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The irony here is truly staggering. The whole point of cryptocurrencies is to eliminate the need for trusted third parties, and especially to eliminate the nee
by lisper 5y ago
The irony here is truly staggering. The whole point of cryptocurrencies is to eliminate the need for trusted third parties, and especially to eliminate the need for trusted third parties who are so heavily regulated that they are essentially arms of the government, like banks. Still, it is far from clear (at least to me) whether the FDIC chair is being clueless or devilishly clever here.
- TwiceCubed 5y agoThe whole point of cryptocurrencies is to scam poor, desperate people, and fuck the planet, for the sake of personal wealth. Fuck off and die you soulless cretin.
- henriquez 5y agoMaybe the FDIC thinks they’re devilishly clever but are actually clueless. Various world governments have been taking potshots at crypto currencies. It’s pretty obvious they can’t control them, so instead they try to undermine them, but thanks to their own incompetence they actually make crypto more attractive (and intractable) in the process.
- matheusmoreira 5y agoBitcoin failed that requirement. Expensive transactions ensure that nobody will attempt to move their coins in order to actually transact. The exchanges turned into banks instead. Also, the risks associated with physically holding substantial wealth in bitcoin cannot be ignored. It's just like storing lots of cash at home. We should have the option to store it at a bank if we want to.
- trixie_ 5y agoPeople don’t transact gold either. It is difficult to transport and verify. Gold is though a reliable store of value as creating more is not easy, just like Bitcoin.
- matheusmoreira 5y agoI don't dispute that gold is a good store of value. I'm saying bitcoin was supposed to have been more than that. It was supposed to be a currency. It failed.
- trixie_ 5y agoNot really, Bitcoins transaction fees, processing times and rate limits have been well known for a decade. If you think Bitcoin was ‘supposed’ to buy a cup of coffee that’s on you. The rest of us have been using it successfully for much bigger things.
- New_California 5y agoYes, there should be options. Not your keys, not your Bitcoin though! You can outsource to an exchange/bank but that gives you an IOU only, and not Bitcoin. The IOU is permissioned, censored, and prone to seizure.
- mywittyname 5y agoI don't think he's being either devilish or clueless. Crypto is an asset class that has cultivated a tremendous amount of interest over the years. Banks want to support crypto in the same way they do other asset classes, but doing so is a minefield. Offering regulatory clarity here is a good thing. This is not an attack on crypto, nor is it about control. Regulators are just providing a framework to allow banks to work with / hold crypto.
- elliekelly 5y agoThe FDIC Chair is a woman, Jelena McWilliams.
- New_California 5y ago1) Banks owning some Bitcoin does not imply Bitcoin needs banks. 2) Banks need Bitcoin though, because long-term everything else is going towards zero in Bitcoin terms.
- andrewla 5y agoWas that the whole point? "Chancellor on brink of second bailout for banks" is to me more germane. Not allowing the state to issue money at will is more of a core tenet. I think the a lot of the dream from there is to make it possible to electronically transfer cash. This is currently impossible with conventional money -- the best we can do is transfer deposit records electronically. To make this work we treat deposit records as surrogate cash, and take on a huge amount of systemic risk into the monetary system, which we basically backstop with unlimited government guarantees. With Bitcoin, at least in theory, we can offer an alternative system. That's not to say that a system can't arise of banks that hold bitcoin deposits and allow you to transfer these deposit record between banks, but the banks need to price in the risk of failure to meet their obligations, so hopefully we can have some mechanism of discounting bank-deposit-bitcoin vs. held-in-wallet-bitcoin. But I think this dream is dying -- there will come a day when you can only buy something with bitcoin, but only with bitcoin deposited in a bank, because it's "easier" and can be unwound, etc., because of correspondence arrangements, and then you'll have the Federal Reserve, that can basically artificially create new "bitcoin deposits", and banks will only let you withdraw 0.01BTC per week, so you'll never notice that they are insolvent, and we'll basically be right back where we started.
- joshuamorton 5y agoI'm lost, how is the government insurance of deposit records any worse than the government insurance of cash?
- andrewla 5y agoIt's worse, not on a "debasement of the currency" basis, but on a surveillance and censorship basis. On a systemic basis it is slightly more dangerous than cash just because it reinforces the notion that bank deposits are valued at their face value and are thus a cash equivalent. But banks can fail or become insolvent, and because the money sovereign has decided that bank deposits are equivalent to cash, it is obligated to maintain that (through bailouts or other support), while at the same time banks are for-profit enterprises that are taking non-negligible risks (and sometimes explosively tail-heavy risks) to earn income based on their deposits.
- r00fus 5y agoYou see irony, I see a captured government. Wealthy, envious of seeing their assets outcompeted by crypto are now hoping banks can allow them to further privatize the gains while socializing the losses.
- arcticbull 5y agoWhose exactly is "their" assets? Assets belong to people, and they're also not broadly stored at banks.
- r00fus 5y agoFinancial instruments are assets as well. Banks handle those all the time.
- arcticbull 5y agoCurrencies aren't assets. [1] [1] https://www.commonfund.org/blog/is-currency-an-asset-class#:~:text=Currencies%20are%20not%20an%20asset,trade%20compared%20to%20another%20currency https://www.commonfund.org/blog/is-currency-an-asset-class#:....
- Kranar 5y agoOne random person's blog post is not sufficient to disqualify centuries of economic and accounting literature that has classically defined cash to be a canonical asset class. Currencies are universally listed at the top of any balance sheet, small or large company alike. https://en.wikipedia.org/wiki/Asset https://en.wikipedia.org/wiki/Asset https://en.wikipedia.org/wiki/Cash_and_cash_equivalents https://en.wikipedia.org/wiki/Cash_and_cash_equivalents
- arcticbull 5y agoThat's fair, I was off base. Withdrawn, but I'll leave it up so folks understand what you're replying to. Thanks for the correction!
- pjc50 5y agoThe point of cryptocurrencies is "number go up". Or at least that's why the marketing has been successful. There's a secondary market in "offshore accounts for everyone", via the shadow-banking stablecoins like Tether.
- kube-system 5y agoTrusted third parties exist because people demand their services. The problems that arise when you stuff cash under your mattress are the same problems that are leading people to turn to third parties to transact in Bitcoin. Bitcoin didn't eliminate these problems, it is simply a system that intentionally ignores them. Even darkweb markets have turned to escrow services.
- bingohbangoh 5y agoIt's funny because right now in New York state you technically can't trade bitcoin without at least one party having a proper BitLicense. [0] [0]: https://en.wikipedia.org/wiki/BitLicense https://en.wikipedia.org/wiki/BitLicense
- elliekelly 5y agoThere are two pretty ginormous exemptions in the regulation that allow transactions in virtual currency without a BitLicense: https://govt.westlaw.com/nycrr/Document/I85908c6b253711e598dbff5462aa3db3?viewType=FullText&originationContext=documenttoc&transitionType=CategoryPageItem&contextData=(sc.Default)&bhcp=1 https://govt.westlaw.com/nycrr/Document/I85908c6b253711e598d...
- bingohbangoh 5y agoAhhh that explains OpenSea operating in NYC. This would only affect you if operating an exchange on behalf of somebody (eg Coinbase)
- richlandlord 5y agoI don't think the point was to ban centralized options, but to allow decentralized options. A system with freedom would allow sub-systems with "no freedom" as well
- trixie_ 5y agoJust because banks hold it doesn’t mean Bitcoin is dependent on banks whatsoever.
- thunkshift1 5y agoWhat if they ‘nationalise’ everyones btc holding?