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It seems CipherTrace provides security/compliance/etc services similar to that of a traditional bank but for cryptocurrency? Will cryptocurrency effectively end

by jmt_ 5y ago

It seems CipherTrace provides security/compliance/etc services similar to that of a traditional bank but for cryptocurrency? Will cryptocurrency effectively end up becoming just another currency/security traded and managed by giant companies rather than flourishing as the decentralized cowboy-esque financial system advocated for by crypto enthusiasts? Even those crypto users who choose to forego services offered by companies such as CipherTrace will still be effected by big companies attempting to regulate and control crypto in various ways, so I'm wondering what the sentiment is in the crypto community regarding this acquisition.

jackson1442 5y ago
> Will cryptocurrency effectively end up becoming just another currency/security traded and managed by giant companies Yes, that is exactly their goal. The only way Visa and MC continue to make money with crypto is centralizing and regulating it to death so no one else can enter the field, just like with payment cards today.
- jmt_ 5y ago
  That's what I'm thinking too. Why would Visa invest anything in crypto if they don't think they can reasonably control and benefit off it? Risk assessment is at the very core of Visa's company and I cannot imagine they would invest in something that has unreasonable risk. Crypto is risky and difficult to predict, which makes me think they have a plan to minimize risk by controlling crypto thru means well known to them and traditional banks.
- rvz 5y ago
  I'm afraid you are totally correct. Involving Mastercard and Visa will allow them to put in place a similar fees structure they use for card payments for cryptocurrencies so that they don't miss out on making money with a fee system. Why do you think they 'embraced' cryptocurrencies all of a sudden and Visa making Coinbase and many others exchanges principle partners to allow them to convert crypto into fiat currency?
ethbr0 5y ago
1) Bemoan how people with all the money abuse their surfeit of capital. 2) Create a new currency, and give it to new people. 3) Create a way for the currency to be converted to standard money. 4) Watch as the newly wealthy become the people complained about in (1) and the link created in (3) enables the old wealthy to abuse their capital advantage on the new system.
- mistrial9 5y ago
  there are names for this sequence of statements, in logic, in rhetoric, but I will offer the seasonal ML machine-learning version: underfitting the data
  - deleted 5y ago
    [deleted]
- samsquire 5y ago
  Bitcoin has a landed wealth aristocracy just like land ownership has. It's not based on merit.
  - gruez 5y ago
    >Bitcoin has a landed wealth aristocracy just like land ownership has. You're thinking of PoS. If you hold 1 bitcoin now, you'll still only have bitcoin 100 years from now. On the other hand, with land and PoS, you'll have the land/coin and the rent you were able to extract. >It's not based on merit. How is it not meritocratic? Literally anyone could mine. This is as opposed to getting land, which typically requires you to be politically connected, or buying it from someone who was politically connected.
    - samsquire 5y ago
      My argument is that mining is not meritocratic. In the same way first ever land ownership is definitely not meritocratic. (See violence over land or enclosure acts stealing land from the commons) We need universal basic income to distribute wealth. Any new currency suffers from the landed wealth problem where a group of people is designated the aristocracy through landed wealth. That is, it's not democratic, universal or voted.
javert 5y ago
As a bitcoin fan, I think that's missing the point. Bitcoin is about ending US monetary hegemony over the world. That dominance allows the US to grossly abuse its own citizens (future generations in particular) and people around the world (e.g. borrowing and throwing away trillions of dollars on unjust foreign wars). Bitcoin is about hard money. It's about eliminating the Fed, but it's not about ending banking middlemen like Visa. Those will always exist, but they are "small fry."
- jeroenhd 5y ago
  I think that was definitely the initial intention of bitcoin when it was launched. Perhaps not specifically to fight off USA influences, but definitely to end government control over the monetary system, be it the dollar, the yen or the euro. However, I don't think that goal has been relevant for a few years now. Bitcoin has turned into an uncontrolled speculation adventure for people with more money than sense or access to cheap electricity. Just the transaction costs alone make it infeasible to use Bitcoin to order pizza. External payment networks related to but not affiliated with Bitcoin have spun up to battle these transaction costs, but Bitcoin itself is nothing like it was way back when. I don't think Bitcoin will ever reach its potential as the initial activists thought it had. However, it has cleared the way for other cryptocurrencies to step up and replace it as a payment system for common people.
  - qecez 5y ago
    > Just the transaction costs alone make it infeasible to use Bitcoin to order pizza. Blatantly false. Transacting on the Lightning Network (Bitcoin L2) costs next to nothing and the settlement is final and immediate. Screw pizza, top-of-mind, you can pay a fraction of a cent's worth for an API call with Bitcoin (https://news.ycombinator.com/item?id=28459713 https://news.ycombinator.com/item?id=28459713)... or pay 66 satoshis (~$0.03) / hour for a VPS instance (https://www.bitclouds.sh https://www.bitclouds.sh)... or buy gift cards for any amount (https://www.bitrefill.com/buy/ https://www.bitrefill.com/buy/)... or tip anyone as little as 1 satoshi (~$0.00046) (here's 5 cents worth https://ln.cash/tFVDMpUMRQPYwyj9DZHMqg https://ln.cash/tFVDMpUMRQPYwyj9DZHMqg)... or hell, if you're feeling like pizza, DM me on Twitter and I'll get you one, paid for in Bitcoin (https://ln.pizza https://ln.pizza).
thenewwazoo 5y ago
CipherTrace provides KYC/AML and related services for companies and governments who need and want it. Here's the thing: transactions on the blockchain are anonymous but they're not private. If you're going to do things out in the open, someone's going to watch what you're doing. That doesn't necessarily result in regulation, though it may. It may doesn't necessarily result in incumbents squashing competition, though it may. CipherTrace builds tools, and how they're used is a political question, not a technical one. Disclosure: I know the CipherTrace folks and did a tiny bit of contracting for them between jobs.
- quantumBerry 5y ago
  Accurate for BTC, although it's worth noting there are some privacy coins with blockchains that currently have very limited susceptibility to chain analysis, and thus as far as we can tell are private.
deleted 5y ago
[deleted]

by jmt_ 5y ago

jackson1442 5y ago

> Will cryptocurrency effectively end up becoming just another currency/security traded and managed by giant companies Yes, that is exactly their goal. The only way Visa and MC continue to make money with crypto is centralizing and regulating it to death so no one else can enter the field, just like with payment cards today.

jmt_ 5y ago
That's what I'm thinking too. Why would Visa invest anything in crypto if they don't think they can reasonably control and benefit off it? Risk assessment is at the very core of Visa's company and I cannot imagine they would invest in something that has unreasonable risk. Crypto is risky and difficult to predict, which makes me think they have a plan to minimize risk by controlling crypto thru means well known to them and traditional banks.
rvz 5y ago
I'm afraid you are totally correct. Involving Mastercard and Visa will allow them to put in place a similar fees structure they use for card payments for cryptocurrencies so that they don't miss out on making money with a fee system. Why do you think they 'embraced' cryptocurrencies all of a sudden and Visa making Coinbase and many others exchanges principle partners to allow them to convert crypto into fiat currency?

ethbr0 5y ago

1) Bemoan how people with all the money abuse their surfeit of capital. 2) Create a new currency, and give it to new people. 3) Create a way for the currency to be converted to standard money. 4) Watch as the newly wealthy become the people complained about in (1) and the link created in (3) enables the old wealthy to abuse their capital advantage on the new system.

mistrial9 5y ago
there are names for this sequence of statements, in logic, in rhetoric, but I will offer the seasonal ML machine-learning version: underfitting the data
- deleted 5y ago
  [deleted]
samsquire 5y ago
Bitcoin has a landed wealth aristocracy just like land ownership has. It's not based on merit.
- gruez 5y ago
  >Bitcoin has a landed wealth aristocracy just like land ownership has. You're thinking of PoS. If you hold 1 bitcoin now, you'll still only have bitcoin 100 years from now. On the other hand, with land and PoS, you'll have the land/coin and the rent you were able to extract. >It's not based on merit. How is it not meritocratic? Literally anyone could mine. This is as opposed to getting land, which typically requires you to be politically connected, or buying it from someone who was politically connected.
  - samsquire 5y ago
    My argument is that mining is not meritocratic. In the same way first ever land ownership is definitely not meritocratic. (See violence over land or enclosure acts stealing land from the commons) We need universal basic income to distribute wealth. Any new currency suffers from the landed wealth problem where a group of people is designated the aristocracy through landed wealth. That is, it's not democratic, universal or voted.

javert 5y ago

As a bitcoin fan, I think that's missing the point. Bitcoin is about ending US monetary hegemony over the world. That dominance allows the US to grossly abuse its own citizens (future generations in particular) and people around the world (e.g. borrowing and throwing away trillions of dollars on unjust foreign wars). Bitcoin is about hard money. It's about eliminating the Fed, but it's not about ending banking middlemen like Visa. Those will always exist, but they are "small fry."

jeroenhd 5y ago
I think that was definitely the initial intention of bitcoin when it was launched. Perhaps not specifically to fight off USA influences, but definitely to end government control over the monetary system, be it the dollar, the yen or the euro. However, I don't think that goal has been relevant for a few years now. Bitcoin has turned into an uncontrolled speculation adventure for people with more money than sense or access to cheap electricity. Just the transaction costs alone make it infeasible to use Bitcoin to order pizza. External payment networks related to but not affiliated with Bitcoin have spun up to battle these transaction costs, but Bitcoin itself is nothing like it was way back when. I don't think Bitcoin will ever reach its potential as the initial activists thought it had. However, it has cleared the way for other cryptocurrencies to step up and replace it as a payment system for common people.
- qecez 5y ago
  > Just the transaction costs alone make it infeasible to use Bitcoin to order pizza. Blatantly false. Transacting on the Lightning Network (Bitcoin L2) costs next to nothing and the settlement is final and immediate. Screw pizza, top-of-mind, you can pay a fraction of a cent's worth for an API call with Bitcoin (https://news.ycombinator.com/item?id=28459713 https://news.ycombinator.com/item?id=28459713)... or pay 66 satoshis (~$0.03) / hour for a VPS instance (https://www.bitclouds.sh https://www.bitclouds.sh)... or buy gift cards for any amount (https://www.bitrefill.com/buy/ https://www.bitrefill.com/buy/)... or tip anyone as little as 1 satoshi (~$0.00046) (here's 5 cents worth https://ln.cash/tFVDMpUMRQPYwyj9DZHMqg https://ln.cash/tFVDMpUMRQPYwyj9DZHMqg)... or hell, if you're feeling like pizza, DM me on Twitter and I'll get you one, paid for in Bitcoin (https://ln.pizza https://ln.pizza).

thenewwazoo 5y ago

CipherTrace provides KYC/AML and related services for companies and governments who need and want it. Here's the thing: transactions on the blockchain are anonymous but they're not private. If you're going to do things out in the open, someone's going to watch what you're doing. That doesn't necessarily result in regulation, though it may. It may doesn't necessarily result in incumbents squashing competition, though it may. CipherTrace builds tools, and how they're used is a political question, not a technical one. Disclosure: I know the CipherTrace folks and did a tiny bit of contracting for them between jobs.

quantumBerry 5y ago
Accurate for BTC, although it's worth noting there are some privacy coins with blockchains that currently have very limited susceptibility to chain analysis, and thus as far as we can tell are private.

deleted 5y ago

[deleted]