them/working in the space on US soil. I'd be surprised if i were alone in this sentiment, and in spite of its negative reception on HN, the tech space around cryptocurrencies is quite literally growing as we speak.

Consultant32452 6y ago
The people in power are balancing the business opportunities against their own loss of control over the issuance of currency and some financial market functionalities (with smart contracts, etc.). I think it's a given they will always choose their own power over the business opportunities of others.
maerF0x0 6y ago
> Wait until you hear about cash. anecdote time: I once travelled to Vietnam for a vacation, people in vietnam prefer $100 bills because they're easier to use for hiding wealth, transporting cross border, and other slightly less than legal reasons. Additionally it's the preferred currency of criminals in the country too (so I heard). They will even pay higher exchange rates for ones in better condition or with more anti-counterfeiting features So yeah, USD is used for a lot of crime globally. EDIT: changed "anti-moneylaundering" to "anti-counterfeiting" by suggestion
- asah 6y ago
  "with more anti-laundering features" ? did you mean anti-counterfeiting? just checking...
  - maerF0x0 6y ago
    I think so. Basically things to make it harder to fake them. Changed original post
- retrac 6y ago
  In Canada, organized crime holds on to the $1000 notes. They're the largest value banknote commonly used in the West in the last few decades. They were last issued in 1992 and then officially withdrawn in 2000 for concerns over moneylaundering. They're not legal tender anymore, but can be exchanged at the bank. There's about $1 billion in circulation, and that will likely remain true for a long time yet. They move in a closed loop in the drug trade, stuffed in briefcases and in safes of criminals who effectively act as banks settling debts. No one wants to cash them because of the risk of being traced, but because they can be cashed in theory, they retain full value. The €500 is slowly displacing them, in Canada and abroad. I saw one as a child. Most Canadians have not, as far as I know. An acquaintance of a friend of my father's had several, and my father was interested in numismatics, so he traded one for $100s. The implications of the man who had some "pinkies" (called so for their colour) being a biker with a facial scar didn't click into place until I was much older.
  - tonfa 6y ago
    CHF still has 1k banknote (and with negative interest rates this with a safe might be a better option than a bank account).
    - noxer 6y ago
      Hows that better than a bank account? You can hold CHF on a bank account as well and it keeps the same value as the note. (both lose value due to inflation) Also dont forget insurance for banknotes in a safe.
      - bellyfullofbac 6y ago
        > Hows that better than a bank account? GP said it, negative interest rate, i.e. the bank charging you to hold on to your money when you have more than a certain amount (was it 100k or 25k CHF). So if you put in 100k in the bank and wait a year, you'll be able to withdraw maybe 99.8k CHF. If you hoard 100x 1000 CHF notes, you'll still have 100k CHF. Sure in 1 year those 100k CHF will probably buy less Big Macs then the present, but the 200 CHF loss will mean even less Big Macs.
- puranjay 6y ago
  In Uzbekistan, I saw a disproportionately large number of people with gold teeth. When I asked my host about it, he said that that was the older Soviet-era generation that would get gold teeth so that they could carry some useful wealth with them in case they had to flee their homes all of a sudden.
- BobbyJo 6y ago
  If the sum total of the wealth you are trying to hide is a in the thousands, you aren't who the government is concerned about. At least, not enough for policy changes. So, while cash is likely far more prevalently use in crime, you're talking about the huge long tail of low level drug dealers and smugglers, not the oligarchs and money launderers. Deposited/electronic money tends to be necessary when you hit a million plus. At that point cash sucks and is super risky to hold.
  - maerF0x0 6y ago
    fun fact, each bill is 1g. So $1M in 100s is 10KG (or 22LBs) . Plus the briefcase and hand cuffs if we're going movie style.
- nerfhammer 6y ago
  they prefer USD in parts in SE Asia because the local currency has experienced hyperinflation in the past. the problem is there is no easy way for them to exchange overly worn bills back to the Federal Reserve, so they have like rotting old falling-apart $1 bills that look like they're on the verge of disintegrating.
- Salgat 6y ago
  That doesn't stop cryptocoins from being the currency of choice for criminals that need completely anonymous digital transactions, which is why they are the standard for the online black market and for ransomware. It's hard to argue of the advantages of cryptocoins while in the same breathe arguing that cash is better for crime. The bigger issue is that very few people want to hold onto cryptocoins if their goal is to spend the money. You can't really buy much directly with cryptocoins in comparison to cash which is universal. I can't use it at Walmart, I can't use it at McDonalds, I can't use it to buy a house, I can't use it damn near anywhere. The only way I can use it is through a scheme that converts it to cash first. No criminal wants to add that papertrail step to their operations.
petertodd 6y ago
> Wait until you hear about cash. I'm always bothered by this arguement because most of the same people in government who want to see a crackdown on Bitcoin also seem to want cash to be eliminated. I've been asked to do consulting on one of these digital cash replacement projects. The requirements included all the stuff you'd expect, like strict ID requirements for every account, and the ability to freeze funds at will. But they also wanted things like the contents of receipts getting uploaded to government servers, to allow real-time tracking of not only who was paying who, but what the funds were supposed to be for. My contact wouldn't tell me what government it was supposed to be for. But they did admit it was a dictatorship. Obviously, this would have been a very effective tool for cracking down on dissent. Frankly, I kinda suspect what was really going on was the company that reached out to me was pulling a scam on that dictatorship and had no real plan to actually deliver a working product. But it's still a good example of the panopticon that authoritarians want to replace cash with.
- spurdoman77 6y ago
  Central bankers are often pro-cash but anti-bitcoin. They dont want competition.
  - xxxxxxx12 6y ago
    > They dont want competition Which is another way of saying they want absolute control, which in this case is the absurd charade where "inflation" measures that they claim represent life on the ground exclude the essentials like education, healthcare, and housing.
    - devmunchies 6y ago
      I liked the take from the Mayor of Miami (from a podcast about cryptocurrency): "they [governments] will have to borrow money like everybody else borrows money, they can't just print their own money. They have to borrow money at an interest rate. And if governments don't behave fiscally then they are going to have to borrow at worse and worse rates. They can't just invent their own interest rates and currency, which manipulates how markets work... We in the city of miami, we're forced to balance our budget, we actually have a surplus, about $150 million in surplus and we have some of the lowest tax rates in the history of the city."
captn3m0 6y ago
You can't transfer a billion dollars worth of cash by sending an email with your private key.
- rawtxapp 6y ago
  If you have billions of dirty money to launder, you don't need to worry about cash, you just call your pals at HSBC [1][2]. 1: https://www.icij.org/investigations/fincen-files/hsbc-moved-vast-sums-of-dirty-money-after-paying-record-laundering-fine/ https://www.icij.org/investigations/fincen-files/hsbc-moved-... 2: https://www.investopedia.com/stock-analysis/2013/investing-news-for-jan-29-hsbcs-money-laundering-scandal-hbc-scbff-ing-cs-rbs0129.aspx https://www.investopedia.com/stock-analysis/2013/investing-n...
- john_moscow 6y ago
  If you have a billion dollars to hold, you don't want the volatility that could turn it into a hundred million, or ten billion in a few weeks, just because. Also, holding a billion dollars in a form protected by a single private key is effectively putting a billion-dollar bounty on your own head.
  - noxer 6y ago
    Stable coins exist.
    - john_moscow 6y ago
      Backed by the issuing companies' heartful statements of best intent.
      - noxer 6y ago
        There are stable coins backed by crypto.
        AlexandrB 6y ago
notyourday 6y ago
> Wait until you hear about cash. Cash is extremely difficult to use in criminal enterprises, especially with the USD. Large amounts of cash are bulky due to $100 being the largest note. Massive amounts of cash is difficult to convert to/from other forms of assets due to CTR, SARs and fed surveillance. Cash as a vehicle for facilitating criminal activity by now is largely fiction. Even diamonds are easier than cash.
- spurdoman77 6y ago
  Cash is perfect for small criminals. Practically useless for bigger criminals.
mrtksn 6y ago
The cash argument is not a good take at all. When you travel with large amounts of cash people ask questions, you are obligated to declare it when crossing borders if it’s over certain amount(over 0,25BTC as USD will make you fill out declarations and it may be confiscated until you can prove that it is legitimately yours) depositing it to your bank account rings all kind of bells, the banks can refuse to work with you and can trigger law enforcement interest. We can be cynical about it but actually number of banks paid fines in the billions of dollars and they take it seriously now. Some hard hit banks like BNP that got fined for $9B would even refuse to work with cash intensive businesses. The criminals need to go through trouble of creating shell companies to launder or transfer money, cash is no good anymore.
- insert_coin 6y ago
  > cash is no good anymore. Crime is gone now? What else are they going to use? Crypto is used by less than 1% of the world. All crime uses "cash" relatively speaking. *a lot of it is "digital" cash but still.
  - mrtksn 6y ago
    That’s not my argument. Crime is not gone, tools are changing and the enforcers are trying to catch up. Cash is now for petty criminals only. For anything beyond car level of money you need involvement of politicians or high end criminals. They tend to use gold and fake bank transactions BTW. Just today there is a trial of the Turkish bank Halk Bank that was allegedly caught laundering money for Iran. High ranking Turkish and Iranian politicians are involved, the funds in form of gold were transferred using private jets and laundered through Dubai. The defense of the person who run the gold operations includes Rudy Giuliani. The things are at that level now. Start digging from here if you want to know more: https://en.m.wikipedia.org/wiki/Reza_Zarrab https://en.m.wikipedia.org/wiki/Reza_Zarrab
  - NaturalPhallacy 6y ago
    Only about 10% of USD physically exists: https://www.quora.com/How-much-US-currency-physically-exists-What-percentage-of-the-US-money-only-exists-as-data-on-banks-computers https://www.quora.com/How-much-US-currency-physically-exists... 'M0' is cash. 'M1' are bytes in bank computers. It's really not a big mental leap from USD that doesn't physically exist (which is 90% of USD) to crypto which doesn't physically exist.
throwaway6734 6y ago
>Whatever your stance on cryptocurrencies are, what is of little dispute is the business opportunities they have created. Binance and Coinbase are large, successful companies. What business opportunities have been created outside of the crypto space? > i feel nations who embrace cryptocurrencies early will see mixed results as the landscape matures. They may also leave themselves open to these currencies being manipulated by foreign mal-actors
- prox 6y ago
  Indeed, not an expert... but what is a state actor stopping form putting extraordinary resources (say NSA for instance) in mining and minting to gain an advantage? And how bad is that?
  - throwaway6734 6y ago
    It wouldn't even need to be just mining. I'm assuming there have to be at least a few zero days present on the asics at large miners. Just mucking up the network enough to scare enough people to panic sell could cause massive chaos.
- jayd16 6y ago
  >What business opportunities have been created outside of the crypto space? They're probably just talking about all the pickaxe selling. NFTs are possibly an answer if you assume good faith and not just speculation.
  - ac29 6y ago
    NFTs are not "outside of the crypto space".
AlexandrB 6y ago
> Whatever your stance on cryptocurrencies are, what is of little dispute is the business opportunities they have created. Binance and Coinbase are large, successful companies. Poloniex was sold for ~400M. This is the broken window fallacy writ large. The small value cryptocurrencies provide over other digital transaction methods is overshadowed by the huge inefficiencies of how transactions are processed via PoW. The fact that there are companies that have made a fortune dealing with all these "broken windows" doesn't change the basic fact that cryptocurrency is probably the least energy efficient way to move money digitally.
- yunesj 6y ago
  > The small value cryptocurrencies provide over other digital transaction methods I’m not aware of any other digital transaction methods that can send un-printable money besides cryptos. I think devaluing currency to inflate stocks and fund wars is harmful, and cryptos are a valuable solution. Although, I think there’s better than PoW.
  - AlexandrB 6y ago
    These are political problems. If you think that an additional form of currency will solve them, I have a bridge to sell you. Even if you convince the US government to switch to BTC (this is probably a harder political project than defunding the defence department), I'm sure they'll think of something if they need to fund a war or two. BTC would be a mere speed bump.
    - yunesj 6y ago
      Yes, the US can still raise funds other ways. It would still be preferable if they were more transparent about it. > Even if you convince the US government to switch to BTC There's no need for that. It would be enough for some people to switch to BTC. I.e., not store their money or denominate their salaries in USD. As things stand, most wealthy people already store their money in things other than USD that are somewhat less easy to manipulate, like stocks and commodities. It would be nice if this strategy were more accessible to people worldwide.
kelnos 6y ago
> Whatever your stance on cryptocurrencies are, what is of little dispute is the business opportunities they have created. Binance and Coinbase are large, successful companies. Poloniex was sold for ~400M. I find this argument a little weird, because I think we can all agree that bubbles and fad tech isn't really great for society as a whole. If you believe cryptocurrencies aren't a fad and actually provide useful benefits to real people (which does not include "we built a company that does crypto stuff and made a bunch of money"), then ok, fair opinion, but I don't share that view. To me it just looks like a big house of cards built on something that is fundamentally not that useful or valuable, but is propped up mainly by speculation. Building a company on top of it that is sold for $400M is great for the founders and investors in that company, but doesn't mean that crypto itself is useful for society. I apply this to other things, too... there are ton of lucrative, successful businesses built on top of and around internet advertising, but I think that entire ecosystem is a huge net negative for society.
- rudderz 6y ago
  Take crypto out of the equation, what are the implications of the fed issuing a programmable currency? Many financial services would become obsolete. What do I need a stock broker for? What do I need a bank for? You have Wall St and other sophisticated investors profiteering and competing against the general public, devaluing our purchasing power, making leveraged trades because they know the public will hold the bag. It's a system that exists to favor the few and it's time to disrupt the orgy.
  - KptMarchewa 6y ago
    Why are you asking this question here? While I agree with this idea, it has nothing to do with crypto.
  - heMan09 6y ago
    Humanity already solved this problem: https://en.m.wikipedia.org/wiki/Tax https://en.m.wikipedia.org/wiki/Tax Most white collar crime is obvious and where the bodies are buried is largely known. There’s simply no political will to do anything about it. Crypto becoming mainstream isn’t going to change indifferent minds. Physical reality is a thing. Burying our heads in ephemeral concepts is distraction, not change.
Salgat 6y ago
I don't ever see most nations willingly giving up monetary policy by ceding to cryptocurrencies. This is especially true for China and the US. They can however adopt their own version, where they remain the authority and would operate the nodes responsible for handling transactions. This would allow many of the advantages of cryptocurrencies while still allowing a country to control not only the money supply but also be able to audit money and (even in the cases of fraud and theft) return money to its rightful owners. You could even have a system where you can freely convert between the digital version and the physical cash version.
- powerapple 6y ago
  I believe that is exact where the value of bitcoin is: because any nations will not giving up their own currency. Bitcoin is anti-establishment. Of course, the real test will only happen when some country start banning bitcoin. No one knows what's going to happen.
  - puranjay 6y ago
    It will only prove Bitoin holders right.
    - arcticbull 6y ago
      lol, it will prove them broke. The overwhelming majority of people own bitcoin because number go up. Banning it will make number not go up. This will cause them to divest. Substantially nobody is in it for the ancap utopia espoused by $20 transaction fees and 30 minute long confirmation times.
      - randomopining 6y ago
        Yeah literally that has been my argument too. And I'm invested in this... because number go up. Ok, so govs ban exchanges and you have your stuff in cold storage. You have to buy/sell p2p? Are people gonna do that just to have this magical deflationary currency? Possibly... but idk.
throwastrike 6y ago
I am sorry but that’s a very weak argument about cash being involved in illicit transactions. As it stands right now cash is still TANGIBLE. If you want to launder cash you still need to be physically present. Crypto not so much. I will leave you with this: the reason why crypto will inevitably fail is because no one and no country will be willing to go to war to defend it. As for USD? There’s the single greatest military power assembled by mankind backing all US interests.
- puranjay 6y ago
  Let me introduce you to the wonderful world of Hawala: https://en.wikipedia.org/wiki/Hawala https://en.wikipedia.org/wiki/Hawala The idea that cash can't be laundered because it is tangible is laughable.
  - throwastrike 6y ago
    I am not contesting that cash isn’t laundered. I am simply pointing out that whenever someone brings up crypto being utilized for money laundering the first argument is almost always “well cash is also used for money laundering” which is pretty weak. If you knew what people can do to launder money in shitcoins and bitcoins you would not make that argument. There’s a reason why Macau is no longer needed to get money out of China. And there’s a reason why gold is no longer used to move drug cartel money in the past two years.
    - puranjay 6y ago
      > There’s a reason why Macau is no longer needed to get money out of China Why would letting people circumvent the laws of an oppressive state to move their assets to safer havens be a bad thing? If anything, this describes a bull case for Bitcoin - "use BTC to bypass your oppressive government!" Unless we are pro oppressive governments here (which, by the comments, seems like a lot of people here are)...
puranjay 6y ago
Crypto maximalists - and I know a LOT of them - are drawn to crypto because of ideology, not just the money. The idea that a person should own his/her own assets, be able to share and use them whenever they want, and be free from government censorship and foolhardy economic stewardship is incredibly powerful. When governments talk about banning crypto, what scares them isn't crypto; it's this ideology. And this ideology also makes crypto incredibly hard to ban. You can create all sorts of regulations but that will only harden the stance of crypto maxis because it will only prove them right.
- drog 6y ago
  Why is this post so downvoted? It seems that antigovernment sentiment is not popular here It’s not only that but also all that “crypto is not technologically interesting and it’s just Ponzi scheme!”. There are so many interesting and unique things there. You can mix cryptography, finance, etc. into endless amount of protocols. Here is some interesting ideas in crypto: decentralized stable coin (dai), automatic market makers (uniswap), zero knowledge rollups, dns that you actually own and not rent, p2p prediction markets, automatic borrowing, algorithmic stable coins without peg and so on and so forth. And there is always something new. I think blockchain is essential building block of the future free web.(at least stuff like dns)
  - OGWhales 6y ago
    > Why is this post so downvoted? Oddly, HN is over all rather closed minded about cryptocurrencies/blockchain. I can understand being jaded at all the bitcoin maximalist out there that are frankly ignorant or even just being generally weary about the idea of such currencies... but it seems like the general sentiment is very negative in almost every thread with very minimal understanding of cryptocurrencies or frankly currencies in general. Shame, tbh. I wish there was better discussion on the topic. Blockchain is very cool, even if you don't believe bitcoin is replacing your dollars ever.
    - puranjay 6y ago
      At this point, I don't even care about Bitcoin anymore. It serves no purpose. I don't even care about cryptocurrencies as such. But the ideas popping out from these fields are just so darn exciting. DeFi makes all these complex financial instruments that were previously the sole purview of big banks accessible to anyone. And we're barely scratching the surface with NFTs and DAOs.
r00fus 6y ago
USG knows how to deal with cash - you can't take any decent amount over the border or even on trains without being questioned. Bitcoin main use (regardless of what it was designed for) is for laundering money. Also it's not a currency, but an asset - as it is designed to appreciate due to how mining works.
- waterfowl 6y ago
  even on trains? amtrak specifically questions people about cash? This seems weird -- compared to traveling by air amtrak has approx 0 security, no TSA equivalent, bag scan, etc(unless you check maybe).
  - r00fus 6y ago
    They check cargo holds and do random bag checks - as of the mid 2000s due to the "war on terrah" but maybe that went out of fashion in the past decade. Large denomination bills are designed to be easily scanned externally since they contain metal strips in the bill design.
- jandrese 6y ago
  Large amounts of cash, and not even all that large ($10k) have been considered evidence of crime and confiscated by the cops in the US. The laws that enable this have been slowly dying off, but it still happens. No other evidence of a crime is necessary nor do the people need to be convicted of anything, the cops just take the money because it might be used to commit a crime. http://gm1-miwebvarnish.newscyclecloud.com/opinion/20201218/mangino-column-asset-forfeitures-provide-70-billion-windfall-for-law-enforcement/1 http://gm1-miwebvarnish.newscyclecloud.com/opinion/20201218/...
arcticbull 6y ago
> Wait until you hear about cash. Oh we have don't worry. The proportion of cash used for illicit activities is much much lower than the proportion of crypto used for illicit activities. Especially once you remove speculation volume (which cash doesn't have). Then there's the whole new kind of crime it created - ransomware. Plenty of work was done to ensure tracability of cash. Take large amounts in or out of the country? Form. Withdraw or deposit large amounts? Form. Act suspicious? Form. Structuring? Prison. You can't really compare a system designed to circumvent regulations regarding transactibility to a system designed to provide as much oversight as is practical. They're not even in the same ballpark.
jayd16 6y ago
>Wait until you hear about cash. What if I told you the Treasury Secretary doesn't think your book keeping system in the same as legal tender?
purple_ferret 6y ago
>Binance and Coinbase are large, successful companies I don't think you should group Binance with Coinbase. Binance is mostly unregulated, literally on the run, refusing to admit where it is headquartered[0], possibly because it avoiding paying taxes. It seems like more and more likely that Binance is just a mechanism for CZ to exit via a massive BNB pump and dump. [0]https://www.coindesk.com/binance-doesnt-have-a-headquarters-because-bitcoin-doesnt-says-ceo https://www.coindesk.com/binance-doesnt-have-a-headquarters-...
gpapilion 6y ago
> Wait until you hear about cash. This is why Europe eliminated the 500 euro note, and the US doesn't produce bills larger than 100 dollars. The thought is these are largely used be criminals. Similarly Modi's demonetisation which the intent was to remove black money from the economy. All bills of 500 and 1000 rupee were to become worthless if not exchanged by a certain date. So they've heard about it.
knorker 6y ago
Beany babies spawned a lot of successful business, but you absolutely cannot from derive that they were fit for purpose, or in any way useful. You're cargo culting. They're still a solution in search of a problem, backed by tech people who think they understand what they are trying to replace. Once you understand the fence you can tear it down, but cryptonerds really really don't understand law (they think smart contracts solve a problem) or economics.
- arisAlexis 6y ago
  Could you pay federal taxes in beanie babies? I think not
  - knorker 6y ago
    I don't know if that was meant to be sarcasm, or some sort of slam dunk argument, or what?
- jdgoesmarching 6y ago
  There are few things more annoying than hearing a crypto cultist talk about economics. It’s like a plumber lecturing me about database architecture based on their Excel experience. Ironically people who actually work as blockchain devs are very chill about it.
- conanbatt 6y ago
  12 year old beanie babies with one of the most accessible financial assets in the world with returns of over 60.000x
  - knorker 6y ago
    You missed the whole point there, bud.
csomar 6y ago
> I am more confident that nations which turn their back on it, or shut it out completely, will see a loss of otherwise valuable businesses and mindshare. This is a very under-appreciated point. US persons (citizens and companies) assume the US banking system for granted. Many countries (even some developed ones) do not have a developed banking sector and by consequence it is harder/expensive to make transactions, access to capital is limited and access to markets can be restricted which limits opportunity. Crypto-currencies requires significant expertise, much more than the current banking system. Countries who will attract these companies and knowledge will have lots of sway in the international economy in the future.
vkou 6y ago
> Wait until you hear about cash. Cash sucks for illicit transactions, because laundering it is a pain in the ass. A crypto ecosystem without strong KYC is much easier to use for illicit transactions. A crypto ecosystem with strong KYC... Probably isn't.
golergka 6y ago
> Wait until you hear about cash. I've seen the estimation that 40% of all bitcoin transactions are related to drugs. Hydra (russian dark web drug store) is still the biggest receiver of bitcoin transactions. I don't think that cash is anywhere close.
nullifidian 6y ago
>Wait until you hear about cash. Tell me when 95+% of cash transactions don't serve any good purpose like it currently is with cryptocurrencies (speculation, waste of energy, malware ransoms, money laundering, hiding wealth / tax evasion, other illicit use)
CJefferson 6y ago
My main problem with crypto is I like the rule of law. If someone steals my bitcoin it's gone. Normal bank transactions have (imperfect) protections. There is a reason the world switched from storing cash, or gold, under a mattress. If a country was running on a crypto coin which had a major hack, it could collapse the whole countries economy.
paulpan 6y ago
The possibility of cryptocurrencies being banned in the U.S. is probably greater than what many people realize, especially those current holders. At least an attempted ban not unlike what happened in India. While the whole "illicit transaction" argument is bullshit, Yellen and other Treasury officials probably realize that cryptocurrencies like Bitcoin could pose an existential threat to the U.S. dollar and needs to be snuffed out early. Companies like Microstrategy and Tesla have already began using them as substitutes for U.S. treasuries. Together with the decline of oil dependency and the petrodollar, a day will come when the de facto currency is no longer the U.S. dollar and with it goes the world currency status. Yellen's department, the U.S. Treasury, would become a minor department and a shadow of its current self. An apt analogy could be the U.S. government is like Nokia in the early days of the iPhone. That said, a U.S. ban may actually unintentionally lead to greater adoption as it effectively means cryptocurrencies withstood and prevailed an attack by the world's foremost national power.
- Swizec 6y ago
  > it effectively means cryptocurrencies withstood and prevailed an attack by the world's foremost national power That's a big if. For now the USA remains the world's richest and biggest unified market. Surviving a ban from said market is not a given for any product. In fact I imagine it's a death sentence for most global products.
timoth3y 6y ago
> Whatever your stance on cryptocurrencies are, what is of little dispute is the business opportunities they have created I strongly dispute that claim. After a decade of effort, tens of billions of dollars invested, and thousands of crypto startups, we still don't have a single successful business other than those selling crypto services. (To be fair, Brave looks like it might make a run for it. We'll have to wait and see.) Pointing to the fact that some people arre making a lot of money does not validate a business model or a social good. Even in the most vile and egregious scams, there are always some people making a lot of money.
fma 6y ago
Funny thing is...this is why China is exploring their own digital currency. Every transaction is tracked.
ashtonkem 6y ago
> Whatever your stance on cryptocurrencies are, what is of little dispute is the business opportunities they have created. Binance and Coinbase are large, successful companies. Poloniex was sold for ~400M. I would absolutely dispute this. Personally I think the vast majority of this is just rampant speculation, and bubbles are not business opportunities. Well, unless if you're selling the equivalent of shovels.
jl2718 6y ago
Don’t worry; they’re getting rid of cash too. I don’t understand the crackdown though. Crypto is a dream for tracing criminals. Even the privacy coins.

Consultant32452 6y ago

The people in power are balancing the business opportunities against their own loss of control over the issuance of currency and some financial market functionalities (with smart contracts, etc.). I think it's a given they will always choose their own power over the business opportunities of others.

maerF0x0 6y ago

> Wait until you hear about cash. anecdote time: I once travelled to Vietnam for a vacation, people in vietnam prefer $100 bills because they're easier to use for hiding wealth, transporting cross border, and other slightly less than legal reasons. Additionally it's the preferred currency of criminals in the country too (so I heard). They will even pay higher exchange rates for ones in better condition or with more anti-counterfeiting features So yeah, USD is used for a lot of crime globally. EDIT: changed "anti-moneylaundering" to "anti-counterfeiting" by suggestion

asah 6y ago
"with more anti-laundering features" ? did you mean anti-counterfeiting? just checking...
- maerF0x0 6y ago
  I think so. Basically things to make it harder to fake them. Changed original post
retrac 6y ago
In Canada, organized crime holds on to the $1000 notes. They're the largest value banknote commonly used in the West in the last few decades. They were last issued in 1992 and then officially withdrawn in 2000 for concerns over moneylaundering. They're not legal tender anymore, but can be exchanged at the bank. There's about $1 billion in circulation, and that will likely remain true for a long time yet. They move in a closed loop in the drug trade, stuffed in briefcases and in safes of criminals who effectively act as banks settling debts. No one wants to cash them because of the risk of being traced, but because they can be cashed in theory, they retain full value. The €500 is slowly displacing them, in Canada and abroad. I saw one as a child. Most Canadians have not, as far as I know. An acquaintance of a friend of my father's had several, and my father was interested in numismatics, so he traded one for $100s. The implications of the man who had some "pinkies" (called so for their colour) being a biker with a facial scar didn't click into place until I was much older.
- tonfa 6y ago
  CHF still has 1k banknote (and with negative interest rates this with a safe might be a better option than a bank account).
  - noxer 6y ago
    Hows that better than a bank account? You can hold CHF on a bank account as well and it keeps the same value as the note. (both lose value due to inflation) Also dont forget insurance for banknotes in a safe.
    - bellyfullofbac 6y ago
      > Hows that better than a bank account? GP said it, negative interest rate, i.e. the bank charging you to hold on to your money when you have more than a certain amount (was it 100k or 25k CHF). So if you put in 100k in the bank and wait a year, you'll be able to withdraw maybe 99.8k CHF. If you hoard 100x 1000 CHF notes, you'll still have 100k CHF. Sure in 1 year those 100k CHF will probably buy less Big Macs then the present, but the 200 CHF loss will mean even less Big Macs.
puranjay 6y ago
In Uzbekistan, I saw a disproportionately large number of people with gold teeth. When I asked my host about it, he said that that was the older Soviet-era generation that would get gold teeth so that they could carry some useful wealth with them in case they had to flee their homes all of a sudden.
BobbyJo 6y ago
If the sum total of the wealth you are trying to hide is a in the thousands, you aren't who the government is concerned about. At least, not enough for policy changes. So, while cash is likely far more prevalently use in crime, you're talking about the huge long tail of low level drug dealers and smugglers, not the oligarchs and money launderers. Deposited/electronic money tends to be necessary when you hit a million plus. At that point cash sucks and is super risky to hold.
- maerF0x0 6y ago
  fun fact, each bill is 1g. So $1M in 100s is 10KG (or 22LBs) . Plus the briefcase and hand cuffs if we're going movie style.
nerfhammer 6y ago
they prefer USD in parts in SE Asia because the local currency has experienced hyperinflation in the past. the problem is there is no easy way for them to exchange overly worn bills back to the Federal Reserve, so they have like rotting old falling-apart $1 bills that look like they're on the verge of disintegrating.
Salgat 6y ago
That doesn't stop cryptocoins from being the currency of choice for criminals that need completely anonymous digital transactions, which is why they are the standard for the online black market and for ransomware. It's hard to argue of the advantages of cryptocoins while in the same breathe arguing that cash is better for crime. The bigger issue is that very few people want to hold onto cryptocoins if their goal is to spend the money. You can't really buy much directly with cryptocoins in comparison to cash which is universal. I can't use it at Walmart, I can't use it at McDonalds, I can't use it to buy a house, I can't use it damn near anywhere. The only way I can use it is through a scheme that converts it to cash first. No criminal wants to add that papertrail step to their operations.

petertodd 6y ago

> Wait until you hear about cash. I'm always bothered by this arguement because most of the same people in government who want to see a crackdown on Bitcoin also seem to want cash to be eliminated. I've been asked to do consulting on one of these digital cash replacement projects. The requirements included all the stuff you'd expect, like strict ID requirements for every account, and the ability to freeze funds at will. But they also wanted things like the contents of receipts getting uploaded to government servers, to allow real-time tracking of not only who was paying who, but what the funds were supposed to be for. My contact wouldn't tell me what government it was supposed to be for. But they did admit it was a dictatorship. Obviously, this would have been a very effective tool for cracking down on dissent. Frankly, I kinda suspect what was really going on was the company that reached out to me was pulling a scam on that dictatorship and had no real plan to actually deliver a working product. But it's still a good example of the panopticon that authoritarians want to replace cash with.

spurdoman77 6y ago
Central bankers are often pro-cash but anti-bitcoin. They dont want competition.
- xxxxxxx12 6y ago
  > They dont want competition Which is another way of saying they want absolute control, which in this case is the absurd charade where "inflation" measures that they claim represent life on the ground exclude the essentials like education, healthcare, and housing.
  - devmunchies 6y ago
    I liked the take from the Mayor of Miami (from a podcast about cryptocurrency): "they [governments] will have to borrow money like everybody else borrows money, they can't just print their own money. They have to borrow money at an interest rate. And if governments don't behave fiscally then they are going to have to borrow at worse and worse rates. They can't just invent their own interest rates and currency, which manipulates how markets work... We in the city of miami, we're forced to balance our budget, we actually have a surplus, about $150 million in surplus and we have some of the lowest tax rates in the history of the city."

captn3m0 6y ago

You can't transfer a billion dollars worth of cash by sending an email with your private key.

rawtxapp 6y ago
If you have billions of dirty money to launder, you don't need to worry about cash, you just call your pals at HSBC [1][2]. 1: https://www.icij.org/investigations/fincen-files/hsbc-moved-vast-sums-of-dirty-money-after-paying-record-laundering-fine/ https://www.icij.org/investigations/fincen-files/hsbc-moved-... 2: https://www.investopedia.com/stock-analysis/2013/investing-news-for-jan-29-hsbcs-money-laundering-scandal-hbc-scbff-ing-cs-rbs0129.aspx https://www.investopedia.com/stock-analysis/2013/investing-n...
john_moscow 6y ago
If you have a billion dollars to hold, you don't want the volatility that could turn it into a hundred million, or ten billion in a few weeks, just because. Also, holding a billion dollars in a form protected by a single private key is effectively putting a billion-dollar bounty on your own head.
- noxer 6y ago
  Stable coins exist.
  - john_moscow 6y ago
    Backed by the issuing companies' heartful statements of best intent.
    - noxer 6y ago
      There are stable coins backed by crypto.
      - AlexandrB 6y ago

notyourday 6y ago

> Wait until you hear about cash. Cash is extremely difficult to use in criminal enterprises, especially with the USD. Large amounts of cash are bulky due to $100 being the largest note. Massive amounts of cash is difficult to convert to/from other forms of assets due to CTR, SARs and fed surveillance. Cash as a vehicle for facilitating criminal activity by now is largely fiction. Even diamonds are easier than cash.

spurdoman77 6y ago
Cash is perfect for small criminals. Practically useless for bigger criminals.

mrtksn 6y ago

The cash argument is not a good take at all. When you travel with large amounts of cash people ask questions, you are obligated to declare it when crossing borders if it’s over certain amount(over 0,25BTC as USD will make you fill out declarations and it may be confiscated until you can prove that it is legitimately yours) depositing it to your bank account rings all kind of bells, the banks can refuse to work with you and can trigger law enforcement interest. We can be cynical about it but actually number of banks paid fines in the billions of dollars and they take it seriously now. Some hard hit banks like BNP that got fined for $9B would even refuse to work with cash intensive businesses. The criminals need to go through trouble of creating shell companies to launder or transfer money, cash is no good anymore.

insert_coin 6y ago
> cash is no good anymore. Crime is gone now? What else are they going to use? Crypto is used by less than 1% of the world. All crime uses "cash" relatively speaking. *a lot of it is "digital" cash but still.
- mrtksn 6y ago
  That’s not my argument. Crime is not gone, tools are changing and the enforcers are trying to catch up. Cash is now for petty criminals only. For anything beyond car level of money you need involvement of politicians or high end criminals. They tend to use gold and fake bank transactions BTW. Just today there is a trial of the Turkish bank Halk Bank that was allegedly caught laundering money for Iran. High ranking Turkish and Iranian politicians are involved, the funds in form of gold were transferred using private jets and laundered through Dubai. The defense of the person who run the gold operations includes Rudy Giuliani. The things are at that level now. Start digging from here if you want to know more: https://en.m.wikipedia.org/wiki/Reza_Zarrab https://en.m.wikipedia.org/wiki/Reza_Zarrab
- NaturalPhallacy 6y ago
  Only about 10% of USD physically exists: https://www.quora.com/How-much-US-currency-physically-exists-What-percentage-of-the-US-money-only-exists-as-data-on-banks-computers https://www.quora.com/How-much-US-currency-physically-exists... 'M0' is cash. 'M1' are bytes in bank computers. It's really not a big mental leap from USD that doesn't physically exist (which is 90% of USD) to crypto which doesn't physically exist.

throwaway6734 6y ago

>Whatever your stance on cryptocurrencies are, what is of little dispute is the business opportunities they have created. Binance and Coinbase are large, successful companies. What business opportunities have been created outside of the crypto space? > i feel nations who embrace cryptocurrencies early will see mixed results as the landscape matures. They may also leave themselves open to these currencies being manipulated by foreign mal-actors

prox 6y ago
Indeed, not an expert... but what is a state actor stopping form putting extraordinary resources (say NSA for instance) in mining and minting to gain an advantage? And how bad is that?
- throwaway6734 6y ago
  It wouldn't even need to be just mining. I'm assuming there have to be at least a few zero days present on the asics at large miners. Just mucking up the network enough to scare enough people to panic sell could cause massive chaos.
jayd16 6y ago
>What business opportunities have been created outside of the crypto space? They're probably just talking about all the pickaxe selling. NFTs are possibly an answer if you assume good faith and not just speculation.
- ac29 6y ago
  NFTs are not "outside of the crypto space".

AlexandrB 6y ago

> Whatever your stance on cryptocurrencies are, what is of little dispute is the business opportunities they have created. Binance and Coinbase are large, successful companies. Poloniex was sold for ~400M. This is the broken window fallacy writ large. The small value cryptocurrencies provide over other digital transaction methods is overshadowed by the huge inefficiencies of how transactions are processed via PoW. The fact that there are companies that have made a fortune dealing with all these "broken windows" doesn't change the basic fact that cryptocurrency is probably the least energy efficient way to move money digitally.

yunesj 6y ago
> The small value cryptocurrencies provide over other digital transaction methods I’m not aware of any other digital transaction methods that can send un-printable money besides cryptos. I think devaluing currency to inflate stocks and fund wars is harmful, and cryptos are a valuable solution. Although, I think there’s better than PoW.
- AlexandrB 6y ago
  These are political problems. If you think that an additional form of currency will solve them, I have a bridge to sell you. Even if you convince the US government to switch to BTC (this is probably a harder political project than defunding the defence department), I'm sure they'll think of something if they need to fund a war or two. BTC would be a mere speed bump.
  - yunesj 6y ago
    Yes, the US can still raise funds other ways. It would still be preferable if they were more transparent about it. > Even if you convince the US government to switch to BTC There's no need for that. It would be enough for some people to switch to BTC. I.e., not store their money or denominate their salaries in USD. As things stand, most wealthy people already store their money in things other than USD that are somewhat less easy to manipulate, like stocks and commodities. It would be nice if this strategy were more accessible to people worldwide.

kelnos 6y ago

> Whatever your stance on cryptocurrencies are, what is of little dispute is the business opportunities they have created. Binance and Coinbase are large, successful companies. Poloniex was sold for ~400M. I find this argument a little weird, because I think we can all agree that bubbles and fad tech isn't really great for society as a whole. If you believe cryptocurrencies aren't a fad and actually provide useful benefits to real people (which does not include "we built a company that does crypto stuff and made a bunch of money"), then ok, fair opinion, but I don't share that view. To me it just looks like a big house of cards built on something that is fundamentally not that useful or valuable, but is propped up mainly by speculation. Building a company on top of it that is sold for $400M is great for the founders and investors in that company, but doesn't mean that crypto itself is useful for society. I apply this to other things, too... there are ton of lucrative, successful businesses built on top of and around internet advertising, but I think that entire ecosystem is a huge net negative for society.

rudderz 6y ago
Take crypto out of the equation, what are the implications of the fed issuing a programmable currency? Many financial services would become obsolete. What do I need a stock broker for? What do I need a bank for? You have Wall St and other sophisticated investors profiteering and competing against the general public, devaluing our purchasing power, making leveraged trades because they know the public will hold the bag. It's a system that exists to favor the few and it's time to disrupt the orgy.
- KptMarchewa 6y ago
  Why are you asking this question here? While I agree with this idea, it has nothing to do with crypto.
- heMan09 6y ago
  Humanity already solved this problem: https://en.m.wikipedia.org/wiki/Tax https://en.m.wikipedia.org/wiki/Tax Most white collar crime is obvious and where the bodies are buried is largely known. There’s simply no political will to do anything about it. Crypto becoming mainstream isn’t going to change indifferent minds. Physical reality is a thing. Burying our heads in ephemeral concepts is distraction, not change.

Salgat 6y ago

I don't ever see most nations willingly giving up monetary policy by ceding to cryptocurrencies. This is especially true for China and the US. They can however adopt their own version, where they remain the authority and would operate the nodes responsible for handling transactions. This would allow many of the advantages of cryptocurrencies while still allowing a country to control not only the money supply but also be able to audit money and (even in the cases of fraud and theft) return money to its rightful owners. You could even have a system where you can freely convert between the digital version and the physical cash version.

powerapple 6y ago
I believe that is exact where the value of bitcoin is: because any nations will not giving up their own currency. Bitcoin is anti-establishment. Of course, the real test will only happen when some country start banning bitcoin. No one knows what's going to happen.
- puranjay 6y ago
  It will only prove Bitoin holders right.
  - arcticbull 6y ago
    lol, it will prove them broke. The overwhelming majority of people own bitcoin because number go up. Banning it will make number not go up. This will cause them to divest. Substantially nobody is in it for the ancap utopia espoused by $20 transaction fees and 30 minute long confirmation times.
    - randomopining 6y ago
      Yeah literally that has been my argument too. And I'm invested in this... because number go up. Ok, so govs ban exchanges and you have your stuff in cold storage. You have to buy/sell p2p? Are people gonna do that just to have this magical deflationary currency? Possibly... but idk.

throwastrike 6y ago

I am sorry but that’s a very weak argument about cash being involved in illicit transactions. As it stands right now cash is still TANGIBLE. If you want to launder cash you still need to be physically present. Crypto not so much. I will leave you with this: the reason why crypto will inevitably fail is because no one and no country will be willing to go to war to defend it. As for USD? There’s the single greatest military power assembled by mankind backing all US interests.

puranjay 6y ago
Let me introduce you to the wonderful world of Hawala: https://en.wikipedia.org/wiki/Hawala https://en.wikipedia.org/wiki/Hawala The idea that cash can't be laundered because it is tangible is laughable.
- throwastrike 6y ago
  I am not contesting that cash isn’t laundered. I am simply pointing out that whenever someone brings up crypto being utilized for money laundering the first argument is almost always “well cash is also used for money laundering” which is pretty weak. If you knew what people can do to launder money in shitcoins and bitcoins you would not make that argument. There’s a reason why Macau is no longer needed to get money out of China. And there’s a reason why gold is no longer used to move drug cartel money in the past two years.
  - puranjay 6y ago
    > There’s a reason why Macau is no longer needed to get money out of China Why would letting people circumvent the laws of an oppressive state to move their assets to safer havens be a bad thing? If anything, this describes a bull case for Bitcoin - "use BTC to bypass your oppressive government!" Unless we are pro oppressive governments here (which, by the comments, seems like a lot of people here are)...

puranjay 6y ago

Crypto maximalists - and I know a LOT of them - are drawn to crypto because of ideology, not just the money. The idea that a person should own his/her own assets, be able to share and use them whenever they want, and be free from government censorship and foolhardy economic stewardship is incredibly powerful. When governments talk about banning crypto, what scares them isn't crypto; it's this ideology. And this ideology also makes crypto incredibly hard to ban. You can create all sorts of regulations but that will only harden the stance of crypto maxis because it will only prove them right.

drog 6y ago
Why is this post so downvoted? It seems that antigovernment sentiment is not popular here It’s not only that but also all that “crypto is not technologically interesting and it’s just Ponzi scheme!”. There are so many interesting and unique things there. You can mix cryptography, finance, etc. into endless amount of protocols. Here is some interesting ideas in crypto: decentralized stable coin (dai), automatic market makers (uniswap), zero knowledge rollups, dns that you actually own and not rent, p2p prediction markets, automatic borrowing, algorithmic stable coins without peg and so on and so forth. And there is always something new. I think blockchain is essential building block of the future free web.(at least stuff like dns)
- OGWhales 6y ago
  > Why is this post so downvoted? Oddly, HN is over all rather closed minded about cryptocurrencies/blockchain. I can understand being jaded at all the bitcoin maximalist out there that are frankly ignorant or even just being generally weary about the idea of such currencies... but it seems like the general sentiment is very negative in almost every thread with very minimal understanding of cryptocurrencies or frankly currencies in general. Shame, tbh. I wish there was better discussion on the topic. Blockchain is very cool, even if you don't believe bitcoin is replacing your dollars ever.
  - puranjay 6y ago
    At this point, I don't even care about Bitcoin anymore. It serves no purpose. I don't even care about cryptocurrencies as such. But the ideas popping out from these fields are just so darn exciting. DeFi makes all these complex financial instruments that were previously the sole purview of big banks accessible to anyone. And we're barely scratching the surface with NFTs and DAOs.

r00fus 6y ago

USG knows how to deal with cash - you can't take any decent amount over the border or even on trains without being questioned. Bitcoin main use (regardless of what it was designed for) is for laundering money. Also it's not a currency, but an asset - as it is designed to appreciate due to how mining works.

waterfowl 6y ago
even on trains? amtrak specifically questions people about cash? This seems weird -- compared to traveling by air amtrak has approx 0 security, no TSA equivalent, bag scan, etc(unless you check maybe).
- r00fus 6y ago
  They check cargo holds and do random bag checks - as of the mid 2000s due to the "war on terrah" but maybe that went out of fashion in the past decade. Large denomination bills are designed to be easily scanned externally since they contain metal strips in the bill design.
jandrese 6y ago
Large amounts of cash, and not even all that large ($10k) have been considered evidence of crime and confiscated by the cops in the US. The laws that enable this have been slowly dying off, but it still happens. No other evidence of a crime is necessary nor do the people need to be convicted of anything, the cops just take the money because it might be used to commit a crime. http://gm1-miwebvarnish.newscyclecloud.com/opinion/20201218/mangino-column-asset-forfeitures-provide-70-billion-windfall-for-law-enforcement/1 http://gm1-miwebvarnish.newscyclecloud.com/opinion/20201218/...

arcticbull 6y ago

> Wait until you hear about cash. Oh we have don't worry. The proportion of cash used for illicit activities is much much lower than the proportion of crypto used for illicit activities. Especially once you remove speculation volume (which cash doesn't have). Then there's the whole new kind of crime it created - ransomware. Plenty of work was done to ensure tracability of cash. Take large amounts in or out of the country? Form. Withdraw or deposit large amounts? Form. Act suspicious? Form. Structuring? Prison. You can't really compare a system designed to circumvent regulations regarding transactibility to a system designed to provide as much oversight as is practical. They're not even in the same ballpark.

jayd16 6y ago

>Wait until you hear about cash. What if I told you the Treasury Secretary doesn't think your book keeping system in the same as legal tender?

purple_ferret 6y ago

>Binance and Coinbase are large, successful companies I don't think you should group Binance with Coinbase. Binance is mostly unregulated, literally on the run, refusing to admit where it is headquartered[0], possibly because it avoiding paying taxes. It seems like more and more likely that Binance is just a mechanism for CZ to exit via a massive BNB pump and dump. [0]https://www.coindesk.com/binance-doesnt-have-a-headquarters-because-bitcoin-doesnt-says-ceo https://www.coindesk.com/binance-doesnt-have-a-headquarters-...

gpapilion 6y ago

> Wait until you hear about cash. This is why Europe eliminated the 500 euro note, and the US doesn't produce bills larger than 100 dollars. The thought is these are largely used be criminals. Similarly Modi's demonetisation which the intent was to remove black money from the economy. All bills of 500 and 1000 rupee were to become worthless if not exchanged by a certain date. So they've heard about it.

knorker 6y ago

Beany babies spawned a lot of successful business, but you absolutely cannot from derive that they were fit for purpose, or in any way useful. You're cargo culting. They're still a solution in search of a problem, backed by tech people who think they understand what they are trying to replace. Once you understand the fence you can tear it down, but cryptonerds really really don't understand law (they think smart contracts solve a problem) or economics.

arisAlexis 6y ago
Could you pay federal taxes in beanie babies? I think not
- knorker 6y ago
  I don't know if that was meant to be sarcasm, or some sort of slam dunk argument, or what?
jdgoesmarching 6y ago
There are few things more annoying than hearing a crypto cultist talk about economics. It’s like a plumber lecturing me about database architecture based on their Excel experience. Ironically people who actually work as blockchain devs are very chill about it.
conanbatt 6y ago
12 year old beanie babies with one of the most accessible financial assets in the world with returns of over 60.000x
- knorker 6y ago
  You missed the whole point there, bud.

csomar 6y ago

> I am more confident that nations which turn their back on it, or shut it out completely, will see a loss of otherwise valuable businesses and mindshare. This is a very under-appreciated point. US persons (citizens and companies) assume the US banking system for granted. Many countries (even some developed ones) do not have a developed banking sector and by consequence it is harder/expensive to make transactions, access to capital is limited and access to markets can be restricted which limits opportunity. Crypto-currencies requires significant expertise, much more than the current banking system. Countries who will attract these companies and knowledge will have lots of sway in the international economy in the future.

vkou 6y ago

> Wait until you hear about cash. Cash sucks for illicit transactions, because laundering it is a pain in the ass. A crypto ecosystem without strong KYC is much easier to use for illicit transactions. A crypto ecosystem with strong KYC... Probably isn't.

golergka 6y ago

> Wait until you hear about cash. I've seen the estimation that 40% of all bitcoin transactions are related to drugs. Hydra (russian dark web drug store) is still the biggest receiver of bitcoin transactions. I don't think that cash is anywhere close.

nullifidian 6y ago

>Wait until you hear about cash. Tell me when 95+% of cash transactions don't serve any good purpose like it currently is with cryptocurrencies (speculation, waste of energy, malware ransoms, money laundering, hiding wealth / tax evasion, other illicit use)

CJefferson 6y ago

My main problem with crypto is I like the rule of law. If someone steals my bitcoin it's gone. Normal bank transactions have (imperfect) protections. There is a reason the world switched from storing cash, or gold, under a mattress. If a country was running on a crypto coin which had a major hack, it could collapse the whole countries economy.

paulpan 6y ago

The possibility of cryptocurrencies being banned in the U.S. is probably greater than what many people realize, especially those current holders. At least an attempted ban not unlike what happened in India. While the whole "illicit transaction" argument is bullshit, Yellen and other Treasury officials probably realize that cryptocurrencies like Bitcoin could pose an existential threat to the U.S. dollar and needs to be snuffed out early. Companies like Microstrategy and Tesla have already began using them as substitutes for U.S. treasuries. Together with the decline of oil dependency and the petrodollar, a day will come when the de facto currency is no longer the U.S. dollar and with it goes the world currency status. Yellen's department, the U.S. Treasury, would become a minor department and a shadow of its current self. An apt analogy could be the U.S. government is like Nokia in the early days of the iPhone. That said, a U.S. ban may actually unintentionally lead to greater adoption as it effectively means cryptocurrencies withstood and prevailed an attack by the world's foremost national power.

Swizec 6y ago
> it effectively means cryptocurrencies withstood and prevailed an attack by the world's foremost national power That's a big if. For now the USA remains the world's richest and biggest unified market. Surviving a ban from said market is not a given for any product. In fact I imagine it's a death sentence for most global products.

timoth3y 6y ago

> Whatever your stance on cryptocurrencies are, what is of little dispute is the business opportunities they have created I strongly dispute that claim. After a decade of effort, tens of billions of dollars invested, and thousands of crypto startups, we still don't have a single successful business other than those selling crypto services. (To be fair, Brave looks like it might make a run for it. We'll have to wait and see.) Pointing to the fact that some people arre making a lot of money does not validate a business model or a social good. Even in the most vile and egregious scams, there are always some people making a lot of money.

fma 6y ago

Funny thing is...this is why China is exploring their own digital currency. Every transaction is tracked.

ashtonkem 6y ago

> Whatever your stance on cryptocurrencies are, what is of little dispute is the business opportunities they have created. Binance and Coinbase are large, successful companies. Poloniex was sold for ~400M. I would absolutely dispute this. Personally I think the vast majority of this is just rampant speculation, and bubbles are not business opportunities. Well, unless if you're selling the equivalent of shovels.

jl2718 6y ago

Don’t worry; they’re getting rid of cash too. I don’t understand the crackdown though. Crypto is a dream for tracing criminals. Even the privacy coins.